No More Fair Employment and Housing Commission?

The California Governor just signed SB 1038.  This bill, among many other things, eliminates the California Fair Employment and Housing Commission, and transfers its duties to the California Department of Fair Employment and Housing.  The Commission was the agency that developed regulations and acted as the judicial body that heard claims of discrimination brought before the agency instead of court.  Those duties will be handled by the Department internally now.  Claims for damages currently before the Commission involving emotional distress will be heard in court rather than before the Commission.  Other claims may be heard before an administrative law judge rather than the Commission.

It's unclear how this new law will affect the workings of the DFEH or the Fair Employment and Housing Act. Stay tuned.

SB 1038 is here. But be warned - it's really long and only a small part of it has to do with the FEHC / DFEH piece.

NLRB - More on Protected Activity and Social Media

Tired of hearing about the National Labor Relations Board?  Unless your business is outside of the NLRB's jurisdiction (because it's too small for NLRB jurisdiction, or your business is a public sector employer, for example), I think it's important to watch what the Board is doing. That's because they are on FIRE.  They are not giving up, despite receiving some unfriendly receptions their new initiatives have received in court.

Remember the poster?  A couple of months ago, courts invalidated the NLRB's mandate that employers post a list of rights protected under the NLRA. No poster?  No problem!  The Board is back with a website for employees seeking to understand their rights to engage in protected concerted activity.  The web page defines protected activity and contains links to cases addressing the subject that the Board has handled. Here is the website.

Another Board development - they are still issuing white papers on "social media" and protected activity.  The NLRB counsel's third essay on the subject is here.   If your organization has policies or a handbook listing prohibited employee conduct that could lead to discipline, you should read this memorandum.  You may be surprised to learn that some policies you consider to be routine are illegal under the current Board's view of the NLRA.   The NLRB's Assistant General Counsel picked through policy after policy, opining on portions that are illegal because they might have something to do with unions or working condition (even though the text of the policies have nothing to do with those subjects).  Then, the AGC attaches a policy that the Board found completely, 100% legal.

Here it is:

Social Media Policy

At [Employer], we understand that social media can be a fun and rewarding way to share your life and opinions with family, friends and co-workers around the world. However, use of social media also presents certain risks and carries with it certain responsibilities. To assist you in

making responsible decisions about your use of social media, we have established these guidelines for appropriate use of social media.

This policy applies to all associates who work for [Employer], or one of its subsidiary companies in the United States ([Employer]).

Managers and supervisors should use the supplemental Social Media Management Guidelines for additional guidance in administering the policy.

GUIDELINES

In the rapidly expanding world of electronic communication, social media can mean many things. Social media includes all means of communicating or posting information or content of any sort on the Internet, including to your own or someone else’s web log or blog, journal or diary, personal web site, social networking or affinity web site, web bulletin board or a chat room, whether or not associated or affiliated with [Employer], as well as any other form of electronic communication.

The same principles and guidelines found in [Employer] policies and three basic beliefs apply to your activities online. Ultimately, you are solely responsible for what you post online. Before creating online content, consider some of the risks and rewards that are involved. Keep in mind that any of your conduct that adversely affects your job performance, the performance of fellow associates or otherwise adversely affects members, customers, suppliers, people who work on behalf of [Employer] or [Employer’s] legitimate business interests may result in disciplinary action up to and including termination.

Know and follow the rules

Carefully read these guidelines, the [Employer] Statement of Ethics Policy, the [Employer] Information Policy and the Discrimination & Harassment Prevention Policy, and ensure your postings are consistent with these policies. Inappropriate postings that may include

discriminatory remarks, harassment, and threats of violence or similar inappropriate or unlawful conduct will not be tolerated and may subject you to disciplinary action up to and including termination.

Be respectful

Always be fair and courteous to fellow associates, customers, members, suppliers or people who work on behalf of [Employer]. Also, keep in mind that you are more likely to resolved work related complaints by speaking directly with your co-workers or by utilizing our Open Door Policy than by posting complaints to a social media outlet. Nevertheless, if you decide to post complaints or criticism, avoid using statements, photographs, video or audio that reasonably could be viewed as malicious, obscene, threatening or intimidating, that disparage customers, members, associates or suppliers, or that might constitute harassment or bullying. Examples of such conduct might include offensive posts meant to intentionally harm someone’s reputation or posts that could contribute to a hostile work environment on the basis of race, sex, disability, religion or any other status protected by law or company policy.

Be honest and accurate

Make sure you are always honest and accurate when posting information or news, and if you make a mistake, correct it quickly. Be open about any previous posts you have altered. Remember that the Internet archives almost everything; therefore, even deleted postings can be

searched. Never post any information or rumors that you know to be false about [Employer], fellow associates, members, customers, suppliers, people working on behalf of [Employer] or competitors.

Post only appropriate and respectful content

 Maintain the confidentiality of [Employer] trade secrets and private or confidential information. Trades secrets may include information regarding the development of systems, processes, products, know-how and technology. Do not post internal reports, policies, procedures or other internal business-related confidential communications.

 Respect financial disclosure laws. It is illegal to communicate or give a “tip” on inside information to others so that they may buy or sell stocks or securities. Such online conduct may also violate the Insider Trading Policy.

 Do not create a link from your blog, website or other social networking site to a [Employer] website without identifying yourself as a [Employer] associate.

