California
In addition to the bills discussed
in last month's newsletter, the California legislature is also considering
the following recently-introduced employment bills:
Paid Sick Leave Bill Reintroduced
(AB 400)
This bill would provide that
an employee who works seven or more days in a calendar year in California
is entitled to paid sick days, to accrue at the rate of no less than
one hour for every 30 hours worked. Employees would be entitled
to use this paid sick leave beginning on the 90th calendar
day of employment. Employers would be prohibited from discriminating
or retaliating against employees who request paid sick leave, and would
also be required to satisfy certain new posting and recordkeeping requirements,
including identifying paid sick leave accruals in itemized wage statements.
Similar versions of this bill
have passed the legislature multiple times but were vetoed by then-Governor
Schwarzenegger.
Bill Prohibiting CFRA-Related
Interference Introduced (AB 592)
California's Family Rights
Act (CFRA) and Pregnancy Disability Leave (PDL) prohibit employers from
refusing to grant leave to an eligible employee for certain statutorily
enumerated reasons (e.g., to care for a family member with a serious
health condition under CFRA, to take leave on account of pregnancy under
PDL, etc.). This bill would amend CFRA and the PDL to make
it an unlawful employment practice for an employer to interfere with,
or restrain the exercise or attempted exercise of any right provided
to an employee under these provisions.
This bill would essentially
codify in CFRA and the PDL the Family Medical Leave Act's (FMLA)
prohibition on employer "interference" with FMLA leave rights [See
e.g., 29 U.S.C. § 2615(a)(1) ("it is unlawful for any employer to
interfere with, restrain, or deny the exercise of or the attempt to
exercise" substantive rights guaranteed by the FMLA.)
Paid Family Leave Expansion
Proposed (AB 804)
Currently, the family temporary
disability insurance program provides up to six weeks of wage replacement
benefits to workers who take time off to care for a seriously ill child,
spouse, parent, or domestic partner, or to bond with a minor child within
one year of birth or adoption. This bill would expand the scope
of the family temporary disability program to include time off to care
for a seriously ill grandparent, grandchild, sibling, or parent-in-law,
as defined.
Gender Identity and Expression
Protections Proposed for FEHA (AB 887)
The Fair Employment and Housing
Act (FEHA) presently prohibits discrimination or harassment against
individuals because of "sex," which is defined to include gender,
and though its incorporation of Penal Code section 422.56, gender identity
and behavior. This bill would amend FEHA to specifically identify
"gender, gender identify and gender expression" as characteristics
protected under FEHA. It would also require employers to allow
an employee to appear or dress consistently with the employee's gender
expression (along with gender identity presently required). "Gender
expression" would be defined as "a person's gender-related appearance
and behavior whether or not stereotypically associated with the person's
assigned sex at birth."
Talent Agency Discrimination
Protections Amended (AB 1364)
Labor Code section 1700.47
presently prohibits talent agencies from discriminating against an artist
because of the artist's race, color, creed, sex, national origin or
handicap. This bill would expand the list of criteria based upon
which a talent agency may not discriminate to be fully consistent with
those identified in the Fair Employment and Housing Act (e.g., adding
ancestry, marital status, age, sexual orientation and changing "handicap"
to mean physical disability, mental disability and medical condition).
Bill Would Require Commission
Contracts to be in Writing (AB 1396)
This bill would amend Labor
Code section 2751 and require that by January 1, 2013, all employers
entering into employment contracts for services to be performed in California
and contemplating payment in commissions to put the contract in writing
and identify the method by which commissions will be computed and paid.
Employers failing to comply with these requirements would be liable
to employees for triple damages. This amendment is intended to
address a judicial decision which had effectively invalidated a prior
version of Labor Code section 2751 because it imposed these requirements
only on out-of-state employers. This amendment would apply these
requirements to all employers entering into employment contracts involving
commission payments for services performed in California.
New Rules Proposed
for Employee Inspection Rights of Personnel Records
(AB 1399)
Labor Code section 1198.5 presently
authorizes employees to inspect the personnel records an employer maintains
relating to the employee's performance or any grievance regarding
the employee. This bill would amend this section and require
an employer to maintain personnel records for four years post-termination
of employment, and provide current and former employees, or their representative,
the right to inspect personnel records within 21 days of a request.
The employee would also be entitled to obtain copies of these records
at a charge not to exceed the actual cost of reproduction. Employers
failing to comply with these inspection and copying requirements would
be subject to a $750 penalty payable to the employee or the Labor Commissioner,
and employees would also be permitted to pursue civil action.
