
Employment Law News – January 2013 Legislative Jan 01, 2013 Related Attorneys Expertise Practice Areas Employment California While almost every legislative session draws considerable employer attention, the just-commenced 2013 session may be particularly noteworthy since a single party has super-majorities in both legislative chambers, as well as a governor from the same party. As a New Year’s resolution, employers might consider getting more involved earlier in the legislative process rather than waiting until items reach the Governor’s desk for signature or veto. This newsletter will continue to highlight the key employment bills of general application as they move forward, including the following: Annual Minimum Wage Adjustments Proposed (AB 10) This bill would increase California’s minimum wage by specified amounts for three consecutive years beginning in 2014, with annual adjustments tied to inflation thereafter. Specifically, this bill would increase California’s minimum wage to $8.25 beginning on January 1, 2014, to at least $8.75 in 2015, and to at least $9.25 in 2016. This bill would also provide for annual adjustments beginning in 2017 to maintain employee purchasing power, calculated by using the California Consumer Price Index. The bill would also specifically prohibit the Industrial Welfare Commission from adjusting the minimum wage downward in years with negative inflation levels. Similar versions of this bill are introduced annually and have repeatedly stalled in recent years, but the early introduction of this bill suggests it may be a legislative priority. This fact, coupled with minimum wage increases in several California municipalities and in numerous states, suggests a minimum wage increase is likely in 2013. Social Media Password Prohibitions to Extend to Public Employers (AB 25) Last year, AB 1844 was signed into law prohibiting private employers from requiring or requesting an employee or applicant for employment to disclose a username or password for the purpose of accessing personal social media. This bill would amend the newly-enacted Labor Code section 980 to specify that its various prohibitions apply to both public and private employers. Since AB 1844 passed unanimously last year, and since many likely assumed these prohibitions already applied to both private and public employers, this bill seems likely to pass quickly and be signed into law. Federal Employment Law Aspects of “Fiscal Cliff” Deal While most of the attention focused on the increased income tax rates, there are several noteworthy employment-related items in the American Taxpayer Relief Act of 2012 (H.R. 8) which has already been signed into law. For instance, this bill did not extend the two percent payroll tax cut of the Social Security (FICA) employee tax. Thus, while the employer-paid portion of these taxes remains unchanged at 6.2 percent, the employee-paid portion increases from 4.2% to 6.2% as of January 1, 2013. The Internal Revenue Service has already issued revised tax withholding tables for employers (www.irs.gov/pub/irs-pdf/n1036.pdf), and suggested employers should start using these revised tables as soon as possible but no later than February 2013. However, the bill permanently extends the employer-provided education benefits available under Internal Revenue Code section 127 which allow employees to exclude from income up to $5,250 per year in educational assistance at the undergraduate and graduate levels. The bill also increases the pre-tax benefit for public transportation and vanpool expenses from $125 to $240 per month, thus making it the same monthly pre-tax benefit for commuter parking expenses. AGENCY California California’s New Regulations Concerning Pregnancy Leave and Accommodation are Now Effective On December 30, 2012, the Fair Employment and Housing Commission’s pregnancy regulations took effect. The full text of the approved pregnancy regulations is available at www.fehc.ca.gov/act/pregnancyregulations.asp, but some of the more substantive items are discussed below. California employers with five or more employees must make pregnancy disability leave (PDL) available to employees. The regulations clarify and, in some instances, expand the PDL protections afforded to employees. Specific clarifications in the regulations include a change to the definition of “four months” as related to pregnancy leave. Under the PDL law, “four months” is equivalent to 17-1/3 weeks, not 16 weeks. Further, the amended regulations provide examples of how to calculate the four-month period if the employee works less than a full-time schedule or works a variable schedule. The regulations also list examples of “related medical conditions” that are protected under FEHA, and for the first time include “lactation.” Significantly, the regulations place a duty on employers to reasonably accommodate breastfeeding or expressing breast milk. As an example, this definition could result in an employee requesting (and receiving) changed or reduced hours, or more or longer breaks, as a “lactation accommodation.” The proposed regulations, however, do not place limitations on the length of the time necessary to accommodate lactation. The practical effect of the regulation is that a lactating woman may request