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Employee Benefit Plans

I oftentimes get questions about employee benefit plans, such as health insurance plans and retirement plans. ERISA laws–the Employee Retirement Income Securities Act–govern employer provided benefit and welfare plans. Although I can answer some basic questions about ERISA plans, and have even litigated a couple of cases with ERISA issues, I rely on experienced ERISA attorneys for the best advice and representation regarding employee benefit plans.

Attorneys Handling Employee Benefit Plans

One of my favorite ERISA lawyers is Ruth Silver Taube. Ruth is a valuable resource with a wealth of information. I regularly refer clients to her, and have always received positive feedback about her knowledge, advocacy and advice. At her website she gives a brief description of ERISA Plans:

There are two types of  employee benefit plans.  One is an “employee welfare plan,” and the other is “an employee pension benefit plan.”  ERISA Section 3(3), 29 U.S.C. 1002(3).  An “employee welfare benefit plan” is any “plan, fund, or program” which is “established or maintained by an ‘employer’” or an “employee organization” (union etc.) or both for the purpose of providing benefits to employees such as medical, dental, disability, vacation, etc.  ERISA Section 3(1), 29 U.S.C. 1002(1).   Long term disability (“LTD”) plans provided by the employer or employee organization or union are employee welfare benefit plans and are covered by ERISA.

Ruth has been particularly useful in handling Long-Term Disability plans. She knows how to get to the heart of a matter and advocates zealously for her clients. It’s no wonder she has had so many successful resolutions. I can’t recommend Ruth enough. I’m not in the habit of blogging about hiring another attorney, but if you have an employee benefit plan question, you can’t go wrong contacting Ruth.

If you’re in the East Bay, you should also consider contacting Cassie Ayeni Springer. I got to know Cassie at a recent Alameda County Bar Association event and was immediately impressed with her knowledge and attitude regarding representing clients. I had the opportunity to refer an employee benefit plan case to Cassie recently, and received high praise from the client regarding Cassie’s command of the issues.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

 

IMDb Halts Age Discrimination Law

New Age Discrimination Law in the Entertainment Industry

In 2016, the California legislatures passed AB 1687, “to ensure that information obtained on an Internet Web site regarding an individual’s age will not be used in furtherance of employment or age discrimination.”  The statute prevents IMDb from publishing factual information (information about the ages of people in the entertainment industry) on its website for public consumption. Although Governor Brown signed the new age discrimination law, IMDb sued the government, arguing the statute violated its first amendment rights.

Injunction Prohibiting Enforcement of Age Discrimination Law

On February 22, 2017, U.S. District Court Judge Vince Chhabria issued an injunction prohibiting the government from enforcing the statute. According to Judge Chhabria’s order, “it’s difficult to imagine how AB 1687 could not violate the First Amendment.” Although the government established a valid “goal” of limiting age discrimination, the government failed to show that the restriction is “actually necessary” to serve a compelling government interest. The government “presented nothing to suggest that AB 1687 would actually combat age discrimination (much less that it’s necessary to combat age discrimination).” The court held “there is an exceedingly strong likelihood that IMDb will prevail in this lawsuit.”

So, for the time being, IMDb can continue to publish the ages of actors. I guess Hollywood will have to find another way to combat age discrimination in the entertainment industry. The judge’s order, although not the conclusion of the litigation, is a definite preview of how the court views this new age discrimination law.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

 

Fair Pay Act Investigations

California recently enacted new standards to combat discriminatory pay practices. California’s Fair Pay Act prohibits paying any employee less than the amount paid to employees of the opposite sex, race or ethnicity for doing “substantially similar work.” Employers have the burden of demonstrating that pay differential are based entirely and reasonably upon:

  • Seniority system, merit system, or system that measures earning by quantity or quality of production; or
  • Bona fide factor that is not based on or derived from sex-based differential compensation and that is job-related and consistent with business necessity.

Fair Pay Act Presentation

I recently attended a great presentation sponsored by the Alameda County Bar Association where Hillary Benham-Baker, Jamie Rudman and Carolyn Rashby did an excellent job describing the interplay between the various state and federal statutes, regulations and orders regarding equal pay. Jamie described a speaking engagement where Julie Su, California’s Labor Commissioner, discussed enforcing California’s Fair Pay Act. The Labor Commissioner discussed what questions Deputy Labor Commissioners would typically ask during Fair Pay Act investigations to determine what constitutes “substantially similar work.” I asked Jamie’s permission to share the information, as they represent excellent questions employers should ask themselves when evaluating whether they are complying with the law.

