2021 California Legislative and Case Law Update - Date: January 20, 2021 John Skousen, Esq. Lizbeth Ochoa, Esq. Spencer Waldron, Esq - Industry ...

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2021 California Legislative and Case Law Update - Date: January 20, 2021 John Skousen, Esq. Lizbeth Ochoa, Esq. Spencer Waldron, Esq - Industry ...
2021 California Legislative and
Case Law Update
John Skousen, Esq.
Lizbeth Ochoa, Esq.
Spencer Waldron, Esq.

Date: January 20, 2021

                                  fisherphillips.com
2021 California Legislative and Case Law Update - Date: January 20, 2021 John Skousen, Esq. Lizbeth Ochoa, Esq. Spencer Waldron, Esq - Industry ...
COVID-19 and the California Legislature

                     • Legislature recessed for
                       several months due to
                       COVID-19
                     • Shortened timelines for
                       hearing bills
                     • Limited number of bills – only
                       about 25% of normal volume
                       of bills moved this year
                     • Governor signed/vetoed bills
                       up to September 30
2021 California Legislative and Case Law Update - Date: January 20, 2021 John Skousen, Esq. Lizbeth Ochoa, Esq. Spencer Waldron, Esq - Industry ...
Takeaway of 2020 – One Word COVID
What can we expect in 2021 –COVID
• The majority of the laws, regulations,
  guidelines of 2020 were attributed to
  COVID
• With Legislature out of town,
  Governor Newsom issued dozens of
  Executive Orders on his own.
• Many local governments passed
  COVID-19 paid sick leave and other
  employment ordinances.
• Because the vaccines are not getting
  to the mass population as quickly as
  hoped, at minimum, COVID will
  continue to be a guiding topic
  impacting how companies do
  business well into 2021
2021 California Legislative and Case Law Update - Date: January 20, 2021 John Skousen, Esq. Lizbeth Ochoa, Esq. Spencer Waldron, Esq - Industry ...
Executive Order N-31-20 – WARN Act

“Loosens” the California WARN Act’s 60-day notice requirement
if the following three conditions are met:

1) The shutdown was caused by unforeseen COVID-19
   business circumstances.
2) The employer still provides written notice to employees, EDD
   and local officials.
3) The written notice contains specified information.
2021 California Legislative and Case Law Update - Date: January 20, 2021 John Skousen, Esq. Lizbeth Ochoa, Esq. Spencer Waldron, Esq - Industry ...
New Cal/OSHA Emergency Standard
                 • New emergency standard
                   approved by OSHA Standards
                   Board on November 19.
                 • Effective November 30, 2020
                   but some leniency until 2/2/21
                   on certain aspects.
                 • Very prescriptive and detailed,
                   and now Cal/OSHA can cite
                   employers for violations.
                 • Includes a significant paid time
                   off mandate for employees
                   excluded from the worksite.
2021 California Legislative and Case Law Update - Date: January 20, 2021 John Skousen, Esq. Lizbeth Ochoa, Esq. Spencer Waldron, Esq - Industry ...
New Cal/OSHA Emergency Standard
Written COVID-19 Prevention Program
• Must include specific elements
• May be a stand-alone document or incorporated into an employer’s
  existing IIPP
Notice of COVID-19 Exposures and Cases
• Must notify within one business day close contacts, all employees and
  onsite vendors
• Many of the notice requirements overlap with AB 685 (discussed later), but
  there are some differences
• Must notify local public health departments of “outbreaks” within 48 hours-
  some health departments require calling in the information others have an
  online form you submit- check with your health department in advance!
2021 California Legislative and Case Law Update - Date: January 20, 2021 John Skousen, Esq. Lizbeth Ochoa, Esq. Spencer Waldron, Esq - Industry ...
New Cal/OSHA Emergency Standard
Exclusion of COVID-19 Cases and Exposures
• Very specific timelines for requiring exclusion of employees that have
  COVID-19 or have been exposed (immediately but no later than 1 day)
• Must continue and maintain earnings, seniority, benefits and right to return
  to former job for work related cases so long as employees is able and
  available to work (if source of COVID exposure unknown employer carries
  burden to establish not work related) (Caution: potential wage and hour
  violations if an employer should have paid the wages)
• FAQs issued Jan. 8, 2021 by IWC indicate that the continued earnings
  would not apply if not work related and/or if the employee is too sick that
  they would qualify for disability or worker’s compensation benefits instead
2021 California Legislative and Case Law Update - Date: January 20, 2021 John Skousen, Esq. Lizbeth Ochoa, Esq. Spencer Waldron, Esq - Industry ...
New Cal/OSHA Emergency Standard
Specific Return to Work Criteria
• Cannot insist that employees obtain a negative test before
  returning to work (differs from CDC guidelines)
• Return to work criteria recently reduced by CDC and state for
  employees with symptoms. Now employee may return to
  work at day 11 but only under the following conditions:
  • (1) employee does not have fever for 24 hours without the use of fever
    reducing medications;
  • (2) the other symptoms have improved (they do not need to be
    completely gone) AND
  • (3) at least 10 days have passed since the symptoms first appeared.
2021 California Legislative and Case Law Update - Date: January 20, 2021 John Skousen, Esq. Lizbeth Ochoa, Esq. Spencer Waldron, Esq - Industry ...
New Cal/OSHA Emergency Standard
Specific Return to Work Criteria
• Current Return to Work Criteria for employee who never
  experienced symptoms:
  • At least 10 days have passed since the date of the specimen collection
    of the employee’s first COVID-19 test (in other words, at least 10 days
    after the employee 1st took the COVID test)

