California Court of Appeal Determines Customer of Staffing Agency Is Employer Because of Direction and Control

In Jimenez v. U.S. Continental Marketing, Inc., the California Court of Appeal addressed whether the plaintiff and appellant, Elvia Velasco Jimenez, was an “employee” of a contracting employer under the California Fair Employment and Housing Act (FEHA). In answering this question, the court also provided useful guidance to California businesses on the standard for whether an employment relationship exists under the FEHA. This guidance is particularly relevant for staffing companies and their clients because there can be ambiguity as to which company employs these workers. This question was highly consequential to the parties because, unless Jimenez could establish that she was an employee of the contracting employer under the FEHA, she could not prevail on her claims against that company for harassment, retaliation, failure to prevent harassment or retaliation, and wrongful termination.

Jimenez was a “direct employee” of a staffing agency named Ameritemps, Inc., which assigned her to U.S. Continental Marketing, Inc. (USCM), a manufacturer of shoe care products. At the time USCM terminated her engagement, Jimenez oversaw the production work of up to 30 workers. Ameritemps was responsible for tracking work time, providing benefits and paying Jimenez. With respect to her day-to-day experience at USCM, however, there was virtually no difference between Jimenez and direct employees of USCM.  Jimenez used USCM’s equipment, she was expected to comply with USCM’s policies, she supervised and in turn was supervised by USCM’s direct employees, and USCM sent her to its clinic for any on-the-job injuries. Continue Reading

Ahead of 2020 Election, New York City Issues Enforcement Guidance on National Origin and Immigration Status Discrimination

The Dictionary definition of the word “discrimination” photo taken through magnifying glass from a page of a dictionary with selective focus.Immigration has been at the forefront of news reports and court cases recently, and has already proven to be a hot button issue for the 2020 election candidates to debate. As we move closer to the election, such political conversation may find its way into the office. If it does, employers should ensure that they know what is and is not permitted commentary and actions with respect to individuals who are not U.S. citizens or are of a different national origin.

As you are likely aware, the New York City Human Rights Law (NYCHRL) prohibits discrimination, harassment and retaliation on the basis of, among other protected categories, actual or perceived “alienage and citizenship status” and “national origin.” Citing various statistics to support that New York City is one of the most diverse cities in the world, the NYC Commission on Human Rights (the Commission) released enforcement guidance and a fact sheet, emphasizing that fighting national origin and immigration status discrimination is a priority of the Commission. Continue Reading

California Employers Receive Favorable Interpretation of “Regular Rate of Compensation” in Labor Code Provision Concerning Meal and Rest Period Premium Pay and Guidance Regarding Lawful Rounding Practices

Close-up picture of a personal check and American Dollars with selective focus. Great use for financial concepts.Earlier this month, a California Court of Appeal issued an opinion that is good news for California employers. The opinion addressed the meaning of “regular rate of compensation” in California Labor Code section 226.7, which requires employers to pay employees a premium wage when employees do not receive meal or rest periods, and also addressed under what circumstances an employer’s rounding policy is lawful. The court’s opinion is favorable on both points for employers.

In Jessica Ferra v. Loews Hollywood Hotel, LLC, the Court of Appeal addressed whether the term “regular rate of compensation” within Labor Code section 226.7 has the same meaning as the term “regular rate of pay” within Labor Code section 510. Labor Code section 226.7 requires an employer that fails to provide its employee with a required meal, rest or recovery period to pay the employee an additional hour of pay “at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided.” Labor Code section 510 requires an employer to pay overtime at either one and one-half or twice the employee’s regular rate of pay when the employee works more than a specified number of hours within a workday or within a workweek. Continue Reading

California Court of Appeal Concludes That Claims Under Labor Code 2800 and 2802 Not Excluded From Coverage by “Wage and Hour” Exclusion in Lloyd’s of London Insurance Policy

In a win for California employers, the California Court of Appeal for the Fourth District held in Southern California Pizza Co., LLC v. Certain Underwriters at Lloyd’s, London Subscribing to Policy Number 11EPL-20208, 2019 WL 4572859, that claims against the insured employer brought under California Labor Code §§ 2800 and 2802 were potentially covered by the applicable Lloyd’s of London policy. In doing so, the Court narrowly interpreted the policy’s “wage and hour” exclusion and overruled the trial court’s order sustaining the carrier’s demurrer to the insured’s coverage and bad faith complaint.