reduced or modified hours to accommodate lactation for an indeterminate period of time. Moreover, the regulations clarify an employer’s responsibilities regarding reasonable accommodation or transfer of employees affected by pregnancy, childbirth or related medical conditions. If an employer has a policy, practice, or collective bargaining agreement requiring or authorizing the transfer of temporarily disabled employees to less strenuous positions or duties, including disabilities or conditions resulting from on-the-job injuries, the policy must also apply to transfer employees who are disabled by pregnancy. This is an important distinction from federal law, which only requires employers to provide light-duty programs to pregnant employees if they have a policy in place for employees with non-work related injuries. The regulations also provide for an expanded definition of when a woman is “disabled by pregnancy.” The revised definition includes such examples as post-partum depression, “morning sickness,” and time off for “loss or end of pregnancy.” Therefore, the regulations place a duty on employers to reasonably accommodate post-partum depression, severe morning sickness and loss or end of pregnancy. Importantly, the regulations also require employers to reasonably accommodate “medical conditions” related to pregnancy, even if not “disabled” by pregnancy. Further, the regulations include that it is unlawful to discriminate against or harass an applicant or employee based on “perceived pregnancy.” Perceived pregnancy is defined as being regarded or treated by an employer as being pregnant or having a related medical condition. There is no further guidance and it is unclear how this definition will be interpreted by the Department of Fair Employment and Housing or the courts. The regulations also require employers to respond to an employee’s request for reasonable accommodation, transfer, or pregnancy disability leave “as soon as practicable, and, in any event no later than ten calendar days after receiving the request.” Mandatory changes have also been made to Notices “A” and “B,” which provide information for employees about their rights and responsibilities under pregnancy disability leave (Notice “A”) and the California Family Rights Act (Notice “B”). Interestingly, the regulations have included a form Certification of Health Care Provider for Pregnancy Disability Leave, Transfer, and/or Reasonable Accommodation, which employers can provide to their employees. Although employers may use their own forms, use of the form provided by the Fair Employment & Housing Commission guarantees compliance with the pregnancy regulations. NOTE: Employers are encouraged to review their policies and procedures to reflect these new regulations. FEHC Adopts Amended Disability Regulations Also on December 30, 2012, the Fair Employment and Housing Commission’s disability regulations took effect. The full text of the approved disability regulations are posted on the FEHC's Disability Regulations Page,www.fehc.ca.gov/act/disabilityregulations.asp. but a brief summary of the substantive changes are provided below. First, the regulations broaden the definition of disability to include any disorder that affects a person’s mental or bodily functions and limits a major life activity. “Limiting” a major life activity merely means that the conditions makes achieving a major life activity “difficult.” Consistent with the federal ADAAA regulations, the California regulations advise courts to focus on what accommodations can be provided to the employee and whether the employer engaged in the interactive process with the employee, instead of what constitutes a disability. The regulations also clarify the employer's ability to request additional medical information where the information provided by the employee is not complete, and to provide only those accommodations supported by the medical documentation provided, until additional information is provided. The regulations also provide that an employee can show discrimination if the disability was just one of the factors that influenced the employer to make the adverse employment action, as opposed to the sole or dominant cause of the adverse employment action. (Note that this may change depending upon an upcoming California Supreme Court case, Harris v. City of Santa Monica in which the Court is evaluating the applicability of the so-called “mixed motive” affirmative defense in FEHA discrimination cases). The regulations also follow California case law in determining what may be considered an essential job function, and what evidence may be used to determine an essential job function. Finally, the regulations provide a non-exhaustive list of possible “reasonable accommodations,” including the use of assistive animals, providing a modified work schedule, modifying an employer policy, providing additional training, or permitting an employee to work from home. Again, the regulations conform with case law and EEOC guidance. Federal IRS Increases Mileage Reimbursement Rate for 2013 As a reminder, effective January 1, 2013, the 2013 optional standard mileage reimbursement rate for business purposes has increased from 55.5 to 56.5 cents per mile for business miles driven. While