Fair Pay Act Questions To Determine What Constitutes “Substantially Similar Work”

·         What are the actual tasks performed for each job?  What percentage of time is spent on each?

·         What experience, training and education are required for each job?

·         What knowledge is required to perform each job?

·         What kinds and amounts of physical and/or mental effort are required for each job?  Is one job more physical difficult or stressful?

·          What programs, equipment, tools or products are required for each job? What training is needed to use the programs, equipment, tools or products?

·         What is the working environment?  Does one job involve an exposure to hazards or damages?

·         Does one job require supervision of other employees?

·         What is the difference in terms of the job obligations, levels of authority and/or degrees of accountability?

·         What are the programs, equipment, tools or products used for each job?

·         What kinds and amounts of physical and/or mental effort required for each job?

Employers need to understand what constitutes substantially similar work so they can properly evaluate whether or why employees should be paid the same. Pay disparities must be justified by legitimate business reasons.

If you have questions about equal pay, fair pay or any other employment-related issues, contact me at your convenience.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

PAGA Lawsuits Not Subject to Arbitration

PAGA Lawsuits

The Labor Code Private Attorneys General Act (PAGA) authorizes aggrieved employees to file PAGA lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations. Employees pursuing PAGA claims must follow specified requirements. Labor Code Sections 2698 – 2699.5.

Courts enforce employer-mandated arbitration agreements more often than before. Attorneys representing employees generally view arbitration as a less-favorable place for resolving disputes. They usually prefer to be in court. A recent California Court of Appeals decision held that a PAGA lawsuit is not subject to arbitration. The court opened with:

Bernadette Tanguilig, an employee at Bloomingdale’s, Inc. (Bloomingdale’s), filed a representative action on behalf of herself and fellow employees pursuant to the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.), alleging several Labor Code violations by the company. Bloomingdale’s moved to compel arbitration of Tanguilig’s “individual PAGA claim” and stay or dismiss the remainder of the complaint. The trial court denied the motion. We affirm. Under Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian) and consistent with the Federal Arbitration Act (FAA) (9 U.S.C. et seq.), a PAGA representative claim is nonwaivable by a plaintiff-employee via a predispute arbitration agreement with an employer, and a PAGA claim (whether individual or representative) cannot be ordered to arbitration without the state’s consent.

Iskanian and PAGA Lawsuits

Bloomingdale’s argued Iskanian was wrong under more recent U.S. Supreme Court decisions. On appeal, the company dropped it’s argument that it was distinguishable from Iskanian because the employee had the ability to opt out of the arbitration process. The court disagreed.

[W]e are bound by the Iskanian court’s interpretation of the pre-Iskanian United States Supreme Court decisions cited by Bloomingdale’s. Finally, we note that the Ninth Circuit has ruled that Iskanian correctly decided the federal question, thus superseding conflicting prior federal district court decisions cited by Bloomingdale’s. (See Sakkab v. Luxottica Retail North America, Inc., supra, 803 F.3d at p. 427.)

An essential point in Iskanian and Tanguilig is that PAGA lawsuits are not a dispute between an employer and an employee arising out of their contractual relationship. “It is a dispute between an employer and the state.” The employee is merely acting as a “deputized” agent of the state. Since the state did not sign an arbitration agreement with the employer, the company cannot force the state’s agent–e.g., the employee–into arbitration.

I can think of a couple of different unintended consequences of this analysis. For now, however, I’m keeping those close to my chest as I have a couple of ongoing cases where I may need to use the arguments. No sense giving away all my trade secrets.

Employers wishing to use arbitration agreements should review the agreements with counsel. Not all arbitration agreements are alike, and employees may be able to void an arbitration agreement as unconscionable. I anticipate seeing many more arbitration cases in the upcoming years. If you have an arbitration agreement you would like reviewed, or if you are considering using an arbitration agreement, feel free to contact the Nuddleman Law Firm, P.C.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

 

California Employers Cannot Designate Choice of Law or Venue

What is a Choice of Law or Venue Provision?

