LEGAL UPDATE FOR CALIFORNIA EMPLOYERS
May 06th, 2016/By Admin/In Blog
The following update for California employers is brought to you by Firm Partner Sherry B. Shavit. If you have any questions or comments about the information presented, please contact Ms. Shavit direct at telephone number (818) 205-9955; or via email to sshavit@tharpe-howell.com.
Disability Compensation Increases
Last month, I reported that Assembly Bill 908 was placed on Governor Brown’s desk, seeking to revise the formula for determining disability benefits available under the unemployment disability benefits law and the family temporary disability insurance program. The bill was approved on April 11, 2018, and goes into effect on January 1, 2018. The measure allows people earning low wages to be paid 70% of their salary while out on leave, while workers earning higher wages, up to $108,000 annually, will receive 60% of their salary during leave (up from 55%). The law also eliminates the 7-day waiting period prior to receiving disability benefits.
New FMLA Employer Guide and Revised Poster
The Department of Labor has issued “The Employer’s Guide to the Family and Medical Leave Act,” to provide employers information about the FMLA. There are no new changes to the law or regulations in this guide.
The DOL also revised the Family and Medical Leave Act poster. Employers are not required to update their posters at this time – the 2013 version is still compliant.
Federal Trade Secret Bill Has Passed Congress
On April 27, 2016, the U.S. House of Representatives overwhelmingly passed a bill to create a federal trade secrets law (Defend Trade Secrets Act, or DTSA). If approved by President Obama, which is expected, DTSA will provide uniformity across the country as to what is and is not a “trade secret,” and will provide companies access to federal courts to protect their trade secrets. The bill also provides immunity to employees who turn over trade secrets to the government to investigate potential illegal activity and who disclose trade secrets confidentially as part of an anti-retaliation lawsuit against their employer. Employers will be required to disclose this safe harbor provision in any confidentiality agreement with its employees.
SIGNIFICANT CASE LAW
Employers May Combine Rest Breaks in Limited Circumstances
In Rodriguez v. E.M.E., Inc. (April 22, 2016), employees at a metal finishing company received a single, 20-minute rest break per shift, and a 30-minute meal period. The “preferred” rest break schedule is to provide employees 10-minute rest breaks in the middle of their work periods “in so far as practicable.” The California Second Appellate District Court of Appeals held that an employer only can depart from this preferred schedule if “the departure (1) will not unduly affect employee welfare and (2) is tailored to alleviate a material burden that would be imposed on the employer by implementing the preferred schedule.” The employer proffered reasons why it combined the two rest breaks, such as that the employees preferred a 20-minute rest period and, in the paint and processing line departments, it increased productivity because they spent less time having to clean out each paint gun and paint pot and shut down certain equipment before taking a break. Although this evidence would have been enough to demonstrate a valid reason to depart from the preferred rest break schedule, the plaintiff raised triable issues as to whether the employer’s reasons were true. Thus, the appellate court reversed the lower court’s summary judgment ruling in favor of the employer. Before deviating from the traditional rest break schedule, it is recommended that you consult your employment counsel.
Facially Neutral Rounding Rules are Lawful Under the FLSA
Time Warner Entertainment-Advance/Newhouse Partnership (“TWEAN”) has a policy rounding clock-in and clock-out times to the nearest quarter hour. For instance, if an employee clocks in at 8:07 a.m., the employee will be considered to have clocked in at 8:00 a.m; whereas if the employee clocks in at 8:08 a.m., the employee will be considered to have clocked in at 8:15 a.m. Similarly, if an employee clocks out at 5:05 p.m., the employee will be considered to have clocked out at 5:00 p.m., but if the employee clocks out at 5:09 p.m., then the employee will be considered to have clocked out at 5:15 p.m. A TWEAN employee claimed that he was owed $15.02 due to the rounding policy. The Ninth Circuit disagreed in Corbin v. Time Warner Entertainment-Advance/Newhouse Partnership (May 2, 2016). Because TWEAN’s policy was facially neutral – meaning that it was not designed to intentionally undercompensate or overcompensate employees – it was lawful under the FLSA regulations (29 C.F.R. §785.48(b)), and did it run afoul of California’s state overtime laws. TWEAN’s rounding policy could benefit some employees who, for instance, work less than 15 minutes of overtime, but is rounded up and paid for a full 15 minutes; whereas others may lose time due to downward rounding. The Ninth Circuit also found that working one extra minute before clocking in is non-compensable de minimis time (note, however, that California has not affirmatively adopted the de minimis time rule, although the DLSE has endorsed it).
It’s the Thought That Counts
In the U.S. Supreme Court case Heffernan v. City of Paterson (April 26, 2016), a police officer was demoted because his employer thought (incorrectly) that the police officer had supported a particular individual as a candidate for mayor. The question at hand was whether the police officer’s §1983 claim for “free-speech retaliation” was viable, even though the police officer had not actually engaged in the free speech but the employer thought he had. The U.S. Supreme Court ruled that an adverse employment action prompted by even a perceived exercise of constitutional rights is actionable.
Employers Must Reasonably Accomodate Employees Associated with Disabled Persons
In a case of first impression, on April 4, 2016, the California Second Appellate District Court of Appeals ruled that employers have a duty under FEHA to provide reasonable accommodations to applicants and employees who are associated with a disabled person. Association with a disabled person constitutes a disability under Government Code §12926(o). In Castro-Ramirez v. Dependable Highway Express, Inc., the plaintiff’s son required daily dialysis which the plaintiff had to administer. For several years, the employer scheduled plaintiff so that he could be home at night for his son’s dialysis. However, when a new supervisor took over, plaintiff’s employment was terminated when he refused to work a shift that did not permit him to be home in time for his son’s dialysis. The appellate court reversed the district court’s summary judgment ruling in favor of the employer, permitting the plaintiff to proceed on his discrimination, failure to prevent discrimination and wrongful termination claims.
Modifying a Job While an Employee is Out on Medical Leave is Not Discriminatory
In Mendoza v. The Roman Catholic Archbishop of Los Angeles (April 14, 2016), when Alice Mendoza, a full-time bookkeeper, went out on medical leave, the pastor took over her functions, and determined that the position could be accomplished by a part-time bookkeeper. When Mendoza returned from medical leave, there was no full-time position available for her, and Mendoza declined the part-time position. Instead, she sued the church for disability discrimination and failure to reasonably accommodate. The Ninth Circuit upheld summary judgment in the Archbishop’s favor, finding that converting the position from full-time to part-time was a legitimate business decision, and Mendoza failed to provide any evidence of pretextual disability discrimination. Because the position was now part-time, there was no full-time position to offer her.
[This article is for informational purposes only and does not constitute legal advice. Do not act or rely upon any of the resources and information contained herein without seeking appropriate professional assistance.]