  • Caveat: Employee’s health care provider or Health Officer releases
    employee at an earlier or later time.
2021 California Legislative and Case Law Update - Date: January 20, 2021 John Skousen, Esq. Lizbeth Ochoa, Esq. Spencer Waldron, Esq - Industry ...
New Cal/OSHA Emergency Standard
Testing
• Must offer free testing during working hours when there has
  been one positive case in the workplace
• Additional weekly or twice weekly testing requirements for
  “outbreaks” (3 cases in 14 days) and “major outbreaks” (20
  cases in 30 days)
Additional specific requirements related to physical
distancing, face coverings, employer-provided
transportation and housing, training and instruction
AB 685 – COVID-19 Reporting Obligation

                     • Legislation introduced
                       following some highly-
                       publicized “outbreaks” where
                       employers were alleged to
                       have not informed
                       employees.
                     • Imposes some significant and
                       complex notice requirements
                       that went into effect on
                       1/1/2021.
AB 685 – What Triggers the Notice?
Employers are required to provide notice within one business
day when they receive “notice of a potential exposure.”
• Notification from a public health official or medical provider that an
  employee was exposed to a qualifying individual at work.
• Notification from the employee or their emergency contact that they
  are a qualifying individual.
• Notification through employer’s testing protocol that they are a
  qualifying individual.
• Notification from a subcontracted employer that a qualifying
  individual was on the worksite.
AB 685 – What is a Qualifying Individual?

1) Has a laboratory-confirmed case of COVID-19.
2) Has a positive COVID-19 diagnosis from a licensed health
   care provider.
3) Has a COVID-19 related order to isolate from a public health
   official; or
4) Has died from COVID-19.
AB 685 – Who and What?
1) Must give notice to employees (and any employees of
   subcontractors) who were on the premises at the same
   worksite as the qualifying individual that they may have been
   exposed.
2) Must give notice to employees (and any employees of
   subcontractors) who may have been exposed with
   information about COVID-19 related benefits they might be
   entitled to under federal, state and local law.
3) Must notify all employees of the disinfection and safety plan
   that the employers plans to implement per CDC guidelines.
AB 685 – “Outbreak” Notice
If number of cases meets the definition of an “outbreak”
(generally 3 cases) must notify local public health agency
within 48 hours of:
• Names of employees
• Number of employees
• Occupation and worksite of employees
• Business address and NAICS code of the worksite

Must also notify local public health of any subsequent cases.
AB 1867 & FFCRA– Supplemental COVID-
19 Paid Sick Leave- Expired 12/31/20 But
Might Be Back
• One of the most popular areas
  for legislative activity at the
  local, state and federal (FFCRA)
  levels.
• All aimed at providing
  employees with paid sick leave
  for COVID-related reasons.
• Both laws have now expired but
  employers formerly subject to
  FFCRA may continue to provide
  the COVID pay and get the tax
  credit through March 2021.
Executive Order N-362-20 – Workers’
Compensation Presumption
• Establishes a “rebuttable presumption” that an employee who
  contracts COVID-19 caught it at the workplace and is covered
  by workers’ compensation where:
  • The employee tested positive or was diagnosed with COVID-19 within
    14 days of performing work at the employer’s direction (on or after
    March 19, 2020).
  • The workplace is not the employee’s home.
  • A licensed physician issued the diagnosis and a test confirmed the
    diagnosis within 30 days.
  • Shortens period for rejection of claims from 90 days to 30 days.
  • Only applies until July 5, 2020.
SB 1159 – Workers’ Compensation
Presumption
                   • Subject of one of Governor
                     Newsom’s Executive Orders
                     during the pandemic.
                   • One of the hot issues when
                     the Legislature returned –
                     multiple bills dealt with this
                     subject.
                   • Ultimately, the bill that was
                     signed was SB 1159.
                   • Went into effect immediately.
SB 1159 – Workers’ Compensation
Presumption
The law has three parts:
1. Codifies Executive Order that ran through July 5, which said:
  • A case is presumed to be covered by W/C if infected employee tests
    positive or is diagnosed within 14 days of their last day worked outside
    the home
  • The physician diagnosis must be confirmed by a test within 30 days
  • The presumption is rebuttable by evidence, but the claim must be
    denied within 30 days to be eligible for rebuttal
2. Extends the above for first responders and healthcare
   providers so that the E.O. provisions bridge beyond July 5 for
   those groups
SB 1159 – Workers’ Compensation
Presumption
3. Creates a new rebuttable presumption for cases occurring on or
   after July 6 but only where the employer had an “outbreak”

