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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.

 

New Labor Law Posters for San Francisco

Every year, federal and state employment laws alter the landscape for employers. More recently, cities and counties have entered the mix with their own rules and regulations. Companies doing business in San Francisco are likely familiar with the ever-changing rules and posters.  Effective July 1, 2016, there are some new labor law posters for San Francisco companies that must be displayed in the workplace.  Which posters you have to display depends on how many employees you have working in San Francisco.

San Francisco Labor Law Posters

You can obtain nice laminated posters from various sources, but you have to be sure the posters are up to date and appropriate for your location and the size of your company. Alternatively, you can hunt around the Internet to find the new labor law posters. In order to make it easy for you, I’m including links to the new labor law posters for San Francisco in this article with a brief description of when you need the poster.  The links and posters are accurate as of July 1, 2016, but as I’ve said before, the laws keep changing so it is always a good idea to check with an employment law specialist.

San Francisco Minimum Wage Notice with New $13.00 per hour Minimum wage

On July 1, 2016, pursuant to Proposition J, which passed in 2014 with more than 76% of the vote, San Francisco’s minimum wage increases to $13.00.  All employers, regardless of where they are located, must pay their employees who perform work in San Francisco the San Francisco minimum wage.

The current SF Minimum Wage Notice can be downloaded here.

San Francisco has a helpful FAQ about the SF Minimum Wage requirements.

San Francisco Health Care Security Ordinance (HCSO) Notice with Rate Increases for 2016

Businesses with 20 or more employees (and nonprofit organizations with 50 or more employees) must spend a minimum amount on health care benefits for each of their “covered employees” – generally, those employees who work 8 or more hours per week in San Francisco and have been employed for more than 90 days. Employers with 20-99 employees must spend at least $1.68 for each hour payable for each covered employee. Employers with 100+ employees must spend at least $2.53 for each hour payable for each covered employee. These expenditures must be made for each employee within 30 days following the end of each calendar quarter.

The current SF HCSO can be downloaded here.

You can find more information regarding the SF HCSO, including reporting requirements, here.

San Francisco Family Friendly Workplace Notice

The San Francisco Board of Supervisors passed the Family Friendly Workplace Ordinance (FFWO) on October 8, 2013 and it became effective on January 1, 2014. This ordinance gives certain employees the right to request a flexible work arrangement and gives the employer the right to refuse for legitimate business reasons.

The FFWO requires that employers with 20 or more employees allow any employee who is employed in San Francisco, has been employed for six months or more by the current employer, and works at least eight hours per week on a regular basis to request a flexible or predictable working arrangement to assist with caregiving responsibilities. The employee may request the flexible or predictable working arrangement to assist with care for:

  1. a child or children under the age of eighteen;
  2. a person or persons with a serious health condition in a family relationship with the employee;  or
  3. a parent (age 65 or older) of the employee.

The official notice can be downloaded here.

The SF Office of Labor Standards Enforcement has a helpful FAQ regarding the FFWO.

San Francisco Paid Sick Leave Notice

The San Francisco Paid Sick Leave Ordinance became effective on February 5, 2007.  All employers must provide paid sick leave to each employee (including temporary and part-time employees) who performs work in San Francisco. Although statewide Paid Sick Leave Requirements went into effect on July 1, 2015, employers with employees performing work in San Francisco are required to comply with both laws. Unfortunately, compliance with the statewide Paid Sick Leave Requirements does not guarantee compliance with San Francisco Paid Sick Leave Ordinance.

The official poster that must be posted in the workplace can be downloaded here.

There is a helpful FAQ regarding the SF Paid Sick Leave Ordinance compared to the California paid sick leave requirements.

Knowing which labor law posters to post and when to get updates is not always easy. Hopefully this article will help companies comply with the posting requirements for the various labor law posters in San Francisco.

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.

Workplace Rules that Violate the NLRA: Conduct Toward Management

Last week I wrote about workplace confidentiality rules that the NLRB’s General Counsel says violate the NLRA (National Labor Relations Act).  This week, we are looking at the same report and what it has to say about workplace rules regarding conduct toward management.

Employees have Section 7 right to criticize or protest their employer’s labor policies or treatment of employees.  According to the General Counsel,” rules that can reasonably be read to prohibit protected concerted criticism of the employer will be found unlawfully overbroad.”  The GC goes on to say:

a rule that prohibits employees from engaging in. “disrespectful,” “negative,” “inappropriate,” or “rude” conduct towards the employer or management, absent sufficient clarification or context, will usually be found unlawful.

