California
DLSE Unveils Template for
Employers to Use to Comply with "Wage Theft Prevention Act," and
also Issues FAQs Outlining Employer Obligations
As discussed in prior newsletters,
the Wage Theft Prevention Act of 2011 (AB 469) takes effect January
1, 2012, and imposes new notice requirements upon employers. Specifically,
newly-added Labor Code section 2810.5 requires employers to provide
written notice to employees (unless statutorily exempted) upon hire
in the language the employer typically communicates such information
of: (1) the employee's pay rate and basis for pay rate (e.g., salary,
commission, hourly, etc.); (2) allowances, if any, claimed as part of
the minimum wage, including meal or lodging allowances; (3) the regular
payday designated by the employer; (4) the name of the employer, including
any "doing business as" names used by the employer; (5) the physical
address of the employer's main office or principal place of business,
and a mailing address, if different; (6) the employer's telephone
number; (7) the name, address, and telephone number of the employer's
workers' compensation insurance carrier; and (8) any other information
the Labor Commissioner deems material and necessary.
Employers must also provide
written notice of any change to these items within seven calendar days
after the time of the changes, unless the changes are reflected in a
timely wage statement furnished under Labor Code section 226, or notice
of all changes is provided in another writing required by law, within
seven days of the changes.
These notice requirements apply
to all new hires after January 1, 2012, unless the employee: (1) is
directly employed by the state or any political subdivision thereof;
or (2) is exempt from the payment of overtime wages by statute or the
IWC Wage Orders; or (3) is covered by a valid collective bargaining
agreement that expressly provides for wages, hours of work, working
conditions, premium wages for all overtime, and a regular rate of pay
not less than thirty percent more than state minimum wage.
The new law tasked the Labor
Commissioner with developing and making available a template for employers
to use to comply with these requirements. The Labor Commissioner's
exemplar is now available on the DLSE website at
http://www.dir.ca.gov/dlse/LC_2810.5_Notice.pdf.
The DLSE has also issued a
set of "Frequently Asked Questions" concerning this new law and
the DLSE-issued template. These FAQ's are available at
http://www.dir.ca.gov/dlse/FAQs-NoticeToEmployee.html. As discussed below, the DLSE FAQs contain
several interesting insights, and raise several issues, including to
whom the notices must be provided, that employers should evaluate more
fully, including with their legal counsel.
For instance, the DLSE FAQs
authorize employers to use the DLSE-issued template or to develop their
own form provided it contains the statutorily-required information identified
above, and "any other information the Labor Commissioner deems material
and necessary." Notably, the DLSE-issued template requires employers
to provide certain items beyond that specifically-required in the new
law, including requiring the employer to identify the type of employment
agreement (e.g., oral, written, etc.), to identify the employee's
hire date, to identify the business entity of the employer (e.g., corporation,
partnership, etc.) to provide information about third-party benefits
or payroll administrators, and to identify the Workers' Compensation
policy number. The DLSE's FAQ's, Question No. 6, authorizes
employer to develop their own notices "so long as they contain all
the information required by the law, including all the information requested
on DLSE's template" which suggests the DLSE's position is these
new items are items the DLSE "deems material and necessary."
Notably also, while newly-added
Labor Code section 2810.5 only expressly requires employers to provide
these notices to covered employees "at time of hire" or after any
of these items change, DLSE's FAQs, Question 2, states "the notice
should be given to all current employees and then to all new employees
at the time of hire."
The FAQs further state that
this notice may be presented along with other materials at time of hire
but the notice required under Labor Code section 2810.5 must be on its
own form. The FAQs authorize the form to be provided electronically
provided the worker can acknowledge the receipt of the notice and print
out a copy, and they recommend employers keep a record of notices provided
to their employees.
The new law requires employers
to provide these notices to employees in the language the employer normally
uses to communicate employment-related information, and the DLSE FAQs
indicate the DLSE will post non-English template versions as they are
completed. It indicates the DLSE will provide Spanish, Chinese, Korean,
Vietnamese and Tagalog versions, and potentially others.