   An outbreak is:
      • 4 positives in 14 days if 100 employees or less;
      • 4 percent of employees if over 100;
      • or closure by public health authorities

• Workers’ compensation carrier reporting requirement added as well
  when an employee tests positive – three business days (plus a “look
  back” reporting period to positive tests back to July 6…within 30
  business days of effective date of bill).
SB 1383 (Jackson) – CFRA Expansion

• Originally part of Governor
  Newsom’s budget proposal.
• Continuation of debate over
  recent years.
• One of the few bills not
  directly related to COVID-19.
• Employer concerns,
  especially on heels of COVID-
  19 crisis.
SB 1383 (Jackson) – CFRA Expansion

• Extends CFRA to apply to employers with five or more
  employees (from 50 or more).
• Expands “family members” to include adult children, siblings,
  grandparents, grandchildren.
• Potential stacking issue with FMLA.
• Eliminates “two employees at same employer” rule.
• Eliminates “highly compensated exemption” to reinstatement
  provisions.
SB 973 (Jackson) – Pay Data Reporting
                    • Intent is to apply the Obama pay
                      data reporting program that was
                      halted by Trump administration
                    • Employers with 100 or more
                      employees (and who must file an
                      EEO-1) must provide pay data to
                      the State
                    • Pay data reports will be due on
                      March 31, starting in 2021, for the
                      prior calendar year
                    • Reports must include race,
                      ethnicity, and sex
                    • Amends California Equal Pay Act
                      to allow DFEH to enforce, instead
                      of just the Labor Commissioner
SB 973 (Jackson) – Pay Data Reporting

Who Has to File?

• Employees located inside and outside of California are counted when
  determining whether an employer has 100 or more employees (DFEH
  FAQs)
• Includes part-timers
• An employer has the requisite number of employees if the
  employer either employed 100 or more employees in the Snapshot
  Period chosen by the employer or regularly employed 100 or more
  employees during the Reporting Year
SB 973 (Jackson) – Pay Data Reporting

Do You Have to Report Both California and Non-
California Employees?

DFEH FAQs – Employers Have Two Options:

1) Must include employees assigned to California establishments and/or
   working within California; and

2) May include other employees
SB 973 (Jackson) – Pay Data Reporting
• Reports must include:
  • Race, ethnicity, and sex
  • Job category (10 categories provided)
  • Number of employees whose earnings fall within the pay bands used
    by BLS
  • Number of hours worked
  • Report for each establishment and a consolidated report (like EEO-1)
  • NAICS code
  • Any clarifying remarks (voluntary)
  • Allowed to use the EEO-1 as basis for the report
SB 973 (Jackson) – Pay Data Reporting

• The information is private until the DLSE or DFEH use it to file
  an enforcement action
   • Previously only DLSE could enforce the CA Equal Pay Act
• Reports will be maintained for 10 years

• This will be a lot of work, so plan now!
AB 2992 (Weber) – Victims of Crime

• Amends existing law (LC 230 and 230.1) providing job-
  protected time off for employees who are victims of domestic
  violence, sexual assault or stalking to include:
    • A victim of a crime that caused physical injury or that caused
      mental injury and a threat of physical injury.
    • The immediate family member (child, parent, spouse, sibling,
      or “equivalent”) of a person who is deceased as the direct
      result of a crime.
AB 2257 – AB 5 Follow-Up

• Debate continues regarding
  additional exemptions.
• Same dynamic as last year –
  labor and Asm. Gonzalez in
  control of what was passed.
• Several dozen Republican
  bills were not even heard.
AB 2257 – AB 5 Follow-Up
• This year, AB 2257 (which went into effect immediately on 9/4/2020) made a
  number of changes to the exemptions under AB 5:
   • There are now 109 exemptions from the ABC test.
   • Key changes to the “business-to-business” exemption:
        • Can provide services to the client as long as doing so under the name of
          the business service provider and the business regularly contracts with
          others.
        • Merely have to show that the business service provider “can” contract with
          others and “can” maintain a clientele of their own.
   • Key changes to the “referral agency/service provider” exemption:
        • Non-exclusive list of industries the exemption can apply to.
        • But now specifically excludes janitorial, delivery, courier, transportation,
          trucking, agriculture, retail, logging, in-home care, construction, or any
          high-hazard industry.
AB 3075 (Gonzalez) – Wage Theft

• Author claimed bill is aimed at
  scofflaw employers that close
  down and re-open under a
  different name to avoid
  judgments and liability for
  wage claims.
• Requires business at time of
  incorporation to attest that no
  officer or director has an
  outstanding final judgment.
AB 3075 (Gonzalez) – Wage Theft
Establishes “successor” liability for a final judgment for wages
and penalties where:
1) The successor uses substantially the same facilities or
   substantially the same workforce to offer substantially the
   same services.
2) The successor has substantially the same owners or
   managers that control labor relations.
3) Employs as a managing agent anyone who directly controlled
   the wages, hours or working conditions of the predecessor.
4) Operates a business in the same industry and the business
   owner has a partner, officer or director who is an immediate
   family member of the same of the predecessor.
AB 1947 – Retaliation Claims

