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2018 Best Best & Krieger LLP
Best Best & Krieger
Company/BestBestKrieger
@BBKlaw
Annual Labor & Employment Law Update
December 13, 2018Presented by Best Best & Krieger LLP
Presenters
Joseph [email protected]
Joseph [email protected]
Arlene [email protected]
Elizabeth [email protected]
William “Rick” [email protected]
Isabel [email protected]
Shauna [email protected]
New Legislation
THE NEW BILLS
NEW SEXUAL HARASSMENT, DISCRIMINATION, AND RETALIATION PROTECTIONS
SEXUAL HARASSMENT –PROFESSIONAL RELATIONSHIPSB 224• CURRENT LAW PROHIBITS CERTAIN
PROFESSIONALS, SUCH AS DOCTORS, LAWYERS, AND ACCOUNTANTS, FROM ABUSING THEIR RELATIONSHIP AND ENGAGING IN SEXUAL HARASSMENT
• SB 224 EXTENDS THIS LIST TO ELECTED OFFICIALS, LOBBYISTS, INVESTORS, DIRECTORS, PRODUCERS, AND ANYONE WHO HOLDS HIMSELF OUT AS BEING ABLE TO HELP ESTABLISH A BUSINESS, SERVICE OR PROFESSIONAL RELATIONSHIP
SETTLEMENT OF SEXUAL HARASSMENT CLAIMS - SB 820
• PROHIBITS BROAD CONFIDENTIALITY PROVISIONS IN SEXUAL HARASSMENT SETTLEMENT AGREEMENTS
• TYPICAL NON-DISCLOSURE AGREEMENTS PROHIBITED
• PERTAINS TO SEXUAL ASSAULT, SEXUAL HARASSMENT, GENDER DISCRIMINATION OR RETALIATION FILED IN A COURT OR BEFORE AN ADMINISTRATIVE AGENCY
• DOES NOT PROHIBIT A PROVISION THAT PREVENTS DISCLOSING THE AMOUNT OF SETTLEMENT
WOMEN ON BOARDS - SB 826
• PUBLICLY TRADED COMPANIES REQUIRED TO APPOINT CERTAIN NUMBER OF WOMEN TO BOARD OF DIRECTORS
• AT LEAST ONE FEMALE DIRECTOR BY DECEMBER 31, 2019
• BY END OF 2021:
• IF 6 OR MORE DIRECTORS, AT LEAST 3 FEMALE
• IF 5 DIRECTORS, A MINIMUM OF 2 FEMALE DIRECTORS
• IF 4 OR FEWER DIRECTORS, A MINIMUM OF 1 FEMALE DIRECTOR
TRAINING ON HUMAN TRAFFICKINGAB 2034 & SB 970
• CURRENT LAW REQUIRES THAT CERTAIN TYPES OF BUSINESSES POST HUMAN TRAFFICKING NOTICES WITH REPORTING HOTLINE NUMBERS
• AB 2034 WILL REQUIRE THAT BY 2021 EMPLOYEES OF RAIL AND BUS WHO MIGHT INTERACT WITH VICTIMS ATTEND TRAINING OF AT LEAST 20 MINUTES
• SB 970 WILL REQUIRE THAT BY 2020 EMPLOYEES OF HOTEL AND MOTELS PARTICIPATE IN AT LEAST 20 MINUTES OF TRAINING TO ID, RESPOND AND REPORT HUMAN TRAFFICKING
SEXUAL HARASSMENT – WAIVERS, NON-DISPARAGEMENT, ETC.SB 1300
• MAKES NUMEROUS CHANGES TO CALIFORNIA’S CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT (FEHA) RELATING TO WORKPLACE HARASSMENT CLAIMS.
• PROHIBITS EMPLOYER FROM REQUIRING AN EMPLOYEE, IN EXCHANGE FOR A RAISE, BONUS, OR AS A CONDITION OF EMPLOYMENT TO:
• AGREE NOT TO SUE OR BRING CLAIM UNDER FEHA
• SIGN A NON-DISPARAGEMENT AGREEMENT PREVENTING EMPLOYEE FROM DISCLOSING INFO ABOUT UNLAWFUL ACTS IN WORKPLACE, INCLUDING BUT NOT LIMITED TO SEXUAL HARASSMENT
• MAKES EMPLOYERS LIABLE FOR ANY KIND OF UNLAWFUL HARASSMENT BY NON EMPLOYEES (NOT JUST SEXUAL HARASSMENT) WHERE EMPLOYER KNEW, OR SHOULD HAVE KNOWN, AND DID NOT TAKE REMEDIAL ACTION
What does “any kind of unlawful harassment” include?
