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Employment Law E-Buzz

Easy-to-digest updates on emerging employer legal issues

Did You Know…Public Employees’ Facebook “Like” is the Internet Equivalent of a Political Yard Sign

Posted in Court Decisions, Privacy, Social Media

The courts are taking steps to protect communications made via social media; e.g., Ehling v. Monmouth-Ocean Hospital Service Corp., No. 2:11-cv-03305 (D.N.J. Aug 20, 2013) (holding that private Facebook posts are protected under the Stored Communications Act).

Likewise, the Fourth Circuit Court of Appeals recently ruled that “liking”  something on Facebook is a form of speech protected by the First Amendment. In Bland et al. v. Roberts, sheriff’s department employees in Virginia lost their jobs after a political campaign in which they expressed support on Facebook for the political rival of the winning candidate.

In deciding that this activity on Facebook is considered protected “speech” under the First Amendment, the Court of Appeals wrote: “On the most basic level, clicking on the ‘like’ button literally causes to be published the statement that the User ‘likes’ something, which is itself a substantive statement.” “’Liking’ the campaign page of the incumbent Sheriff’s political opponent, the Court of Appeals said, was the “Internet equivalent of displaying a political sign in one’s front yard, which the Supreme Court has held is substantive speech.”

The Court of Appeals had to balance the rights of public employees to speak as private citizens against the interest of government (public employers) in ensuring its efficient operation. Thus, it is critical that public agency employers in California analyze whether the conduct in which employees are engaging is protected speech before taking any disciplinary action.

Did You Know…Ninth Circuit Holds No Aggregation of PAGA Penalties to Establish Federal Diversity Jurisdiction

Posted in Class Actions, Court Decisions, Litigation, Wage and Hour

In Urbino v. Orkin Servs. of California Inc., a divided Ninth Circuit held that civil penalties recoverable by individual employees under California’s Private Attorneys General Act of 2004 (“PAGA”) cannot be aggregated to meet the $75,000 amount in controversy requirement for diversity jurisdiction.

A wage-and-hour representative PAGA action brought originally in California state court, Urbino was removed by defendants to federal court on the theory that individual claims, when aggregated, meet the minimum requirements of diversity jurisdiction.  After removal, defendants moved to compel arbitration on the basis that Urbino had executed an Arbitration Agreement agreeing to arbitrate all claims against the company, including PAGA and representative action claims.

The District Court maintained its federal jurisdiction, and denied defendants’ motion to compel arbitration, distinguishing representative PAGA action waivers from class action waivers enforced by the U.S. Supreme Court in AT&T Mobility LLC v. Concepcion.  

Defendants appealed the District Court’s denial of their motion to compel arbitration, and Urbino cross-appealed the District Court’s refusal to remand the case to state court.

On appeal, the  Ninth Circuit determined that it lacked subject matter jurisdiction over the PAGA dispute, and remanded the action to state court for resolution – leaving undecided the issue of whether an arbitration agreement’s waiver of a PAGA representative action claim is enforceable.  The latter issue is pending before the California Supreme Court in Iskanian v. CLS Transportation of Los Angeles

Although it is anticipated that defendants will challenge the Ninth Circuit decision in Urbino, until and unless Urbino is overturned, employers will not be able aggregate claims in the removal of a PAGA action based on diversity.  However, the Ninth Circuit did not address whether a PAGA  action could be removed under the Federal Class Action Fairness Act  (“CAFA”).  Recently a California district court held that a defendant could remove a PAGA action under CAFA by aggregating the civil penalties.  The Ninth Circuit vacated the submission of that case pending the U.S. Supreme Court’s decision in Mississippi ex rel. Hood v. AU Optronics Corp.

The Ninth Circuit’s interpretation of PAGA could also have effects outside the removal context; e.g., whether PAGA claims can be made on an individual vs. representative basis.  

Stay tuned!

Did You Know…U.S. Supreme Court Narrowly Defines “Supervisor” For Purposes of Title VII Employer Liability

Posted in Court Decisions, Harassment

In Vance v. Ball State University, No.11-556, the U.S. Supreme Court ruled in favor of Ball State, making it harder for employees to sue employers for harassment under Title VII.    