• Extends the deadline for filing a retaliation claim under LC 98.7
  with DLSE from 6 months to one year.
• Authorizes one-sided, plaintiff-only attorney’s fees for LC
  1102.5 (whistleblower) claims.
   • Increases the stakes for such claims.
   • Makes them more expensive to settle.
   • Makes them more likely to be filed in court.
AB 1963 – Mandated Reporters

                  • Makes certain HR employees
                    and those who supervise
                    minors “mandated reporters”
                    for abuse and neglect.
                  • Requires employers to
                    provide those employees who
                    are mandated reporters with
                    training on such duties.
                  • May be online training from
                    Department of Social
                    Services.
AB 1963 – Mandated Reporters
• “Human resource employee”
  • The employee designated by the employer to accept complaints under
    FEHA.
  • Only those who work for FEHA-covered businesses (5 or more
    employees).
• Supervisors of Minors
  • Those whose duties require direct contact with, and supervision of,
    minors in the workplace.
  • Is a mandated reporter of sexual abuse only.
  • Only those who work for FEHA-covered businesses (5 or more
    employees).
SB 1384 – Arbitration

• An employee who is unable to have their claim adjudicated by
  DLSE because of an order to compel arbitration can request
  that the Labor Commissioner represent them in the arbitration.
• A petition to compel arbitration of a claim pending under LC 98,
  98.1 or 98.2 must be served on DLSE.
• If requested by the employee, the Labor Commissioner can
  represent the employee in proceedings to determine the
  enforceability of the arbitration agreement (whether in court or
  in the arbitration).
AB 979 – Corporate Board Diversity

• Follow up to prior legislation
  on female board members.
• By end of 2021, a publicly
  held corporation with principal
  offices in California must have
  a minimum of one director
  from an “underrepresented
  community” on its board.
AB 979 – Corporate Board Diversity

• “Underrepresented community” (UC) means an individual who
  self-identifies as Black, African-American, Hispanic, Latino,
  Asian, Pacific Islander, Native American, Native Hawaiian, or
  Alaska Native, or who self-identifies as LGBT.
• By the end of 2022, these requirements increase:
   • If 9 or more directors, at least 3 directors from UCs.
   • If 5-9 directors, at least two directors from UCs.
   • If 4 or fewer, at least one director from UC.
• Litigation has already been filed challenging this law.
Proposition 24 – CA Privacy Rights Act
(CPRA)
• Effective 1/1/2023, with some provisions having a lookback
  period of 12 months (i.e., compliance as of 1/1/2022)
• Amends and expands the California Consumer Privacy Act
• Changes to which businesses are required to comply with the
  CCPA
• Extends until 1/1/2023 limited exemption for data from
  employee/job applicants and in B2B context
Proposition 24 – CA Privacy Rights Act
(CPRA)
                    • Data minimization: Cannot retain
                      data for longer than necessary for
                      disclosed purposes
                    • New requirements for a
                      business’s relationships with
                      vendors/service providers
                    • New right of consumers to
                      request correction of inaccurate
                      personal information
                    • Establishes the California Privacy
                      Protection Agency
5 Minute Stretch Break
2021 Case Law Update

                       fisherphillips.com
Sanchez v. Martinez
    (2020) 54 Cal.App.5th 535
Sanchez v. Martinez
• Facts
  • Farm laborers brought suit against former employer (Martinez) for
    various labor law violations that allegedly occurred when the
    employees pruned grape vines at a piece rate.

  • The trial court directed former employer to pay $416 in damages and
    $17,775 in civil penalties.

  • On appeal, both parties challenge the trial court’s calculation of
    damages and penalties.

  • The former employees claim that they should be compensated twice for
    the days that they took rest breaks without pay.
Sanchez v. Martinez
• Result
  • The Court of Appeal rejected the former employees’ calculation of
    damages.

  • Instead, the Court of Appeal found that piece-rate employees who are
    provided with unpaid rest breaks are entitled to damages in the amount
    of the minimum wage for actual unpaid time or an additional hour of
    pay under CA Labor Code section 226.7, but are not entitled to both.

  • Applying that principle here, the Court of Appeal declined to reverse the
    trial court’s holding because it found that the former employees did not
    suffer actual prejudicial error because the former employees had
    already recovered the minimum wage for the actual time they took rest
    breaks without pay.
Oman v. Delta Air Lines, Inc.
         (2020) 9 Cal.5th 762
Oman v. Delta Air Lines, Inc.
• Facts
   • Flight attendants brought a class action against Delta Air Lines alleging various wage and
     hour violations.

   • Specifically, they alleged that Delta failed to pay its flight attendants in accordance with
     the state’s minimum wage laws, provide comprehensive wage statements, and timely pay
     wages.