The applicable policy language reads, “[t]his Policy does not cover any Loss resulting from any Claim based upon, arising out of, directly or indirectly connected or related to, or in any way alleging violation(s) of any foreign, federal, state, or local, wage and hour or overtime law(s), including, without limitation, the Fair Labor Standards Act; however, we will pay Defense Costs up to, but in no event greater than $250,000 for any such Claim(s)…” Continue Reading

NLRB Adopts Standard Making it Easier for Employers to Make Unilateral Changes to Working Conditions

Labor Board Ditches the “Clear and Unmistakable Waiver” Standard in Favor of the Employer-Friendly “Contract Coverage” Test

2019 has been the “Summer of Love” for employers at the Trump-administration National Labor Relations Board (“Board” or “NLRB”). Over the past several weeks, the Board has issued a handful of employer-friendly decisions covering issues such as worker misclassification, the rights of union organizers and the appropriate scope of a proposed bargaining unit. Perhaps the most far-reaching of these decisions came down on September 10, when the Board eased a unionized employer’s ability to make unilateral changes to terms and conditions of employment. In M.V. Transportation, Inc. (368 NLRB No. 66), the Board overturned decades of precedent when it abandoned the “clear and unmistakable waiver” standard in favor of the “contract coverage” test for evaluating unilateral changes.

As background, under the National Labor Relations Act (“NLRA” or “Act”), an employer with a unionized workforce has a duty to bargain with the union over wages, hours, and terms and condition of employment. An employer that fails to meet its bargaining obligation and institutes “unilateral changes” to terms and conditions of employment violates the Act. The Board’s decision in M.V. Transportation changed the standard that the Board uses to evaluate unilateral changes. Continue Reading

New Job Protections for Medical Marijuana Users in New Jersey

Last month, New Jersey Governor Phil Murphy signed into law the Jake Honig Compassionate Use Medical Cannabis Act (the Act), amending the New Jersey Compassionate Use Medical Marijuana Act (NJCUMMA). The Act expands job protections for employees and applicants who use medical marijuana. With this new law, New Jersey joins a growing list of states (including Massachusetts and New York) offering employment protections for authorized users of medical marijuana.

The NJCUMMA had expressly excluded employment accommodations for medical marijuana users.[1] However, in Wild v. Carriage Funeral Holdings, Inc., Docket No. A-3072-17T3 (N.J. App. Div. March 27, 2019), the New Jersey appeals court held that an employee who was fired after testing positive for medical marijuana could sue his former employer for disability discrimination and failure to accommodate.

The Act now prohibits employers from taking an adverse employment action against an employee or applicant who is a registered qualifying patient based solely on the individual’s status as a registrant. Under the Act, an “adverse employment action” is defined as “refusing to hire or employ an individual, barring or discharging an individual from employment, requiring an individual to retire from employment, or discriminating against an individual in compensation or in any terms, conditions, or privileges of employment.”

The Act also amends how employers should react to a positive test result. Specifically, employers must (i) provide employees and applicants with a written notice of the right to offer an explanation and (ii) give employees and applicants three working days after receiving the notice to submit an explanation or request a second test of the original sample at the employee’s or job applicant’s own expense. Despite the new amendments, the Act does not “restrict an employer’s ability to prohibit or take adverse employment action for the possession or use of intoxicating substances during work hours or on workplace premises outside of work hours.” Additionally, the Act expressly authorizes employers to take an adverse employment action against a medical marijuana patient if accommodating the employee’s medical marijuana use would “violate federal law or result in the loss of a federal contract or federal funding.”

With the Act having taken effect last month, employers must amend their drug screening programs and hiring processes to ensure that they are in compliance with the Act. If you have any questions about or need help with this new law, or with any of the rapidly expanding laws on marijuana, our team would be happy to assist you.

[1] “Nothing in the law requires an employer to accommodate an employee’s use of medical marijuana.” N.J.S.A. 24:6I-14

New Jersey and Illinois Join the Salary History Ban Train

On July 25, 2019, Acting Gov. Sheila Oliver signed NJ A1094 (“the Law”) banning salary history requests in New Jersey. The Law will take effect on Jan. 1, 2020.

The Law makes it unlawful for an employer to (1) screen a job applicant based on the applicant’s salary history, (2) require that the applicant’s salary history satisfy any minimum or maximum criteria or (3) use an applicant’s refusal to volunteer compensation information as a factor in any employment decision.

However, the Law also defines several situations in which an employer may consider salary history. First, employers may consider an applicant’s salary history in determining compensation if the applicant voluntarily, “without prompting or coercion,” provides the information. Additionally, after the employer has made an offer of employment, the employer may ask an applicant to provide him with a written authorization to confirm salary history.