Many contracts, including employment contracts, contain choice of law and/or a venue provisions. A choice of law provision directs a court which state’s laws apply. A venue provision dictates where to try the case. For example, even though you work in California, your employment contract could follow Massachusetts law. The contract could also require litigation in Texas. Courts generally enforce choice of law and venue provisions unless it violates a fundamental public policy.

Why Employers Like Choice of Law and Venue Provisions

Employers like choice of law and venue provisions for two main reasons:

  1. They allow the employer reasonable certainly of consistency regarding which laws, and how those laws, will be applied.
  2. They allow the employer to move a case to a more favorable forum.

For employees, a choice of law provision deprives the employee access to California’s more beneficial laws.

On September 25, 2016, Governor Brown signed sB 1241 prohibiting employers from forcing employees to sign choice of law or venue provisions requiring litigation outside California.  Effective January 1, 2017, SB 1241 adds Labor Code section 925, which states:

(a) An employer shall not require an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would do either of the following:

(1) Require the employee to adjudicate outside of California a claim arising in California.

(2) Deprive the employee of the substantive protection of California law with respect to a controversy arising in California.

(b) Any provision of a contract that violates subdivision (a) is voidable by the employee, and if a provision is rendered void at the request of the employee, the matter shall be adjudicated in California and California law shall govern the dispute.

(c) In addition to injunctive relief and any other remedies available, a court may award an employee who is enforcing his or her rights under this section reasonable attorney’s fees.

(d) For purposes of this section, adjudication includes litigation and arbitration.

(e) This section shall not apply to a contract with an employee who is in fact individually represented by legal counsel in negotiating the terms of an agreement to designate either the venue or forum in which a controversy arising from the employment contract may be adjudicated or the choice of law to be applied.

(f) This section shall apply to a contract entered into, modified, or extended on or after January 1, 2017.

Effect of Prohibition again Non-California Choice of Law and Venue Clauses

There are two significant areas where I have seen choice of law provisions make a big difference in litigation: Non-competition/non-solicitation clauses and arbitration clauses.  California is one of the toughest states when it comes to non-compete clauses. Most other states allow an employer to prevent an employee from working with a competitor. In California, such agreements are usually void. As a result, companies oftentimes require litigation in more favorable states. In some cases, my clients were prevented from working for employers because the non-competition clauses were upheld in other states. New Labor Code 925 prevents that from happening.

I wrote several arguments about the enforceability of arbitration clauses in California. Although California courts seem to be currently favoring arbitration–or at least allowing it–there is still significant efforts to keep employment cases out of arbitration in California. Employers have an easier time enforcing arbitration agreements in other states. This new law will make it more difficult for companies to move employment cases into arbitration.

Choice of Law and Venue Choice OK If Employee Attorney Involved

The new Labor Code contains an exception for cases where the employee “is in fact individually represented by legal counsel in negotiating the terms of an agreement.” The statute doesn’t specify whether the attorney must actually negotiate the terms, or whether the employee needs to simply consult with an attorney regarding the negotiations. I expect that may come up in future cases. Don’t be surprised if this provision is challenged in court on other grounds. I also question whether courts in other states will even enforce the new Labor Code.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

The Magnificent Seven Wage and Hour Rules

The Magnificent Seven

The Magnificent Seven is one of my all-time favorite movies. The story is timeless and has been adapted several times. Yes, I know the Magnificent Seven is an adaptation of Akira Kurosawa’s Seven Samurai. Even Pixar came out with it’s own version in A Bug’s Life. I never tire of the story-line and the actors in the original Magnificent Seven. I even bare a scar on my forehead from when my brother tired to imitate James Coburn’s knife throwing skills. Thankfully the butt-end of the screwdriver hit me instead of the other end. Thanks, David!

When I saw the remake coming out with some of my current favorite actors, it definitely made my “must-see” list. It also got me thinking: what other Magnificent Sevens are worth considering?

The Magnificent Seven Wage and Hour Rules

Those familiar with my law practice know that I represent a lot of employers and employees regarding wage and hour disputes. I also frequently present seminars to attorneys, HR staff and payroll specialists regarding how to pay employees correctly. Therefore, I thought it would be fun to provide my Magnificent Seven Wage and Hour Rules.