• Issues
   1. Do sections 204 and 226 apply to wage statements provided by an out-of-state employer
   to an employee, who in relevant pay period, works in California only episodically and for
   less than a day at a time?

   2. Does California minimum wage law apply to all work performed in California for an out-of-
   state employer by an employee who works in California only episodically and for less than a
   day at a time?

   3. Does Armenta/Gonzalez bar on averaging wages apply to a pay formula that generally
   awards credit for all hours on duty, but which, in certain situations resulting in higher pay,
   does not award credit for all hours on duty?
Oman v. Delta Air Lines, Inc.
• Result for Issue 1
   • No, an employee is not entitled to protection under sections
     204 and 226 unless California is the principal place that the
     employee works during the relevant pay period.

   • The court relied on Ward, which held that the principal place
     of work test is satisfied if: (1) an employee works primarily
     (majority of the time) in California; or (2) does not spend
     majority of his or her time in any one state, but California
     serves as his or her base of operations.
Oman v. Delta Air Lines, Inc.
• Result for Issue 2
   • The court did not reach the issue regarding California’s minimum wage laws because the
     record established that Delta complied with state minimum wage law.

   • However, the court’s opinion set forth standards for minimum wage laws and
     compensation schemes for employees paid on an hourly basis or by task. See Id. at 781-
     784.

   • For example, the court stated: “For all hours worked, employees are entitled to the greater
     of: (1) amount guaranteed by contract for the specified risk or period; or (2) the amount
     guaranteed by the minimum wage. Whether a particular compensation scheme complies
     with these obligations may be thought as two separate inquires. First, for each task or
     period covered by the contract, is the employee paid at or above the minimum wage?
     Second, are there other tasks or periods not covered by the contract, but within the
     definition of hours worked, for which at least the minimum wage should have been paid?”

• Result for Issue 3
   • The court declined to answer this – “In light of the answer to the question about the
     legislative application of the state’s minimum wage laws, we do not address the separate
     question concerning the geographic scope of that law’s application.”
Ridgeway v. Walmart, Inc.
        (2020) 946 F.3d 1066
Ridgeway v. Walmart, Inc.
• Facts
  • Long-haul truckers brought a class action against their employer,
    Walmart, alleging that it did not pay them properly in accordance with
    California law.

  • On appeal, Walmart alleges that the district court erred in: (1)
    concluding that it had jurisdiction; (2) in certifying the class; (3) in
    interpreting California minimum wage law; (4) in allowing expert
    testimony; and (5) in providing jury instructions.

  • The Court of Appeal rejected each of these arguments and affirmed the
    jury award of $44,699,766 for layovers, $3,961,975 for rest breaks, and
    $2,971,220 for post-trip inspections.
Ridgeway v. Walmart, Inc.
• Result
  • First, the Court found that it did have jurisdiction over the case because it
    presented an Article III case or controversy because the two lead plaintiffs
    (truckers) remained in the action.

  • Second, the Court determined that, under California law, the time that
    truckers spend on layovers is compensable if the employer (Walmart)
    exercised control over the truckers during those breaks.
     • “[T]he district court correctly concluded that Walmart’s policies, if applied as written,
       resulted in Walmart exercising control over employees during mandated layovers.”
     • “Walmart’s written policy gave the company control over whether drivers could go
       home during a layover period. Additionally, drivers that took an unauthorized layover
       at home were subject to disciplinary action, including potential termination. As such,
       Walmart’s policy dictated what drivers could do on layovers and restricted employees
       from complete freedom of movement during breaks.”

  • Third, the Court stated that the FAAA does not preempt California meal and
    rest break laws.
Ridgeway v. Walmart, Inc.
• Fourth, the Court stated that Walmart cannot meet rest period or
  inspection payment requirements by “borrowing” from other
  compensation sources, such as hourly rate or mileage payment.
   • “[U]nder California law, all time worked must be accounted for in the
     compensation scheme. In other words, an employer is not permitted to take a
     worker’s entire salary – even if it is six figures – and divide it by the number of
     hours worked to ensure that minimum wage was paid to all activities.”

• Fifth, the Court held that the district court did not err in certifying the
  class and allowing representative evidence as proof of class-wide
  damages.

• Finally, the Court affirmed the district court’s determination as to
  liquidated damages, finding that Walmart acted in good faith and with
  a reasonable belief in the legality of its actions.
Kim v. Reins International
   California Institute
       (2020) 459 P.3d 1123, 259
Kim v. Reins International California Institute
 • Facts
   • Kim brought a class/PAGA action against his employer alleging
     various Labor Code violations.

   • Kim’s individual claims were sent to arbitration because Kim had
     signed an arbitration agreement. Kim’s PAGA claims were put on
     hold until the conclusion of the arbitration.

   • In arbitration, Kim and his employer settled. Thus, Kim dismissed
     his individual and class claims. This left only the PAGA claim.

   • The employer subsequently moved to dismiss the PAGA claim. In
     doing so, the employer argued that the named representative
     (Kim) was no longer an “aggrieved employee” as required under
     PAGA because his individual claim had settled in arbitration.
Kim v. Reins International California Institute
• Issue
  • Do employees lose standing to pursue a claim under PAGA if they
    settle and dismiss their individual claims for Labor Code violations?