San Francisco's Minimum
Wage Increases to $10.24 on January 1, 2012
On January 1, 2012, the San
Francisco minimum wage will increase from $9.92 per hour to $10.24 per
hour for all employees (including temporary or part-time employees)
who perform work in San Francisco. Pursuant to the San Francisco
Minimum Wage Ordinance, Chapter 12R of the San Francisco Administrative
Code, the City's minimum wage is adjusted annually based on increases
in the regional consumer price index. All employers, regardless
of where located, must pay this San Francisco-specific minimum wage
to employees who work at least two hours of a particular week in the
City's geographic boundaries. More information about this wage
increase, including the new minimum wage poster and a set of Frequently
Asked Questions regarding this minimum wage, is available on the City
and County of San Francisco Labor Standards Enforcement website: www.sfgsa.org.
San Francisco Employers
Required to Display New Poster in 2012 Regarding Health Care Security
Ordinance
Effective January 1, 2012,
businesses with more than twenty (20) employees (and non-profits with
more than fifty (50) employees) must display a notice outlining the
amounts employers must spend on health care benefits to comply with
the San Francisco Health Care Security Ordinance (HCSO). Under
the HCSO, businesses with twenty 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 more than ninety (90) days. As
outlined in the new Notice, employers with between 20-99 employees must
spend at least $1.46 for each hour worked for each covered employee,
while employers with 100+ employees must spend at least $2.20 for each
hour worked by each covered employee. More information as well
as a downloadable copy of this Notice is available at www.sfgov.org/olse/hcso.
Federal
Bill Authorizing Tax Credits
for Hiring Veterans Takes Effect
Congress recently passed and
President Obama signed into law a bill providing various tax credits
to encourage employers to hire unemployed veterans. Under the
Hire Heroes Tax Credit, employers would receive a $2,400 tax credit
for hiring veterans who have been unemployed between four weeks and
six months, and a tax credit of $5,600 for hiring veterans who have
been unemployed for more than six months. Under the Wounded Warriors
Tax Credit, employers would receive up to a $9,600 tax credit for hiring
veterans with service-related disabilities who have been unemployed
for more than six months.
AGENCY
Federal
NLRB Postpones (Again) Deadline
for Employers to Display Union Rights Poster
The National Labor Relations
Board (NLRB) has announced that it is postponing until April 30, 2012
(from January 31, 2012), the deadline for employers to display a poster
advising employees of their rights under the National Labor Relations
Act. The NLRB states this postponement flows from a request by
the federal district count in Washington D.C. that is hearing legal
challenges to this posting requirement.
As mentioned in prior newsletters,
a downloadable copy of this poster, which must be 11x17 inches, is available
for free download at www.nlrb.gov/poster, and employers can obtain more
information about this poster and the fairly-detailed posting and translation
requirements at www.nlrb.gov/faq/poster.
IRS Mileage Reimbursement
Rate to Remain at $ .555 in 2012
The Internal Revenue Service
(IRS) has announced that the 2012 optional standard mileage rate used
to calculate the deductible costs of operating an automobile for business,
charitable, medical or moving expenses. Beginning January 1, 2012,
the standard mileage rates for the use of a car will be: 55.5 cents
per mile for business miles driven (unchanged since an increase announced
in July 2011), 23 cents per mile driven for medical or moving purposes,
and 14 cents per mile driven in service of charitable organizations.
The full-text of the IRS' announcement is available at www.irs.gov.
NTSB Proposes Complete Ban
on Cell Phone Usage While Driving
Citing a desire to prevent
distracted driving, the National Transportation Safety Board (NTSB)
has recently called for a nationwide-ban on driver use of personal electronic
devices (PEDs) while operating a motor vehicle. If enacted, this
ban would appear to extend to even "hands free"-type PEDs, except
those installed by the vehicle's manufacturer, and would prohibit
drivers from using cell phones or texting while driving. The NTSB's
rule would not preclude passengers from using such devices. (In
July 2008, California implemented a ban on driver use on non-hands free
cell phones, and in January 2009, prohibited texting while driving).
The NTSB's proposed ban is not an employment rule per se or even targeted
specifically at employers, but may have employment-related ramifications,
particularly for those employers who have mobile employees. More
information about the NTSB's proposal is available at www.ntsb.gov/doclib/fact_sheets/PED_Ban_Fact_Sheet.pdf.
JUDICIAL
California
California Supreme Court
Allows Supplemental Briefing in Brinker
Following the recent oral argument
in Brinker, the California Supreme Court announced it will allow
supplemental briefing on the issue of whether any ruling on the "rolling
five" issue would apply prospectively only, or also apply retroactively.