Continue Reading

UPDATE: New York State Expected to Vastly Overhaul Harassment/Discrimination Laws Again

The Dictionary definition of the word “discrimination” photo taken through magnifying glass from a page of a dictionary with selective focus.As we reported in our blog post, and our summer newsletter, in late June, the New York Legislature passed a bill that vastly changed the discrimination and harassment landscape for employers. Today, Gov. Cuomo signed that bill into law. 

 As a result, employers likely now need to change their New York state-required anti-harassment policies and training. Specifically, policies and training should be reviewed to ensure that any reference to the severe and pervasive standard be eliminated and a strong emphasis be placed on the employer’s receptiveness to any and all complaints and how the employer will react swiftly to such complaints. Additionally, policies and training should be reviewed to ensure that they include the enhanced protections the law provides to other protected classes that previously only applied to sexual harassment. 

 Under the new law, employers can be held responsible even when an employee has not complained internally, so employers also should start making additional efforts to ensure their employees are happy and harassment is not occurring. It is also imperative for employers to play up their anti-retaliation provisions in this new construct – if employees are concerned they will be retaliated against, they are sure to not report problems to the company, and under this new law, they don’t have to. To accomplish both of these goals – instilling good morale and creating an open atmosphere where employees feel comfortable speaking to managers – employers might consider instituting town hall meetings or other similar touch-base meetings between management and employees, utilizing an anonymous hotline, hiring an ombudsperson, undertaking an immediate investigation of any complaints made (including those that do not meet the old standard of severe and pervasive), and providing and encouraging team-building activities. Perhaps most important, employers should ensure that management is present and engaged in all training and team-building activities and that management (not just those in human resources and legal) take immediate action with regard to any inappropriate behavior, not just behavior that meets the old standard of severe or pervasive.  

 

California Supreme Court reopens the door for SLAPPing retaliation and discrimination claims

The California Supreme Court has ruled that a former employee’s retaliation or discrimination claim can be dismissed at the initial stages of litigation via California’s anti-SLAPP statute. In Wilson v. CNN, decided July 22, 2019, the court overturned decisions of several courts of appeal that held otherwise and returned a strong tool to employers in defending against suits challenging an employee’s termination.

Anti-SLAPP background

California’s anti-SLAPP statute (SLAPP stands for “Strategic Lawsuit Against Public Policy”), Code of Civil Procedure 425.16, allows a defendant to have a plaintiff’s claim dismissed at the very beginning of litigation if (1) the employer can establish that the plaintiff’s claim implicates activity protected by the statute and (2) the plaintiff is unable to show that his or her claim has minimal merit. California’s Legislature enacted the statute to allow the quick dismissal of claims that implicate a defendant’s First Amendment-related acts. Filing the motion automatically stays discovery and, if the defendant wins, entitles the defendant to attorney’s fees.

In order to trigger the anti-SLAPP statute, the defendant must establish that the actions the plaintiff complains of fall under one of four categories of activity protected by the anti-SLAPP statute. The fourth category of activity protected by the anti-SLAPP statute is “conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” Continue Reading

New York State Bans Race Discrimination Based on Hair Texture and Hairstyles

We previously reported that the NYC Commission on Human Rights issued legal enforcement guidance for employers regarding racial discrimination on the basis of hair under the New York City Human Rights Law (NYCHRL). Although that guidance does not reflect a change in the NYCHRL, it makes clear that employers’ grooming and appearance policies may not prohibit hairstyles historically associated with certain racial communities, such as those who identify as “African, African American, Afro-Caribbean, Afro-Latin-x/a/o or otherwise having African or Black ancestry.”

Recently, New York state went a step further by passing a law that amends the definition of “race” in the New York State Human Rights Law (NYSHRL) to include “traits historically associated with race, including but not limited to, hair texture and protective hairstyles.” This would include, but is not limited to, hairstyles such as “braids, locks, and twists.” As a result, the NYSHRL now prohibits racial discrimination based on natural hair or hairstyles. Interestingly, the amendment contemplates the protection of traits historically associated with race other than hair or hairstyles, which traits are not clearly identified in the law.

The passing of this law makes New York the second state, after California, to prohibit discrimination based on hairstyles. New Jersey is considering similar legislation.

New York employers should review their discrimination, harassment, grooming and appearance policies to ensure such policies prohibit discrimination based on traits historically associated with race, including, but not limited to, hair texture and protective hairstyles. Employers should also train their HR personnel and management about this new law. Our New York team is available to advise regarding this amendment and best practices for your company.

 

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