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Employment Law E-Buzz

Easy-to-digest updates on emerging employer legal issues

Did You Know…Depression Does Not Automatically Qualify An Employee For FMLA Leave

Posted in Court Decisions, Disability Discrimination, Discrimination, Leave Laws

In recent years, employers have been bombarded by increasing numbers of lawsuits by employees with mental disabilities alleging discrimination and retaliation.  These lawsuits are based on a variety of theories including alleging being denied federal and/or state protected medical leave.  In a small blow to this growing trend, however, the Eleventh Circuit recently vacated a $1 million plaintiff’s judgment holding that depression and anxiety is not a “serious health condition” for FMLA purposes where the employee cannot show he or she was also incapacitated by the condition.

In Hurley v. Kent of Naples, Inc., Case No. 13-10298 (11th Cir. March 20, 2014), plaintiff, who suffers from depression, alleged he was wrongfully denied unpaid FMLA leave and terminated.  Although the jury did not find that plaintiff had been wrongfully terminated, the jury did decide that the employer improperly denied FMLA leave.  The jury found that the plaintiff successfully showed he suffered from a serious health condition and gave proper notice under FMLA.  The jury made its finding despite the fact that the plaintiff’s doctor testified that although plaintiff’s condition was chronic, plaintiff was not incapacitated or unable to work.  The doctor added that there was no way to predict future periods of incapacity.  Based on this testimony, the employer moved for a judgment as a matter of law on grounds that plaintiff failed to prove his burden that he qualified for protection under FMLA.  Despite the weight of this evidence, the district court denied the motion.

However, the Eleventh Circuit’s three judge panel overturned what it deemed a “puzzling” verdict.  The Eleventh Circuit sided with the employer.  Plaintiff tried to argue that under the FMLA, it was only necessary for an employee to show he “potentially” qualifies for protection.  The Eleventh Circuit said no.  It found nothing in the FMLA or case law supporting plaintiff’s interpretation.  The Eleventh Circuit held that an employee must “actually” qualify for FMLA, requiring the employee to show that he or she is unable to work as a result of the employee’s serious health condition.

It is not yet known whether plaintiff will appeal this decision and whether other circuits may come up with similar decisions.  However, given that here in California we look to federal cases for much of our guidance on ADA issues, this is an issue we will continue to monitor.  Check back here for updates.

Did You Know…Background Checks – Buyer [Employer] Beware!

Posted in Class Actions, Discrimination, Forms, Litigation, Privacy

As we recently reported at our annual employment law seminar and discussed in “Did You Know…New Informal Guidance From EEOC & FTC Re Background Checks,” background checks are not only the focus of the EEOC and FTC, but also plaintiff class action attorneys.  Underscoring this point is the recent putative class action filed against UBS Financial Services, Inc.

The Plaintiff alleges, on behalf of a class of potentially thousands of members, that UBS violates the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. (“FCRA”) by systematically (1) procuring consumer reports about current or prospective employees and, inter alia, deceptively embedding improper release language, in the consumer consent and disclosure document that UBS requires prospective and current employees to sign prior to ordering a background check; and (2) using employment background checks to make adverse employment decisions without providing the consumer job applicants who are the subjects of the background checks a copy of the report used, along with a summary of his or her rights.  The plaintiff seeks, inter alia, class certification, punitive damages and statutory damages between $100 to $1,000 per violation per class member.

It is critical for employers to be knowledgeable about and compliant with federal, state and local laws/regulations regarding background checks to avoid being the target of such lawsuits.

Did You Know…New Informal Guidance From EEOC & FTC Re Background Checks

Posted in Disability Discrimination, Discrimination, Privacy

As we recently reported at our annual employment law update, additional restrictions are being placed on the use of background checks in light of the potential for disparate impact and invasion of the right to privacy.

Recently, the EEOC and FTC** issued joint informal guidance concerning the issues employers may face when consulting background checks into a worker’s criminal record, financial history, medical history or use of social media. You can access the guidance here for employers and for employees.

Some key points underscored in the guidance:

  1. It is not illegal for an employer to ask questions about an applicant’s or employee’s background except with respect to certain restrictions related to medical and genetic information or to require a background check.
  2. When an employer uses a background check, the employer must be sure to remain in compliance with laws prohibiting discrimination based on the protected categories; i.e., race, color, national origin, sex, religion, disability, genetic information, and age.
  3. When an employer gets a background report from an outside agency it must comply with the Fair Credit Reporting Act [and in California also with the Investigative Consumer Reporting Act].
  4. Employers should ensure that they are seeking the same background information from all individuals, rather than only checking the background of employees or applicants of a certain race or background.
  5. Employers should not request an applicant’s or employee’s genetic information which includes family medical history. And if they do have that information, they should not use it to make an employment decision.
  6. Employers are not to ask any medical questions before a conditional job offer has been made, and only to ask current employees medical questions if there is objective evidence that the employee is unable to do the job or poses a safety risk because of a medical condition.
  7. The EEOC requires employers to preserve records created for one year after the records were made, or after a personnel action was taken, whichever comes later.

