MyOHR 2012 Employment Law Update

1. MyOHR2012 Employment Law Update Presented by: Felicia R. Reid, Esq. Curiale Hirschfeld Kraemer LLP 727 Sansome St. San Francisco, CA 94111 (415) 835-9024 / freid@chklawyers.com

2. Agenda • Wage/Hour Developments • New Background Check Laws • Social Media Issues • EEO • Sexual Harassment • Leaves of Absence • Disability Discrimination • After Acquired Evidence Defense

3. WAGE/HOUR DEVELOPMENTS: Wage Theft Prevention Act • New hires must receive information in writing: • Rates of pay & basis, i.e., hour, shift, day, week, salary, piece including overtime rates • Regular paydays • Credits toward minimum wage, i.e., meals, lodging • The employer’s designated regular payday • Employer name, including dba • Employer address for main office/ppb & mailing • Employer’s telephone number • Workers compensation carrier name, address, phone

4. WAGE/HOUR DEVELOPMENTS: Wage Theft Prevention Act • Written notice must be provided to current employees whenever any required information changes. • Wage statement or other writing reflecting new information is sufficient • Applies to private sector non-exempt & non-union employees only • DLSE optional new hire information form available at http://www.dir.ca.gov/dlse/Governor_signs_Wage_Theft_Protection_Act_of_2011.html • See FAQs at http://www.dir.ca.gov/dlse/FAQs-NoticeToEmployee.html

5. WAGE/HOUR DEVELOPMENTS: Commission Agreements • Effective January 1, 2013 • If wages include commissions there must be a written & signed contract stating the method by which commissions are computed and paid • “Commission” does not include short-term productivity bonuses paid to retail clerks (“splifs”) or profit sharing plans • Employee must be given copy of signed contract & sign a receipt for it. • Most important components of commission plan: when commissions ware “earned” and termination provisions.

6. WAGE/HOUR DEVELOPMENTS: Changes to Certain Minimum Wages • No increase in CA minimum wage of $8.00, but increases in AZ, CO, FL, MT, OH, OR & WA • San Francisco Living Wage Ordinance: $10.24/hour • Computer Professional Exemption +2.5% • $38.89 per hour • $81,026.25 annual salary • Physicians & Surgeons paid hourly $70.86/hour

7. WAGE/HOUR DEVELOPMENTS: California Law Applies To Any Work In State • Sullivan v. Oracle, 51 Cal.4th 1181 (2011) • Plaintiffs were residents of CO & AZ who worked for Oracle as instructors providing training to customer across U.S., including CA • Lawsuit claimed they were misclassified as exempt teachers & Oracle owed them daily overtime under CA law for their work in CA • Held: Non-exempt employees who do not reside in CA but who spend whole days or workweeks working in CA for California-based employer are entitled to overtime for CA work in accordance with CA overtime laws. But not entitled to CA overtime for work elsewhere. • Other issues: meal, rest, travel time?

8. WAGE/HOUR DEVELOPMENTS: Administrative Exemption Possibly Alive & Well • Harris v. Superior Court, Cal. Supreme Ct. 12/29/11 • Issue: Are insurance claims adjustors whose work involves investigating claims, determining coverage, and setting reserves “production workers” who are not eligible for the administrative exemption from overtime? • Held: Not necessarily. • Court rejects exclusive reliance on “administrative/production dichotomy” as a “strained attempt to fit the operations of modern-day post-industrial service-oriented businesses into an analytical framework formulated in the industrial climate of the 1940s.” • Work need not be performed at a policy level to be administrative in nature, and also includes advising management, planning, negotiating and representing the company.

9. WAGE/HOUR DEVELOPMENTS: Reporting Time Pay Clarification • Aleman v. Airtouch Cellular, Cal. Ct. App. 12/21/11 • Reporting Time Pay Rule: Each day employee reports for work and is furnished less than 1/2 scheduled day’s work, employee is entitled to pay for ½ scheduled day’s work, but no less than 2 or more than 4 hours pay. • Issue: When employee attends a 1 to 1.5-hour meeting on a day he was not regularly scheduled to work, where the meeting was scheduled four days in advance, is he entitled to four hours pay? • Held: No. The “regularly scheduled” workday is the scheduled 1-1.5 hour meeting, because it was scheduled in advance. Meetings always were at least half the length they were scheduled for. • The relevant workday is not the employee’s usual workday, when he worked a full eight hours. • But if employee were called in without advance notice, then the usual workday would be the “regularly scheduled workday” of 8 hours.

10. BACKGROUND CHECKS: New Laws & Limits • Employers now prohibited from obtaining credit report as part of applicant or employee background check. Exceptions for positions: • That are managerial & qualify for executive exemption • Having regular access to bank, credit card, SSN# or DOB • That involve being signatory on employer’s bank or credit card account, authorized to transfer money and/or enter into financial contracts • With access to confidential & proprietary information • With regular access to $10,000 cash during workday • Where law requires obtaining information in consumer credit report • Government employees: law enforcement, DOJ • All background check notice/authorization forms must have website address of consumer reporting agency (phone number, if none)

11. SOCIAL MEDIA: NLRA Issues • Section 7 of the National Labor Relations Actprotects all employees (not just unionized employees) from retaliation for engaging in “concerted activity” for “mutual aid and protection.” • According to National Labor Relations Board: • Comments made on social media websites that pertain to the terms and conditions of employment, and that are not made solely on the employee’s own behalf, are protected activity under section 7. Individual gripes not protected. • Social media policies that prohibit negative or disparaging comments about the employer, supervisors, employees, etc., are overbroad and violate section 7.