HARASSMENT BASED ON OTHER PROTECTED CHARCTERISTICS, INCLUDING, BUT NOT LIMITED TO:
• RACE
• RELIGIOUS CREED
• COLOR
• NATIONAL ORIGIN, and
• ANCESTRY
INCREASED SEXUAL HARASSMENT TRAINING –SB 1343
• BY JANUARY 1, 2020:EMPLOYERS WITH 5 OR MORE EMPLOYEES MUST PROVIDE:
• 2 HOURS TRAINING TO SUPERVISORS, AND
• 1 HOUR TRAINING TO NON SUPERVISORY EMPLOYEES
• WITHIN 6 MONTHS OF HIRE OR PROMOTION
• EVERY 2 YEARS THEREAFTER
HARASSMENT TRAINING MATERIALS – TALENT AGENCIESAB 2338• UNDER AB 2338 TALENT AGENCIES WILL NEED TO PROVIDE
ARTISTS WITH EDUCATIONAL MATERIALS ON SEXUAL HARASSMENT PREVENTION, RETALIATION, AND REPORTING RESOURCES, AS WELL AS NUTRITION AND EATING DISORDERS
• ALL MATERIALS MUST BE PROVIDED WITHIN 90 DAYS IN A LANGUAGE THE ARTIST UNDERSTANDS
• ARTIST BETWEEN 14 AND 17, ALONG WITH THEIR PARENTS OR LEGAL GUARDIANS, WILL NEED TO RECEIVE TRAINING IN SEXUAL HARASSMENT PREVENTION, RETALIATION AND REPORTING PRIOR TO ISSUANCE OF A WORK PERMIT
WAIVERS OF RIGHT TO TESTIFYAB 3109• ANY PROVISION IN A CONTRACT OR SETTLEMENT
AGREEMENT WILL BE DEEMED UNENFORCEABLE IF IT PROHIBITS TESTIMONY ABOUT CRIMINAL CONDUCT OR SEXUAL HARASSMENT IN AN ADMINISTRATIVE, LEGISLATIVE, OR JUDICIAL PROCEEDING
• ONLY COVERS TESTIMONY THAT IS REQUIRED, SUCH AS BY A SUBPOENA OR COURT ORDER, OR IN RESPONSE TO A WRITTEN REQUEST IN AN ADMINISTRATIVE OR LEGISLATIVE HEARING
OTHER NOTABLE EMPLOYMENT BILLS
PAID FAMILY LEAVESB 1123
• EXPANDS EDD’S “PAID FAMILY LEAVE” ENTITLEMENTS BY 2021
• TIME OFF ASSOCIATED WITH BEING CALLED TO ACTIVE DUTY
OR
• A SPOUSE, DOMESTIC PARTNER, PARENT OR CHILD CALLED TO ACTIVE DUTY
• NOT A NEW PROTECTED LEAVE (ALREADY PROVIDED BY FMLA)
CONSTRUCTION INDUSTRY PAGAEXEMPTIONAB 1654• CONSTRUCTION INDUSTRY EMPLOYEES WILL
BE PROHIBITED FROM FILING PRIVATE ATTORNEY GENERAL ACT (PAGA) CLAIMS, IF THEY ARE COVERED BY A COLLECTIVE BARGAINING AGREEMENT
• CAVEAT: TO QUALIFY THE COLLECTIVE BARGAINING AGREEMENT MUST CONTAIN GRIEVANCE AND BINDING ARBITRATION PROCEDURES THAT CAN ADDRESS LABOR CODE VIOLATIONS
LACTATION ACCOMMODATIONSB 1976• CHANGES TO EXISTING LAW
• BEFORE:
• EMPLOYERS REQUIRED TO MAKE “REASONABLE EFFORTS” TO PROVIDE LOCATION OTHER THAN TOILET STALL
• NEW LAW:
• LOCATION MUST BE OTHER THAN BATHROOM
• SHOULD BE A PERMANENT LOCATION
• CAN BE TEMPORARY IF: (UNDUE HARDSHIP)
• UNABLE TO PROVIDE DUE TO OPERATIONS, FINANCIAL OR SPACE LIMITS;
• IT IS PRIVATE AND FREE FROM INTRUSION DURING LACTATION PURPOSE;
• THE TEMPORARY LOCATION IS NOT USED FOR OTHER PURPOSES WHILE USED FOR LACTATION PURPOSE
VERY LIMITED MEAL & REST PERIOD EXEMPTIONS - AB 2605 & AB 2610
• THE RECENT AUGUSTUS (2016) CASE PREVENTS INSTANT COMMUNICATION DEVICES DURING BREAKS. AB 2605 ALLOWS SAFETY-SENSITIVE PETROLEUM INDUSTRY EMPLOYEES TO CARE SUCH DEVICES DURING REST BREAKS, IF THEY ARE ALLOWED TO MAKE UP INTERRUPTED BREAKS
• - AND -
• AB 2610 ALLOWS COMMERCIAL DRIVERS TRANSPORTING FEED IN RURAL AREAS TO DEVIATE FROM THE NORMAL TIMING FOR MEAL PERIODS IF THE DRIVER RECEIVES NO LESS THAN 1.5X OVERTIME WHEN REQUIRED BY LAW
©2016 Best Best & Krieger LLP
Wage & Hour Update
MINIMUM WAGE/OT EXEMPTION INCREASES
� Fair Wage Act of 2016:� $12.00 as of Jan. 2019 (26+)� $13.00 as of Jan. 2020(26+)� Trend to $15 by 2022 (26+)� Several “Off Ramp” Provisions
� White Collar Exemption, Salary Req.:� FLSA — DOL salary threshhold rules
on hold ($23,360/yr still applies)
� California- $49,920/yr as of Jan. 2019 (26+)- $54,080/yr as of Jan. 2020 (26+)
ABC TEST APPLIES TO ESTABLISH WORKERS AS INDEPENDENT CONTRACTORS UNDER STATE IWCORDERS
Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal. 5th 903
• Dynamex operates same-day courier and delivery service.
• Dynamex hired delivery drivers, who were required to provide their own vehicles, pay all of their own transportation expenses. Dynamexobtained customers, set delivery fees. Drivers could set own delivery schedules, make deliveries for other companies.
ABC TEST APPLIES TO ESTABLISH WORKERS AS INDEPENDENT CONTRACTORS UNDER STATE IWCORDERS (Cont.)
• Dynamex paid drivers either a flat fee or percentage of delivery fee.
• Drivers brought class action against Dynamex, claiming violations of state IWC wage order and misclassification of drivers as independent contractors.
• Held:• Supreme Court affirmed lower court
order certifying the class action.
ABC TEST APPLIES TO ESTABLISH WORKERS AS INDEPENDENT CONTRACTORS UNDER STATE IWCORDERS (Cont.)
• “ABC” test will be applied to determine whether workers are “employees” entitled to protection under IWC wage orders.
• Worker is presumed to be “employee” –and not independent contractor – unless the hiring entity establishes:
(A) Worker is free from control and direction of hirer in connection with the performance of the work, both under the contract for performance of the work and in fact; and
ABC TEST APPLIES TO ESTABLISH WORKERS AS INDEPENDENT CONTRACTORS UNDER STATE IWCORDERS (Cont.)
(B) Worker performs work that is outside the usual course of the hiring entity’s business; and(C) Worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.
NONEXEMPT EMPLOYEE ENTITLED TO COMPENSATION UNDER CALIFORNIA LAW FOR OFF-THE-CLOCK DUTIES PERFORMED AS A REGULAR PART OF THE JOB
Troester v. Starbucks Corporation (2018) 5 Cal. 5th 829
• Starbucks employed Troester as a nonexempt shift supervisor
• Starbucks required Troester to perform 4-10 minutes of uncompensated closing tasks each night after clocking out at the end of his shift. Over 17 months, Troester’s unpaid earnings for those off-the-clock tasks totalled $102.67.