Citing Casino San Pablo, 361 NLRB No. 148, slip op. at 3 (Dec. 16, 2014).

As with the confidentiality rules, the General gives several examples of rules regarding conduct toward management that he believes violate the NLRA and examples of rules that do not violate the NLRA.

Rules that Violate the NLRA

  • “Be respectful to the company, other employees, customers, partners, and competitors.”
  • Do “not make fun of, denigrate, or defame your co-workers, customers, franchisees, suppliers, the Company, or our competitors.”
  • “Be respectful of others and the Company.”
  • No “[d]efamatory, libelous, slanderous or discriminatory comments about [the Company], its customers and/or competitors, its employees or management.
  • “Disrespectful conduct or insubordination, including, but not limited to, refusing to follow orders from a supervisor or a designated representative.”
  • “Chronic resistance to proper work-related orders or discipline, even though not “Refrain from any action that would harm persons or property or cause damage to the Company’s business or reputation.”
  • overt insubordination” will result in discipline.
  • “[I]t is important that employees practice caution and discretion when posting content [on social media] that could affect [the Employer’s] business operation or reputation.”
  • Do not make “[s]tatements “that damage the company or the company’s reputation or that disrupt or damage the company’s business relationships.”
  • “Never engage in behavior that would undermine the reputation of [the Employer], your peers or yourself.”

Rules that Do Not Violate the NLRA:

  • No “rudeness or unprofessional behavior toward a customer, or anyone in contact with” the company.
  • “Employees will not be discourteous or disrespectful to a customer or any member of the public while in the course and scope of [company] business.”
  • “Each employee is expected to work in a cooperative manner with management/supervision, coworkers, customers and vendors.”
  • “Each employee is expected to abide by Company policies and to cooperate fully in any investigation that the Company may undertake.”
  • “Being insubordinate, threatening, intimidating, disrespectful or assaulting a manager/supervisor, coworker, customer or vendor will result in” discipline.

Confused yet?  Does it seem that some of the lawful rules are extremely close to the unlawful rules? You’re not alone.  It’s difficult to tell the difference in many examples.

When drafting workplace conduct policies, employers should be mindful that employees have the right to complain about their workplace and share their experiences and opinions regarding management and the company.  Limiting an employee’s right to complain about management will likely violate the NLRA.  Employers have to consider the impact of workplace rules on employee rights and find an appropriate balance.

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.

 

New Law Promises More Liability for Employee Wages

California has been a pioneer in terms of enforcing the state’s wage and hour laws.  No sooner is a problem identified than a new law is passed to resolve the problem. This year, the governor signed SB 588 to help ensure employers pay employees the wages they are owed.  It creates powerful enforcement mechanisms for the Labor Commissioner, but it also expands who can be sued when an employee thinks s/he is owed wages.

New Law Promises More Liability for Employee Wages

The new law promises more liability for employee wages by making employers, directors, officers and managing agents responsible for unpaid wage claims.

SB 588 creates Labor Code section 588.1, which provides:

Any employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be held liable as the employer for such violation.

In other words, directors, officers and managing agents of the employer can be personally liable for the failure to pay wages owed.  This new law may apply to any persons that have control over an employee’s wages, and will make it easier for employees to sue a variety of people to recover allegedly unpaid wages.  The move is seen as a strong tool in the effort to ensure employees are paid properly.  Unfortunately, in the wrong hands, it can also mean more individuals will be sued even when they were “just following orders.”

SB 588 also gives the Labor Commissioner the power to mail a notice of levy to anyone possessing any credits, money, or property belonging to the judgment debtor, or who owe any debt to the judgment debtor at the time they receive the notice of levy.  For example, if a customer owes the employer money, and the employer fails to pay the Labor Commissioner’s award, the customer could receive a notice of levy informing the customer to pay the Labor Commissioner instead of the employer.  If the customer fails or refuses to pay, the customer could be liable to the Labor Commissioner for the amount it should have turned over to the Labor Commissioner

If an employer fails to pay a Labor Commissioner judgment within 30 days, the employer can be prohibited from conducting business in California unless the employer obtains a bond equal to about 10 times the amount of the actual judgment. Failure to obtain a bond can result in a stop notice and, in the instance of a long-term care facility, result in denial of licensure.