Federal
The new congress is also considering
a number of employment-related bills, including the following:
Repeal of 1099 Reporting
Requirement Expected Shortly (H.R. 4)
One of the more controversial
aspects of last year's Health Care Reform was a requirement that employers
complete 1099 Forms for all payments in excess of $600. This bill,
as well as a similar Senate bill, would repeal this reporting requirement,
and it is widely anticipated that some version of this bill will become
law shortly.
Bill to Mandate Use of E-Verify
(H.R. 800)
Known as the Jobs Recovery
by Ensuring a Legal American Workforce Act of 2011, this bill would
make the E-Verify program for assessing employee work eligibility permanent
and mandatory. Presently, employer usage of E-Verify is generally
voluntary.
National Right-to-Work Act
Introduced (S. 504)
This bill would amend the National
Labor Relations Act and codify a national right to be free from compulsory
membership in a labor union. Another recently-introduced bill
(H.R. 972) would make it an unfair labor practice for an employer to
bargain collectively with a labor organization selected other than by
secret ballot elections. These bills have almost no chance of
passing or being enacted into law, but their introduction and the events
in Wisconsin, Ohio and other states signal that Labor issues will continue
to be prominent even though the Employee Free Choice Act also seems
unlikely to be enacted.
AGENCY
Federal
EEOC Issues Long-Awaited
ADAAA Regulations
On March 24, the Equal Employment
Opportunity Commission (the Commission) issued its long-awaited final
regulations under the ADA Amendments Act (ADAAA), which expanded the
scope of ADA coverage and was signed by President Obama in September
2008. The final regulations are effective on May 24, 2011.
The regulations implement the
ADAAA including Congress's mandate that the definition of disability
be construed broadly. In enacting the ADAAA, Congress made it
easier for an individual seeking protection under the ADA to establish
that he or she has a disability within the meaning of the statute.
Some of the more interesting aspects of the regulations are summarized
below.
Major Life Activities:
The concept of major life activities has been expanded to include "the
operation of a major bodily function, including but not limited to,
functions of the immune system, normal cell growth, digestive, bowel,
bladder, neurological, brain, respiratory, circulatory, endocrine, and
reproductive functions." For instance, the Commission stated
that "kidney disease affects bladder function; cancer affects normal
cell growth; diabetes affects functions of the endocrine system . .
. ." Thus whether or not a person may be limited in normal bodily
functions now needs to be considered when analyzing disability.
Vague Standard for
"Substantially Limits": To be covered by the ADA an individual
must show he/she has an impairment that "substantially limits" a
major life activity. Previously, case law such as the U.S. Supreme
Court's decision in Toyota v. Williams required plaintiff to
show a significant restriction in order to meet the "substantially
limiting" threshold. This standard was rejected by the ADAAA
and the Commission fails to provide a new standard or define what "substantially
limits" means. The Commission does provide examples of conditions
that are and are not substantially limiting, but it is still expected
that this issue will be litigated and sorted out by the courts, although.
It also took the position that the ability of an individual to perform
a major life activity should be "compared to most people in the general
population."
Moreover, in considering whether
a person is substantially limited in a particular life activity the
Commission said employers should only consider the activities the individual
cannot perform, not those that the individual is able to perform.
Duration of the Impairment:
Short term conditions are not covered by the ADA, but the ADAAA regulations
seem to undercut that principle as they suggest that impairments that
are of shorter duration may also be covered if they are sufficiently
severe. This is especially troubling for employers looking for
defined standards to guide them in administering and following the ADAAA.
Mitigating Measures:
The ADAAA provides that an individual's condition should be analyzed
"without regard to mitigating measures such as medication, most assistive
technology or behavioral modifications." Thus, mitigating measures
are not relevant to the determination of whether a person has a disability.
However, they remain relevant to determinations of whether or not someone
is "qualified" for a position (i.e., is a person qualified for this
position if he refuses to wear a hearing aid?) or poses a direct threat
to safety. In addition, mitigating measures may be relevant to
an analysis of accommodation issues.