NONEXEMPT EMPLOYEE ENTITLED TO COMPENSATION UNDER CALIFORNIA LAW FOR OFF-THE-CLOCK DUTIES PERFORMED AS A REGULAR PART OF THE JOB (cont’d)
• Troester filed a class action on behalf of all nonmanagerial Starbucks employees claiming Starbucks owed them compensation for off-the-clock tasks as “hours worked” under state IWC wage order No. 5-2001.
• Starbucks defended on basis that FLSA “de minimis” rule should apply, since the closing tasks involved insubstantial amounts of time which could not be precisely recorded for payroll purposes.
• Held: • Supreme Court ruled that “de minimis” rule does not
apply to claims for unpaid compensation under State IWC wage orders where a nonexempt employee is required to perform off-the-clock work on a regular basis or as a regular feature of the employer’s job.
NONEXEMPT EMPLOYEE ENTITLED TO COMPENSATION UNDER CALIFORNIA LAW FOR OFF-THE-CLOCK DUTIES PERFORMED AS A REGULAR PART OF THE JOB (cont’d)
• Court left open possibility there may be off-the-clock employee activities which are so irregular or brief in duration that employers may not be reasonably required to compensate employees for time spent on them.
EMPLOYER’S POLICY OF ROUNDING EMPLOYEE HOURS COMPLIES WITH STATE LAW
AHMC Healthcare, Inc. v. Superior Court(2018) 24 Cal. App. 5th 1014
• AHMC operates medical facilities, using an automatic time-clock payroll system that rounds employee time up or down to nearest quarter hour.
• Examples under AHMC system: employee clocking in between 6:53 and 7:07 paid as if she clocked in at 7:00; employee clocking in between 7:23 and 7:37 as if she clocked in at 7:30.
EMPLOYER’S POLICY OF ROUNDING EMPLOYEE HOURS COMPLIES WITH STATE LAW (Cont.)
• Four-year analysis of AHMC time records showed, on a day-by-day basis, majority of hourly employee shifts had time added or unaffected by the rounding procedure.
• Plaintiffs, former AHMC hourly employees, filed class action alleging rounding method violated Labor Code because AHMC did not use exact clock-in and clock-out times to calculate compensable hours.
• Named plaintiffs showed they had lost 3.7 hours and 1.6 hours during the four-year study period.
EMPLOYER’S POLICY OF ROUNDING EMPLOYEE HOURS COMPLIES WITH STATE LAW (Cont.)
• Held:• Appellate court reversed lower court’s denial
of summary judgment for AHMC.• Relying on federal precedent, court stated
that a rounding system comports with California law if system is “fair and neutral” both facially and as applied such that it does not undercompensate employees over time.
• AHMC system was neutral on its face and in fact employees as a whole were significantly overcompensated.
• Appellate court ordered lower court to enter summary judgment in favor of AHMC.
PROPER METHOD FOR CALCULATING OVERTIME ON FLAT SUM BONUS REQUIRES DIVIDING BONUS AMOUNT BY TOTAL NON-OVERTIME HOURS ACTUALLY WORKED
Alvarado v. Dart Container Corporation of California (2018) 4 Cal. 5th 542
• Alvarado earned a flat $15 bonus from his employer Dart by completing full shifts on weekend days.
• The issue here was the method Dart used to calculate the per-hour value of the bonus to be included in an employee’s regular rate for overtime purposes.
• Dart utilized the formula prescribed in federal regulations, as no California regulatory formula currently exists.
PROPER METHOD FOR CALCULATING OVERTIME ON FLAT SUM BONUS REQUIRES DIVIDING BONUS AMOUNT BY TOTAL NON-OVERTIME HOURS ACTUALLY WORKED (Cont.)
• The federal formula uses divisor (A) which equals the number of hours the employee actually works during the pay period, including overtime hours.
• Alvarado sued Dart, claiming Dart’s formula should have used divisor (B) which equals the number of non-overtime hours the employee actually works during the pay period.
• The lower court granted summary judgment for Dart finding that its use of divisor (A) was appropriate. Alvarado appealed.
PROPER METHOD FOR CALCULATING OVERTIME ON FLAT SUM BONUS REQUIRES DIVIDING BONUS AMOUNT BY TOTAL NON-OVERTIME HOURS ACTUALLY WORKED (Cont.)
• Held:• The Supreme Court reversed, ruling that
the divisor (B) was the correct approach. • The Court found alternative (B) more
aptly furthers the state’s policies of discouraging employers from imposing overtime work and interpreting wage and hour laws in favor of protecting employees’ interests.
WAGE DIFFERENTIAL UNDER EQUAL PAY ACT CANNOT BE BASED ON EMPLOYEE’S PRIOR SALARY
Rizo v. Yovino, 887 F. 3d 453 (9th Cir. 2018)• Plaintiff was hired as a math consultant
by defendant County.• County’s salary guidelines consisted of
10 stepped salary levels; a new hire’s salary was determined by taking the hiree’s prior salary, adding 5%, and placing the hiree on the corresponding step of the salary schedule.
WAGE DIFFERENTIAL UNDER EQUAL PAY ACT CANNOT BE BASED ON EMPLOYEE’S PRIOR SALARY (Cont.)
• Plaintiff had been paid an annual $50,630 salary in her prior teaching position. County guidelines dictated she be placed on step 1 of level 1 of the salary schedule. Plaintiff later discovered County had subsequently hired male math consultants at higher salary steps.
• Plaintiff sued County in U.S. District Court, claiming a violation of the Federal Equal Pay Act (Act).
WAGE DIFFERENTIAL UNDER EQUAL PAY ACT CANNOT BE BASED ON EMPLOYEE’S PRIOR SALARY (Cont.)
• The Act prescribes a “catch-all” exception for a differential in pay for equal work which is based on any factor other than sex.
• County defended based on the “catch-all” exception, arguing plaintiff’s salary step placement was driven by her prior salary, and prior salary was a permissible “factor other than sex” justifying her pay differential.
• District Court denied County’s motion for summary judgment, and County appealed.
WAGE DIFFERENTIAL UNDER EQUAL PAY ACT CANNOT BE BASED ON EMPLOYEE’S PRIOR SALARY (Cont.)