SB 588 goes into effect on January 1st. The new law promises more liability for employee wages. In addition to reviewing your policies to ensure compliance with California law, employers should also consider Employer Practices Liability insurance and Directors and Officers Liability insurance to help defray the increasing costs of litigation.

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.

New Paid Sick Leave Law Causes Anxiety for Employers

California workers are often faced with a difficult decision: I don’t feel well and I don’t want to go to work where I will get other people sick, but I can’t afford to miss any work. In order to remedy this malady, the California legislature passed AB 1522 creating the Healthy Workplaces, Healthy Families Act of 2014, which requires all employers to provide at least 24 hours of annual paid sick leave to all employees. Unfortunately, the new law was poorly drafted, causing confusion. The Labor Commissioner set up a FAQ page that helped a little, but still didn’t answer important questions.

Just about every employer client I have called me in the weeks leading up July 1st with questions about what they needed to do to comply with the law, and the answers were not always simple. Then, 13 days after employers were required to begin providing paid sick leave, governor Brown signed AB 304 modifying the statute. Although I suspect the purpose of the amendment was to clarify the law, California’s Healthy Workplaces, Healthy Families Act of 2014 leaves the most ardent HR professionals lightheaded.

HEADACHES

For employers that did not previously offer any type of paid time off, the new law seems fairly simple: Employers must provide at least 24 hours of paid sick leave every year. Simple, right? But what about employees working in San Francisco, Oakland, Emeryville, San Diego or any other city that has passed its own local ordinances requiring a hiring amount of paid sick leave?

If a company has employees working in different cities, even if the employees perform as little as two hours per week in one of the cities that has passed its own paid sick leave ordinance, the employer has to either adopt the highest city requirement and apply that across the board, or have different policies for different employees depending on how much time they spend in each different city. Now an employer has different accrual rates and leave caps for different employees. No chance an employer will make a mistake, right?

HOURLY EMPLOYEES

At what rate must employer’s pay out the paid sick leave? For hourly employees, you would assume the hourly rate is the employee’s regular rate of pay. In fact, the original statute defined “Paid sick days” as “time that is compensated at the same wage as the employee normally earns during regular work hours.” Section 246(k) also says, “[t]he rate of pay shall be the employee’s hourly wage.” Simple, right? It was until the legislature amended subsection k.

Now, the employer has three different methods to choose from:

(k) For the purposes of this section, an employer shall calculate paid sick leave using any of the following calculations:
(1) Paid sick time for nonexempt employees shall be calculated in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek.
(2) Paid sick time for nonexempt employees shall be calculated by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.
(3) Paid sick time for exempt employees shall be calculated in the same manner as the employer calculates wages for other forms of paid leave time.

You’ll notice that there are two different calculations an employer can choose from for nonexempt employees:

  1. the employee’s regular rate of pay; OR
  2. divide the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the previous 90 days.

What does that second option mean? It’s a bit confusing, so let’s use an example. Alice’s regular rate of pay is $12.00 per hour, and she typically works 50 hours per week—40 regular hours and 50 overtime hours. Her regular weekly paycheck is $660.00 [($12 x 40) + ($18 x 10) = $660].

Under the amended statute, the employer is only supposed to include “full pay periods of the prior 90 days of employment.” Let’s assume Alice is paid every week. That would mean that, at most, there are 12 full pay periods in the 90 days prior to the intended sick leave. So, Alice earned $7,920 in those 12 full pay periods ($660 x 12 = $7,920).

The statute then directs us to divide the employee’s total wages “not including overtime premium pay” by the total hours worked. Alice worked 600 hours in the 12 pay periods (50 per week x 12 weeks = 600). When you divide her total wages not including overtime ($5,760) by her total hours worked (600) her paid sick leave rate would be $9.60—$2.40 less than her regular hourly rate. So, if an employee regularly works overtime, the employer can actually pay less than the employee’s regular hourly rate if the employer chooses to use the (k)(2) method of calculating the paid sick leave rate of pay. Maybe the lower rate under (k)(2) rewards employers that are willing to “do the math,” but I don’t see many employers using this alternative calculation.

I’d give an example of what happens when you pay different rates for shift differentials, but it looks like my calculator has a headache.

COMMISSIONS, SALARIES AND PIECE RATES

But what about employees paid commissions, salaries or on a piece rate basis? Well, for salaried employees, the regular rate of pay is presumably the weekly salary divided by 40, as dictated by Labor Code section 515(d)(2). Employees receiving commissions or paid on a piece rate basis are more complicated. Get out your calculators.