Whether a Particular Condition
is A Disability: Where the Commission had previously
indicated certain conditions would "consistently" meet the definition
of disability (such as deafness, blindness, cerebral palsy, HIV/AIDs,
etc.) the Final Regulations now state that the enumerated conditions
will "virtually" always meet the definition of disability, but leaves
open that an individualized analysis may indicate that one of the enumerated
conditions is so mild for a particular individual so as not to render
that person disabled. The regulations state that "it should
be easily concluded" that certain impairments are disabilities including
deafness, blindness, intellectual disability, partially or completely
missing limbs or mobility impairments requiring the use of a wheelchair,
autism, cancer, cerebral palsy, diabetes, epilepsy, HIV infection, multiple
sclerosis, muscular dystrophy, major depressive disorder, bipolar disorder,
post-traumatic stress disorder, obsessive compulsive disorder and schizophrenia.
New Definition of
"Regarded As" Disabled: The ADAAA changes the definition
of "regarded as" disabled. Previously, an individual had to
show that he/she was regarded as having a substantially limiting impairment,
but the ADAAA merely requires that to be "regarded as disabled"
that an individual show he/she "has been subjected to an action prohibited
under this Act because of an actual or perceived physical or mental
impairment whether or not the impairment limits or is perceived to limit
a major life activity." Impairments that are "transitory and
minor" are excluded from this definition. "Transitory" means
"actual or expected duration of 6 months or less." The Regulations
indicate that the condition must be both transitory and minor
to be excluded. Because of this expanded definition we expect
to see more "regarded as" claims and more litigation over the scope
of such claims. Importantly, the employer is not required to provide
a "reasonable accommodation" to a person who is only covered by
the "regarded as" category. (California law does require
such accommodation.)
Although the definition of
"regarded as" disabled has been expanded, the Regulations indicate
that if an employer provides assistance that such assistance cannot
be used as the basis of a "regarded as" claim. Although providing
an accommodation might indicate an employer believes an individual has
an impairment, it will not – in and of itself – demonstrate that
the employer regarded the individual as having a disability. Similarly
if an employer asks an employee who is having difficulty performing
a job duty because of an impairment if the individual needs an accommodation,
this will note equate to "regarding" the individual as disabled.
Similarly, providing someone with a workers' compensation form or
FMLA paperwork will not equate to "regarding" that person as disabled.
Symptoms of an Impairment:
The Commission has deferred issuing regulations on actions taken because
of either an impairment's symptoms or use of mitigating measures.
Disability rights advocates argued that symptoms of impairment are part
and parcel of the impairment itself and suggested an employer could
evade liability under "regarded as" by asserting that the employment
action was taken because of the symptom of the impairment or medication
taken because of the impairment. For instance, if an air traffic
controller fell asleep at work, the employer may wish to terminate for
sleeping on the job. However, disability rights advocates argue
the employee is protected if the sleeping was the symptom of an impairment
or because of medication taken to treat an impairment. Due to
the complexity of this issue, the Commission felt it could not be given
appropriate comprehensive treatment in these regulations. We would
expect the Commission to issue separate regulations addressing this
particular issue.
The full text of the Final
Regulations under the ADAAA, including the preamble and an appendix
which contains numerous examples, can be found at: http://www.federalregister.gov/articles/2011/03/25/2011-6056/regulations-to-implement-the-equal-employment-provisions-of-the-americans-with-disabilities-act-as
DOL Considering Rule to
Require Employers to Provide Independent Contractor Analysis to Employees
and the DOL
In its recently-published regulatory
agenda, the Department of Labor (DOL) announced it is considering rules
that would require employers to provide additional information to employees
about wage and hour issues. Specifically, covered employers would
be required to notify employees of their rights under the Fair Labor
Standards Act (FLSA) and provide information regarding hours worked
and wage computations. Employers seeking to exclude workers from
the FLSA's coverage (i.e., independent contractors) would be required
to perform a classification analysis, to disclose that analysis to the
worker and to retain that analysis to give it to Wage and Hour Division
enforcement personnel who might request it. The DOL's Fact Sheet
concerning this proposed rule is available at www.dol.gov/regulations/factsheets/whd-fs-flsa-recordkeeping.htm.
JUDICIAL
California
FEHA Statute of Limitations
Flows from Date Right-To-Sue Letter is Issued, Not Date
Received
FEHA requires an employee to
file an administrative charge with and obtain a right-to-sue notice
from the Department of Fair Employment and Housing (DFEH) before filing
a civil suit, and Government Code section 12965 states an employee must
bring suit "within one year from the date of that notice." In this
case, the DFEH issued an immediate right-to-sue notice on December 24,
2004, but the employee did not file civil suit until December 30, 2005.
The employer argued the civil suit was untimely because filed more than
one-year from the date of the right-to-sue letter, while the employee
argued the one-year period commenced upon his receipt of the notice.