• Result
  • No, settlement of individual claims does not strip an aggrieved
    employee of standing as the state’s authorized representative to
    pursue PAGA remedies.

  • The California Supreme Court reasoned that the employee’s continued
    injury, or lack thereof, has no bearing on his or her standing or ability to
    bring suit under PAGA.
Anthony v. Trax International
       Corporation
      (9th Cir. 2020) 955 F.3d 1123
Anthony v. Trax International Corporation
• Facts
  • TRAX terminated Anthony from her position as a Technical Writer.
  • Anthony brought suit, alleging that TRAX terminated her because of: (1) her
    disability; and (2) for failure to engage in the statutorily required interactive
    process to find her a reasonable accommodation.
  • During the course of litigation, TRAX learned that Anthony did not have a
    bachelor’s degree, which is required for the position of a Technical Writer.
    Moreover, this was contrary to the representations that Anthony provided on
    her employment application.

• Issue
  • Under these circumstances, is after-acquired evidence that an employee
    does not satisfy the prerequisites for the position, including educational
    background, render the employee ineligible for relief under the Americans
    with Disabilities Act (“ADA”)?
Anthony v. Trax International Corporation
• Result
  • The Ninth Circuit permitted the employer to offer this after acquired evidence
    in order to demonstrate that Anthony was not qualified for the position under
    the ADA.
  • Thus, in light of the after acquired evidence, the court found that: (1) Anthony
    was not qualified for the position as a Technical Writer because she did not
    have a bachelor's degree; and (2) that TRAX was not required to engage in
    the interactive process because Anthony was not qualified for the position.
  • In reaching this conclusion, the court distinguished the use of after-acquired
    evidence in Age Discrimination Employment Act (“ADEA”) from the ADA
    because the ADA expressly limits its protections to “qualified individuals,”
    whereas the ADEA does not have a qualified individual element.

• Takeaway
  • Employers may use after-acquired evidence to demonstrate that a plaintiff is
    not a qualified individual under the ADA.
McPherson v. EF Intercultural
     Foundation, Inc.
       (2020) 47 Cal.App.5th 243
McPherson v. EF Intercultural Foundation, Inc.
 • Facts
   • Employer had a written vacation policy in its employee handbook that
     applied to hourly employees but did not apply to three exempt
     managers.

   • These managers were verbally told that they could take time off with
     pay but did not accrue vacation days.

   • If these managers wanted to take a vacation day, they were required to
     notify their supervisor, and did not use the company’s online system to
     request time off or that would track the number of days taken.

   • At the end of their employment with the company, these exempt
     managers were not paid out accrued, unused vacation time.
McPherson v. EF Intercultural Foundation, Inc.
 • Facts Continued
   • These exempt managers brought suit alleging violation of Labor Code Section
     227.3 and seeking waiting time penalties under Labor Code Section 203,
     among other causes of action.

   • The employer argued that it had an unlimited vacation policy; thus, these
     exempt managers were not entitled to any payout under Labor Code Section
     227.3.
 • Issue
   • When an employer’s policy allows an employee to take an unspecified
     amount of paid time off without accruing vacation time, does the employee’s
     right to that paid time off vest so the employer must pay her for unused
     vacation under Labor Code section 227.3 when her employment ends?

   • Or does section 227.3 apply only to policies providing a fixed amount of
     vacation that accrues over time?
McPherson v. EF Intercultural Foundation, Inc.
 • Result
    • The Court of Appeal held that Labor Code section 227.3, which requires the pay out of
      vacation at separation, applies to an employer’s unwritten “unlimited” vacation policy.
      However, this “by no means holds that all unlimited paid time off policies give rise to an
      obligation to pay ‘unused’ vacation when an employee leaves.”

    • The Court of Appeal held section 227.3 applied to this Company’s purported unlimited
      paid time off policy based on the particular facts of this case.

        • The court noted that the company did not have a formal written unlimited vacation policy, did not
          inform plaintiffs that they were entitled to unlimited vacation, and did not offer unlimited vacation
          in practice.

        • The court held that the policy had an implied limit of two to four weeks per year and that the
          exempt managers generally could not and did not take more than this amount.

        • Thus, the court awarded these exempt managers damages, but not wait time penalties.
Bostick v. Clayton County, Georgia
           (2020) 140 S. Ct. 1731
Bostick v. Clayton County, Georgia
• The Court’s opinion combined three cases - two involving employees who
  alleged that they were discriminated against because of sex when they
  were terminated based on their sexual orientation, and one involving an
  employee who alleged that she was terminated on the basis of sex when
  she was terminated for being transgender.

• The U.S. Supreme Court ruled that workplace discrimination because of
  an individual’s sexual orientation or gender identity – including being
  transgender – is unlawful discrimination “because of sex” under Title VII of
  the Civil Rights Act of 1964.