The Court adopted a narrow definition of “supervisor” for purposes of vicarious liability under Title VII, holding that an employee is a “supervisor” only if he or she is empowered by the employer to take tangible employment actions against the subordinate employee (i.e., actions that have a “significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits”).  This is important because if the harassing employee is not a “supervisor”  but a “co-worker,” the employer is liable only if it was negligent in controlling working conditions; i.e., if the employer knew or reasonably should have known about the harassment but failed to take remedial action.  

In 1998, the Supreme Court held that an employer may be vicariously and strictly liable for a supervisor’s unlawful harassment.  Faragher v. City of Boca Raton, 524 U.S. 775 (1998); Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998).  However, the Court left open the question of who qualifies as a “supervisor.”

In Vance v. Ball State University, Maetta Vance, a catering specialist at Ball State University, accused a co-worker, Shaundra Davis, of racial harassment and retaliation.  Vance sued the school under Title VII of the Civil Rights Act of 1964, saying the University was liable for the harassment she experienced since Davis was her supervisor.  The District Court ruled that Ball State University could not be held vicariously liable for Davis’ alleged racial harassment because Davis could not “hire, fire, demote, promote, transfer, or discipline” Vance, and, as a result, was not Vance’s supervisor.  The Seventh Circuit affirmed, and Vance appealed to the Supreme Court.

Writing for the majority, conservative Justice Samuel Alito affirmed the judgment of the Seventh Circuit, holding for the University to be liable, Davis must have had the authority to “hire, fire, demote, promote, transfer, or discipline” Vance.

The Court specifically rejected Vance’s argument that a supervisor was anyone with day-to-day oversight of an employee’s activities. 

The Court also rejected the “nebulous” definition of a supervisor advocated by the U.S. Equal Employment Opportunity Commission — one who “wield[s] authority ‘of sufficient magnitude so as to assist the harasser explicitly or implicitly in carrying out the harassment’” — calling the EEOC definition a “study in ambiguity.”

However, to put this into perspective for California employers, this decision will have little – if any – impact in California given that most employees sue under California’s more favorable Fair Employment and Housing Act (FEHA) and not Title VII.  A harassment claim under FEHA applies the definition of supervisor in California Government Code section 12926(s): “Supervisor” means any individual having the authority, in the interest of the employer, to hire, transfer, suspend, layoff, recall, promote, discharge, assign, reward, or discipline other employees, or the responsibility to direct them, or to adjust their grievances, or effectively to recommend that action . . . .”  Thus, the California defintion of supervisor is more expansive than under Title VII.

Did You Know…U.S. Supreme Court Strengthens Class Action Waivers in AmEx Ruling

Posted in Class Actions, Court Decisions

In another employer-friendly decision, the U.S. Supreme Court reinforced its support for class action waivers, ruling in American Express Co. v. Italian Colors Restaurant that an explicit class action waiver in an arbitration agreement cannot be invalidated simply because the plaintiff’s cost of individually arbitrating a claim exceeds the potential recovery.

Justice Scalia, writing for the five-judge majority, distinguished the right to pursue a claim from the expense involved in proving a claim: “[T]he fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue the remedy.”

The American Express decision clarified that the Court’s earlier decision in AT&T Mobility LLC v. Concepcion was not limited to the Federal Arbitration Act’s preemption of state law, as had been interpreted by some lower courts.  Rather, courts must “rigorously enforce” arbitration agreements according to their terms, even for claims alleging violation of a federal statute, unless the FAA’s mandate has been overridden by a contrary congressional command.

Although American Express was decided in the context of an antitrust case, it will assist employers in wage-and-hour litigation, where class waivers frequently have been challenged, and cost of individual arbitration is a common argument invoked by plaintiffs.

American Express is also significant to California employers seeking to enforce waivers of representative Private Attorney General Act (“PAGA”) claims, as the decision makes clear that the right to pursue a claim as a class (or presumably as a group) can be bargained away so long as the ability to pursue the underlying cause of action remains.