12. Another NLRA Issue To Know About • Effective April 30, 2012, all employers (even non-unionized) are required to post “Employee Rights Under the National Labor Relations Act,” a new poster from the NLRB. • Information and a copy of the poster is available at https://www.nlrb.gov/poster

13. EEO: New Laws • “Gender” as a protected category under FEHA • Now includes “gender identity” and “gender expression” • “Gender expression” = a person’s gender-related appearance and behavior, whether or not stereotypically associated with assigned sex at birth. • Employers must allow employees to dress consistently with gender identity and gender expression • “Genetic information” as a protected category under FEHA • Genetic tests of the individual or his/her family members • Manifestation of disease or disorder in family members • Receipt of genetic services (including clinical study) by individual or family member • GINA “safe harbor” language for medical certifications

14. EEO: SCOTUS on Associational Retaliation • Thompson v. American Stainless, 131 S.Ct. 863 (2011) • Issue: Does Title VII’s prohibition on retaliation extend to lovers, etc.? • Answer: Yes. • Prohibition applies to employer actions that might dissuade a reasonable worker from making or supporting a discrimination charge. • A reasonable worker might be dissuaded from making a charge if she knew her fiancee would be fired • Court refuses to establish a “fixed class” of relationships for which retaliation is unlawful

15. EEO: SCOTUS on “Cats Paw” Liability • The “Cat’s Paw” Fable • Cat’s Paw Doctrine: Employer is liable when a biased lower-level supervisor uses senior decision-maker to achieve discriminatory termination. • Staub v. Proctor Hospital, 131 S.Ct. 1186 (2011). • Parties agreed decision-maker not biased • 7th Circuit: bias of lower level supervisor can be attributed to decision-maker only if there was “blind reliance” & here there wasn’t because he performed own evaluation • Unanimous reversal: Ultimate decision-maker’s independent use of judgment does not negate the ill-intent of the lower level supervisor if the supervisor’s acts were the “proximate cause” of termination, i.e., employee would not otherwise have come to attention of decision-maker but for supervisor’s animus

16. Sexual Harassment: California Courts on What It Takes • Brennan v. Townsend & O’Leary, 191 Cal.App.4th 133 (2011). • Occasional incidents of boorish behavior are insufficient to support a verdict of sexual harassment • Fuentes v. AutoZone, Inc., 2011 Cal.App. LEXIS 1437 (11/16/11) • Conduct occurring over only three-week period can still rise to severe or pervasive level if bad enough • Kelly v. The Conco Companies, 196 Cal.App.4th 191 (2011) • Sexually themed crude and offensive speech without disparate treatment does not create sexual harassment liability under FEHA.

17. LEAVES OF ABSENCE: What’s New • PDL • Health benefit continuation required during entire Pregnancy Disability Leave • Does not count against 12 week CFRA benefits? • Organ/bone marrow donor leave • 15 or more employees • 5 business days of paid leave for bone marrow donors • 30 business days of paid leave for organ donors • Employer may require use of up to 2 weeks of accrued paid time off for organ donation and 5 days for bone marrow donation

18. LEAVES OF ABSENCE: FMLA Cases • Brookdale v. Senior Living Communities, 2012 U.S. App. LEXIS 492 (11th Cir. 1/10/12). • Employee not yet eligible for FMLA can sue for unlawful interference with FMLA rights when employer terminated her after she informed it of pregnancy • Pre-eligibility requests for post-eligibility leave are protected • Righi v. SMC Corp. of America, 632 F.3d 404 (7th Cir. 2011) • Employee who provides vague notice of need to take FMLA-qualifying leave cannot ignore employer’s legitimate attempts to obtain full information to confirm leave is FMLA-qualifying

19. Disability Discrimination: Drugs and Insanity • Lopez v. Pacific Maritime Assn, 2011 U.S. App. LEXIS 19620 (9th Cir. 2011) • Employer may permanently refuse to consider an applicant who fails a pre-employment drug screening, despite subsequent rehabilitation. • Wills v. Superior Court, 194 Cal.App.4th 312 (2011) • Employer entitled to take action against employee for disability-caused misconduct involving threats of violence • Compare Gambini v. Total Renal Care: Employer violates the ADA when terminating employee for disability-caused insubordination

20. After Acquired Evidence Defense: Some Good News • Salas v. Sierra Chemical Co., 196 Cal.App.4th 29 (2011) • At hire, employee gave a fake Social Security Number on I-9 form and other tax documents • Sued for disability discrimination after he was laid off and not rehired, and fake SSN was revealed in discovery • Held: Employee was not lawfully qualified for the job in the first place, so had no claim for disability discrimination. • Caution: Result very different for claims that employee suffered damage during employment, such as claims for unpaid wages and sexual harassment, because being qualified for job is not a requirement for them

21. QUESTIONS

22. Felicia R. Reid • Partner, Curiale Hirschfeld Kraemer LLP • 727 Sansome St. • San Francisco, CA 94111 • Direct dial: (415) 835-9024 • Email: freid@chklawyers.com • Firm website: http://chklawyers.com/