It is critical to be certain that as employers you are compliant with both federal, state and local laws regarding obtaining background information with respect to employees and applicants.

**The EEOC enforces the anti-discrimination laws and the FTC addresses background checks under the Fair Credit Reporting Act.

Did You Know…San Francisco “Bans the Box”: Are Your Job Applications Up to Snuff?

Posted in Forms, Legislation, Privacy

San Francisco recently “banned the box” by adopting the Fair Chance Ordinance, which prohibits the popular criminal history check box on employment applications.  Last year, the California Legislature passed Senate Bill 530 and Assembly Bill 218, further limiting the type of information employers may ask job applicants regarding their criminal history.  San Francisco’s Fair Chance Ordinance, however, takes these limitations a bit further.  Under the ordinance, employers with 20 or more employees in San Francisco are prohibited from inquiring into an applicant’s criminal history during the first interview.  Even once employers may inquire into criminal history, they may ask only about misdemeanor and felony convictions that occurred in the last seven years.  Any inquiry into an applicant’s criminal history, whether conducted by the employer or a background check agency, must be disclosed to the applicant.

In light of these changes, make sure to audit and update your job application forms and consult counsel to ensure compliance.

Did You Know…Update Re California Family Rights Act (CFRA) – Proposed Pending Amendments

Posted in Leave Laws

As you know in the past we have provided updates regarding changes with respect to the leave laws. Now on February 21, 2014, California’s Department of Fair Employment and Housing Council published proposed amendments to the CFRA regulations. These regulations are intended to clarify some aspects of the existing regulations and also to adopt many of the recent amendments to the Family Medical Leave Act (FMLA) regulations to make the two acts more consistent. Notwithstanding, there remain some differences between CFRA and FMLA administration. The proposed amended regulations touch on almost every aspect of the CFRA process, addressing, among other things, length of service/eligibility issues, the certification process and timeframes for responding to employee requests for CFRA leave, computation of amount of leave entitlements, key employee issues, clarification of reinstatement rights, maintenance of health and other benefits during leave, retroactive designation of leave, and the interplay between CFRA leave and California pregnancy disability leave. [The proposed amendments cover 11 sections with the following titles/subjects: 1. Definitions, 2. Right to CFRA Leave: Denial of Leave; Reasonable Request; Permissible Limitation, 3. Right to Reinstatement: Guarantee of Reinstatement; Rights Upon Return; Refusal to Reinstate; Permissible Defenses, 4. Computation of Time Periods: Twelve Workweeks; Minimum Duration, 5. Requests for CFRA Leave: Advance Notice; Certification; Employer Response, 6. Terms of CFRA Leave, 7. Relationship between CFRA Leave and Pregnancy Disability Leave; Relationship between CFRA Leave and Non-Pregnancy Related Disability Leave, 8. Retaliation and Protection from Interference with CFRA Rights, 9. Notice of Right to Request CFRA Leave, 10. Relationship with FMLA Regulations, and 11. Certification Form.]

For example, the proposed regulations make it clear that (1) same-sex spouses are covered under CFRA and the FMLA regulations apply to CFRA leave “to the extent not inconsistent” with the CFRA regulations, and (2) a California employer is required to maintain the employee’s group health benefits for the entire time an employee is on pregnancy disability leave and FMLA/CFRA leave, not just during the latter [12 week].

If you have any concerns regarding the proposed amendments, now is the time to speak up. There is a public comment period through June 2, 2014. Comments can be submitted via email to FEHCouncil@dfeh.ca.gov. There will also be two public hearings on the proposed amended regulations: 10:00 a.m. on April 7, 2014 at UC Irvine School of Law, and 10:00 a.m. on June 2, 2014 at the California Public Utilities Commission Main Auditorium in San Francisco. More on the DFEH website.

Stay tuned for further updates……………..

Did You Know…An $80,000 Facebook Post Costs $80,000

Posted in Court Decisions, Social Media

When does a confidentiality provision in a settlement agreement mean what it says? What if you tell your children about your confidential settlement and they post about it on Facebook? Well, here is what just might happen:

Patrick Snay’s daughter cost him $80,000 when she posted about his lawsuit settlement on Facebook. On February 26, the Third District Court of Appeals ruled that Snay’s $80,000 discrimination settlement with his former employer Gulliver Preparatory School was null and void because his daughter breached the terms of the non-disclosure clause when she broadcast the settlement on social media.