In no particular order, here is my list of seven wage and hour rules to follow if you want to avoid problems in the workplace:

  1. Only pay a salary to employees if they are truly exempt from overtime.
  2. Keep accurate records of the hours worked for at least 4 years.
  3. Have policies in place providing for regular rest and meal breaks, and have employees clock out for unpaid meal breaks.
  4. Just because you think someone is an independent contractor, doesn’t mean the government or the courts will agree.
  5. Know if local ordinances require different rules for employees working in different cities and counties.
  6. Commission and bonus agreements should be in writing and identify when a commission or bonus is earned.
  7. Tips belong to the employees, not to the employer!

Employing workers in California can be difficult. Most employers make mistakes out of good intentions rather than evil objectives. Regardless of the intent, however, employers are responsible for following state and federal wage and hour laws. Hopefully this short list will help employers and employees avoid the most common wage and hour problems.

Now, go buy your ticket for the new Magnificent Seven. I don’t know if Denzel Washington, Chris Pratt and Ethan Hawke can match Yul Brynner, Steve McQueen and James Coburn, but I’m sure it will be a good time.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

New Employment Laws in California

As usual, the California legislature has been busy this year.  Recently, Governor Brown signed several new employment laws in California.  The following is a brief summary of the new employment laws.  More will certainly follow.

New Employment Laws in California

Wage Payments for Security Guards

Employers must pay most employees at least twice a month (semi-monthly). Employers can choose to pay employees every two weeks (bi-weekly) or even weekly. Under Labor Code Section 201.3, temporary service employers are required to pay employees weekly.  On July 26, 2016, Governor Brown signed AB 1311 expanding Labor Code section 203.1 to apply to certain security guards .

This new law took effect immediately upon enactment as an urgency statute.

Civil actions for Human Trafficking

Victims of human trafficking can bring a civil action for damages and other appropriate relief.

AB 1684 allows the DFEH to investigate, mediate, and prosecute human trafficking complaints. The DFEH can also recover damages for the victims of human trafficking.

This new employment law goes into effect January 1, 2017.

Work Experience Education and Job Shadowing

16-years old students can receive credit for completing a work experience education program. Students can “job shadow” for a maximum of 25 hours in a specified period.

AB 2063 expands the job shadowing to 14-year olds with the school principal’s certification.  AB 2063 also increases the hours to 40 hours in a specified period with the principal’s certification.

This new employment law goes into effect January 1, 2017

Wages: Itemized Statements

Employers must provide accurate itemized statements to employees containing specified information. The wage statements must show the total hours worked. Salaried employees exempt from California’s overtime requirements do not have to have their total hours on the pay stubs.

AB 2535 adds computer software workers, outside salespeople and certain family members to the list of employees who do not have receive pay stubs showing the total hours worked.

Workers’ Compensation Independent Medical Reviews

Under California’s workers’ compensation system, if a treatment or diagnostic service remains disputed after a 3rd physician’s opinion, the injured employee can request an independent medical review. Existing law requires the review to use standards established in statute or use the American College of Occupational and Environmental Medicine’s Occupational Medicine Practice Guidelines.

SB 914 deletes the authorization to use the American College of Occupational and Environmental Medicine’s Occupational Medicine Practice Guidelines as standards for those independent medical reviews.

Deaf or Hard-of-Hearing Individuals

Several statutes use the term “hearing impaired,” or a close variation of that term. AB 1709 replace the term “hearing impaired” with the term “hard of hearing,” or a close variation of “hard of hearing,” and makes other technical, nonsubstantive changes in those provisions.

Wage Investigations and Subpoenas

Existing law authorizes the Labor Commissioner to subpoena witnesses and documents. If a person fails to comply with a subpoena the superior court can compel the witness to testify or for the production of documents.

SB 1342 allows cities and counties to delegate that body’s authority to issue subpoenas and to report noncompliance to a judge for enforcement.

These are just some of the new employment laws the California legislature has and will adopt for 2016. This is a good time to review your policies and procedures.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. Use of this website for communication does not establish an attorney-client relationship. Do not send confidential or time-sensitive information via this website. Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

 

Service Advisors Exempt from FLSA

Encino Motorcars, LLC is an automobile dealership. Encino’s service advisors filed a lawsuit alleging that Encino violated the FLSA by failing to pay them overtime compensation when they worked more than 40 hours in a week. At issue in this case is whether the Department of Labor’s interpretation of the service advisor exemption is valid.