The California court of appeal
agreed with the employer that the civil suit was time-barred, holding
that the one-year statute of limitations is triggered by the date on
the right-to-sue notice, not the date the employee receives it.
The appellate court observed the statutory language unambiguously stated
the limitations period flowed from "the date of that notice," and
this date would provide a bright-line rule for statute of limitations
purposes. The court also observed that any slight delay in receipt
due to mail or other issues would not prejudice the employee given the
one-year period in which to file post-notice. (Hall v. Goodwill
Industries of Southern Cal. (2011) 193 Cal.App.4th 718.)
(NOTE: given the different
statutory language and the much shorter limitations period to file suit
(90 days post-right-to-sue) under Title VII, federal courts often track
the federal limitations period from the date a federal right-to-sue
letter is received, rather than issued.)
Employer May Not Artificially
Designate Workweek to Avoid Seventh Day Overtime Premium
Plaintiffs worked consecutive
fourteen day "hitches" on the employer's ships providing emergency
clean up of oil spills and other environmentally hazardous discharges,
during which they worked twelve hour shifts followed by four hours of
"off duty" time and eight hours of sleep time. Plaintiffs
were required to carry a cell phone or pager and remain within 30-45
minutes of the ship during the "off duty" hours and were required
to sleep on the ship. Plaintiff sued for unpaid overtime wages and unfair
business practices based on the employer's failure to pay them for
two seventh day premiums per hitch, and failure to pay them for either
the "off duty" time or sleep time.
Although plaintiffs worked
a 14-day schedule beginning at noon on Tuesdays and ending at noon two
Tuesdays later, the employer calculated overtime on the premise that
the workweek began at 12:00 a.m. on Monday and ended at 11:50 p.m. the
following Sunday. The employer argued the plaintiffs worked six
days in the first workweek, seven days in the second workweek and two
days in a third workweek and thus were owed only one seventh day premium
for that work period. The court of appeal held that the employer could
not subvert the overtime requirements set forth in Labor Code section
510 by designating an artificial workweek that did not correspond to
the hours actually worked.
Although the court acknowledged
that plaintiffs were able to engage in many recreational activities
during the four hours of "off duty" time – including run errands
and go to the gym – the court considered the requirement that plaintiffs
be able to return to the ship within 45 minutes if called, coupled with
the requirement that the plaintiffs return to the ship to sleep meant
the plaintiffs remained at all times under the substantial control of
the employer and thus had to be compensated for these hours. As
such, the plaintiffs were 24-hour employees. As such, pursuant
to Monzon v. Schaefer Ambulance Serv., Inc., 224 Cal.App.3d 16
(1990), a maximum of eight hours a 24-hour employee spends sleeping
at the employer's premises may be excluded from compensation by prior
agreement. The court found such an agreement to exist between
the plaintiffs and employer in this case. (Seymore v. Metson
Marine, Inc. (2011) 193 Cal.App.4th 64.)
Federal
Oral Complaints Suffice
under FLSA's Retaliation Provision
The Fair Labor Standards Act
(FLSA) sets forth employment rules concerning minimum wages, maximum
hours and overtime pay. The FLSA's retaliation provision prohibits
discrimination against an employee who has "filed any complaint"
or caused to be instituted any proceedings under the FLSA. The
federal courts had issued conflicting decisions concerning whether the
phrase "filed any complaint" included oral as well as written complaints
within the retaliation provision's protections. The United
States Supreme Court concluded that the FLSA's retaliation provision
included both oral and written complaints.
The Court first determined
that the FLSA's statutory language was inconclusive since other federal
statutes and judges had interpreted the term "filed" to include
oral complaints. Accordingly, the Court cited several functional
considerations weighed in favor of a broader interpretation, including
not denying the FLSA's retaliation protections to poorer or less educated
workers who might not be able to complain in writing. The Court
also noted that limiting complaints to writing would preclude the Government
from using hotlines, interviews and other oral methods to receive a
complaint. The Court also looked to observed various federal agencies,
including the Department of Labor and the Equal Employment Opportunity
Commission, have interpreted the words "filed any complaint" to
apply to oral complaints.
The Court agreed with the employer
that the FLSA requires fair notice to the employer, and noted that phrase
"filed any complaint" requires some degree of formality such that
the employer would or should understand that a complaint had been made.