During oral argument on the main issue presented (whether employers
must "provide" or "ensure" a meal period is taken), the justices
inquired whether employers might be required to provide a meal period
for every five hours worked (a "rolling five hour" obligation),
including a second meal period during an eight hour shift where an early
meal period is taken. The Court's Order specifies that each
side will submit initial written briefs on this issue by January 3,
2012, and reply briefs by January 13, 2012, at which time the matter
will be deemed re-submitted. This supplemental briefing suggests
that a final ruling will not be issued until Spring 2012, and that the
final ruling may involve a new interpretation of the "rolling five"
issue, meaning Brinker may create new issues while resolving
others.
California Supreme Court
Provides Guidance, but not Bright-Line Rules, on Administrative Exemption
Insurance claims adjusters
filed four class action lawsuits against their insurance company employer
alleging that they had been erroneously classified as exempt "administrative"
employees and sought damages for unpaid overtime work. The
California Supreme Court overturned the appellate court's holding
that the claims adjusters were not exempt as a matter of law and explained
that the lower court's analysis was flawed, as it had focused solely
on determining whether the adjusters were administrative or production
workers under the "administrative/production worker dichotomy."
Using this dichotomy, the lower court evaluated the employee's duties
as compared to the business of the employer to determine whether the
employee primarily engaged in administering the affairs of the enterprise
or primarily engaged in producing the commodities, whether goods or
services, that the enterprise exists to produce and market. The
lower court found that the claims adjusters were "production workers,"
and thus non-exempt, because their work was not carried on at the level
of policy or general operations.
The Supreme Court rejected
the lower court's strict application of the dichotomy and directed
that the doctrine had effectively been superseded in this context by
more specific and detailed statutory and regulatory enactments, including
Wage Order 4-2001. While the Court declined to eliminate the dichotomy
entirely, it held that its application was limited to circumstances
where statutory and regulatory authorities failed to provide adequate
guidance. Rather, here, the question of whether workers are "exempt"
under the administrative exemption required consideration of the express
language of IWC Wage Order 4-2001, the relevant federal statutes and
regulations specifically cited in the order, and the relevant sections
of the California Labor Code.
Pursuant to Labor Code section
515(a) and IWC Wage Order 4-2001, there is a four-part test to determine
whether employees qualify under the administrative exemption: (1) workers
must be paid no less than two times the state minimum wage for full-time
employment; (2) their work must be "administrative"; (3) their primary
duties must involve that administrative work; and (4) they must regularly
exercise independent judgment and discretion. In addressing whether
the work of claims adjusters is "administrative" in nature, the
Supreme Court looked to the statutory and regulatory authorities cited
in the Wage Order and explained that work qualifies as "administrative"
when it is "directly related to management policies or general business
operations." Work is "directly related" if it is qualitatively
administrative and quantitatively of substantial importance to the management
or operations of the business. This is a conjunctive test.
The Court noted that with regard to the qualitative aspect of the test,
administrative operations include work done by "white collar" employees
engaged in servicing a business. Such servicing includes, as relevant
in this case, advising management, planning, negotiating, and representing
the company. The Court refused to opine on the quantitative aspect
of the test.
The Court ultimately declined
to decide whether claims adjusters actually qualified for the administrative
exemption and ordered the trial court on remand to undertake a factually
intensive inquiry of the claims adjusters' duties and evaluate whether
they meet the test for exemption as articulated in the applicable statutes
and wage orders.
(Harris v. Superior Court
(ex rel Liberty Mutual Ins. Co.) (2011) ___ Cal.4th ___, 2011 Cal.
LEXIS 13237.)
Appellate Court Provides
Guidance on "Reporting Time Pay"
and "Split Shift Premiums" for Employees who Attend Scheduled Meetings
Employees who attended scheduled
monthly meetings, including on their days off, filed a class action
seeking "reporting time pay" and "split shift premiums" under
Wage Order 4. The employees argued that although they were paid
for attending these scheduled meetings, which often lasted approximately
an hour or ninety minutes (although scheduled for ninety minutes to
two hours), they were entitled to statutorily-enumerated "reporting
time pay" and additional split shift premium pay on those occasions
where the employees worked their regular shift later on the same day.
In a case of first impression, a California court of appeal rejected
both arguments and held the employer was not required to pay additional
compensation beyond that already paid either for attending the meetings,
or for attending the meeting and later working a regularly-scheduled
shift.