• The Court stated that: “An individual’s homosexuality or transgender status
  is not relevant to employment decisions. That’s because it is impossible to
  discriminate against a person for being homosexual or transgender without
  discriminating against that individual based on sex.”
Frlekin v. Apple, Inc.
     (2020) 8 Cal.5th 1038
Frlekin v. Apple, Inc.
• Facts
  • Employees brought a wage and hour class action against
    Apple, seeking compensation for time spent waiting for and
    undergoing exit searches pursuant to Apple’s package and
    bag search policy.

• Result
  • The California Supreme Court held that time spent by
    employees waiting for and undergoing security checks of
    bags and other personal items is compensable time under
    California law, even when the policy only applies to
    employees who choose to bring personal items to work.
Herrera v. Zumiez, Inc.
     (2020) 953 F.3d 1063
Herrera v. Zumiez, Inc.
• Facts
  • Employees brought a class action against their former employer alleging that
    Zumiez failed to pay employees reporting time pay for “Call In” shifts.

  • At Zumiez, an employee scheduled for a Call-In shift must make herself
    available to work during the shift, then call her manager thirty minutes to an
    hour before the shift, or if she works a shift immediately before the Call-In
    shift, contact her manager at the end of that shift. At that time, the manager
    tells the employee whether she will be required to work during the Call-in
    shift. If the employee does not work, Zumiez does not pay the employee.

• Issue
  • Does an employee have to physically present himself or herself at the
    workplace in order to “report to work” and thereby qualify for reporting time
    pay under California law?
Herrera v. Zumiez, Inc.
• Result
  • While the appeal to this case was pending, the California Court of
    Appeal decided Ward v. Tilly’s, Inc. Ward held that reporting time pay
    must be paid under Wage Order 7 in a case that was factually similar.

  • Thus, the Court of Appeal stated, “[b]ecause there is no persuasive
    data to convince us that the California Supreme Court would decide
    otherwise, we follow Ward’s ‘controlling interpretation of state law’ and
    affirm with respect to the time pay claim.”

  • “In sum, following Ward, we conclude that, under section 5 (A) of Wage
    Order 7, a requirement that employees call their managers thirty
    minutes to one hour before a scheduled shift constitutes ‘report[ing] to
    work.’”
Oliver v. Konica Minolta
  Business Solutions
    (2020) 264 Cal.App.5th 1
Oliver v. Konica Minolta Business Solutions
 • Facts
   • Service technicians were required to drive their personal vehicles which
     contained their employer’s tools and parts to customers sites to make repairs
     on copiers and other machines.

   • These service technicians did not report to an office for work and instead
     drove from their homes to the first customer location of the day and, at the
     end of the day, from the last customer location to their home.

   • The service technicians filed a wage and hour class action against their
     employer seeking wages for: (1) time spent commuting to the first work
     location of the day and commuting home from the last work location; and (2)
     reimbursement for mileage incurred during those commutes.
 • Issue
   • Is Konica legally obligated to pay class members wages for the time spent
     driving their personal vehicles from their homes to the first work site of the
     day and from the last work site of the day back to their homes?
Oliver v. Konica Minolta Business Solutions
 • Result
   • The Court of Appeal held that there was a genuine dispute of material fact
     precluding summary judgment.
      • “If carrying tools…during the commute was optional, then a service technician was
        not subject to the control of [Konica] for purposes of determining whether that time
        was constituted as hours worked.”
      • “Even if a service technician was required…to carry tools and parts during the
        commute, the service technician would not be subject to the control of [Konica] during
        the commute if the service technician was able to use the time effectively for the
        service technician’s own purpose.”
      • “[I]f a service technician was required during the commute to carry a volume of tools
        and parts that did not allow the service technician to use the time effectively for the
        service technician’s own purposes, then the technician would be subject to the control
        of [Konica] for purposes of determining hours worked and entitlement to wages.”

 • Takeaway
   • The level of the employer’s control over its employees is determinative of
     whether an activity is compensable under the control provision.
David v. Queen of Valley
    Medical Center
     (2020) 51 Cal.App.5th 653
David v. Queen of Valley Medical Center
• Former nurse brought a wage and hour action against hospital
  employer alleging failure to provide meal and rest periods and
  failure to pay minimum wages.

• The Court of Appeal held that hospital employer: (1) provided
  meal breaks as required by law; (2) provided rest breaks as
  required by law; and (3) employer’s policy of rounding
  employee hours up or down to the nearest quarter hour was
  lawful because it was neutral on its face and without an eye
  towards whether the hospital or employee benefited.
David v. Queen of Valley Medical Center
• Meal Breaks
  • As to meal breaks, the court found that the employer hospital provided meal
    breaks as required by law because it provided one meal period for every five
    hours of work, and a second meal period for those who worked more than 10
    hours.

  • Moreover, the employee nurse could not recall missing a meal period or
    notifying her employer about a missed meal period.

  • She also could not recall a supervisor interrupting her meal periods with work-
    related questions or requests.

  • Her supervisors never told her to end a meal break early.

