California Developments

California Takes One Step Closer to Imposing Reporting Requirements and Public Shaming for Employer Pay Gaps

When we last checked in on AB 1209, the Gender Pay Gap Transparency Act, the proposed legislation was making its way through the California Senate. After making a few key amendments, the Senate passed the bill on September 7, 2017. The California Assembly approved the amendments on September 11, 2017, and now the fate of AB 1209 lies in the hands Governor Jerry Brown. READ MORE

Expanded Protections for Working Mothers in San Francisco

 

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.

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No Trial Needed: Ninth Circuit Confirms Summary Judgment Appropriate Where Discrimination Plaintiff Can’t Rebut Legitimate Business Reasons

Employers faced with discrimination claims must determine if summary judgment is a viable means to dispose of those claims. A recent Ninth Circuit decision provides some additional ammunition for employers moving for summary judgment going forward.

In affirming summary judgment on August 16, 2017, the Court in Merrick v. Hilton Worldwide, Case No. 14-56853, 2017 WL 3496030, held that “context is key when a plaintiff alleges age discrimination based on circumstantial evidence” and, on the facts before it, affirmed summary judgment for the employer. Id. at *8. Plaintiffs fond of quoting the standard for summary judgment articulated in Chuang v. Univ. of Cal. Davis, Bd. of Trs., 225 F.3d 1115, 1124 (9th Cir. 2000) – which held that a plaintiff in an employment discrimination case needs to produce “very little evidence” to defeat summary judgment – will need to contend with the more nuanced picture of summary judgment requirements that Merrick paints.

In Merrick, Plaintiff alleged that his employment was terminated in violation of the California Fair Employment and Housing Act (“FEHA”) when he was laid off as part of a reduction-in-force, allegedly because of his age.  After concluding that Plaintiff had established a prima facie case and that Hilton produced evidence that it terminated Plaintiff’s employment for legitimate, non-discriminatory business reasons, the Court found that Plaintiff failed to produce sufficient evidence to allow a jury to conclude that age was a “substantial motivating factor” in the decision, i.e., that Hilton’s reasons for termination were false or the true reason for the termination decision was discriminatory.  Specifically, “the evidence as a whole [was] insufficient to permit a rational inference that the employer’s actual motive was discriminatory” considering the substantial evidence the employer tendered supporting the business justification for his selection:

  • lost profits during a preceding economic downturn
  • a series of layoffs over several years, the overall age of the workforce
  • the fact that Plaintiff survived previous layoffs despite having also been a member of a protected class at the time of those layoffs, and
  • the business reasons for selecting his position for elimination.

Faced with this evidence, the Merrick court emphasized that a plaintiff “must do more than establish a prima facie case and deny the credibility of [the employer’s] witnesses”; if she does nothing more, summary judgment should be granted. Merrick, 2017 WL 3496030, at *5.

In affirming summary judgment, the Merrick court cited to a line of Ninth Circuit cases – Coleman v. Quaker Oats Co., 232 F.3d 1271 (9th Cir. 2000), Nidds v. Schindler Elevator Corp., 113 F.3d 912 (9th Cir. 1996); and Wallis v. J.R. Simplot Co., 26 F.3d 885, 891 (9th Cir. 1994) – that had affirmed summary judgment where a plaintiff failed to adduce adequate proof of pretext.  This contrasts with the Chuang line of cases that could be read to suggest that less is required of plaintiff.

The Merrick decision thus underscores that the summary judgment standard for discrimination cases in the Ninth Circuit is not as lax as some plaintiffs may suggest. Merrick‘s analysis was predicated on the familiar McDonnell-Douglas burden-shifting framework—which the Court held applied to state law discrimination claims under FEHA just as it would to federal Title VII claims—and thus has implications for any claims in federal court analyzed under that framework.