Subdivision 5(A) of Wage Order
regulates "reporting time pay" and provides: "[e]ach workday an
employee is required to report for work and does report, but is not
put to work or is furnished less than half said employee's usual or
scheduled day's work, the employee shall be paid for half the usual
or scheduled day's work, but in no event for less than two (2) hours
nor more than four (4) hour, at the employee's regular rate of pay,
which shall not be less than the minimum wage." The appellate
court rejected the employees' argument this provision required they
be paid no less than two hours wages regardless of whether the meeting
was scheduled and if they worked at least half of the time allotted
for the meeting. The court emphasized the statutory language conditioning
reporting time pay based upon either the employee's "usual" or
"scheduled" days work, and held that provided the meeting is sufficiently
scheduled, thus providing adequate notice to the employee, reporting
time pay is only required when the employee is paid less than the scheduled
day's work. As applied in this case, the employees were not
entitled to receive a minimum of two hours pay simply for attending
a scheduled meeting, but were entitled to only the time spent in the
meeting provided the meeting (i.e., the time worked) lasted at least
half of the scheduled time.
In reaching this conclusion,
the court distinguished the recent result in Price v. Starbucks,
Inc. (2011) 192 Cal.App.4th 1136, 1146, in which the court upheld
two hours of reporting time pay for an employee called into work simply
to be terminated in a one-minute meeting. The court noted that
the Price court had concluded two hours of reporting time pay
was appropriate because he had been called in on an impromptu basis
on his day off and therefore had not planned for the meeting and had
no expectation how long it would last. In contrast, these employee
meetings were scheduled with certain start times and expected agendas
and durations, and all lasted at least half of the expected duration.
In another issue of first impression,
the appellate court also rejected the employees' claim to "split
shift premiums" on those occasions where they worked later on the
same day as these meetings because these employees already earned more
than the minimum wage required by Wage Order 4. Subdivision 4(C)
of Wage Order 4 states that "[w]hen an employee works a split shift,
one (1) hour's pay at the minimum wage shall be paid in addition to
the minimum wage for that workday, except when the employee lives at
the place of employment." Again focusing on the statutory language,
and the fact subdivision 4(C) is located in the "minimum wage" section
of Wage Order 4, the court concluded that the one-hour minimum wage
penalty is paid in addition to the "minimum wage for that workday,"
not the regular wage for that workday.
Thus, an employee is only entitled
to additional compensation representing the difference between what
they actually earned and what they would have earned had they been paid
the minimum wage for their entire shift plus an extra hour.
The court used the following example based upon an eight-hour shift
to explain this point: a minimum wage worker earning $8.00 an hour and
working an eight-hour shift would be entitled to a ninth-hour of minimum
wage ($72.00) where a split-shift premium applied. However, an
employee making $12.00 per hour and working an eight-hour shift would
not be entitled to any split-shift premium because he has already actually
earned an amount ($96 [eight times an hour rate of $12]) exceeding the
amount owed had he worked an entire shift at minimum wage plus an extra
hour ($72 [eight hours of minimum wage plus one additional hour of minimum
wage as a penalty).
The court also concluded one
of the class representatives had already waived her claims for split-shift
premiums or reporting time pay by executing a broadly-worded release
and accepting a severance payment. The court rejected the employee's
claim these items were undisputedly owed and thus incapable of being
released pursuant to Labor Code section 206, because a good-faith dispute
existed regarding the employee's entitlement to these items.
However, the court also held these employees' claims for reporting
time and split shift premiums were governed by Labor Code section 1194
and its unilateral attorney fee provision rather than Labor Code section
218.5 and its provision awarding attorneys' fees to the "prevailing
party." Thus, these employees could not be held liable for the
attorneys' fees incurred by the employer in successfully defending
against these "reporting time" and "split shift" payment claims.
(Aleman v. Airtouch Cellular (2011) ___ Cal.App.4th ___, 2011 Cal.App.LEXIS 1609.)
Employer May Provide Hearsay
Evidence to Obtain Temporary Restraining Order to Prevent Workplace
Violence
Code of Civil Procedure section
527.8 permits an employer to seek a temporary restraining order and
an injunction on behalf of an employee who has suffered unlawful violence
or a credible threat of violence carried out at the workplace.
To obtain a temporary restraining order, the employer must provide an
affidavit showing reasonable proof that an employee has suffered unlawful
violence or a credible threat of violence by the defendant, and that
great or irreparable harm would result to an employee. The court
will conduct a hearing within 15 days of the petition's filing, and
if the judge finds "clear and convincing" evidence of unlawful violence
or a credible threat of violence, the judge may issue an injunction
lasting up to three years.