In 2010, Snay, now 69, sued Gulliver for age discrimination and retaliation when the school decided not to renew Snay’s employment contract. Gulliver settled the case in November of 2011 and agreed to pay Snay $80,000. Central to the settlement agreement was a detailed confidentiality provision, which provided that the existence and terms of the agreement between Snay and the school were to be kept strictly confidential, and that if Snay or his wife should breach the confidentiality provision, the $80,000 settlement proceeds would be void.

Despite the terms of the confidentiality provision, Snay immediately told his daughter that the case had settled. She, in turn, took to social media to announce the news to her 1,200 Facebook friends, many of whom are current and former Gulliver students:

“Mama and Papa Snay won the case against Gulliver,” she wrote. “Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”

The news made its way back to Gulliver’s attorneys. Four days after the deal was signed, Gulliver notified Snay that the school would not be paying any of the settlement money. Snay initially won an order to enforce the agreement, but the Court of Appeals tossed out the $80,000 settlement last week. “Snay violated the agreement by doing exactly what he had promised not to do,” Judge Linda Ann Wells wrote. “His daughter then did precisely what the confidentiality agreement was designed to prevent.” Read the full opinion here.

This case is a reminder that Facebook – and other forms of social networking sites – are making an increasingly significant mark on the world of litigation. Any information posted by a user, and even information posted by a third-party about a user and his whereabouts, can be used as evidence in a court action.

Did You Know…The Continuing Saga of Arbitration Agreements & Unconscionability

Posted in Court Decisions

In light of the United States Supreme Court decision in AT&T Mobility LLC v. Concepcion, the California Supreme Court recently reversed its own prior decision where it had held that an arbitration agreement that requires an employee to waive the right to a hearing [Berman hearing] before the state labor commissioner is contrary to public policy and unenforceable. Thus, in Sonic-Calabasas A, Inc. v. Moreno, the California Supreme Court held that the Federal Arbitration Act preempts (trumps) California state law categorically prohibiting the waiver of a Division of Labor Standards Enforcement Berman hearing in a mandatory pre-dispute arbitration agreement. However, a majority of the Court held that arbitration agreements can be invalidated where the employee can show that such agreements are found to be unconscionable whenever it is “unreasonably favorable to the more powerful party” so long as the basis for finding the unconscionability does not interfere with “fundamental attributes of arbitration.”

The Court has thus remanded the case to the trial court to determine whether the arbitration agreement in this case was otherwise so unconscionable as to be unenforceable. So stay tuned…

In light of this decision, employers who do not have arbitration agreements should consider whether they should implement them and those with arbitration agreements should revisit them to ensure that they do not contain provisions that could be construed as “unconscionable” and “unenforceable” because they “unfairly advantage” the employer.

Did You Know…Lady Gaga Settles Wage and Hour Claim

Posted in Wage and Hour
As we reported to you earlier in the year during our annual employment seminars, Lady Gaga was sued by her former personal assistant who alleged Lady Gaga violated federal law by failing to pay her overtime for being “on-call” 24/7.  Her personal assistant claimed overtime ”for every hour of every day” beyond 40 hours a week during her 13 months of employment.  As you will recall, at her deposition Lady Gaga testified that her employees work no more than eight hours daily, though the time is spaced out throughout the day.  Per Lady G - ”You don’t get a schedule that is like punch in and you can play f—ing Tetris at your desk for four hours and then you punch out at the end of the day….This is —when I need you, you’re available.”
It should come as no surprise that Lady Gaga settled the lawsuit for an undisclosed confidential amount.   

Did You Know…California Raises Minimum Wage

Posted in Legislation, Wage and Hour

On September 25, 2013, Governor Brown signed AB 10 into law, raising California’s minimum wage from $8 per hour today to $10 per hour by 2016.    

The bill will raise the minimum wage in two separate one-dollar increments: from $8 to $9 per hour effective July 1, 2014, and then from $9 to $10 per hour effective January 1, 2016.

California is the first state to implement a $10 per hour minimum wage, which is considerably higher than the current federal minimum wage of $7.25 per hour.  While most employers in California are subject to both the federal and state minimum wage laws, the employer must follow the stricter standard; that is, the one most beneficial to the employee.  Accordingly, all employers in California who are subject to both laws must pay the higher California minimum wage rate unless their employees are exempt. 
The higher minimum wage will impact more than just the increase to hourly earners in California.  For example, the following areas will be affected by the minimum wage hike:

  • Salary Basis Test for “White Collar” Exemptions: Exempt California employees are required to receive a monthly salary of at least twice the California minimum wage for full-time employment.  Under AB 10, the minimum salary amounts will go up from $33,280 per year today to $37,440 per year by July, 2014, and to $41,600 by January, 2016.
  • Commissioned Salesperson Exemption: To qualify for the commissioned salesperson exemption, employees must earn more than 1.5 times the California minimum wage.  Thus, the minimum earning rate will go up from $12 per hour today to $13.50 per hour on July 1, 2014, and $15.00 per hour by January, 2016.
  • Overtime, Vacation, Sick Leave, Paid Time Off, Meal and Rest Period Premiums: These must be adjusted in light of the increased minimum wage.
  • Employees Who Furnish Tools or Equipment: An employee who is paid at least twice the minimum wage may be required to provide and maintain hand tools and equipment customarily required by his or her trade.  This rate will go up from $16 per hour today to $18 per hour on July 1, 2014, and $20 per hour by January, 2016.
  • Split-Shift Pay: Employers who operate 2 or more shifts in a workday with an unpaid break of more than an hour between them must comply with “split-shift” pay regulations — an extra hour of pay at California’s minimum wage, unless the employee earns more than an hour of extra pay at minimum wage on that workday. 
  • Voluntary Meal or Lodging Agreement: Meals or lodging may not be credited against the minimum wage without a voluntary written agreement between the employer and the employee.  Any such voluntary written agreement will need to be adjusted to reflect the minimum wage increase.
  • Posting Requirement: Employers will be required to post the new wage in an area frequented by employees where it may be easily read during the work day.

Note that certain California cities may impose an even higher minimum wage and/or adjust their minimum wage more frequently.  For example, San Francisco’s current minimum wage rate is $10.55 per hour.  San Jose’s current minimum wage rate is $10.00 per hour, and will increase to $10.15 per hour on January 1, 2013.

Also note that while the California minimum wage provisions apply to public employers (see, e.g., Wage Order Nos. 1-13, 16; Sheppard v. N. Orange County Reg’l Occupational Program), the impact may vary from that outlined above.

Employers should review their compensation policies for all employees—hourly, salaried and exempt—to ensure timely compliance with the new changes in California’s minimum wage.  

See our earlier eBuzz for more information on AB 10.

Did You Know… A New San Francisco Ordinance Imposes a Duty on Employers to Consider and Respond to Employee Requests for Flexible Work Arrangements

Posted in Disability Discrimination, Leave Laws, Wage and Hour

On October 1, 2013, the San Francisco Board of Supervisors approved the Family Friendly Workplace Ordinance, giving employees the right to request flexible work schedules to assist with caregiver responsibilities.  Under the ordinance, San Francisco employers will be required to formally consider and respond to such requests.  San Francisco Mayor Ed Lee has stated that he intends to sign the ordinance into law.  

The San Francisco Board of Supervisors hopes that the Ordinance will alleviate the high attrition rates of families leaving San Francisco.  The Board notes that, according to the 2010 census, children make up only 13.5 percent of the San Francisco population, making San Francisco the city with the lowest population of children of any major city in the United States.  Despite aims of making San Francisco’s workplaces more family-friendly, the Ordinance likely also will increase the already high costs of doing business for employers in San Francisco. The Ordinance will apply to employers who regularly employ 20 or more employees, including part-time employees, within the City of San Francisco.  The Ordinance grants employees who have six or more months of service and work at least eight hours per week a right to request a flexible work schedule to assist with caregiver responsibilities for:

  1. a child;
  2. a parent age 65 or older; or
  3. a spouse, domestic partner, parent, child, sibling, grandparent, or grandchild with a serious health condition. 

Under the Ordinance, eligible employees may request any type of flexible work arrangement, such as an alternative work schedule, part-time employment, telecommuting, job sharing, or a predictable schedule.  Employees have a right to make such requests twice a year, but may make additional requests following the birth or adoption of a child or an increase in caregiver responsibilities for a family member with a serious health condition.  The request must be made in writing, specifically identifying the accommodation requested and how that accommodation assists the employee’s caregiver responsibilities.  

Employers will be required to respond to flexible work schedule requests verbally and in writing.  Within 21 days of receiving a written request, the employer must meet with the employee to discuss the request.  Thereafter, the employer must respond to the request within 21 days, either granting or denying the request.  If the employer denies the request, the response to the request must identify a bona fide business reason for the denial and notify the employee of his or her right to request a reconsideration within 30 days.
While the Ordinance does not provide a private right of action, it makes it unlawful for San Francisco employers to interfere with or retaliate based upon an employee’s request for a flexible work arrangement.  The Ordinance grants the San Francisco Office of Labor Standards Enforcement (“OLSE”) authority to investigate alleged violations and take administrative and legal action to enforce the Ordinance and remedy certain violations.  In addition to injunctive relief, OLSE can impose administrative penalties of $50 per employee per day that the violation continues.  If signed into law as expected, the Ordinance will take effect on January 1, 2014.  As such, San Francisco employers should be aware of new requirements under the Ordinance.