Allegations of Misclassification Are Insufficient to Demonstrate Commonality and Typicality According to California Court of Appeal Decision

The California Court of Appeal for the Fourth District held that misclassification alone does not establish liability for overtime violations, and, thus, the fact that members of a putative class were classified as exempt was not sufficient to demonstrate the required commonality and typicality for a misclassification class action to proceed. The court in Kizer v. Tristar Risk Management held that in addition to alleging misclassification, the plaintiffs needed to prove that the misclassification caused harm. The standard announced by the Kizer Court augments the burden on plaintiffs in misclassification wage and hour class actions to establish commonality and typicality. On July 26, the decision was certified for publication. READ MORE

California Supreme Court Expands PAGA Plaintiffs’ Access to Statewide Discovery of Employee Contact Information

On July 13, 2017, the California Supreme Court greatly expanded the scope of discovery available under California’s Labor Code Private Attorneys General Act of 2004 (“PAGA”). In Williams v. Superior Court (Marshalls of CA, LLC), ___Cal. 5th ___ (Jul. 13, 2017), the court held that the breadth of discovery in a PAGA action should be no less than what is normally permitted in a class action. Additionally, the Court held that as an essential first step to prosecuting any representative action, a PAGA plaintiff is presumptively entitled in the early stages of litigation to obtain from the employer-defendant the contact information of those the plaintiff purports to represent in early stages of litigation. READ MORE

Sick of It Yet? The DLSE Issued New Paid Sick Leave FAQs

Paid sick leave remains an epidemic that won’t quit.  Since California enacted the Healthy Workplaces, Healthy Families Act of 2014 (Cal. Lab. Code § 245, et seq.) (“California Paid Sick Leave”), paid sick leave laws have spread to both state and local levels, requiring employers to maneuver a patchwork of laws.  These laws left several unanswered questions in their wake.  Indeed, the unanswered questions were so numerous that the California Legislature passed a fix-it bill of amendments revising and clarifying California Paid Sick Leave only a few months after it took effect.  Despite the fix-it bill, several questions remained.

On March 29, 2017, the California Labor Commissioner, through the Division of Labor Standards Enforcement (the “DLSE”), attempted to provide further guidance by issuing an update to its California Paid Sick Leave: Frequently Asked Questions (“FAQs”).  The updated FAQs address questions regarding the use of “grandfathered” paid time off (“PTO”) policies and the intersection of California Paid Sick Leave and employer attendance policies.  Here are the takeaways: READ MORE

California’s Tightened Regulations on Considering Criminal History in Employment Decisions Take Effect July 1, 2017

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

First Dibs: New Ordinance Requires San Jose Employers to Offer Additional Hours “In-House” to Qualified Part-Time Employees before Hiring

For anyone who missed it, on Monday, March 14th the “Opportunity to Work Ordinance” (the “Ordinance”) went into effect in San Jose.  The Ordinance, which was approved by voters on November 8, 2016, requires employers to offer additional hours to existing part-time employees before hiring externally, either directly or through a temporary staffing agency. Employers must offer the additional hours to employees who have the skills and experience to perform the work.  Whether or not an existing employee has the requisite skill and experience is a determination left to the employer – modified only by the requirement that the employer act in good faith and with reasonable judgment.  Further, an employer need not offer an existing employee additional hours if doing so would require the employer to compensate the existing employee at time-and-a-half or any other premium rate under the law or a collective bargaining agreement.  READ MORE

Uber Rolls Along, Despite Driver Challenges to its Arbitration Agreement

Companies operating in the “on-demand” or “gig economy” have enjoyed tremendous success in recent years, as emerging technologies and shifts in consumer tastes have buoyed their growth. These companies span a cross-section of industries (transportation, food delivery, lodging) but have one thing in common: each aims to deliver traditional services more efficiently by connecting consumers directly with service providers.

But as we all know by now, success often begets legal challenges. Take Uber, for example.  The company has faced a thicket of litigation in recent years, most notably related to the question of whether its drivers are employees or independent contractors.

Like many companies in today’s economy, Uber has implemented an arbitration policy as a way to efficiently resolve disputes. Below we recap some of the developments in this area and preview some legal issues that companies will want to monitor in the months ahead. READ MORE

Not Providing Compliant Rest Breaks in California Could Break the Bank – New Clarifications from the State’s High Court

Recently, in Augustus v. ABM Security Services, Inc., the California Supreme Court upheld a $90 million award of statutory damages, interest, and penalties against an employer who required employees to remain on-call during rest periods, despite no evidence showing that any employee’s rest period was ever actually interrupted.  This holding has significant implications statewide, and employers in California should promptly review their rest break policies to ensure full compliance.  READ MORE