• Held:• Ninth Circuit Court of Appeal affirmed, holding
prior salary alone or in combination with other factors cannot justify pay differential under the Act.
• Prior salary factor allows employers to capitalize on persistence of the wage gap and perpetuate that gap ad infinitum – thus undercutting purpose of the Act.
• “Catch-all” exception is limited to legitimate job related factors such as employment experience, ability, or educational background.
Harassment, Discrimination, Retaliation
Wassman v. South Orange County Comm. College Dist. 24 Cal. App. 5th 825 (2018)• District terminated Wassman’s
employment for cause in April 2011• 5-day hearing conducted before ALJ who
issued 20-page decision August 2013 finding cause and upholding the termination
• Wassman filed a writ petition claiming ALJ’s decision wasn’t supported by weight of evidence
Wassman v. South Orange County Comm. College Dist. 24 Cal. App. 5th 825 (2018)• Trial court denied the writ petition• December 2013 Wassmann filed DFEH
charge of race and age discrimination and harassment; sued District and several supervisors for FEHA violations and infliction of emotional distress
• Trial court granted defendants’ motions for summary judgment on grounds (among others) of res judicata/collateral estoppel and statute of limitations
Wassman v. South Orange County Comm. College Dist.24 Cal. App. 5th 825 (2018)• Appellate court affirmed
• Administrative proceedings under the Education Code provide robust platform and evidentiary hearing to challenge adverse employment actions, and judicial review is available
• Where admin hearing possesses the requisite judicial character, the decision is binding in a later civil court action
Meeks v. AutoZone, Inc.24 Cal. App. 5th 855 (2018) • Long-time employee Meeks worked her way
up from customer sales representative to store manager
• 2009 she reported sexual harassment over several years by Fajardo (who had similarly worked up to store manager).
• District mgr (Ledesma) told her Fajardo said it was all a joke and misunderstanding, so Meeks should “just squash it” and tell HR investigator it was all taken care of
Meeks v. AutoZone, Inc.24 Cal. App. 5th 855 (2018) • Meeks testified Ledesma later threatened
to fire Meeks (and her husband) if she took the complaints higher
• Meeks sued AutoZone and Fajardo for sexual harassment and retaliation
• Trial court granted MSA on retaliation; jury returned defense verdict. Meeks appealed both determinations.
Meeks v. AutoZone, Inc.24 Cal. App. 5th 855 (2018) • Appeals court reversed on harassment claims and
remanded for new trial• Affirmed ruling on retaliation – no “adverse action”
• Not just big ticket actions – e.g, firing, demotion, failure to promote – but whole spectrum of employment actions reasonably likely to adversely and materially affect job performance or opportunity for advancement
• Meeks continued to work there, no loss of pay/benefits/ status, never denied a promotion. Although Meeks said Ledesma threatened to fire her, no evidence that threat was acted upon
Abed v. Western Dental Servs .23 Cal. App. 5th 726 (2018)• Abed externed at Western Dental in
Napa while in school; hoped to land permanent position as dental assistant.
• Co-workers learned during externship that Abed was pregnant
• Supervisor later told Abed there were no open positions in Napa, but one existed in Vacaville. Abed did not apply for position at either location
Abed v. Western Dental Servs .23 Cal. App. 5th 726 (2018)• Another extern started 3 weeks after
Abed’s externship ended, and the new extern was offered a permanent position less than a month later
• Abed sued that fall for FEHA pregnancy discrimination, and Western Dental won summary judgment at the trial court due to Abed’s failure to apply for a position. Abed appealed.
Abed v. Western Dental Servs .23 Cal. App. 5th 726 (2018)• Reversed—
• Typically plaintiff in “failure to hire” case must show plaintiff applied for position as part of prima facie case
• However, Abed was not required to do so due to Western Dental falsely telling her no position was available (and thus causing her not to apply)
Arave v. Merrill Lynch(2018) 18 Cal.App.5th 1098• Plaintiff Brent Arave claims he was subjected to unlawful
conduct as a result of his religious beliefs.• Arave files suit for violation of FEHA, i.e., discrimination,
harassment, and retaliation, and for failure to pay wages owed (vacation) at time of separation.
• Jury decides in favor of Merrill Lynch on all claims and trial court rules as follows on Merrill Lynch post-judgment motions:
• Motion for attorneys’ fees on FEHA claims denied• Motion for attorneys’ fees on wage claim granted• Motion for recovery of expert witness costs granted• Motion for costs granted
Arave v. Merrill Lynch
• Court of Appeal ruling:• Attorneys’ fees, costs and expert fees based on FEHA claims were not
recoverable by Merrill Lynch.• Prevailing defendants are entitled to recover attorneys’ fees, expert
fees and costs only when a FEHA claim is found to be frivolous, unreasonable, without foundation or brought in bad faith.
• FEHA is not trumped by Code of Civil Procedure section 998, which provides that expert costs incurred after an offer of compromise is rejected are recoverable if the plaintiff does not recover an amount greater than that which was offered in compromise.
• Attorneys’ fees and cost motion on wage claim remanded to trial court • Per Labor Code section 218.5, prevailing defendants in wage claims
are only entitled to recover attorneys’ fees and costs when there is a finding that the employee brought the wage claim in bad faith. The trial court therefore needed to make such a determination.
Campbell v. State of Hawaii Dept. of Ed. (9th Cir. 2018) 892 F.3d 1005
• Patricia Campbell, a teacher employee of the Hawaii Dept. of Education, claimed that during the 2006-2007 school, while she was teaching music at King Kekaulike High School, she was harassed and degraded by students on the basis of her race (white) and her sex (female) and was physically threatened.
• She reported the student’s alleged misconduct to the administration, in response to which various disciplinary measures were imposed against the students.
• At the same time, Campbell herself with the subject of numerous complaints.
• An investigation determined that Campbell had intimidated and discriminated against students, physically grabbed and verbally abused students, failed to adequately supervise students at school-sanctioned activities and harassed a colleague. However, no action was taken against Campbell and she was allowed to keep her position.
Campbell v. State of Hawaii Dept. of Ed.• On May 7, 2007, Campbell stormed into the office of a vice
principal who was meeting with a student, started yelling and refused to leave.
