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.

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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.


UPDATE: Texas Legislature and Courts Clash With Cities Over Mandatory Sick Leave: What Employers Need to Know

This is an update to a previous post from June 24, 2019.

Earlier today, Dallas became the last of the three Texas cities to face a legal challenge to its paid sick leave ordinance, which is scheduled to take effect this Thursday, August 1. The lawsuit and request for preliminary injunction were filed by two north Texas businesses in the U.S. District Court for the Eastern District of Texas, and attack Dallas’ ordinance on substantially the same grounds as earlier lawsuits filed to enjoin the enforcement of similar ordinances in San Antonio and Austin. The lawsuit also comes on the heels of an agreement between the City of San Antonio and business plaintiffs in the parallel litigation to postpone the implementation of San Antonio’s sick leave ordinance for four months. The presiding Bexar County judge signed off on that agreement less than a week ago, changing the effective date of San Antonio’s ordinance from August 1, 2019 to December 1, 2019.

While businesses operating in San Antonio can take solace in this short reprieve from the city’s new regulations, Dallas businesses have not been so lucky. Absent swift action by the Eastern District of Texas or a voluntary delay in the ordinance’s implementation by the City of Dallas, Dallas businesses will be required to comply with the sick leave starting on August 1, as scheduled. Additional guidance regarding Dallas’ paid sick leave ordinance, including answers to Frequently Asked Questions, can be found on the city’s website. In addition, our Texas Labor and Employment Group would be happy to answer any specific questions you may have regarding these changes.

Paid Family and Medical Leave Is Coming to Oregon

Earlier this month, Oregon passed its own paid family and medical leave act (the act), making it the eighth state in the country to pass such a law. Oregon joins California, Massachusetts, New Jersey, New York, Rhode Island, Connecticut and the District of Columbia in providing paid family and medical leave benefits to employees.

In contrast to other states, Oregon’s new law is particularly expansive. Among other things, the act broadly defines “family,” grants employees a generous amount of leave, and provides 100% paid leave to “low-income workers,” as defined by statute. The act also establishes the Paid Family and Medical Leave Insurance (FAMLI) program to be administered by the Oregon Employment Department to help fund payroll contributions.

Eligibility and Leave Length

Under the new law, employers must provide their employees with a maximum of 12 weeks of paid leave to (i) care for a serious medical condition of the employee; (ii) care for a serious medical condition of the employee’s family member, which broadly includes any spouse, child, parent, domestic partner, grandparent or grandchild of the employee or any individual related by blood or affinity whose close association is the equivalent of a family relationship; (iii) care for or bonding with a newborn, adopted or foster child; or iv) deal with circumstances related to domestic violence, harassment, sexual assault or stalking.

In addition, employees may take up to four weeks of unpaid leave for which the employee may be eligible under the Oregon Family Leave Act (OFLA) and up to two additional weeks of benefits for limitations related to pregnancy, childbirth or a related medical condition.

Notably, leave taken under the act must be taken concurrently with any OFLA leave and with any leave taken under the federal Family and Medical Leave Act. Employees may also use vacation or sick time to supplement their weekly benefit amount, up to 100% of their wages. Continue Reading