There are typically two types of commissioned employees: inside sales and outside sales. While outside salespeople are exempt from overtime laws, inside sales people are only exempt if they are covered by either wage order 4 or wage order 7, more than 50% of their wages are paid in the form of commissions, AND the employee earns at least 1.5 times the current minimum wage. Although the Paid Sick Leave law has rules for employees exempt from overtime under the administrative, professional and executive exemption, it does not have rules for other exempt employees (some inside sales, outside sales, sheepherders, irrigators, etc.).

The Labor Commissioner says “If an employee is paid commission or piece rate, then divide total compensation for previous 90 calendar days by number of hours worked and pay this rate.” But, do you use the compensation earned or the compensation paid? Commissions are oftentimes earned before they are paid. Hopefully the employer’s commission agreements clearly identify when the commission is earned versus when it is paid, but neither the Labor Commissioner nor the statute answer this question.

For piece rate employees it is a little bit easier, divide the total amount earned in the previous 90 days by the total hours worked. If the employer is reporting the pieces and hours worked on the pay stubs as required by Labor Code section 226, then this shouldn’t be a problem. On the bright side, employers that were not previously tracking hours worked for their piece rate workers have a good excuse to change their policies so they can properly track paid sick leave.

WHAT IS A YEAR?

There are still other decisions that have to be made. What constitutes a year? The law became effective January 1st, but employers were not required to provide the paid sick leave until July 1st. Should the employer use a calendar year? A year based on the employee’s start date? A year beginning when the paid sick leave requirement became effective? Choosing the right “year” alters how the employer tracks accrued paid sick leave.

CAN I USE MY EXISTING PTO POLICY?

Will your existing PTO policy satisfy the requirements? In most cases, no, because most employees typically do not begin accruing paid sick leave on their first day of employment. Although employers can prohibit an employee from using the paid sick leave during the first 90 days of employment, the employee begins accruing the paid sick leave from day 1. Keep in mind, if an employer modifies its PTO policy to allow the employee to begin accruing PTO from day 1, and that employee stops working in the first 90 days, the employer has to pay out the unused PTO. If the employer decides to keep Paid Sick Leave separate from other paid leave, the employer would not have to pay out the Paid Sick Leave upon termination.

In order for a PTO policy to satisfy the Paid Sick Leave requirements, the PTO has to have the same 30:1 accrual rate required by the Health Workplaces, Healthy Families Act. Although an employer can cap the Paid Sick Leave at 48 hours, the 30:1 accrual rate would actually give the employee about 66 hours of Paid Sick Leave in a year (assuming the employee works 40 hours a day, 50 weeks per year). If you have a PTO policy that allows an employee to accrue 48 hours of PTO per year, the accrual rate is actually lower than the 30:1 Paid Sick Leave requirements.

The July 13th amendment provided a small safe harbor. If an employer had a pre-existing PTO policy that allowed the employee to accrue at least 8 hours of PTO within the first 3 months of employment and at least 24 hours of PTO within the first 9 months of employment, the employer can use the existing PTO policy to satisfy the Paid Sick Leave requirements. However, if the employer ever alters the accrual method used in that policy, then the employer has to default to the 30:1 accrual rate. This applies even if the employer provides a more generous PTO accrual rate than it previously provided.

Rob’s prediction? Litigation.

Although I don’t know that the value of a paid sick leave violation claim would justify a single-plaintiff lawsuit, you can bet there are class action attorneys waiting file suit when an employer makes a mistake. Keep in mind that the Health Workplaces, Healthy Families Act of 2014 is part of the Labor Code. That means an employee can sue under the Labor Code Private Attorney General Act (PAGA) and bypass the class action requirements. Even though the individual employee’s recovery may be minimal, even small errors can create significant liability given that the penalties will accrue every pay period for all employees.

BROAD RETALIATION PROVISION

I also predict we will see litigation regarding employers who ask employees for proof that the leave was for a qualifying reason. The Act has a very broad anti-retaliation provision:
An employer shall not deny an employee the right to use accrued sick days, discharge, threaten to discharge, demote, suspend, or in any manner discriminate against an employee for using accrued sick days, attempting to exercise the right to use accrued sick days, filing a complaint with the department or alleging a violation of this article, cooperating in an investigation or prosecution of an alleged violation of this article, or opposing any policy or practice or act that is prohibited by this article

There is a rebuttable presumption of retaliation for a variety of actions, including “if an employer denies an employee the right to use accrued sick days, discharges, threatens to discharge, demotes, suspends, or in any manner discriminates against an employee within 30 days of … (c) [o]pposition by the employee to a policy, practice, or act that is prohibited by this article.”