 Express only your personal opinions. Never represent yourself as a spokesperson for [Employer]. If [Employer] is a subject of the content you are creating, be clear and open about the fact that you are an associate and make it clear that your views do not represent those of [Employer], fellow associates, members, customers, suppliers or people working on behalf of [Employer]. If you do publish a blog or post online related to the work you do or subjects associated with [Employer], make it clear that you are not speaking on behalf of [Employer]. It is best to include a disclaimer such as “The postings on this site are my own and do not necessarily reflect the views of [Employer].”

Using social media at work

Refrain from using social media while on work time or on equipment we provide, unless it is work-related as authorized by your manager or consistent with the Company Equipment Policy. Do not use [Employer] email addresses to register on social networks, blogs or other online tools utilized for personal use.

Retaliation is prohibited

[Employer] prohibits taking negative action against any associate for reporting a possible deviation from this policy or for cooperating in an investigation. Any associate who retaliates against another associate for reporting a possible deviation from this policy or for cooperating in

an investigation will be subject to disciplinary action, up to and including termination.

Media contacts

Associates should not speak to the media on [Employer’s] behalf without contacting the Corporate Affairs Department. All media inquiries should be directed to them.

For more information

If you have questions or need further guidance, please contact your HR representative.

Happy Anniversary to Us!

Shaw Valenza just celebrated its sixth anniversary on 6/19/06.  That means it's been six years since we started this blog. So, more than 500 posts after we began, we thank you once again for reading, commenting, and forwarding our posts.

Thanks and best wishes,

Greg

Supreme Court Clarifies California Public Sector Unions' Notice Requirements

Like many states, California permits unions to represent public sector employees. But employees may "opt out" of paying dues toward these unions' political activities.To permit the "opt out," the unions must issue what are known as "Hudson" notices at least annually, which advise employees of how much of their dues are spent on collective bargaining and how much on political and other non-representative activity.  The employees can opt-out of paying the fee not that are not allocated to collective bargaining -related activities. Unions are permitted to rely on the prior year's ratio to set the current year's dues.

This system exists because of the First Amendment.  The public sector employer would not be able to force employees to join an organization that  requires financing of viewpoints with which the employee does not agree.

So far so good?  Well,what if the union issues a Hudson notice, and then a few weeks after the "opt out" period, issues a special fees increase after issuing its Hudson notice?  Can it unilaterally do this without a new notice?  That was the issue the Supreme Court confronted in Knox v. SEIU, Local 1000.

The Supreme Court said, "no":

To respect the limits of the First Amendment, the union should have sent out a new notice allowing nonmembers to opt in to the special fee rather than requiring them to opt out. Our cases have tolerated a substantial impingement on First Amendment rights by allowing unions to impose an opt-out requirement at all. Even if this burden can be justified during the collection of regular dues on an annual basis, there is no way to justify the additional burden of imposing yet another opt-out requirement to collect special fees whenever the union desires.

Why?

Public sector unions have the right under the First Amendment to express their views on political and social issues without government interference. . . .But employees who choose not to join a union have the same rights. The First Amendment creates a forum in which all may seek, without hindrance or aid from the State, to move public opinion and achieve their political goals. “First Amendment values [would be] at serious risk if the government [could] compel a particular citizen, or a discrete group of citizens, to pay special subsidies for speech on the side that [the government] favors.” ...  Therefore, when a public-sector union imposes a special assessment or dues increase, the union must provide a fresh Hudson notice and may not exact any funds from nonmembers without their affirmative consent.

5 justices joined the majority opinion.  2 justices concurred in the judgment, agreeing the union needs to secure consent from the non-members.  2 justices dissented, and would hold that the union gets to set its non-member contribution rate based on the prior year's expenses, even if the union imposes a special assessment immediately thereafter.

The case is Knox v. SEIU, Local 1000 and the opinion is here.

U.S. Supreme Court: Pharmaceutical Sales Reps are FLSA Exempt

The Supreme Court resolved a split between circuit courts and held that pharmaceutical sales representatives engage in "sales" and therefore are exempt under the Fair Labor Standards Act.

Under the FLSA and California law (and other states' laws), "outside salespersons" are exempt from minimum wage and over time law.

The issue for the Supreme Court was that pharmaceutical reps do not really "sell" drugs to doctors. They "sell" to the doctor that the doctor should promise to prescribe the pharma company's medicine.  Plaintiffs argued that because the rep makes no "sale" he or she should not be considered a salesperson.  Rather, they are non-exempt "promoters."

The Department of Labor took the position that Pharmaceutical reps were non-exempt beginning in 2009.  But the DOL's reasoning apparently evolved as to "why."  According to the Court, the Agency argued:

“[a]n employee does not make a ‘sale’ for purposes of the ‘outside salesman’ exemption unless he actually transfers title to the property at issue.” Brief for United States as Amicus Curiae 1213 (hereinafter U. S. Brief).13 .

That would seem to remove from the exempt a whole lot of sales persons who previously were exempt, and it was much narrower than regulations and prior case law.  So, the Court refused to defer to the DOL interpretation.

The decision was 5-4.  The dissent agreed that the government's own interpretation was not worth much.  But the dissent's opinion was that the duties performed do not amount to "sales" but rather were promotion activities and non-exempt.

This decision may not directly affect California's outside sales exemption. But it should, because California law does not go into any level of detail regarding what is an "outside salesman."  Therefore, the courts and agencies may will follow the Supreme Court's opinion regarding what counts as a sale.