Did You Know… The Supreme Court’s DOMA Ruling Opening Federal Benefits to Same-Sex Couples Requires Employers to Update Employee Benefits Policies

Posted in Court Decisions

The Supreme Court’s ruling that the Defense of Marriage Act’s definition of marriage as a legal union only between one man and one woman is unconstitutional requires employers to treat same-sex couples who are legally married the same as married opposite-sex couples under federal law. In prohibiting federal law from distinguishing between same-sex couples and opposite-sex couples, the ruling immediately extended a wealth of employee benefits to same-sex couples — perks which were already given to opposite-sex couples. This benefits extension, will require employers to update their employee benefits policies and plans to reflect the change. Exactly how much an employer will have to change their plans depends on the range of benefits already offered to same-sex couples. Among other changes, Employers should be aware of the following important employee benefits that are now available to same sex couples:

  • Joint and survivor annuities, retirement and pension plans
  • Tax-free health care plans
  • Tax-favored benefits such as flexible spending accounts
  • Leave under the Family Medical Leave Act to care for a same-sex spouse suffering from a serious health condition, for military caregiver leave, or for qualifying exigency when a same-sex spouse is called to active military duty in a foreign country
  • Continuance of health insurance benefits under COBRA

Did You Know…Employee Privacy Rights May Be Trumped By Third Party Requests for Disclosure of Contact Information

Posted in Privacy

The California Supreme Court ordered the County of Los Angeles to disclose non-union employees’ contact information to SEIU Local 721.  The Union sought to amend the bargaining agreements to require the County to disclose addresses and phone numbers of non-members.  The Supreme Court considered whether California’s right to privacy outweighed the Union’s right to the information.  Notwithstanding the Court’s finding that there was a right to privacy and the disclosure amounted to a serious intrusion, the Court concluded that the Union’s interest was sufficiently important to justify the intrusion.

The Supreme Court first addressed and concluded:

  • the Union’s request for the employees’ home addresses and phone numbers was relevant to its bargaining obligations,   
  • the disclosure violated the employees’ right to privacy and was a “serious invasion of privacy” , and 
  • the Union’s interest in the non-union employees’ contact information outweighed the employees’ privacy rights and alternate means of communicating with employees, such as bulletin board postings or union meetings, were inadequate.

Finally, the Court noted that employees and the County could put into place procedural safeguards themselves that would limit or preclude disclosure of non-members’ information such as via collective bargaining:  

Employers like the County remain free to bargain for a notice and opt-out procedure in negotiating collective bargaining agreements with employee unions.  Public employers can also draft employment contracts that will notify employees their home contact information is subject to disclosure to the union and permit employees to request nondisclosure.  Finally, nothing in the relevant statutes or case law appears to prohibit agencies such as PERB or ERCOM from developing notice and opt-out procedures that would allow employees to preserve the confidentiality of their home addresses and telephone numbers.

Although this decision is regarding a public employer, it has significance for private employers as well given the Supreme Court’s conclusion that employees have a right to privacy in their personal contact information.  This will be important in deciding when and how to disclose such information to third parties; e.g., vendors, insurance companies, benefits providers, future employers, in litigation [class or representative actions].  Careful consideration should be given before any disclosure is made to ensure proper safe guards are implemented.

Did You Know…Minimum Wage Hike Passes California Assembly

Posted in Legislation, Wage and Hour

On May 30, the California Assembly passed AB 10, a bill that would increase California’s hourly minimum wage from $8 to $9.25 in three separate increments over the next three years.  Thereafter, the bill would require the minimum wage to adjust annually for inflation.

The bill passed 45-27 with a vote along party lines.

Assemblyman Luis Alejo (D-Salinas) authored the bill in an effort to address the widening income gap.  According to Alejo, minimum wages have not kept pace with the cost of living and has equated to a decrease in purchasing  power.  “We have created a system where we pay workers less but need them to spend more,” says Alejo.  “That causes middle class families to fall down the economic ladder.  It’s the reason our middle class is shrinking and the reason we are facing the largest gap between upper- and lower-income Californians in at least 30 years.”

The California Chamber of Commerce (Chamber) along with a coalition of business groups, opposes the bill, labeling it a “job killer.”  The Chamber states that California’s economic recovery is still in the infancy stage and that an increase in the minimum wage in 2014 will negatively impact any economic recovery by either limiting available jobs, or worse, creating further job loss.

The measure now goes to the Senate for consideration.  Stay tuned for further developments.