The Court stated that to constitute a "filed" complaint, the oral
complaint must be sufficiently clear and detailed for a reasonable employer
to understand it, in light of both its content and context, as an assertion
of rights protected by the FLSA and a call for its protections.
The Court remanded the matter for the lower court to determine whether
this employee's comments that he felt the employer's time clock
placement was unlawful and that he was thinking about filing a lawsuit
satisfied this reasonable notice standard for oral complaints.
(Kasten v. Saint-Gobain Performance Plastics Corp. (2011) __
U.S.__, 2011 U.S.LEXIS 2417.)
Ninth Circuit
Outlines Burden of Proof for FMLA Interference Claim
A former employee sued for
FMLA "interference" after the employer refused to reinstate her
after her leave for chemical sensitivity exposure, on the grounds it
could not guarantee her workplace safety despite her doctor's release.
After a jury verdict in the employer's favor, the employee appealed
claiming the court had improperly instructed the jury that she had the
burden of providing the employer "without reasonable cause" failed
to reinstate her from FMLA leave. In a case of first impression
in the ninth circuit, the court agreed with the employee and held that
on an FMLA interference claim, the employer bears the burden of demonstrating
a legitimate reason for not reinstating the employee.
The court first noted that
the FMLA recognizes two theories of recovery for FMLA violations: (1)
when an employer discharges or otherwise discriminates against an employee
for exercising FMLA rights (the so-called "retaliation/discrimination"
theory); and (2) when an employer interferes with, restrains or denies
the exercise of or attempt to exercise the FMLA's substantive rights,
including by not reinstating the employee after leave (the so-called
"interference" theory). In this case, the court noted an employee
who is denied reinstatement and subsequently pursues an FMLA interference
claim is not required to demonstrate the employer intended to act unlawfully
(i.e., "without reasonable cause" as this lower court had instructed).
Rather, because reinstatement is the linchpin of the interference/entitlement
theory, the employee need only demonstrate (1) he was eligible for FMLA
leave; (2) the employer was covered by the FMLA; (3) he was entitled
to leave under the FMLA; (4) he provided sufficient notice of his intent
to take leave; and (5) his employer denied him FMLA benefits to which
he was entitled (in this case, reinstatement after FMLA leave ended).
The court noted the employee's
reinstatement rights are not absolute and that an employer may successfully
defend against an "interference" claim by satisfying one of the
FMLA's statutory exceptions to reinstatement. Notably, however,
the court concluded the employer bears the burden of proving it had
a legitimate reason for denying reinstatement (i.e., that the employee
could not perform essential job functions, etc.), rather than the employee
having to prove the employer acted unreasonably in not providing reinstatement.
The court also concluded the trial court's instructional error was
not harmless since it effectively required the employee to prove an
otherwise unnecessary element on her FMLA interference claim. (Sanders
v. City of Newport (2011) __ F.3d ___, 2011 U.S.App.LEXIS 5263.)
"One Strike" Rule Permanently Banning
Employees for Failed Drug Test Does Not Violate the ADA or FEHA
An applicant filed suit under
the ADA and the FEHA challenging the shipping lines "one-strike"
rule which permanently eliminated from consideration any job applicant
who tests positive for drug or alcohol use during the pre-employment
screening process. (This applicant had been disqualified from
further consideration due to a positive drug test seven years earlier
during a prior application to this same employer, after which the employee
had successfully completed drug rehabilitation.) The applicant
claimed this "one strike rule" violated the ADA and the FEHA by
discriminating against him on the basis of his protected status as a
rehabilitated drug addict. (See 42 U.S.C. § 12114(b)(1) [expressly
protecting from employment discrimination any person who has "been
rehabilitated successfully and is no longer engaging in [illegal drug
use]."])
The ninth circuit concluded
this permanent ban was harsh, but did not violate the ADA's protections
for rehabilitated drug users. The circuit court first held the
prohibition was not facially discriminatory since it eliminated all
candidates who test positive for drug use, not only former drug addicts.
The court also rejected the employee's claim the rule was intended
to preclude rehabilitated drug users, noting that the rule was adopted
as a response to several serious accidents attributable to a culture
that accepted the use of alcohol and drugs in the workplace. The
court also rejected the employee's disparate impact claim since the
employee had not presented evidence this policy necessarily screens
out recovering drug addicts disproportionately as compared to the number
of qualified recovered drug addicts in the relevant labor market.
(Lopez v. Pacific Maritime Assn. (2011) __ F.3d ___, 2011 U.S.App.LEXIS
3923.)