The case is Christopher v. Smithkline Beecham and the opinion is here.

Court of Appeal: "Refusing to Sign" Is Insubordination(!)

When you present an employee a warning (or a review, etc.), and you ask the employee to sign the document to acknowledge receipt of a copy, and the employee refuses to do so, that is called "insubordination" and is a legitimate reason to fire an employee.  Better, still:  it's "misconduct" and the employee may be disqualified from unemployment benefits.

The employer does not have to discharge the employee, but it could.  I have no idea where this "refuse to sign" notation came from, or when employees gained the power to tell employers what they will and will not sign. Perhaps this decision will change things a bit.

In Paratransit v. UIAB, the employee was in a union. The union contract required employer to obtain the signature of the employee on disciplinary action notices, but the notices had to have a disclaimer that says the employee is only acknowledging receipt of the document.  So, employee Craig Medeiros was rude to a customer, the employer tried to give him a disciplinary notice. Employee refused because he feared it would be deemed an admission of guilt, despite the clear disclaimer.  He was told he would be fired if he did not sign the document, and he refused.  Paratransit fired him.

So, the employee then applied for unemployment, which Paratransit contested.  The Unemployment Ins. Appeals Board granted benefits, overturning the decision of an Administrative Law Judge.  Paratransit then sought relief in court.  The Superior Court agreed with Paratransit, and the employee appealed to the Court of Appeal.

If you're fired for "misconduct" you are disqualified from receiving unemployment.  What is misconduct?  Unemployment Ins. Code Section 1256 has the answer, as explained by the court:

Section 1256 provides in relevant part: ?An individual is disqualified for unemployment compensation benefits if . . . he or she has been discharged for misconduct connected with his or her most recent work.? Misconduct within the meaning of section 1256 is limited to "conduct evincing such willful or wanton disregard of an employer's interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer‟s interests or the employee‟s duties and obligations to his employer. On the other hand mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good faith errors in judgment or discretion are not to be deemed "misconduct" within the meaning of the statute . . .

The Court of Appeal held that refusing to sign an acknowledgment, in violation of a direct order to do so, was insubordination and, therefore, misconduct:

Under the circumstances presented, we conclude Claimant‟s failure to sign the disciplinary memo violated his obligations to Employer under Labor Code section 2856. (See Lacy v. California Unemployment Ins. Appeals Bd., supra, 17 Cal.App.3d at p. 1133 [employee must comply unless the employer‟s directive imposes a duty that is both new and unreasonable].) The remaining question is whether such insubordination was misconduct under section 1256 or a good faith error in judgment. ***

As described above, an intentional refusal to obey an employer‟s lawful and reasonable directive qualifies as misconduct. But where an employee, in good faith, fails to recognize the employer‟s directive is reasonable and lawful or otherwise reasonably believes he is not required to comply, one might conclude his refusal to obey is no more than a good faith error in judgment. ***

***Claimant was told to sign the disciplinary memo and that, if he did not, he would be subject to termination. Instead, Claimant requested union representation. He was then told he had no right to union representation at the meeting. Claimant was then instructed to sign the memorandum without union representation. By refusing to do so, Claimant was not seeking redress by other means. He was directly disobeying the employer‟s command.

So, employers have the right to obtain an employee acknowledgment of a disciplinary action. Why is this a big deal?  Because employees may later claim that the action notice was "inserted" in the file, or that the employee did not have prior notice that his or her performance was unsatisfactory, or that the employee did not get a chance to see a disciplinary warning.  That "refused to sign" language that employers write on unsigned notices is worth nothing in court.  The employee's signed acknowledgment is worth a lot. That's why.

To be sure, an employer is not required to fire someone who does not follow directions, or who does not want to sign a disciplinary notice.  But then again, there are employers who may wish to impose consequences for employees' who refuse to follow directions.  Even in 2012, it's nice to know the employer still has a fundamental management right to ask an employee to obey a legal instruction.  Important caveat:  it's a good idea for the warning notice to include an express disclaimer, such as: "Signature is only an acknowlegement that the employee received a copy of this notice and does not signify agreement with the contents."  Or somethjing like that.  Remember: Nothing in this blog is legal advice. 

This case is Paratransit Inc. v. Unemployment Ins. Appeals Bd. and the opinion is here.

SV Makes Some Law: No Section 1983 Claims Based on ADA

It's nice to blog about one of your own cases, and even better when it's a victory.  So, Josephine Okwu was a Caltrans employee, who agreed to disability retirement status.  She then wanted to be reinstated from disability retirement status to her former job. Denied, she was unsuccessful under civil service procedure. She then sued CalPERS and Caltrans officials in federal court under 42 U.S.C. Section 1983 for violation of her civil rights.

She had to rely on Section 1983, she believed, because she could not sue her employer, Caltrans, under the Eleventh Amendment.  She could not sue CalPERS, either.  She could not use the ADA to sue the individuals in any court, because individuals cannot be held liable under the ADA.

The district court dismissed the case because Section 1983 cannot be used as a substitute claim for ADA claims that are not viable in federal court. The Ninth Circuit affirmed:

We conclude that Congress’s inclusion of a comprehensive remedial scheme in Title I of the ADA precludes § 1983 claims predicated on alleged violations of ADA Title I substantive rights. We also conclude that Okwu’s allegations of fact do not state a claim under the Equal Protection Clause. We therefore affirm.

The case is Okwu v. McKim and the opinion is here.