• Two days later, the vice principal met with Campbell and subsequently gave her a memo documenting the meeting which stated that Campbell had “verbally ragged at” a security officer, and directed Campbell not to “address adults or students on campus in a yelling or ragging manner.”
• Campbell complained, claiming that the words “ragged” and “ragging” were a reference to her menstrual cycle, and that the vice principal had stalked and sexually harassed her.
• An investigation determined that Campbell’s complaint was unsubstantiated. The vice principal’s use of the words “ragged” and “ragging” were not derogatory, but rather were used to mean that Campbell “railed at” or “scolded” others.
Campbell v. State of Hawaii Dept. of Ed. • Before the 2007-2008 school year, Campbell requested
transfer to teach elsewhere on Maui. • Her requests were denied because the positions she
requested were not open during the transfer period and her transfer requests were untimely.
• Unable to transfer, in August 2007 Campbell requested and was granted a 12-month leave of absence without pay due to work related stress. She was subsequently granted a second year of unpaid leave.
• At the end of her second year of leave, Campbell was informed there were not enough music students, so she had to also teach three remedial math classes. She was told she would be terminated if she refused the assignment.
Campbell v. State of Hawaii Dept. of Ed. • Campbell resigned and filed suit, claiming she
had been discriminated against and subjected to a hostile work environment because of her race and sex in violation of Title VII, and that she had been retaliated against for complaining of harassment at the school in violation of Title VII.
• After all of the claims were decided on pre-trial motions in favor of the Defendants, Campbell appealed the rulings on her claims for disparate treatment, hostile work environment, retaliation and sex discrimination.
Campbell v. State of Hawaii Dept. of Ed. • The Court of Appeal affirmed in favor of the
Defendants.• As to the claims of disparate treatment based on sex
and race, retaliation and intentional sex discrimination:
• Campbell failed to establish a prima facie case because she did not show that she was subject to an adverse employment action or that similarly situated individuals outside her protected class were treated more favorably, or as to the retaliation claim, that the decision to investigate her alleged misconduct and the direction to teach remedial math were not neutral decisions and instead were pretexual.
Campbell v. State of Hawaii Dept. of Ed. • As to the hostile work environment claim:
• Even if the comments from the students were sufficient to create a hostile work environment, Defendants could be held liable only to the extent that they failed reasonably to respond to the conduct or ratified or acquiesced in the conduct, neither of which was the case.
• With regard to the vice principal’s use of the words “ragged” and “ragging,” Campbell was ignoring the difference between the well-known phrase “rag” or “rag on” and the potentially offensive phrase “on the rag.” Regardless, the one-time, isolated comments, which were immediately investigated after Campbell complained, would not alone support a claim for a hostile work environment.
Terris v. County of Santa Barbara20 Cal. App.5th 551 (2018)• Shawn Terris was laid off from her employment
with the County of Santa Barbara. She filed a complaint with the County’s Civil Service Commission alleging her termination procedure violated her seniority rights.
• She then filed suit, alleging, among other things, that the County terminated her in retaliation for her workplace complaints in violation of Labor Code section 1102.5
• The trial court found that Terris failed to exhaust her administrative remedies and granted summary judgment in favor of the County. Terrisappealed.
Terris v. County of Santa Barbara20 Cal. App.5th 551 (2018)• Terris argued that she was not required to
exhaust administrative remedies before bringing a Section 1102.5 cause of action.
• She claimed that because Labor Code section 244 stated that claimants aren’t required to exhaust administrative remedies unless the code section expressly requires it, and because Section 1102.5 does not expressly require exhaustion, she was under no obligation to file an internal complaint before filing suit under Section 1102.5.
Terris v. County of Santa Barbara20 Cal. App.5th 551 (2018)• The Court of appeal disagreed.
• Section 244 was enacted to protect the right to sue without first having to exhaust administrative proceedings before the Labor Commissioner, not an employer’s internal administrative remedies.
• In doing so, the Court disapproved a federal trial court’s ruling to the contrary upon which Terrisrelied and resolved conflicting interpretations of the controlling Campbell v. Regents of the University of California case.
• Pursuant to Campbell, employees are required to exhaust their employer’s internal administrative remedies before filing suit. Because she failed to do so, her retaliation claims were barred.
Camacho v. Target Corporation24 Cal. App.5th 291 (2018)• Adrian Camacho filed a workers’ compensation claim
against his employer, Target Corporation. In signing the “Compromise and Release” pre-printed form settling his worker’s compensation claim, Camacho also signed a release contained in an addendum that Target argued released all civil claims.
• Camacho then sued Target alleging claims for harassment, discrimination, and retaliation. The trial court dismissed Camacho’s claims on summary judgment, finding that the addendum Camacho signed constituted a broad release of any and all potential claims that Camacho may have had against Target, including the claims at issue in the suit.
Camacho v. Target Corporation24 Cal. App.5th 291 (2018)• Camacho appealed and the court of appeal reversed.• Camacho did not release non-workers’ compensation claims
in his workers’ compensation settlement. • The pre-printed Compromise and Release stated that
the release did not apply to claims that were not within the scope of the workers’ compensation law, “unless otherwise expressly noted,” and the parties indicated on the form and attached addendum that the Compromise and Release applied only to workers’ compensation matters. There was no reference to claims outside the workers’ compensation system and the language did not show an intention to generally release all claims.
• Accordingly, Camacho was allowed to proceed with his claims.
Disability Discrimination and Medical Leaves
Snapp v. United Transportation Union (9th Cir. 2018) 889 F.3d 1088. • Danny Snapp worked for BNSF as a trainmaster. He was
diagnosed with sleep apnea and unable to work. • He commenced a long-term leave and obtained benefits
from the carrier. After five years, the carrier discontinued benefits. Snapp requested that BNSF reinstate his benefits, but BNSF declined and directed Snapp to talk to the carrier.
• BNSF gave him 60 days to secure another position within the company or be terminated. He did not apply for any open positions or request accommodation, but he did ask to displace a senior yardmaster. Since he did not have the requisite seniority, BNSF denied that request. After the expiration of the 60-day period, BNSF terminated his employment.
Snapp v. United Transportation Union (cont’d )• Snapp sued under the ADA for failure to provide reasonable
accommodation. At trial, the jury decided in favor of BNSF, and the Ninth Circuit affirmed.