The Labor Commissioner has told employers that it is illegal to “deny sick leave due to a failure to provide details” regarding the need for the paid sick leave. The Act is silent as to whether an employer can require an employee to provide a doctor’s note for the absence, but the Labor Commissioner seems to be taking the position that if an employer asks an employee for the details of the leave (e.g., “Why do you need to take paid sick leave?”), and the employee refuses to provide the details, the employer must still pay the employee to take the time off work.

To be safe, employers should only ask for doctors’ notes once an employee has used the full 24 hours of paid sick leave.

Employment attorneys helping companies comply with the law have been inundated with phone calls and emails from clients that want to comply with the law. California’s new paid sick leave requirements confuse even the most seasoned HR professionals. I am glad the legislature took a stance on this important issue. Sick workers should not be forced to choose between paying rent or showing up to work where they can get other people sick. The idea behind the statute is good and honorable. Unfortunately, as is often the case, the legislature’s method is blemished.

Having thought this all through, I’m starting to feel a bit queasy myself. I think I need to take a sick day.

 

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.

Workplace Investigations: When, Who, and How

Workplace investigations occur for several reasons. Some workplace investigations result from an employee complaint of discrimination, harassment claims, or wrongful termination. Others are mandated by regulatory procedures. Others, still, are instituted to improve workplace performance.

Regardless of the purpose of the investigation, how the investigation proceeds and what it entails shapes an employer’s response and can help reduce exposure to legal claims.

While the exact procedures differ based on the company, employees, the alleged conduct involved, and the investigator, there are certain overriding principles common in most investigations. If the investigation is faulty, any response to the complaint may suffer the same defects.

WHEN TO CONDUCT AN INVESTIGATION?

Investigations should occur promptly, to ensure the employer adequately responds to a complaint and to provide the best opportunity to obtain relevant information and preserve potential evidence. Employers must take all complaints seriously, and evaluate the appropriate scope of the investigation so it can take prompt action.  At a minimum, the investigator should interview the complainant, the accused, and all witnesses

In some instances, an employer is obligated to conduct an investigation even in the absence of an employee complaint. For example, if the employer “knows or should have known” of conduct that requires investigation, the employer can be held liable for failing to conduct an investigation.

When contemplating an investigation, the employer must also consider whether to take some form of interim relief pending the results of the investigation. This could include separating the complainant and the alleged perpetrator, suspending the alleged perpetrator, temporarily modifying reporting structures or other appropriate action.  The purpose of interim relief is to ensure no further misconduct occurs before the company has an opportunity to investigate and resolve the situation.

WHO SHOULD CONDUCT THE INVESTIGATION

Several years ago, the California legislature passed a law restricting who could conduct a workplace investigation.  The purpose was to ensure the investigators were properly trained in how to conduct an effective investigation, and to protect employees lodging complaints in the workplace.  If the investigation is conducted by a person who is not employed by the company, the investigator must be a private investigator or a licensed attorney.  Internal investigations (i.e., conducted by an employee of the organization) do have to be conducted by private investigators or attorneys, but the person conducting the investigation should have the necessary skills and objectivity necessary to conduct an effective investigation.

When choosing who will conduct the investigation, start with someone who is objective, skilled, experienced, and with sufficient authority to be credible. Line managers are usually not sufficiently skilled to conduct a thorough investigation.  Additionally, if ultimate decision maker is influenced by others who had retaliatory motives, the investigation is not “independent”.  Many human resources personnel are qualified to conduct an investigation, but a human resources title does not guarantee the person has the training, skill and expertise necessary to do the job right.

A common question is whether an attorney should conduct the investigation.  Sometimes it is a good idea. Other times it is not. Attorneys are often trained in interviewing witnesses and testing credibility.  An attorney with litigation experience will have a better idea of the types of evidence that might be examined if a matter went to trial.  However, have the company’s corporate attorney conduct an investigation can also create a conflict of interests. The investigator will oftentimes be a witness if a matter proceeds to litigation, this could result in an unintentional waiver of the attorney-client privilege. As general rule, including lawyers in an internal investigation does not automatically insulate an investigation from disclosure.