U.S. Supreme Court on Federal Employees' Access to Court

WARNING - Most of you will not care about this. The Supreme Court held today that a federal government employee covered by the Civil Service Reform Act must bring employment claims before the Merit Systems Protection Board, rather than district court.

The MSPB is the exclusive forum, even if the employee is raising a constitutional law claim, and even if the employee is ineligible for federal employment. 

In this case, Elgin did not register for the draft and was fired because people who do not register are ineligible for federal employment.  He tried to bring a claim at the MSPB, but an ALJ held that MSPB had no jurisdiction over his claims. So, he sued in district court, which denied his claim on the merits.  He then appealed to the First Circuit Court of Appeals, which decided that both the district court and the First Circuit lacked jurisdiction.

The Supreme Court agreed, holding that the MSPB can decide constitutional law issues, and that MSPB rulings are subject to review by the Federal Circuit Court of Appeals and by the Supreme Court.

The case is Elgin v. Dept. of Treasury and the opinion is here. 

Court of Appeal: Concepcion Kills Gentry

It's hard to keep up with arbitration law in California.  Can you waive class actions? Must you attach the entire rule set to the arbitration agreement?  Must you serve a nutritious meal when you provide the arbitration agreement?  It never ends. 

The tension between California case law and case law interpreting the Federal Arbitration Act causes these problems. Last year the U.S. Supreme Court decided in ATT Mobility v. Concepcion that the Federal Arbitration Act allows parties to limit arbitration agreements to single-plaintiff claims.  The Court overruled the Califoria Supreme Court's decision in Discover Bank v. Superior Court.  We posted about that here.

Discover Bank was about a consumer class action for small dollars / cents per claim. In Gentry v. Superior Court (2007) 42 Cal.4th 443, the California Supreme Court extended Discover Bank  to wage-hour class actions. The Court held that a class waiver should not be enforced if "class arbitration would be a significantly more effective way of vindicating the rights of affected employees than individual arbitration."

The U.S. Supremes never mentioned Gentry. So what happened to it after Concepcion?

GENTRY

The Court of Appeal in Iskanian v. CLS Transportation- Los Angeles  (opinion here) decided that Gentry is no more. The real news here, though, is that this decision may dispose of - or severely restrict -- the entire body of anti-arbitration case law that has been developed over the past 10 years in California.  The language I've quoted below seems to sound the death knell to California courts' hostility to arbitration on "public policy" grounds (assuming this case remains on the books):

Now, we find that the Concepcion decision conclusively invalidates the Gentry test.  . . . Concepcion thoroughly rejected the concept that class arbitration procedures should be imposed on a party who never agreed to them. ... This unequivocal rejection of court-imposed class arbitration applies just as squarely to the Gentry test as it did to the Discover Bank rule. 

Second, Iskanian argues that the Gentry rule rested primarily on a public policy rationale, and not on Discover Bank‟s unconscionability rationale. While this point is basically correct, it does not mean that Gentry falls outside the reach of the Concepcion decision. ....

Third, the premise that Iskanian brought a class action to "vindicate statutory rights" is irrelevant in the wake of Concepcion. As the Concepcion court reiterated, "States cannot require a procedure that is inconsistent with the FAA, even if it is desirable for unrelated reasons." (131 S.Ct. at p. 1753.) ....

PAGA
 This Court then decided that Concepcion applies to PAGA claims too. The Court disagreed with
Brown v. Ralphs Grocery Co. (2011) 197 Cal.App.4th 489. "Brown held that the Concepcion holding does not apply to representative actions under the PAGA, and therefore a waiver of PAGA representative actions is unenforceable under California law."
This Court disagreed and held that Concepcion would not allow courts to invalidate arbitration agreements merely because they preclude PAGA claims:

Respectfully, we disagree with the majority‟s holding in Brown. We recognize that the PAGA serves to benefit the public and that private attorney general laws may be severely undercut by application of the FAA. But we believe that United States Supreme Court has spoken on the issue, and we are required to follow its binding authority.

HORTON

The Court then went for the Tri-Fecta and disagreed with the National Labor Relations Board's decision in DR Horton, too. D. R. Horton  (2012) 357 NLRB No. 184

In D.R. Horton, the NLRB held that a mandatory, employer-imposed agreement requiring all employment-related disputes to be resolved through individual arbitration (and disallowing class or collective claims) violated the National Labor Relations Act (NLRA) because it prohibited the exercise of substantive rights protected by section 7 of the NLRA.

 The Court decided that it was not bound to follow DR Horton:

We decline to follow D.R. Horton. In reiterating the general rule that arbitration agreements must be enforced according to their terms, Concepcion (which is binding authority) made no exception for employment-related disputes. Furthermore, the NLRB‟s attempt to read into the NLRA a prohibition of class waivers is contrary to another recent United States Supreme Court decision. In CompuCredit Corp. v. Greenwood (2012) __ U.S. __, __ [132 S.Ct. 665, 668] (CompuCredit), plaintiff consumers filed suit against a credit corporation and a bank, contending that they had violated the Credit Repair Organizations Act (CROA) (15 U.S.C. § 1679 et seq.).5 The plaintiffs brought the matter as a class action, despite having previously agreed to resolve all disputes by binding arbitration. The Supreme Court rejected their efforts to avoid arbitration, finding that unless the FAA‟s mandate has been "„overridden by a contrary congressional command,‟" agreements to arbitrate must be enforced according to their terms, even when federal statutory claims are at issue. (CompuCredit, at p. 669, citing (1987) 482 U.S. 220, 226.) The Supreme Court held: "Because the CROA is silent on whether claims under the Act can proceed in an arbitrable forum, the FAA requires the arbitration agreement to be enforced according to its terms." (CompuCredit, at p. 673.)