In this case, the husband of
a terminated employee alleged the trial court improperly issued a three-year
injunction enjoining him from making further violent threats against
two of her fellow co-workers. The husband argued the trial court
should not have considered hearsay evidence recounting his statements
that he was going to "put [the two co-workers] down" or that he
was "going to flip his lid" and "do something he would regret."
A California appellate court rejected this argument, noting section
527.8 authorizes the trial judge to consider "any testimony that is
relevant" and does not specifically exclude hearsay. The appellate
court also cited the unique expedited nature of these workplace violence
injunctive hearings, and that a judge, rather than a jury, will weigh
this evidence and decide whether the clear and convincing standard of
proof is met in any case. (Kaiser Foundation Hosp. v.
Wilson (2011) 201 Cal.App.4th 550.)
Employer Not Required to
Indemnify Employee for Attorneys' Fees Incurred Defending Against
Suit by the Employer
An employee who successfully
defended a lawsuit brought by his employer alleging breach of contract
and conversion requested indemnification under Labor Code section 2802
for the attorneys' fees he incurred. Labor Code section 2802
states "an employer shall indemnify his or her employee for all necessary
expenditures or losses incurred by the employee in direct consequence
of his or her duties." In a case of first impression, a California
court of appeal concluded that while section 2802 would require indemnification
of the employee for claims brought by a third-party, the common law
definition of "indemnify" did not extend to "first party disputes"
or "direct liability" between the employer and the employee.
The appellate court also noted that while Government Code section 317
requires corporations to indemnify agents who successfully defend a
corporation's claims, section 317 did not extend to limited liability
corporations such as this employer. (Nicholas Laboratories
LLC v. Chen (2011) 199 Cal.App.4th 1240.)
Company Contracting With
Caltrans to Provide Tree Pruning and Removal Services Must Pay Its Employees
the Prevailing Wage Rate
California's Prevailing Wage
Law (Labor Code §§ 1720-1861) requires that, except in specified circumstances
(e.g., public works contracts involving less than $1,000), workers employed
on "public works" shall be paid at least the general prevailing
rate of per diem wages for work of a similar character in the locality
in which the public work is performed. In this case, a private
company that contracted with CalTrans on a one-time basis for tree removal
and pruning on the highways argued it was not performing "public work"
or "maintenance" (as defined) and thus was not required to pay the
prevailing wage to its employees.
The Department of Industrial
Relations and a California court of appeal disagreed citing the parties'
contractual terms, the expansive definition of "maintenance" (which
extended to these tree trimming operations) and the broad interpretation
generally afforded the Prevailing Wage Law and its regulations.
The court observed such "maintenance" fell within the definition
of "public works" and the Prevailing Wage Law applied to even a
one-time contract since even though this work was not routine and recurring
for this contractor, it was routine and recurring for CalTrans.
(Reliable Tree Experts v. Baker (ex rel. Cal. Dept. of Trans.) (2011) 200 Cal.App.4th 785.)
Under After-Acquired Evidence
Doctrine, Back Pay Award Stops Accruing at the Time Plaintiff
Engaged in Misconduct that Would Have Resulted in Termination
Under the "after acquired
evidence" doctrine, conduct discovered after termination that would
have resulted in termination may potentially bar an employee from suing
completely or cut off economic damages after the date of discovery.
In this case, a California court of appeal held that a sheriff who had
been improperly terminated could not recover economic damages after
his post-termination felony convictions (three years after termination)
since those felony convictions would have disqualified him from working
as a law enforcement officer.
However, the appellate court
declined to apply the "unclean hands" doctrine to preclude the sheriff
from any recovery whatsoever. While the "unclean hands" doctrine
potentially applies more broadly and may act as a complete defense to
recovery, and the "after acquired evidence" doctrine generally limits
further damages after the date of discovery, the complained-of misconduct
generally must relate to the particular dispute between the parties
in the litigation. Thus, the fact this sheriff had improperly
once used a county helicopter or subsequently engaged in tax-fraud would
not insulate the country from its improperly motivated termination since
these events were not related.
The court also held the sheriff's
complaints directly to the decisionmaker about the decisionmaker's
unlawful activities constituted a legally-protected activity under California's
whistle-blowing statute (Labor Code section 1102.5). Lastly, the
court rejected the county's suggestion the sheriff had waived the
protections of the Public Safety Officers Procedural Bill of Rights
Act (POBRA) by signing a three-paragraph memorandum that did not mention
POBRA and simply noted he would serve at the "pleasure" of the incoming
sheriff. (Jaramillo v. County of Orange (2011) 200 Cal.App.4th 811.)