• The Court held that to prevail at trial, an employee alleging failure to accommodate must prove: (1) that the employee is a qualified individual; (2) the employer received notice of the employee’s disability; and (3) a reasonable accommodation was available that would not create an undue hardship for the employer.
• Note that a different result may have been obtained under California law. FEHA, unlike the ADA, makes it unlawful for an employer to fail to engage in the interactive process. By contrast, the ADA has no standalone cause of action for failure to interact.
Hernandez v. Rancho Santiago Community College (2018) 22 Cal.App.5th 1187• Marisa Hernandez worked for Rancho Santiago Community
College District as an administrative assistant. She was required to complete a one-year probationary period, during which District policy contemplated performance reviews at specified intervals (three months, seven months, and eleven months). Pursuant to the District’s personnel rules, Hernandez would be considered a permanent employee after completing 12 months of probation.
• Eight months into her probationary period and with the District’s approval, Hernandez commenced a temporary disability leave to undergo surgery for a work-related injury. She requested three to four months of leave, which meant that she was scheduled to return on, or shortly after, the anniversary of her hiring date. The District terminated her while she was on leave.
Hernandez v. Rancho Santiago Community College (cont’d)• Hernandez sued the District under FEHA,
alleging failure to provide reasonable accommodation and failure to engage in an interactive process. At the conclusion of a bench trial, the trial court found in Hernandez’ favor and awarded her $723,746 in damages.
• On appeal, the District argued that it was compelled to terminate Hernandez’ employment because she otherwise would have automatically become a permanent employee without obtaining the requisite performance evaluations.
Hernandez v. Rancho Santiago Community College (cont’d)• The Court of Appeal disagreed, finding that
the District could have (1) extended her probationary period by the length of her leave and (2) conducted the evaluations upon her return to work after she completed a full 12-months of employment.
• The Court of Appeal also concluded that the District failed to engage in the interactive process because there was no exchange of information before the District reached its decision to terminate her employment.
Nunies v. HIE Holdings, Inc ., ___ F.3d ___, 2018 WL 5660628 (Nov. 1, 2018)• Herman Nunies worked as a delivery driver
for HIE Holdings, Inc. as a delivery driver. In June 2013, Nunies requested to transfer from his full-time position to a part-time warehouse position. HIE approved the transfer. A few days later, Nunies informed his manager that he was having shoulder pain. Two days after that, HIE rescinded the transfer and forced Nunies to resign on the basis that the driver position had been eliminated due to budget cuts.
Nunies v. HIE Holdings, Inc .(cont’d)• Nunies filed a lawsuit in federal court
against HIE, alleging disability discrimination under the ADA and Hawaii state law. He alleged both “regarded as” and “actual” disability theories.
• The trial court granted summary judgment to HIE, concluding that Nunies failed to provide any evidence that his employer subjectively believed he was substantiallylimited in a major life activity.
Nunies v. HIE Holdings, Inc .(cont’d)• The Ninth Circuit reversed, finding that the trial court applied
outdated law. Under current ADA law, an individual need not establish that the employer believed the individual was substantially limited – being limited in a major life activity is sufficient.
• The Ninth Circuit also reversed on the disability discrimination claim, finding that Nunies offered sufficient evidence of a substantial limitation since he experienced stabbing pain whenever he raised his arm above chest height.
• This case was based on the ADA, but the same result would likely have been reached under FEHA, which does not require a “substantial” limitation – for both actual and “regarded as” claims, any limitation of a major life activity will suffice.
EEOC v. BNSF Railway Co . (9th Cir. 2018) 902 F.3d 916• Russell Holt received a conditional job offer from
BNSF for the position of Senior Patrol Officer. This offer was contingent on Holt’s satisfactory completion of a post-offer medical review. During that medical review, Holt disclosed a previous back injury. Holt’s primary care doctor, his chiropractor, and the doctor BNSF hired to examine Holt all concluded that Holt had no current limitations and found no need for follow-up testing.
• Despite that, BNSF demanded that Holt submit to an MRI of his back – at his own cost – as a condition of accepting employment. Holt could not afford to pay for the MRI (which would have cost $2,500). As a result, BNSF revoked his offer of employment.
EEOC v. BNSF Railway Co . (cont’d)• Holt filed a charge with the EEOC, which sued on his behalf
in federal district court for alleged violations of the ADA.• The district court granted summary judgment in favor of the
EEOC on a disability discrimination theory and awarded nationwide injunctive relief, requiring BNSF to bear the cost of procuring any additional information deemed necessary to complete a medical qualification evaluation for any prospective employee.
• On appeal, the Ninth Circuit agreed with the district court and held that BNSF could not require Holt to pay for the cost of an MRI. The Ninth Circuit also found that injunctive relief was appropriate and remanded to the district court to make findings as to the proper scope of the injunction.
Dunlap v. Liberty Natural Products, Inc . (9th Cir. 2017) 878 F.3d 794• Tracy Dunlap worked as a shipping clerk at
Liberty Natural Products, Inc. During her employment, Dunlap began experiencing pain in her elbow and filed a workers’ compensation claim. She was diagnosed with problems in both elbows and received modified duty for two years. Her workers’ compensation claim was eventually accepted and then closed. One month later, Liberty terminated Dunlap’s employment. She requested reinstatement to her former or another suitable position, but that was denied.
Dunlap v. Liberty Natural Products, Inc . (cont’d )• Dunlap sued Liberty for disability discrimination and
related theories under the ADA and Oregon state law.
• The trial court granted summary adjudication to Liberty as to four claims (three workers’ compensation-related and one whistleblowing). The case went to a jury trial on the remaining three claims for disability discrimination, “regarded as” discrimination, and failure to reinstate. The jury returned a verdict for Dunlap on the disability discrimination claim and in Liberty’s favor on the other two. The trial court reduced Liberty attorneys’ fees to account for her limited success on the merits. Both parties appealed.
Dunlap v. Liberty Natural Products, Inc . (cont’d)• On appeal, Liberty argued that the trial
court improperly conflated the elements of a disability discrimination claim and a failure to accommodate claim. Liberty argued that the jury should have been separately instructed as to the different elements of each claim.