The D.R. Horton decision identified no "congressional command" in the NLRA prohibiting enforcement of an arbitration agreement pursuant to its terms. D.R. Horton’s holding—that employment-related class claims are "concerted activities for the purpose of collective bargaining or other mutual aid or protection" protected by section 7 of the NLRA, so that the FAA does not apply—elevates the NLRB‟s interpretation of the NLRA over section 2 of the FAA. This holding does not withstand scrutiny in light of Concepcion and CompuCredit.

ARMENDARIZ?

Well, all that is left is Armendariz.  This Court did not touch it expressly. So, stay tuned.... The California Supreme Court is considering related issues. My bet is that the Court will take this case up as well if the parties seek review.

DGV

Employer SLAPPed for Suing Ex-Employee

Robert Rogers is a former officer of Summit Bank, a local, Oakland bank.  When Summit learned there were a number of anonymous, negative posts about it on Craigslist, it decided to sue Rogers for defamation. Here are some of his posts, according to the court:

The June 7, 2009 post: ―Being a stockholder of this screwed up Bank, this year there was no dividend paid. The bitch CEO that runs this Bank thinks that the Bank is her personel [sic] Bank to do with it as she pleases. Time to replace her and her worthless son.

 The June 21, 2009 post: ―Whats [sic] up at this problem Bank. The CEO provides a [sic] executive position to her worthless, lazy fat ass son Steve Nelson. [¶] This should not be allowed. Move your account now.

 The July 14, 2009 post: ―The FDIC and the California Department of Financial Institutions are looking at Summit Bank. This is the third time in less than one year. This is not a good thing, move your accounts ASAP.‖

The July 25, 2009 post: ―I had banked at Summit Banks [sic] Hayward Office. Service was poor and Summit Bank closed this office. Whats [sic] up with that. [¶] All the customer [sic] were left high and dry. This is a piss poor Bank. I would suggest that anyone that banks at Summit Bank leave before they close. 

The second July 25, 2009 post: ―Move your accounts now before its [sic] too late.

The Bank learned that Rogers was the author of the anonymous posts and named him in the lawsuit as the defendant.

Rogers then brought an "anti-SLAPP" motion, used to strike lawsuits that arise from protected speech.  The Bank argued that Rogers' speech was not protected, because making false allegations about a bank's financial condition is criminal conduct under California law.  (When the conduct upon which a lawsuit is based is criminal, a SLAPP motion is barred.)

The trial court denied Rogers' motion because the trial court believed that Rogers' conduct was actionable as defamation and that the Bank was likely to win.  Rogers appealed.

The Court of Appeal, though, decided that the trial court should have granted Rogers' Motion to Strike.  First, the Court of Appeal held that Financial Code Section 1327 (which criminalizes false statements about a bank's financial condition) is an unconstitutional violation of freedom of speech.

The Court then decided that Rogers' posting on an internet bulletin board was speech in furtherance of the public interest in stable, financially sound banking, entitling him to the protection of the anti-SLAPP statute.   Rogers therefore satisfied step one of the two-step analysis applicable to anti-SLAPP motions.

Step 2 involves an analysis regarding whether the plaintiff (Bank) is likely to succeed on its defamation claim against Rogers' posts.  The Court of Appeal decided that the Bank could not win on its defamation suit because Rogers' posts were expressions of (1) true facts - such as financial difficulties the bank had experienced or (2) "opinion" rather than fact. The Court took into consideration that the posts were on the "Rants and Raves" part of Craigslist, that bulletin boards are known for hyperbole and strong opinions, and that in context, even the arguably factual statements were more likely to be understood as opinion.

This case proves it can be hard to sue disgruntled ex-employees for defamation based on anonymous web postings.  The CEO, called a "bitch," and basically accused of stealing money, has no remedy against Rogers.  The Bank, accused of stiffing customers of a closed branch (untrue allegedly), also has no remedy. And because Rogers won his anti-SLAPP motion, he gets his attorney's fees. What a country!

The case is Summit Bank v. Rogers and the opinion is here.

9th Circuit Agrees that Medical Marijuana Users Not Protected by ADA

In 2008, the California Supreme Court held in Ross v. Ragingwire Telecomm. Inc. that the California Fair Employment and Housing Act does not protect current users of medical marijuana.  Post here.  Article here.

The Ninth Circuit just held (2-1) that the federal ADA excludes from coverage current illegal drug users and that "illegal" includes marijuana use that would be lawful in California, but is unlawful under federal law:

We hold that doctor-recommended marijuana use permitted by state law, but prohibited by federal law, is an illegal use of drugs for purposes of the ADA, and that the plaintiffs' federally proscribed medical marijuana use therefore brings them within the ADA's illegal drug exclusion. This conclusion is not altered by recent congressional actions allowing the implementation of the District of Columbia's local medical marijuana initiative.

The case is James v. Costa Mesa and the opinion is here.

Court of Appeal Won't Enforce Botched Arbitration Agreement

Few lawyers, and even fewer non-lawyers, pay attention to legal-sounding mumbo jumbo in releases and employment agreements.  Until they matter.