Court of Appeal Upholds
Substantial Jury Verdict Award Based on Humiliating Sexual Conduct Directed
at Female Employee
A California appellate court
upheld an $860,000 jury verdict (of which $677,000 was attorneys'
fees) in favor of a female employee who alleged her male supervisors
had sexually harassed her. The court concluded that the alleged
conduct (i.e., telling her to "show her butt to customers" to increase
sales, spreading rumors she had herpes and was sleeping with co-workers,
and inviting her to strip clubs and suggesting she pose in a bikini)
was sufficient pervasive even though occurring only over a several week
period. The court also concluded the conduct was sufficiently
severe given the sexually-explicit and vulgar nature of the conduct,
which included touching her on the arm and turning her around so customers
could view her body, the "humiliating" impact upon this young female
employee and the fact her supervisors were the harassers. The
court also distinguished this case from several recent California cases
which had declined to impose liability simply because of sexual discussions
in the workplace, noting this conduct specifically involved and was
targeted at the complaining female employee rather than simply discussing
sex in general.
The court also rejected the
employer's contentions the employee's allegations were "inherently
improbable" given several inconsistencies in witness' recollection,
noting it would not second-guess the juror's credibility determinations
and it is not uncommon for witnesses to vary slightly in their recollection.
(Fuentes v. Autozone, Inc. (2011) 200 Cal.App.4th 1221.)
Supervisors May Not be Individually
Liable for Discrimination under California State Law Equivalent of USERRA
A serviceman denied reinstatement
following his military deployment sued his employer and several supervisors
under California's Military and Veterans Code section 394 which prohibits
discrimination or retaliation against members of the armed forces.
In a case of first impression in California, a California court of appeal
concluded the supervisors could not be held individually liable notwithstanding
section 394's prohibition against any "employer or person or agent"
engaging in discriminatory or retaliatory actions.
Relying heavily upon several
California Supreme Court decisions precluding individual liability under
the Fair Employment and Housing Act for discrimination and retaliation,
the appellate court concluded that similar statutory interpretation
rules and public policy grounds precluded holding supervisors liable
for personnel management decisions. Rather, the primary target
remained the employer on whose behalf the decisions were made.
(Haligowski v. Superior Court (ex rel Pantuso) (2011) 200 Cal.App.4th
983.)
(NOTE: the court specifically
declined to follow several federal court decisions which had interpreted
USERRA as potentially authorizing individual liability, noting USERRA
involved decidedly different language and this employee had not sued
under USERRA.)
Governmental Entity May
be Liable under False Claims Act for Retaliatory Discharge
An in-house attorney sued her
governmental entity employer for wrongful discharge under California's
False Claims Act (Gov. Code section 12653), contending she was terminated
for investigating concerns about misuse of governmental funds.
The governmental entity argued that because it was not a "person"
capable of being sued under the False Claims Act, it was also immune
from wrongful discharge claims under the False Claims Act. A California
court of appeal rejected this argument noting that while the employer
did not fit within the definition of "person" in section 12650 of
entities that could be sued for misusing funds, the whistleblower provision
(section 12653) specifically precluded an "employer" from retaliating
against employees who initiate False Claims Act claims.
The appellate court also affirmed
the trial court's instruction that the employer bears the burden of
affirmatively proving the employee failed to mitigate her damages, including
by demonstrating that comparable employment was available and rejected.
The court noted that pursuing self-employment, rather than a position
identical to the former position, may be reasonable provided the discharged
employee applies sufficient effort trying to make the business successful.
Lastly, the court declined to reduce by half the $415,000 attorneys'
fees award simply because the employee prevailed on only one of two
interrelated claims pursued at trial. (Coredero-Sacks v. Housing
Authority of the City of Los Angeles (2011) 200 Cal.App.4th 1267.)
Church-Owned School Exempt
from FEHA Marital Status Discrimination Claim
A pre-school teacher employed
by a church sued for FEHA marital status discrimination after the church
terminated her for violating a church precept (e.g., she was living
with her boyfriend in a sexual relationship and was raising their child
in that living arrangement). A California court of appeal held
the church was not subject to the FEHA because the FEHA's definition
of employer (Gov. Code section 12626(d)) expressly excludes religious
associations or corporations that are not organized for private profit.