  • She was never discouraged from taking a meal break.
David v. Queen of Valley Medical Center
• Rest Breaks
  • As to rest breaks, the court found that the hospital employer provided rest breaks
    as required by law because the employee received a 15-minute rest period for
    every 4 hours of work.
      • Moreover, supervisors did not discourage employees from taking rest breaks
        nor did they tell employees to cut their breaks short.
      • Supervisors also did not interrupt rest periods with work-related questions or
        requests.
      • If co-workers did ask questions on break, the employee advised that she was
        on a break and then left alone.
      • In the few times that the employee did miss a break, she reported it and
        received a extra pay pursuant to the hospital’s practice of paying premium for
        a missed break whenever requested.

  • The court rejected the employee’s claim that she had been denied a rest period
    because charge nurses looked at the clock while she was on a break, and which
    she interpreted as a signal to cut her break short.
      • A supervisor’s glance at a clock does not constitute coercion or pressure
        sufficient to undermine a formal policy of providing meal and rest breaks.
David v. Queen of Valley Medical Center
• Rounding Policies
  • The employee also challenged the employer’s rounding policy. However, the
    court found that the policy was lawful.

  • This is because the employer’s rounding policy was neutral on its face and
    neutral in practice.

  • The rounding policy was neutral on its face because it rounded all employee
    time punches to the nearest quarter-hour without an eye towards whether the
    employer or employee is benefitting from the rounding.

  • The rounding policy was neutral in practice because it did not systematically
    undercompensate. That is, sometimes in a given pay period the employee
    gained minutes and compensation and sometimes lost minutes and
    compensation.
Robinson v. Southern Counties
        Oil Company
        (2020) 53 Cal.App.5th 476
Robinson v. Southern Counties Oil Company
 • Robinson bought a class action against his former employer for
   alleged meal and rest break violations and sought civil penalties
   under PAGA.

 • In February 2019, the San Diego County Superior Court approved a
   settlement in a another class action that sought individual damages
   and civil penalties under PAGA for the same alleged Labor Code
   violations and which covered the time of Robinson’s employment.

 • The Court of Appeal held: (1) that even though Robinson had opted
   out of the other class/PAGA action, the settlement of that
   class/PAGA action prohibited Robinson’s claim; and (2) that
   Robinson could not maintain an action for alleged violations that
   occurred after he was no longer employed.
Robinson v. Southern Counties Oil Company
 • Specifically, the Court of Appeal held that while Robinson had
   opted out of the class settlement, “there is no mechanism for
   opting out of the judgment entered into on the PAGA claim.”

 • “[A]n aggrieved employee’s action under PAGA functions as a
   substitute for an action brought by the government itself.”

 • As a result, “a judgment in that action binds all those, including
   nonparty aggrieved employees who would be bound by a
   judgment in an action brought by the government.”
Starks v. Vortex Industries, Inc.
       (2020) 53 Cal.App.5th 1113 (2020)
Starks v. Vortex Industries, Inc.
• Facts
  • Employees filed separate actions under PAGA against their employer alleging
    violations of wage statutes and meal and rest period requirements.

  • One of the employee’s cases settled. As a result, the Labor and Workforce
    Development Agency (“LDWA”) accepted its share and the aggrieved
    employees were paid out.

  • Upon notice of this settlement, the other employee that had a pending PAGA
    action moved to vacate this judgment and to intervene.

  • However, upon settlement of the first case, the employer moved for summary
    judgment to preclude the other employee’s case. Specifically, the employer
    argued that the other employee’s case was barred by the doctrine of res
    judicata.
Starks v. Vortex Industries, Inc.
• Result
  • The Court of Appeal held that summary judgment in this case was proper.

  • This is because acceptance of judgment by the LWDA following settlement
    precluded LWDA or its agents, including putative intervenor employees, from
    challenging that judgment on appeal.

  • “Because a PAGA plaintiff acts as a proxy or agent of the state’s labor law
    enforcement agencies and the PAGA functions as a substitute for action
    brought by the government itself, a judgment in that action binds all those,
    including nonparty aggrieved employees who would be bound by a judgment
    in an action brought by the government. Thus, although courts have held
    different aggrieved employees may be deputized by the LWDA to pursue
    PAGA actions concurrently against the same employer, a judgment obtained
    in one action will bar other PAGA actions against the employer under the
    doctrine of res judicata.”
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              © 2021 Fisher & Phillips LLP *This presentation does not constitute legal advice.
FOR ADDITIONAL RESOURCES ON COVID, AB685, CalOSHA COVID
EMERGENCY REGULATIONS SEE THE FOLLOWING:

1. CDC website: www.cdc.gov
2. Los Angeles County Health Department:
www.publichealth.lacounty.gov
3. California’s Department of Public Health:
www.cdph.ca.gov/COVID19
4. Department of Industrial Relations re: AB685:
www.dir.ca.gov/dosh/coronavirus/AB6852020FAQs.html
5. Department of Industrial Relations re: CalOSHA Emergency
Covid Regs.: www.dir.ca.gov/dosh/coronavirus/

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