Employer American Management Services had a broad arbitration provision that applicant Brandon Grey signed (called an issue resolution agreement or "IRA").  But Grey's offer letter contained a narrower arbitration clause, which the employee duly signed as well. That offer letter said it was "integrated," meaning that its provisions superseded all prior agreements.  Yep, the integration clause killed the prior, broader, arbitration provision in the IRA.

The contract contains an integration clause. It provides, in part: ?This Agreement is the entire agreement between the parties in connection with Employee‟s employment with [AMS], and supersedes all prior and contemporaneous discussions and understandings.
 ***
 Construing the clause as a whole, we interpret it to mean the contract is the final expression of the parties‟ agreement with respect to Grey‟s employment and it supersedes the IRA. * * *

Well, Grey arbitrated his claims and lost.  Then he petitioned the court vacate the arbitration award, presumably on the ground that he had not agreed to arbitrate.  Grey had sued for discrimination, harassment based on sexual orientation, and other claims not based on a breach of his employment contract per se.  Grey claimed the language of the offer letter was narrow and he was not required to arbitrate such claims.  The court of appeal agreed:

The scope of the arbitration clause in the employment contract only applies to claims arising from a breach of that contract and does not encompass all claims an employee may have against AMS. All of Grey‟s claims are for statutory violations, and none arises from a breach of the employment contract. We agree with both parties that Grey is not required to arbitrate his claims under these terms. 

 So, Grey gets another bite at the apple, but in court this time. 

The case is Grey v. American Management Services and the opinion is here.

Court of Appeal: Let Jury Decide Co-Worker Harassment Case

The Court of Appeal issued a "writ" of mandate, overturning a summary judgment order on a harassment claim.  Mustafa Rehmani worked for Ericsson in Silicon Valley.  He is Pakistani. Many of his co-workers are Indian. Rehmani claimed the Indian co-workers gave him a rough ride.  The court describes a series of incidents, over a few months, in which there were political jokes, terrorism jokes, and the like.  However, these jokes were pretty isolated, occurring about a month apart. 

The court decided that the allegations were enough to send the case to a jury and that the trial court should not have granted summary judgment.  The court also held that the company's management had sufficient notice of the conduct, and there was insufficient evidence of an adequate response to the conduct to justify summary resolution.

If you believe the plaintiff's version of events (which the court had to do), he told his manager repeatedly about his co-workers' anti-Pakistani / anti-Muslim jokes.  But she brushed them off.  So, a very thin case of national origin harassment will go to a jury, or a mediator.  A little management training (or better training) could have helped here.

The case is Rehmani v. Superior Court and the opinion is here.

NLRB's General Counsel Issues New Guidance for "R" Cases

The NLRB revised its procedures for handling "representation" cases - the NLRB proceedings that relate to elections.  We recently wrote an article about the main revisions here. The NLRB's acting General Counsel issued a memorandum explaining how to implement the new procedures here. You can find some FAQs from the Board here.

NLRB Poster Takes Another Hit

The D.C. Circuit Court of Appeals enjoined the NLRB's implementation of the poster in an order  here.  What poster? See here.  What NLRB?  See here. Thanks, Cal Chamber.

Ninth Circuit Holds Regular Attendance Is Essential Job Function for a Nurse

Some welcome, common sense ADA analysis.  When a job must be performed at the job site, and the employee is not a fungible member of a group of similar workers who can each replace each other, the employer can require regular attendance as a job requirement.

Monika Samper was a neo natal nurse at a Providence Hospital.  She claimed to have Fibromyalgia, which resulted in poor attendance. She violated the attendance policy and was fired.  She wanted essentially a waiver from the policy.

No sale.

It is a “rather common-sense idea . . . that if one is not able to be at work, one cannot be a qualified individual.” Waggoner v. Olin Corp., 169 F.3d 481, 482 (7th Cir. 1999). Both before and since the passage of the ADA, a majority of circuits have endorsed the proposition that in those jobs where performance requires attendance at the job, irregular attendance compromises essential job functions. Attendance may be necessary for a variety of reasons. Sometimes, it is required simply because the employee must work as “part of a team.” Hypes v. First Commerce Corp., 134 F.3d 721, 727 (5th Cir. 1998). Other jobs require face-to-face interaction with clients and other employees. Nowak v. St. Rita High Sch., 142 F.3d 999 (7th Cir. 1998) (teacher); Nesser v. Trans World Airlines, Inc., 160 F.3d 442 (8th Cir. 1998) (airline customer service agent); Tyndall v. Nat’l Educ. Ctrs., 31 F.3d 209 (4th Cir. 1994) (teacher). Yet other jobs require the employee to work with items and equipment that are on site. EEOC v. Yellow Freight Sys., Inc., 253 F.3d 943 (7th Cir. 2001) (en banc) (dockworker); Jovanovic v. In-Sink-Erator, 201 F.3d 894 (7th Cir. 2000) (tool and die maker); Waggoner, 169 F.3d 481 (production worker); Corder v. Lucent Techs., Inc., 162 F.3d 924 (7th Cir. 1998) (telephone customer support); Halperin v. Abacus Tech. Corp., 128 F.3d 191 (4th Cir. 1997) (computer consultant); Rogers v. Int’l Marine Terminals, Inc., 87 F.3d 755 (5th Cir. 1996) (mechanic); Jackson v.Veterans Admin., 22 F.3d 277 (11th Cir. 1994) (housekeeping aide); Carr v. Reno, 23 F.3d 525 (D.C. Cir. 1994) (coding clerk under the Rehabilitation Act); Law v. U.S. Postal Serv., 852 F.2d 1278 (Fed. Cir. 1988) (mail handler under the Rehabilitation Act).