HOW TO CONDUCT AN EFFECTIVE INVESTIGATION

Confidentiality and discretion are cornerstones of an effective investigation. Confidentiality is essential to protect the investigation and to help the participants feel comfortable disclosing information. Investigation records should be kept separate from other corporate or personnel records.

Investigation should be limited to a “need to know” basis. Only individuals who need to be involved in the investigation or in deciding the outcome should be kept apprised of the investigation’s progress.

Investigators cannot promise absolute confidentiality when interviewing witnesses or the complaining employee.  A thorough investigation will necessarily require revealing certain information.  Promising complete confidentiality can hurt the investigator’s ability to conduct an effective investigation.  Instead, the investigator should tell the complainant, the alleged perpetrator and any witnesses that the investigator will keep the information confidential to the extent possible, but will have to disclose certain information in order to conduct a thorough investigation.

If possible, the investigator should avoid using names of the accused and the complainant. Open-ended questions such as, “Have you seen anyone at work touch other employees in a way that made the employee feel uncomfortable?” is a good way to start.  As the interview proceeds, the investigator may get more specific.

Investigators must assume that everything that is said or written in an investigation will be discoverable.  Maintaining accurate notes is essential.

Investigators must also be aware that certain laws protect employees from over-intrusive investigations. The Employee Polygraph Protection Act – The Federal Employee Polygraph Protection Act (“EPPA”), 29 U.S.C.A. 2001 et seq., The Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. §§ 2510-2520 and the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., are just a few examples.

Investigators must also be cognizant of different tort claims that can arise from an improper investigation.  Claims such as defamation, false imprisonment, invasion of privacy or even intentional infliction of emotional distress must be considered.

FIVE PHASES OF AN EFFECTIVE INVESTIGATION

Investigations typically have 5 phases:

  1. The intake
  2. Creating the investigation pan
  3. Interviews and document review
  4. Evaluating the information
  5. Closing the loop

The intake is usually beginning of any investigation.  It’s where the investigator learns about the complaint or other impetus for the investigation, who the primary participants in the investigation may be, and the scope of the investigation.  It is the foundation of the investigation, and the building blocks for the following stages.

The investigator should then create an investigation plan detailing the likely witnesses to be interviewed and documents to be reviewed. The investigator may have suggestions for interim remedies necessary to preserve the investigation’s integrity or for employee protection.  The investigator must consider who to interview first, where the interviews will take place, and the possible scope of documents to be reviewed.

After an investigation plan is drafted, the investigator will begin interviewing witnesses and reviewing documents. There is no magic formula as to whom should be investigated first and in what order, but most investigators start with the person making the complaint.  The investigator may receive information that reveals other potential witnesses.  Depending on the circumstances, the investigator may want to speak with independent witnesses before interviewing the alleged perpetrator.  In some instances, such as when documents or video evidence reveals the exact nature of the alleged misconduct, additional interviews may be limited. In other circumstances, the number of witnesses may be very high.

After the investigator interviews the witnesses and reviews the relevant documents, the investigator has to evaluate the information.  Investigators should evaluate the credibility of each witness, which may include underlying motivations.  Depending on the scope of the investigation, the investigator may be called asked to render an opinion regarding the conclusions to be drawn from the information obtained. In other circumstances, the investigator presents only the facts and the employer reaches its own conclusions.

Closing the loop is usually the final step an effective investigation.  This is where the investigator, or the employer, reveals the results of the investigation and takes appropriate remedial steps.  The complainant is not necessarily entitled to a full report of each piece of information obtained, but someone should reach out to the complainant and the alleged perpetrator to discuss the end results of the investigation.  This provides finality to investigation process, and enables the parties to determine how to proceed.

Each investigation is unique.  Although there are general underlying principles that apply in most investigations, sometimes an investigation must deviate from the norm.  What is required in any particular instance will be determined by the specific facts and circumstances leading to the investigation.

 

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 attorneys of Nuddleman Law Firm, P.C. represent 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.

Facts and Myths Regarding Employee Handbooks

Are All Employers Required to Have Employee Handbooks?

HR professionals and employment attorneys recommend employee handbooks for most companies, but there are no statutes or cases that require employee handbooks.  An employee handbook centralizes the company’s policies, sets forth the company’s expectations for its workforce and describes the benefits available to its employees.  While the law does not require a handbook, if a company has a handbook several laws require the employer to include certain policies in the handbook.

