As states continue to pass legislation focused on the workplace, employers should be mindful that federal agencies are also continuing to regulate the workplace even in the absence of new federal legislation, especially with respect to when disputes arise regarding compensation and working conditions. Section 7 of the National Labor Relations Act (“Act”) arguably protects an employees’, including non-union employees’, rights to engage in concerted activities, including circumstances where an employee’s profane language or sexually- or racially- offensive speech is legally protected. Following criticism from the judiciary, the National Labor Relations Board (“NLRB”) announced this month it is now seeking input on the scope and applicability of this protection. READ MORE
Posts by: Jessica R. L. James
Employers across the country should dust off their background check policies and forms and be mindful of recent developments related to the federal Fair Credit Reporting Act (FCRA).
FCRA mandates specific, technical steps for employers using consumer reports to make employment decisions, including hiring, retention, promotion or reassignment. While many employers are familiar with the importance of following FCRA requirements, actual compliance with the law can be tedious and challenging. As the law continues to evolve, employers should be aware of recent updates to the model federal form for consumer rights and recent guidance from a California federal court related to the “stand-alone” disclosure and authorization requirement. READ MORE
Last week, the Financial Industry Regulatory Authority (“FINRA”) filed its first disciplinary action involving cryptocurrencies, conforming with its stated 2018 goal of monitoring and supervising the largely unregulated cryptocurrency market. FINRA’s actions reflect a long-anticipated and increased scrutiny on entities—including employers—dealing with cryptocurrency.
In the September 11 disciplinary complaint, FINRA alleged that a former Massachusetts broker, Timothy Tilton Ayre, committed securities fraud by avoiding registration requirements and selling an unregistered, cannabis-focused cryptocurrency security called HempCoin. Ayre purchased HempCoin in June 2015 and immediately advertised as “the first minable coin backed by marketable securities.” Ayre transformed the cryptocurrency into a security tied to his company, Rocky Mountain Ayre (“RMTN”), valuing each HempCoin as 0.1 shares of RMTN and trading over the counter. Investors mined over 81 million HempCoins through late 2017. However, Ayre failed to register HempCoin with the U.S. Securities and Exchange Commission (“SEC”).
FINRA’s action, coupled with recent joint statements by the Commodity Futures Trading Commission (“CFTC”) and the SEC addressing plans for heightened oversight of virtual currency regulation, reflect potential obstacles entities may face in dealing with cryptocurrency, or blockchain technology more broadly.
Growing start-ups or legacy companies with new industry sectors should be particularly mindful of the novel and transformative legal issues related to these emerging areas. For instance, although blockchain technology is generally expected to make data more secure, employers should continue to monitor their use of this technology for data privacy concerns related to information storage and programs for employment-related decisions. Further, employers should note that cryptocurrency is not currently recognized as legal tender in the United States.
The Federal Labor Standards Act (“FLSA”) mandates “payments of the prescribed wages, including [minimum wage and] overtime compensation, in cash or negotiable instrument payable at par.” 29 CFR § 531.27(a). The phrase “payable at par” allows cryptocurrencies to be a lawful method of payment under the FLSA, but employers should proceed with care if considering whether to use cryptocurrency to pay employee wages, particularly due to challenges with minimum wage and overtime calculations. Indeed, the legal designation for tax purposes is also unsettled: the SEC classifies cryptocurrency as a security; the CFTC says cryptocurrency is a commodity; and since 2014, the IRS has defined cryptocurrency as taxable property.
Given these ambiguities and emerging issues, employers dealing with cryptocurrency and incorporating blockchain technology into their practices should be aware of the potential legal implications and oversight in areas beyond the traditional employment law arena.
On June 4, 2018, a 7-2 United States Supreme Court in Masterpiece Cakeshop Ltd. et al. v. Colorado Civil Rights Commission et al. reversed discrimination penalties against a baker who refused to create a wedding cake for a same-sex couple. This long-anticipated decision turns narrowly on an administrative agency’s past treatment of the case and largely avoids the core constitutional issues involving free speech, religious freedom of the First Amendment, and asserted LGBTQ rights. READ MORE
In the first federal court in California to issue a rule on classification of gig-economy workers, the Northern District of California recently concluded that restaurant delivery drivers are properly classified as independent contractors instead of employees under California law.
In Lawson v. Grubhub, Inc., No. 15-cv-05128-JSC (N.D. Cal. Feb. 8, 2018), Plaintiff Raef Lawson worked as a restaurant delivery driver for Grubhub for four months in late 2015 and early 2016. Grubhub is part of the growing gig-economy, connecting diners to local restaurants through its internet food ordering app. Lawson brought his claims both in an individual capacity and as a representative action pursuant to the California Private Attorney General Act (PAGA). The critical question before the court was whether Lawson was an employee or an independent contractor. READ MORE
In a trend that is gaining steam across the country, multiple cities and states have, or are considering adopting, laws that impose conditions and penalties on employer scheduling practices, otherwise known as “scheduling laws.” Although these laws mostly apply to retail and/or fast food employers, the specific language of the law or ordinance should be consulted to determine whether a broader category of employers may be implicated.
Effective January 1, 2018, San Francisco will expand available protections for nursing mothers working within city limits. California law currently requires employers to provide lactating employees with a reasonable amount of break time and to make reasonable efforts to provide the employee with a room, other than a bathroom, in close proximity to the employee’s work area to express milk. Similarly, federal law requires employers to provide a reasonable break time for an employee to express breast milk for one year after the child’s birth in a place, other than a bathroom, that is shielded from view and free from intrusion from co-workers and the public. Signed into law by San Francisco’s Mayor Ed Lee on June 30, 2017, the “Lactation in the Workplace Ordinance” will expand these requirements for San Francisco employers in the following ways.
Last year, the California Fair Employment and Housing Council proposed new regulations on an employer’s consideration of criminal history in making employment decisions. Those regulations were approved this year by the Office of Administrative Law after a period of public comment and are due to become effective on July 1.
New Clarification on Adverse Impact Claims READ MORE
The federal Fair Credit Reporting Act (FCRA) has created a flurry of class action complaints in recent years aimed at employers who fail to comply with the FCRA’s hyper-technical disclosure and consent requirements. However, a new class action against UPS reminds us that traditional FCRA claims have not faded away and employers should remain mindful of the Act’s requirements. READ MORE
California’s resistance to the longstanding federal policy favoring arbitration frequently results in public expressions of frustration by the justices of the U.S. Supreme Court. In over five years since the Supreme Court’s broad directives in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), recent California decisions, including our recent coverage of the California Supreme Court’s holding in Sandquist v. Lebo, Case No. S220812, 2016 WL 4045008 (Cal. July 28, 2016), suggest that the state’s stubbornness may be waning, at least for the time being. The following summarizes key decisions that diverge from California’s traditional resistance to arbitration and which every employer should have in their arsenal of tools.