The common-sense notion that on-site regular attendance is an essential job function could hardly be more illustrative than in the context of a neo-natal nurse. This at-risk patient population cries out for constant vigilance, team coordination and continuity. As a NICU nurse, Samper’s job unites the trinity of requirements that make regular on-site presence necessary for regular performance: teamwork, faceto-face interaction with patients and their families, and working with medical equipment face interaction with patients and their families, and working with medical equipment. Samper herself admits that her absences sometimes affected “teamwork and cause[d] a hardship for [her] coworkers who must cover for [her].” Similarly, once at work, Samper’s tasks required her to “lift babies, push cribs and isolettes.” More critically, she had to “get up at a moment’s notice to answer alarms [and] . . . [o]ften . . . run to codes.”
****
Samper’s performance is predicated on her attendance; reliable, dependable performance requires reliable and dependable attendance. An employer need not provide accommodations that compromise performance quality—to require a hospital to do so could, quite literally, be fatal.

Zing. The case is Samper v. Providence St. Vincent Med. Ctr. and the opinion is here.

The California Labor Commissioner Updates Its Wage Theft Forms

Effective 4/12/12, the DLSE updated its templates and FAQs to help employers comply with the Wage Theft Prevention Act.  You can find the page of forms here.   I guess they couldn't wait until the Brinker hoopla died down a little?

There are clarifications such as related to who is responsible for the notice when an employer hires a temp from a staffing agency (the agency), etc.  Fortunately, the DLSE also says that employers don't have to distribute new notices every time the DLSE issues an update.  Whew!

DGV

District Court Kills the NLRB Poster?

Our friends at the California Chamber of Commerce just let me know that the U.S. District Court for the District of South Carolina held in Chamber of Commerce v. NLRB (opinion here) that the NLRB did not have authority to require employers to post a poster informing employees of their rights under the National Labor Relations Act. (Poster information here and here.)  A district court previously held the NLRB did have the authority to require the poster, but did not have the power to create a new "unfair labor practice" when employers do not comply.   See National Ass’n of Manufacturers v. NLRB, No. 11-1629, 2012 WL 691535 (D.D.C. Mar. 2, 2012) (opinion here).

So, this is going to shake out in the Courts of Appeals or the U.S. Supreme Court.  Perhaps the Board will "delay" the implementation date again. Stay tuned.

Random Post-Brinker Thoughts

I have taken more time to read Brinker.  Here are some thoughts to add on to yesterday's post.

1.  The Supreme Court tried to clarify when class actions should be certified.  The trial court will have a  lot of latitude to decide certification, as it has been since 2004's Sav-on decision.  But this opinion will give trial courts more encouragement to certify class actions. The Court limited the trial court's examinations of whether a case has legal merit at the class action stage to resolving a legal issue that affects common issues so much that class certification would be improper. The trial courts will still wrestle with this issue and class action practice is likely safe under this analysis.  As explained below, the Court's application of class action rules means that class actions based on common policies (such as rest periods) may be authorized more freely than courts have been allowing up to now.

1.5 The summary judgment motion will be a very important part of class action defense and should be considered early in the process to avoid class certification of claims that are based on a common policy, but have no merit.

2.  Rest period law:  The Court precisely explained to employers the rest period rules.  Policies must be drafted in accordance with this formula:  "the rest time that must be permitted as the number of hours worked divided by four, rounded down if the fractional part is half or less than half and up if it is more (a “major fraction”), times 10 minutes."

You don't like math?  Well they explain it even better here, because they incorporate the fact that employees with shifts of fewer than 3.5 hours in length are not entitled to any rest period: "Employees are entitled to 10 minutes’ rest for shifts from three and one-half to six hours in length, 20 minutes for shifts of more than six hours up to 10 hours, 30 minutes for shifts of more than 10 hours up to 14 hours, and so on.... an employee would receive no rest break time for shifts of two hours or less, 10 minutes for shifts lasting more than two hours up to six hours, 20 minutes for shifts lasting more than six hours up to 10 hours, and so on." 

Caveat re scheduling:  although the court added up the rest-period minutes above, the law requires paid, 10-minute rest periods during each four hour work period.  So, the employer should draft its policies such that the rest periods fall somewhere in the middle of each four-hour work period.  Here is the rule regarding timing:

Employers are thus subject to a duty to make a good faith effort to authorize and permit rest breaks in the middle of each work period, but may deviate from that preferred course where practical considerations render it infeasible. ....

in the context of an eight-hour shift, “[a]s a general matter,” one rest break should fall on either side of the meal break. (Ibid.)

3. The Court then held that the trial court properly certified a rest-period class because Brinker's rest-period policy was uniformly applied and was vague enough to permit the argument that it violated the law because it did not specifically authorize rest periods when employees work "major fractions" of four-hour periods.  Here is the policy:

Under the written policy, employees receive one 10-minute rest break per four hours worked: “If I work over 3.5 hours during my shift, I understand that I am eligible for one ten minute rest break for each four hours that I work.”