this reflects the Internal Revenue Service’s optional standard reimbursement rate, taxpayers retain the option of calculating the actual costs of using their vehicle. DOT Responds to “Recreational Marijuana” Laws Passed in Several States During November’s election, several states passed laws permitting marijuana usage for “recreational purposes,” prompting considerable discussion about how this may impact employers generally and drug-testing programs specifically. The Department of Transportation (DOT) has recently issued a notice making it “perfectly clear” that these state laws will have no impact upon the DOT’s regulated drug-testing program for safety-sensitive transportation employees. The DOT’s notice stated that its Drug and Alcohol Testing Regulation (49 CFR Part 40) does not authorize the use of Schedule 1 drugs, including marijuana, for any reason including “recreational.” Accordingly, its Medical Review Officers will not verify a drug test as negative upon learning the employee used “recreational” or “medical” marijuana in states that have passed such initiatives. The full text of the DOT Notice is available athttp://content.govdelivery.com/bulletins/gd/USDOT-5fa546. JUDICIAL California Supreme Court Depublishes Two Appellate Decisions Applying Brinker; District Courts of Appeal Reverse Prior Rulings in Two Others In the three and one-half years that the California Supreme Court was considering the nature and scope of an employer’s obligation to “provide” a meal period in the case of Brinker v. Sup. Ct., it granted review in at least eight other cases and deferred briefing and decisions in those cases until after its resolution of Brinker. After the court issued its opinion in Brinker in April 2012, it remanded the cases to the various courts of appeal with instructions to those courts to vacate their prior decisions and reconsider the cases “in light of Brinker.” The courts of appeal have begun to do so and the Supreme Court appears not to like the result, at least in some of them. In Lamps Plus Overtime Cases, Hernandez v. Chipotle Mexican Grill, Inc., andTien v. Tenet Healthcare Corp., Division Eight of the Second District Court of Appeal again affirmed the trial courts’ denial of class certification. In doing so, it arguably applied a more expansive definition of what it means to provide a meal; one that can be viewed as less burdensome for employers to comply with: “employers must only provide meals, meaning make them available.” On December 12, 2012, the Supreme Court signaled its disapproval of the court of appeal’s approach by ordering both the opinions in Lamps Plus andChipotle depublished. As a result, while the ruling in those cases remains, neither opinion can be cited or relied on by attorneys or courts in subsequent cases. A request for depublication in Tien is pending. Interestingly, the Seventh Division of the Second District Court of Appeal came to the same conclusion on December 5, 2012 in its unpublished opinion in Brookler v. RadioShack Corp. though on different grounds. In that case, the appellate court reversed its prior ruling that a class should have been certified, finding that the standard that it had applied — that an employer who “does not ensure compliance with meal period requirements… violates the Labor Code” — had been “squarely rejected” by Brinker. Rather, in its post-Brinker review, the appellate court found that, in decertifying the class, the trial court had applied the correct standard and upheld its decision. Finally, in the “grant and hold” case of Bradley v. Networkers International, LLC, Division One of the Fourth District Court of Appeal appeared more cautious in light of Brinker. In its original decision in 2009, that court had affirmed the trial court’s denial of certification. In applying Brinker, the court reversed its prior ruling and held that “the trial court erred in refusing to certify the class with respect to each of plaintiffs’ claims [for overtime, meal and rest breaks, inaccurate wage statements, and waiting time penalties] except for claims based on alleged off-the-clock violations.” 2012 Cal.App. LEXIS 1261, 2. In particular, the court found that Brinker* instructed that an employer’s uniform lack of a meal and rest break policy, as was the case there, was a predominant common issue that made the case amenable to class treatment. California Supreme Court Upholds Labor Union’s Right to Picket on Privately Owned Walkway in Front of Grocery Store A supermarket owner sought a court injunction to prevent a labor union from picketing on the privately owned walkway in front of the only customer entrance to its store. In response, the union argued that two statutory provisions — Code of Civil Procedure section 527.3 (the Moscone Act) and Labor Code section 1138.1 (section 1138.1) — prohibited issuance of an injunction under these circumstances. Quickly summarized, the Moscone Act recognizes the importance of picketing during labor disputes, while section 1138.1 prohibits the issuance of an injunction during a labor dispute absent essentially a mini-trial involving live testimony demonstrating unlawful acts, the lack of an otherwise adequate remedy, and that the public officers are unable or unwilling to provide adequate protection. The