Can a Company Be Sued for Failing to Follow the Employee Handbook?

Most handbooks are not contracts, and are not enforceable as contracts.  Employees typically do not have a private right of action to enforce the handbook.  Failing to follow the employer’s stated policies can, however, give rise to other liability.  For example, an employee trying to prove discrimination may use the employer’s failure to follow established policies in order to prove the employer treated the employee differently than other workers.  So, while an employer usually cannot be sued for a breach of the employee handbook, failing to follow the company’s established policies may be evidence of other violations.

What Policies Should the Employee Handbook Include?

The specific policies will depend on the company, but there are some policies that should be in every handbook.

At-Will Employment – Every handbook should specify that the employment is at-will, and can be terminated by either party at any time, for any reason or no reason, and that the at-will nature of the employment can only be modified in writing signed by the head of the company

Anti-Harassment, Non-Discrimination and Anti-Retaliation – Companies with even 1 employee are subject to California’s anti-harassment laws.  It is important for the company to identify prohibited conduct and provide a clear complaint process for employees who believe they are the victim of unlawful harassment or discrimination.

Meal and Rest Periods – California requires employees to receive certain mandated rest and meal breaks.  A clear policy expressing the employee’s right to take breaks helps employee’s understand their entitlement to breaks.

Employment Classifications – Employees may be classified in different ways (exempt versus non-exempt, full-time versus part-time, temporary versus, non-temporary, production versus management, etc.).  Their classification can impact their pay, benefits, schedule and obligations.  Companies with different classification can use the handbook to clearly identify how the different classifications are treated differently

Leaves of Absence and Time Off Benefits – Depending on the size of the employer, if an employer has an employee handbook the employer is required to identify certain legally required leaves of absence.  Employers can also use the handbook to define when time off will be paid or unpaid (e.g., paid sick leave, paid time off, vacation, holidays, etc.).

Payroll – Employers are required to identify the pay periods and pay dates.  In addition to posting the pay dates in the workplace, the employee handbook is an appropriate place to describe the employer’s payroll practices.  Employers should consider identifying when time cards must be turned in, whether the company allows payroll advances, and what happens when a payday falls on a non-work day.

Depending on the size of the employer, different laws can require other policies in the employee handbook, such as rights and obligations under:

  • The Family Medical Leave Act (FMLA)
  • The California Family Rights Act (CFRA)
  • The Pregnancy Disability Leave Act (PDLA)

How Often Should A Company Revise The Employee Handbook?

Employers should review their employee handbook on an annual basis.  Any time there is a significant change in the law, whether created by a new or revised statute or by a court’s interpretation of the law, employers need to evaluate whether their handbook needs to be updated.

For example, in 2014, the California legislature adopted the Healthy Workplace Healthy Family Act of 2014, requiring all employers in California to provide paid sick leave for all employees.  This major shift required companies to review their paid time off policies to ensure compliance with the new law, and to develop new compliant policies.

Several years ago, California and Federal courts identified a possible defense to sexual harassment claims when an employee failed to follow an employer’s written anti-harassment policies and later sued the employer for sexual harassment.  The cases clarified that an employer may avoid, or at least limit, liability in certain circumstances provided the employer clearly communicated a complaint process for victims of sexual harassment.  Companies had to review their policies to ensure the complaint process was clearly explained and communicated to employees.  Employers that were not aware of the cases may have missed an opportunity to take advantage of the newly developed defense. In 2016, the FEHC modified the regulations regarding sexual harassment prevention policies, requiring employers to ensure employees received the anti-harassment policies.

I recommend employers have their handbooks reviewed at least every one to two years, but changes in the law can require modifications at more frequent intervals.

Can an Employer Use a Handbook from Another Company and Just Change the Name?

Many companies try to save time and money by using handbooks created for other companies, and simply changing the name of the company.  Although many policies may be similar or even identical, this is a very bad idea.  Different laws apply to employers depending on their location, their size and even their industry.  Companies that simply copy policies from another company may wind up with policies that do not apply or that create obligations that are not appropriate.

Additionally, many companies consider their employee handbooks confidential, proprietary, or even a trade secret.  Copying another company’s handbook could also violate the law.

There are low cost, trusted methods to create an employee handbook, but all handbooks should be reviewed by a competent, knowledgeable employment law professional. Don’t be penny-wise and a pound-foolish. A bad employee handbook can be worse than no handbook at all.

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.