As you can see, this policy permits the argument that employees who worked 6.5 hours were not given a second rest period, even under the policy.  So, the Court's holding re class certification re-opens the door for rest period class actions. Therefore, employers must have a more detailed rest-period policy that spells out rest periods are authorized and permitted in accordance with the formula above, or a class action lawyer can argue that the vague, common policy is applied contrary to law.  Additionally, management must be educated to enforce rest period policies in accordance with their terms when they schedule. Make with the drafting!

4.  Meal periods.   I pulled the quotes in my post yesterday.  Here are some more thoughts.
- Meal period policies should emphasize they are "duty free," meaning the employee can come and go and leave the premises as desired.

the wage order’s meal period requirement is satisfied if the employee (1) has at least 30 minutes uninterrupted, (2) is free to leave the premises, and (3) is relieved of all duty for the entire period.

Under the class action rule the Court developed, a vague policy is subject to an argument that the common policy violates the law.  So, policies should be explicit.

- Employers will be liable for regular straight time or overtime pay when the know or should have known that employees work through meal periods.  That's normal, because you have to pay employees when you "suffer or permit" them to work.  So, if employees don't punch out for meals, you cannot "auto-deduct" meal period time. As we have said before, the remedy for employees who do not comply with policies is discipline, not docking pay.

- Managers who prevent employees from taking meal periods per policy (such as discouraging meal periods) may expose the company to liability for meal period premiums.  When there is a "corporate culture" of discouraging the meal period, look for class actions based on a "common de facto policy."

- The legally compliant policy must provide that a meal period must start before the sixth hour of work begins.  That means, an employee who starts at 9 must be given a meal break by 2 pm.  Again, employers do not have to police the requirement, but the policy should be explicit to avoid the argument that the policy allows for illegal lunches.

- The legally compliant policy also should provide for a second meal period that starts before the eleventh hour of work begins.  There is a waiver of the second meal period allowed upon certain conditions, and that can be included as well.

- Caveat:  Know your business's wage order!  I am going over the general rules here (Wage Order 4, 5, 7 - the biggies).  There are different meal period provisions in some of the lesser used wage orders, such as Wage Order 12, applicable in the film industry. That Wage Order requires meals at six-hour intervals, not before the sixth hour and before the eleventh hour.

5.  Off the clock.  The Supreme Court decided that no "off the clock" work class would be allowed because (1) Brinker had an express and specific policy prohibiting off the clock work and (2) the only evidence in support of class certification was anecdotes about specific instances.  The Court noted the absence of a "de facto" policy requiring workers to work off the clock.  So, it pays to have a policy barring off the clock work.  We also like sign offs on time cards / time sheets certifying that employees reported all time worked, and verifying they know not to work off the clock.

Well, that's it for now.  I'm sure we'll have more down the road.  I hope this has been helpful.

Greg

Brinker: Employers Need Not Force Meal Periods

I will digest the Court's unanimous Brinker opinion a bit later. Those of you waiting to read it, it is here.

There is a long discussion of class certification in wage hour cases, which I will analyze later.  But
here are the money quotes on rest periods / meal periods.  At first read, this is total victory for the employer's position:

Rest periods:

Employees are entitled to 10 minutes’ rest for shifts from three and one-half to six hours in length, 20 minutes for shifts of more than six hours up to 10 hours, 30 minutes for shifts of more than 10 hours up to 14 hours, and so on.* * * 

Hohnbaum asserts employers have a legal duty to permit their employees a rest period before any meal period. Construing the plain language of the operative wage order, we find no such requirement and agree with the Court of Appeal, which likewise rejected this contention.

* * *

in the context of an eight-hour shift, “[a]s a general matter,” one rest break should fall on either side of the meal break. (Ibid.) Shorter or longer shifts and other factors that render such scheduling impracticable may alter this general rule.

Meal Periods:

Hohnbaum contends that an employer has one additional obligation: to ensure that employees do no work during meal periods. . . . We are not persuaded. The difficulty with the view that an employer must ensure no work is done—i.e., prohibit work—is that it lacks any textual basis in the wage order or statute.

* * *

If work does continue, the employer will not be liable for premium pay. At most, it will be liable for straight pay, and then only when it “knew or reasonably should have known that the worker was working through the authorized meal period.”

Proof an employer had knowledge of employees working through meal periods will not alone subject the employer to liability for premium pay; employees cannot manipulate the flexibility granted them by employers to use their breaks as they see fit to generate such liability. On the other hand, an employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks.

* * *

To summarize: An employer’s duty with respect to meal breaks under both section 512, subdivision (a) and Wage Order No. 5 is an obligation to provide a meal period to its employees. The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so. What will suffice may vary from industry to industry, and we cannot in the context of this class certification proceeding delineate the full range of approaches that in each instance might be sufficient to satisfy the law.

On the other hand, the employer is not obligated to police meal breaks and ensure no work thereafter is performed. Bona fide relief from duty and the relinquishing of control satisfies the employer’s obligations, and work by a relieved employee during a meal break does not thereby place the employer in violation of its obligations and create liability for premium pay under Wage Order No. 5, subdivision 11(B) and Labor Code section 226.7, subdivision (b).

And finally - no "rolling 5 hour" meal periods.

We conclude that, absent waiver, section 512 requires a first meal period no later than the end of an employee’s fifth hour of work, and a second meal period no later than the end of an employee’s 10th hour of work. We conclude further that, contrary to Hohnbaum’s argument, Wage Order No. 5 does not impose additional timing requirements.