trial court denied relief, ruling that the supermarket owner had failed to satisfy section 1138.1’s requirements for obtaining an injunction against labor picketing. The court of appeal reversed. It held that the walkway fronting the supermarket’s entrance was not a public forum under the California Constitution’s provision protecting liberty of speech, and therefore the store owner could regulate speech in that area. It further held that both the Moscone Act and section 1138.1, because they give speech regarding a labor dispute greater protection than speech on other subjects, violate the free speech guarantee of the federal Constitution’s First Amendment and the equal protection guarantee of the federal Constitution’s Fourteenth Amendment. The Supreme Court agreed with the court of appeal that the supermarket’s privately owned entrance area is not a public forum under the California Constitution’s liberty of speech provision. The Court observed that to be a public forum under the liberty of speech provision, “an area within a shopping center must be designed and furnished in a way that induces shoppers to congregate for purposes of entertainment, relaxation, or conversation, and not merely to walk to or from a parking area, or to walk from one store to another, or to view a store’s merchandise and advertising display.” For this reason, a union’s picketing activities in a privately owned entrance area does not have state constitutional protection. However, the Court held these picketing activities do have statutory protection under the Moscone Act and section 1138.1, and the Court rejected the appellate court’s conclusion these statutes were unlawful. Specifically, the Supreme Court held these state laws afford both substantive and procedural protections to peaceful union picketing on a private sidewalk outside a targeted retail store during a labor dispute, and such union picketing may not be enjoined on the ground that it constitutes trespass. The state law permitting employees and labor unions to picket on privately owned areas outside the entrances to shopping center supermarkets is justified by the state’s interest in promoting collective bargaining to resolve labor disputes, the recognition that union picketing is a component of the collective bargaining process, and the understanding that the area outside the entrance of the targeted business often is the most effective point of persuasion. The Court further held that these provisions do not violate the federal Constitution’s free speech or equal protection guarantees on the ground that they give speech regarding a labor dispute greater protection than speech on other subjects. (Ralphs Grocery Company v. Union Food and Commercial Workers Union Local 8 (2012) Cal. .) Employer Generally Entitled to “Business Judgment” Instruction in FEHA Discrimination Case An important and increasingly debated topic involves the appropriate jury instructions in FEHA discrimination cases. Specifically, whether an employee must demonstrate only that their protected classification was a “motivating reason” for the challenged decision, even if other non-discriminatory factors applied, or whether the employee must meet the higher standard of showing they were discriminated against “because of” this protected classification. The California Supreme Court is presently considering this precise issue inHarris v City of Santa Monica (S181004) and a final decision is expected early in 2013. In the interim, a recent appellate court decision has held that employers are generally entitled to the so-called “business judgment” instruction which may provide a helpful counterweight to the “motivating reason” instruction often proposed by plaintiffs. In this FEHA pregnancy discrimination case, the trial court refused to provide the employer’s proposed instruction to the effect that it could only be liable if the jury concluded it had intentionally discriminated based on pregnancy, and not if it had “made a wrong or unfair decision” or “made an error in business judgment.” Instead, the trial court provided only the so-called “motivating factor” instruction authorizing liability if the pregnancy was one factor amongst several, and the plaintiff prevailed receiving a $100,000 verdict plus $1.2 million in attorneys’ fees. The appellate court reversed finding the trial court had prejudicially erred, noting that absent the business judgment instruction, the jury may erroneously base a finding of illegal discrimination merely on its views regarding the soundness of the employer’s business judgment, or its perception of fairness. (Veronese v. Lucasfilm LTD (2012) ___ Cal.App.4th ___, 2012 Cal.App.LEXIS 1311.) Employer’s Good Faith Belief of Employee Misconduct Not a Defense to CFRA Interference Claim An employee discharged several weeks before his anticipated return from a CFRA leave, sued for CFRA interference. The employer argued it had terminated Plaintiff for violating its policies by working at another employer while on CFRA leave, and that even if it had drawn the wrong conclusion about his other work, its honest belief that he had violated its policies precluded any argument it had intended to violate CFRA. The arbitrator and trial court accepted the employer’s argument and