The appellate court also rejected
the employee's public policy claims noting that Title VII allows employers
to terminate an employee whose conduct or religious beliefs are inconsistent
with those of its employer. The court noted that this church terminated
this teacher not because she had become pregnant, or was female or raising
their child out of wedlock (which might be discriminatory), but because
she was violating a church precept by living with her boyfriend in a
sexual relationship and raising their child in that relationship.
Lastly, the court noted the Constitutional "ministerial exception,"
which excludes church-related employment decisions from judicial review,
was not limited solely to the clergy but applied to all employees of
a religious institution whose primary functions serve its spiritual
and pastoral mission. In this case, the teacher's position and
duties (which included instructing the students on the Bible and leading
them in prayer) qualified for this exception. (Henry v. Red
Hill Evangelical Lutheran Church of Tustin (2011) 201 Cal.App.4th 1041.)
(NOTE: the United States Supreme
Court is presently considering a case (Hosanna-Tabor Evangelical
Lutheran Church v. EEOC (10-55) involving what types of teachers at sectarian schools qualify under
the ministerial exemption.)
Federal
Employer's Reasonable
Accommodation Duty Does Not Apply to Assist Employee in Meeting Job
Prerequisites
A teacher with a history of
depression and mental disorder alleged her school district employer
failed to reasonably accommodate her disability because it would not
authorize a provisional certificate that would allow her continue teaching
until she obtained a renewed state-issued certificate. (Applicable
state law required all teachers to hold an education certificate, which
required minimum continued education, and this employee had not been
able to meet the continued education requirements due to a bi-polar
flare up). The Ninth Circuit Court of Appeal concluded the teacher
was not a qualified individual with a disability, and held the employer
had no accommodation obligation under the Americans with Disabilities
Act ("ADA") until the employee first satisfied the position's
prerequisites.
The ADA defines "qualified
individual" as an "individual who, with or without reasonable accommodations,
can perform the essential job functions of the employment position that
such individual holds or desires." The circuit court cited EEOC
regulations suggesting whether someone is a "qualified individual"
involves a two-step inquiry of (1) whether the individual satisfies
the requisite skills, experience, education and other job-related requirements;
and (2) whether they can perform the essential functions of such position
with or without reasonable accommodation. The court held that unless
the prerequisite is discriminatory in itself, the employee must first
demonstrate they can independently satisfy the job prerequisites without
accommodation, before the employer has a duty to consider reasonable
accommodations that may enable them to perform the essential job functions.
Thus, this employer had no duty to consider reasonable accommodations
such as the issuance of a temporary certificate because the employee
could not first satisfy the job prerequisite of having obtained a state
issued teaching certificate. (Johnson v. Bd. of Trustees of the Boundary
County School Dist. No. 101 (9th Cir. (Idaho) 2011) __ F.3d ___,
2011 U.S.App.LEXIS 24305.)
Application of California
Labor Code to Non-Resident Plaintiffs Performing Work Inside California
Does Not Violate Due Process or Dormant Commerce Clause
Following the Ninth Circuit's
certification to the California Supreme Court of three questions of
state law regarding work performed by non-resident plaintiffs inside
and outside of the state, the California Supreme Court held in Oracle that: (1) California's overtime laws apply to work performed by non-resident
employees in California for a California employer; (2) Business and
Professions Code section 17200 applies to such overtime work; and (3)
section 17200 does not apply to overtime work performed by non-resident
employees outside of California for a California-based employer.
In this subsequent matter,
the Ninth Circuit rejected the employer's two remaining challenges
and held that the application of the California Labor Code to non-residents
working in California does not violate the Due Process Clause of the
Fourteenth Amendment or the Dormant Commerce Clause of the United States
Constitution. In rejecting the employer's due process argument,
the court held that California clearly had sufficient contacts to create
a state interest in the application of the California Labor Code in
this case: the employer had its headquarters and principal place of
business in California; made the decision to classify plaintiffs as
exempt from overtime laws in California; and the work in question was
performed in California. The Ninth Circuit also rejected
the employer's Dormant Commerce Clause argument finding that California's
application of its Labor Code equally to work performed in California
by residents and non-residents did not impose an excessive burden on
commerce in relation to putative local benefits. (Sullivan
v. Oracle Corp. (9th Cir. 2011) ___ F.3d ___, 2011 U.S. App. LEXIS
24625.)