Dunlap v. Liberty Natural Products, Inc . (cont’d)• The Ninth Circuit noted that separate jury instructions would have been
ideal, but it was harmless error because Liberty was on notice of Dunlap’s physical limitations and accompanying restrictions, which triggered Liberty’s duty to engage in the interactive process. For that reason, the jury would have reached the same verdict had they received the appropriate instruction.
• Liberty also argued that Dunlap failed to meet her burden to show that a reasonable accommodation was available. The Ninth Circuit disagreed. Once an employer is aware of the need for accommodations, the employer has a duty to engage in the interactive process to identify reasonable accommodations. Dunlap produced evidence that assistive devices could have allowed her to perform her duties, and Liberty failed to discuss or otherwise pursue any of these options before terminating Dunlap’s employment.
• As for Liberty’s attorneys’ fees, the Ninth Circuit held that it was appropriate to reduce her fees by 50% to account for her limited success on the merits. She ultimately prevailed on only one of her five claims.
Caldera v. Dept. of Corrections and Rehabilitation (2018) 25 Cal.App.5th 31• Augustine Caldera worked for the California
Department of Corrections and Rehabilitation as a correctional officer. Caldera has a speech impediment and stutters when he speaks. Over a period of about two years, a supervisor at the prison, Sergeant Grove, publicly mocked Caldera’s stutter about a dozen times. Caldera filed a formal complaint about Grove’s actions with CDCR. Two days later, Caldera learned that Grove was to be reassigned to the same hall where Caldera was assigned. Despite asking for Grove to be assigned elsewhere, the prison declined. Grove continued to mock Caldera’s stutter.
Caldera v. Dept. of Corrections and Rehabilitation (cont’d )• Caldera (who remained employed at the
prison) filed a lawsuit against CDCR, alleging claims for disability harassment, failure to prevent harassment, and retaliation. The jury found in Caldera’s favor on all three claims. CDCR appealed, arguing that the evidence did not rise to the level of severe or pervasive harassment.
• The Court of Appeal disagreed, concluding that Caldera was publicly and repeatedly mocked in front of other employees.
Caldera v. Dept. of Corrections and Rehabilitation (cont’d )• The jury verdict was upheld because
Caldera was subjected to unwanted harassing conduct based on his disability; the harassment was severe and pervasive; a reasonable person in Caldera’s position would have considered the work environment to be hostile or abusive; a supervisor participated in the harassing conduct; and CDCR failed to take reasonable steps to prevent the harassment.
©2016 Best Best & Krieger LLP
Tax Update
Changes in 2019
• Bipartisan Budget Act of 2018 • Eases the rules on hardship withdrawals from 401(k) plans
• Distributions permitted for other types of distributions beyond employee salary deferrals (e.g., QNEC, QMAC, safe harbor and earnings).
• Eliminates 6 month suspension. • Eliminates requirement that participant first obtain a plan loan.
• Effective on first day of plan year beginning in 2019, January 1, 2019 for plans operating on a calendar year basis.
• No changes to 457(b) plan unforeseeable emergency withdrawals.• Action items if 401(k) plan sponsor wishes to permits hardship
withdrawals: • Update hardship distribution procedures.• Coordinate with record keepers to ensure implementation.• If offered, plan sponsors must amend their plans by the last day
of the first (second for governmental plans) plan year beginning on or after January 1, 2019.
Retirement Plan Changes due to California Wildfires
• Bipartisan Budget Act of 2018 • Qualified Wildfire Distributions
• For distributions made between Oct. 8, 2017 and Dec. 31, 2018.• Qualified Individual:
• During any portion of the period from Oct. 8, 2017 to Dec. 31, 2017,• Principal residence in located in California wildfire disaster area, • Sustained an economic loss due to the wildfires.
• Can take a distribution up to $100,000; not subject to 10% penalty; can repay within 3 years, otherwise included in income over 3 years.
• Plan Loans• Limits increased to $100,000 for Qualified Individuals from Feb. 9, 2018 to
Dec. 31, 2018. • Repayment of loans for Qualified Individuals made between Oct. 8, 2017 and
Dec. 31, 2018 may be delayed by 1 year.
• If offered, plan sponsors must amend their plans (same timeline as prior slide).
California Rule
• Federal & State Constitutions prohibit the State (or local governments) from impairing contracts.
• In Kern v. Long Beach (1947), California Supreme Court holds right of a public employee to a pension benefit is a right based on contract principles.
• The Court also established that “the right to a pension becomes a vested one upon acceptance of employment.”
• Two step analysis: (1) Is there a vested contractual right, and if so, (2) is the impairment unconstitutional?
• Lower court cases have interpreted the California Rule to prohibit any change in benefits or at least to set a very high bar for changes.
• However, the California Supreme Court has held that prior to retirement, an employee does not obtain “any absolute right to fixed or specific benefits, but only to a substantial or reasonable pension”.
California Rule
• Could we be seeing a change to the California Rule in the next year?
• Cal. Fire Local 2881 v. CalPERS (2016)• Marin Assoc. of Public Employees v. MCERA (2016)• Alameda County Dep. Sheriffs Assoc. v. ACERA (2018)• McGlynn v. State of California (2018)• Hipsher v. LACERA (2018)
• All five cases before the California Supreme Court challenge changes made by AB 340 (pension reform) that impact classic/legacy employees.
• The Cal Fire case had oral arguments on December 5, 2018. • Line of questioning suggests that Court will side with State –
that no vested right to purchase “air time” existed. • Line of questioning also appears to be looking ahead to
Alameda case.
News Laws
• AB 1912 (JPAs)• Current and former members of a JPA must be responsible for
the retirement obligations of the JPA.• Amends Joint Exercise of Powers Act to provide that member
agencies must agree on allocation of total retirement liability upon the occurrence of certain specified events.
• If member agencies cannot agree, retirement board is empowered to apportion liability.
• Applies retroactively.• AB 2696 (Out of Class Appointments)
• Amends Gov’t Code Section 20480 (PERL only) to increase penalties for noncompliance with “out of class appointments.”
• Increased penalties effective January 1, 2019.