Did You Know…“Primary Purpose” Is The Appropriate Test To Determine Exemption Status Of An Employee

Posted in Wage and Hour

In Heyen v. Safeway, Inc., an action to recover unpaid overtime pay by a former assistant manager, the Court of Appeal affirmed the trial court’s award of overtime pay to Heyen, even though she was classified as an exempt employee while she was employed by Safeway. Heyen claimed that Safeway should have classified her as “non-exempt” because she regularly spent a majority of her time performing checking and bagging duties. Safeway claimed that Heyen was simultaneously managing the store while also performing checking and bagging duties, and therefore her activities should be considered exempt.

Relying on Federal regulations incorporated into Wage Order 7 and the California Supreme Court case Ramirez v. Yosemite Water Co., the Court held that the jury was properly instructed by the trial court that when a party claims an employee is engaged in concurrent performance of exempt and non-exempt work, the jury must consider the time to either be exempt or non-exempt, depending on the “primary purpose” for which the employee undertook the task. Essentially, there is no hybrid category. If the tasks or activities were conducted to supervise employees or ensure smooth functioning of the store, then those activities would be exempt work. However, if the tasks were undertaken for other reasons such as in Heyen, where the employee devoted the majority of her time to non-exempt work so as not to exceed the number of hours budgeted for the store, then those activities are non-exempt.

Heyen reiterates that the burden of proof of showing an employee’s exempt status rests on the employer. To meet its burden, Heyen requires employers to show that the primary purpose of tasks performed by their store managers relate to employee supervision and/or management of the store.

Did You Know…Court of Appeal Applies Brinker To Reverse Denial of Class Certification

Posted in Wage and Hour

On May 10, 2013, the California Court of Appeals in Faulkinbury v. Boyd & Associates reversed its denial of class certification as to meal period and rest period violations in light of the California Supreme Court’s decision in Brinker Restaurant Corp. v. Superior Court.  (Recall, Brinker granted class certification to determine the lawfulness of a uniform rest break policy that allegedly violated the applicable wage order requirements by failing to include the “major fraction” language as directed in the wage order, discussed here.) 

With respect to the meal period violations, plaintiffs alleged that the employer had an unlawful, uniform policy that required employees to sign an on-duty meal period agreement and take on-duty meal periods.  In light of Brinker, the Court held that the claim for meal period violations was amenable to class treatment because the employer’s “on-duty meal policy was uniformly and consistently applied to all . . . employees.”  Faulkinbury at 13.  The Court explained that “the employer’s liability arises by adopting a uniform policy that violates the wage and hour laws. Whether or not the employee was able to take the required break goes to damages, and ‘[t]he fact that individual [employees] may have different damages does not require denial of the class certification motion.’”  Faulkinbury at 15-16 (emphasis added).  This decision arguably runs counter to the Supreme Court’s recent decision in Comcast Corp. v. Behrend, in which the Supreme Court rejected class certification based on plaintiffs’ damages model, as discussed here.  

With respect to rest period violations, plaintiffs alleged that the employer had no formal rest break policy and had an express policy requiring employees “to remain at their posts at all times.”  Faulkinbury at 16-17.  Consistent with its decision as to meal period violations, the Court held that “the lawfulness of [the employer's] lack of rest break policy and requirement that all security guard employees remain at their posts can be determined on a classwide basis.”  Id. at 18.  Employees’ individualized rest break practices would “at most” establish “individual issues of damages, which would not preclude class certification.”  Id. at 18-19.  The employer’s liability, if any, “would arise upon a finding that its uniform rest break policy, or lack of policy, was unlawful.”  Id. at 19.

Did You Know…EEOC Clarified That “Disability” Within the Meaning of the ADA Now Includes Cancer, Diabetes, Epilepsy, and Intellectual Disabilities

Posted in Disability Discrimination

Recently, the U.S. Equal Employment Opportunity Commission (“EEOC”) updated its informal guidance on how the Americans with Disabilities Act (“ADA”) applies to job applicants or employees with cancer, diabetes, epilepsy, and intellectual disabilities.  Since Congress passed the ADA Amendments Act (“ADAAA”) in 2008, the EEOC has received frequent questions from employers regarding how the ADA applies to these conditions.  As discussed in our 2013 Emerging Employment Law Seminar, while the ADAAA did not change the definition of disability, it expanded how the definition should be interpreted to make it easier for an individual to establish that he or she has a disability.  To clarify the implications of this broadened definition, the EEOC revised its question and answer guidance to indicate that employees with cancer, diabetes, epilepsy, and intellectual disabilities “should easily be found to have a disability.”