History of Service Advisors Exemption under the FLSA

The Fair Labor Standards Act (FLSA) requires employers to pay over­time compensation to covered employees who work more than 40 hours in a given week. In 1966, Congress enacted an exemption from the overtime compensation requirement for “any salesman, parts-man, or mechanic primarily engaged in selling or servicing automo­biles” at a covered dealership. Congress authorized the Department of Labor to promulgate necessary rules, regulations, or orders with respect to this new provision. The Department exercised that authority in 1970 and issued a regulation that defined “salesman” to mean “an employee who is employed for the purpose of and is primarily engaged in making sales or obtaining orders or contracts for sale of the vehicles . . . which the establishment is primarily engaged in selling.” 29 CFR §779.372(c)(1) (1971).

The regulation excluded service advisors, who sell repair and maintenance services but not vehicles, from the ex­emption. Several courts, however, rejected the Department’s conclusion that service advisors are not covered by the statutory exemption. In 1978, the Department issued an opinion letter departing from its previous position and stating that service advisors could be exempt under 29 U. S. C. §213(b)(10)(A). In 1987, the Department confirmed its new interpretation by amending its Field Operations Handbook to clarify that service advisors should be treated as exempt under the statute. In 2011, however, the Department issued a final rule that followed the original 1970 regulation and interpreted the statutory term “salesman” to mean only an employee who sells vehicles. 76 Fed. Reg. 18859. The Department gave little explanation for its deci­sion to abandon its decades-old practice of treating service advisors as exempt under §213(b)(10)(A).

Does the FLSA Apply to Service Advisors?

Encino argued that the FLSA overtime provisions do not apply because service advisors are covered by an exemption in §213(b)(10)(A).The District Court granted the motion, but the Ninth Circuit reversed in relevant part. Deferring under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, to the interpretation set forth in the 2011 regulation, the court held that service advisors are not covered by the §213(b)(10)(A) exemption.

The Ninth Circuit held that section 213(b)(10)(A) must be construed without placing controlling weight on the Department’s 2011 regulation.

According to the court:

When an agency is authorized by Congress to issue regulations and promulgates a regulation interpreting a statute it enforces, the interpretation receives deference if the statute is ambiguous and the agency’s interpretation is reasonable. See Chevron, supra, at 842–844. When Congress authorizes an agency to proceed through notice-and-comment rulemaking, that procedure is a “very good indicator” that Congress intended the regulation to carry the force of law, so Chevron should apply. United States v. Mead Corp., 533 U. S. 218, 229–230. But Chevron deference is not warranted where the regulation is “procedurally defective”—that is, where the agency errs by failing to follow the correct procedures in issuing the regulation. 533 U. S., at 227.

One basic procedural requirement of administrative rulemaking is that an agency must give adequate reasons for its decisions. Where the agency has failed to provide even a minimal level of analysis, its action is arbitrary and capricious and so cannot carry the force of law. Agencies are free to change their existing policies, but in explaining its changed position, an agency must be cognizant that longstanding policies may have “engendered serious reliance interests that must be taken into account.” FCC v. Fox Television Sta­tions, Inc., 556 U. S. 502, 515. An “[u]nexplained inconsistency” in agency policy is “a reason for holding an interpretation to be an arbitrary and capricious change from agency practice,” National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U. S. 967, 981, and an arbitrary and capricious regulation of this sort re­ceives no Chevron deference.

Applying those principles, the Ninth Circuit determined that the 2011 regulation was issued without the reasoned explanation that was required in light of the Department’s change in position and the significant reliance interests position that service advisors are exempt from the FLSA’s overtime pay requirements. Employers had negotiated and structured compensation plans against this background understanding. In light of this background, “the Department needed a more reasoned explanation for its decision to depart from its existing enforcement policy.” The Department instead said almost nothing. It did not analyze or explain why the statute should be interpreted to exempt dealership employees who sell vehicles but not dealership employees who sell services. “This lack of reasoned explication for a regulation that is inconsistent with the Department’s longstanding earlier position results in a rule that cannot carry the force of law, and so the regulation does not receive Chevron deference.”

This is not the first time the DOL has changed courses and reinterpreted the law. In this instance, the court found that the DOL’s failure to include a reasoned explanation regarding the change of course was sufficient to render the DOL’s interpretation void.