New Laws
• AB 2310 (Cost-Sharing)• Amends Gov’t Code Section 20516 effective January 1, 2019. • Changes requirement for an exact percentage. Permits the
use of a methodology for calculating the cost-sharing rate. • Single contract amendment sufficient even for subsequent
cost-sharing agreements.• Employer must provide CalPERS a signed letter ratified by
union and employer indicating exact percentage at least 90 days prior to effective date.
• SB 1413 • Establishes the California Employers’ Pension Prefunding
Trust Fund effective January 1, 2019. • Mechanism to allow public employers to prefund pension
liabilities similar to the CERBT for OPEB liabilities.
©2016 Best Best & Krieger LLP
Public Agency
Ochoa v. County of Kern (2018) 22 Cal.App.5th 235• Deputy Ochoa was reported by a young woman for harassment
and Ochoa's supervisor, Sergeant Bittle, looked further into her allegations on March 25, 2013
• Dept launched a criminal investigation into Ochoa’s conduct and provided Ochoa with a Notice of Proposed Disciplinary Action on August 11, 2014
• POBRA requires that an investigation and notice of intended disciplinary action must occur within one year after a person authorized to initiate an investigation discovers the alleged misconduct
• Ochoa argued that the Dept’s notice was untimely• Dept argued that it did not authorize Bittle to initiate an
investigation into Ochoa • Court held that the Notice of Proposed Disciplinary Action was
untimely because Bittle’s inquiries into Ochoa triggered POBRA’sone year statute of limitation
Perez v. City of Roseville (9th Cir. 2018)882 F.3d 843
• Perez was discharged after an internal affairs investigation was conducted into her romantic relationship with fellow officer - both officers were married to other people
• Evidence that Perez’s supervisors had reviewed the report and made comments that they disproved of Perez’s extramarital conduct
• Perez sued for sex discrimination under state and federal law• A police department can only take disciplinary action against an
officer for private off-duty sexual involvement with another officer if it impacts job performance or if there is a narrowly tailored regulation in place prohibiting such conduct
• City did not have an anti-fraternizing policy, instead relied on general performance standards and terminated her for unsatisfactory work performance and conduct unbecoming
Whitehall v. County of San Bernardino (2017)17 Cal.App.5th 352
• Mary Whitehall, a social worker, collected evidence including medical data and photos, for a case she was working on and provided this evidence to her supervisor who told her to withhold certain photos and alter others
• Whitehall provided Deputy County Counsel with a copy of the photographs and filed a motion to inform juvenile court that the County had perpetrated fraud on the court
• Whitehall was placed on paid leave for two months and she resigned before being terminated
• Whitehall sued the County claiming that it violated Labor section 1102.5• 1102.5 prohibits employers from retaliating against an employee who
discloses improper government activity• Court held that County placing Whitehall on paid administrative leave
constituted an adverse action • Courts will look at the effects of the paid administrative leave to determine
whether being away from the workplace is a “substantial adverse change in the terms and conditions” of their employment
Mount Lemmon Fire District v. Guido (2018)139 S.Ct. 22
• In 2009, Mount Lemmon laid off Captains John Guido and Dennis Rankin - the two oldest firefighters in the Dept at the time
• They filed a claim with EEOC citing the ADEA• The District argued that Guido and Rankin were not let go due to age
and that ADEA did not apply to the District because it employed less than 20 people
• ADEA defines “employer” as “a person engaged in an industry affecting commerce who has twenty or more employees for each working day.”
• ADEA states that an employer “also means (1) any agent of such a person, and (2) a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State.”
• Supreme Court held that “also means” adds a new category of employers under ADEA’s purview and applies to state and political divisions without a numerical limit like it does to private businesses
Estill v. County of Shasta (2018) 25 Cal.App.5th 702• Estill was terminated from her employment with County and filed a
government claim with the County on February 23, 2012 claiming that she first became aware of the relevant incidents on September 9, 2011
• County denied her government claim • Estill sued the County for invasion of privacy and harassment
• During her deposition, County became aware that Estill learned of the underlying incidents in 2009, not in 2011 as her claim had indicated
• County moved to dismiss Estill’s lawsuit on the basis she did not timely present her claims
• Court dismissed the case agreeing with the County that Estill did not timely file her government claim
• Ignorance of a defendant’s true identity is not sufficient to delay filing of a lawsuit because Estill could have listed the individual as a Doe defendant
Barone v. City of Springfield (9th Cir. 2018)902 F.3d 1091
• A community service officer, Barone, alleged that the City retaliated against her after she responded at a public event to a citizen inquiry about racial profiling by the Police Dept
• Barone was suspended from work and had to sign a Last Chance Agreement which prohibited her from making negative comments about the Dept, City, or other employees
• Barone sued the City for First Amendment retaliation and imposing an unlawful prior restraint
• In order to prove retaliation an employee needs to demonstrate: • She spoke on a matter of public concern• As a private citizen• That the relevant speech was a substantial or motivating factor in the City’s
decision to terminate her employment
• Court held that because the employee was speaking at an event due to work duties and appeared in uniform, she was speaking as an employee
• But court agreed that because the City’s proposed LCA restricted the employee’s speech on a matter of public concern without proper justification it was an unconstitutional prior restraint
Groundbreaking Supreme Court Decision: Janus v. AFSCME
• Mandatory union agency fees declared unconstitutional.
• Forcing employees to endorse ideas and positions they objected to violated their First Amendment right to free speech.
• Employee must affirmatively consent to pay the union dues.
SB 866: California Legislature’s Response to Janus
• Employee must submit any request regarding union dues to the union and not employer.
• Any “mass communication” sent to employees or applicants concerning their rights to join union require “meet and confer.”
• Do not communicate with employees about payment of dues or Janus case. Refer employees back to union.
SB 866: California Legislature’s Response to Janus
• Unions required to indemnify public employers against claims regarding dues deductions made in reliance on Union information.
• Date, time, and location of new employee orientation sessions are confidential.
-AB 119
• SB 285: Unlawful for a public employer to deter or discourage public employees from becoming or remaining members of an employee organization.
Napa Valley Community College(2018) PERB Dec. No. 2563 -E
• Held employees who have rightful access to their employer’s email system in the course of their work have the right to use the e-mail system to engage in EERA-protected communications on non-working time.
• E-mail has become a “natural gathering place” for employee conversations like lunch rooms and employee lounges.
Thank you for attending .