State Bar’s Guide to Kids and the Law

Every year the California State Bar publishes several  guides regarding different areas of the law.  The State Bar recently published it’s annual “Kids and the Law Guide.”  The guide has several useful topics such as:

  • The Age of Majority
  • Alcohol and Kids
  • Bikes, Skateboards and Scooters
  • Cars, Kids and Traffic Laws
  • Child Abuse and Neglect
  • Civil Laws and Lawsuits
  • Criminal Law and Crimes
  • Curfew Laws
  • Drugs and Kids
  • Emancipation
  • Fighting
  • Hate Crimes and Hate Speech
  • The Internet, Cell Phones and Computers
  • Parents’ Rights and Responsibilities
  • Privacy and Kids
  • Schools and School Rules
  • Work, Work Permits and Taxes

State Bar’s Kids and the Law Guide

I started reviewing the annual guide regarding Kids and the Law when I taught a high school class as part of a law school course I took at Santa Clara University School of Law.  The guide was very helpful in identifying topics for discussion with my students.  Now that I have kids of my own, the guide reminds me how important it is for my children to understand their rights and responsibilities.  I have not represented a significant number of minors in the workforce, and most of my employer clients do not employ minors beyond the occasional son or daughter. Reviewing the section on work permits is always a good refresher.  Since I am scoutmaster for my sons’ boy scout troop, I may use different portions of the guide to help educate the scouts.

You can download the Kids and the Law Guide in English or Spanish.  You can also order multiple copies of the guide.

Anyone with children, or who works with children or has responsibility for children should take a look and consider reviewing the information with their family and friends.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

 

Inability to Work Under Particular Supervisor Not a Disability

A California court recently reaffirmed that the inability to work under a particular supervisor because of anxiety and stress related to the supervisor’s standard oversight of job performance—is not a disability recognized under California’s Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.).

Higgins-Williams worked as a clinical assistant for Sutter Medical Foundation’s Shared Services doing patient intake. In 2010, Higgins told her doctor she was stressed because of interactions at work with human resources and her manager.  Her doctors diagnosed her as having adjustment disorder with anxiety, and Higgins went on a stress-related leave of absence under the California Family Rights Act and the Family Medical Leave Act. The doctor reported Higgins’ disabling condition as “…stress[] when dealing with her Human Resources and her manager.”

When Higgins returned to work, she received her first negative performance evaluation since she began working at Sutter.  Higgins believed she was being singled out, and that her supervisor “was curt and abrupt with plaintiff, while being open and friendly with plaintiff’s coworkers, and gave plaintiff a disproportionate share of work.”  Plaintiff requested a transfer to a different department for “…forever”), a schedule of 9:00 a.m. to 6:00 p.m., and another leave of absence.  Plaintiff made the requests in order to accommodate her alleged disability: adjustment disorder with anxiety.

Sutter granted the leave of absence, but refused to transfer her to a different department with a different manager.  Higgins’ doctor continued to extend the leave of absence because Sutter never agreed to transfer Higgins to a different department with a different manager.  The doctor opined that although Higgins could return to work as a clinical assistant, the doctors was concerned about Higgins’ ability to do so in the same department as her regional manager.  Sutter eventually terminated Higgins because there was no indication Higgins would ever be able to return to her job.

Inability to Work Under Particular Supervisor Not a Disability

Higgins sued Sutter for disability discrimination and failure to accommodate.  The appellate court held:

An employee’s inability to work under a particular supervisor because of anxiety and stress related to the supervisor’s standard oversight of the employee’s job performance does not constitute a disability under FEHA, citing Hobson v. Raychem Corp. (1999) 73 Cal.App.4th 614, 628 [“the inability to perform one particular job, or to work under a particular supervisor, does not constitute a qualified disability” under FEHA].

Because the court determined the plaintiff did not have a “disability,” the remaining disability-related causes of action were dismissed.

California and federal law define “disability” very broadly, but that doesn’t mean every stress or anxiety requires an accommodation.  When the requested accommodation is a different supervisor, courts are reluctant to hold an employer liable for disability discrimination.  Employers must take every request for a disability accommodation seriously.  When properly conducted, the employer and employee should engage in an interactive process to determine what reasonable accommodations will enable the person to perform the essential functions of the job.

The Nuddleman Law Firm represents employers and employees regarding disability accommodations and discrimination.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.