concluded that just as in the FEHA intentional discrimination context, an employer’s honest belief (even if mistaken) regarding an employee’s misconduct would justify non-reinstatement under CFRA. A California court of appeal, however, reversed holding that while the good faith belief may justify termination in the FEHA intentional discrimination context and potentially even in the CFRA retaliation context, it does not apply in the CFRA interference context. The court noted that CFRA and FMLA do not simply authorize time off from work but, except in certain very narrow circumstances, guarantee reinstatement to the same or comparable position. Drawing upon the statutory language and many federal opinions (including the ninth circuit), the court observed an employee shall not even be deemed to have been granted leave unless the employee is ultimately reinstated from the leave, and that an employer who fails to grant leave or to provide reinstatement can be sued for CFRA interference (as opposed to CFRA retaliation which would occur if an employer subsequently takes an adverse employment action against a reinstated employee). The court noted this reinstatement right is such that an employer’s interference with this right violates CFRA (and FMLA) regardless of the employer’s intent to do so. The court also noted the applicable statutes expressly provide that an employer has the burden of proving by a preponderance of evidence that the employer would not otherwise have been employed at the time reinstatement is requested in order to deny reinstatement. The court then noted that theMcDonnell-Douglas shifting burdens standard, in which the employee has the final burden of rebutting the employer’s proffered business rationale, even a mistaken one, by demonstrating sufficient evidence of pretext to support a finding of intentional discrimination, is inapplicable in the CFRA interference claim. Thus, in the CFRA interference context, the employee does not need to demonstrate the employer intended to violate CFRA; rather, the employer has the burden of actually establishing that one of the several statutory exceptions for denying reinstatement apply. In this case, the court noted that while an employer can deny reinstatement based upon proven employee misconduct that would have resulted in termination, this employer’s “superficial” investigation and “imprecisely worded and inconsistently applied company policy” failed to carry its burden of proving actual disqualifying misconduct. (Richey v. Autonation, Inc. (2012) 210 Cal.App.4th 1516, 2012 Cal.App.LEXIS 1177.) Employer’s Delay in Notifying Employee about Ineligibility for CFRA Leave does not Preclude it from Terminating Employee An employee who was terminated after leaving to care for his mother despite being told he did not satisfy CFRA’s hours requirement and would be terminated, sued for wrongful termination in violation of public policy. The employee did not challenge the employer’s determination he had worked less than 1,250 hours needed for CFRA leave, but argued the employer was estopped from terminating him either because it expressly suggested his leave had been approved or unduly delayed in communicating its denial. The trial court and the appellate court both rejected the estoppel argument and ruled in the employer’s favor. The court first rejected the employee’s claim that the employer had misrepresented by deed that his leave had been approved. The court noted that while the employer had previously granted non-CFRA leaves and had asked the employee to train his replacement prior to the contemplated leave, the employer had consistently maintained his leave would only be approved once Human Resources granted the leave request. As such, there was no basis to suggest the employer had intended to have plaintiff rely upon statements the leave was approved since it consistently stated the leave was not yet approved. The employee next argued that since the employer had failed to notify him about his ineligibility within ten days of his leave request, its silence was tantamount to an approval precluding the employer from terminating him. While the court expressed displeasure with how long the employer took to calculate the hours worked, it noted the applicable regulations (Cal.Code Regs, tit. 2 § 7297.4) only required the employer to “respond” to a leave request within ten days, but did not require the employer to communicate a final approval or denial. Thus, provided the employer initially “responded” within the requisite ten day period, it may communicate its actual decision to grant or deny after the expiration of this ten-day window to respond. In this case, the employer had responded within the ten-day period by notifying the employee that additional medical information was needed so it had sufficiently “responded,” thus entitling it to communicate its final denial several weeks later. (Olofsson v. Mission Linen Supply (2012) ___ Cal.App.4th ___, 2012 Cal.App.LEXIS 1263.) Appellate Court Concludes Functions Identified by Employer were Essential Job Functions Even if Not Frequently Required by all Police Officers A police officer sued for FEHA disability discrimination and failure to accommodate after the police department failed to return him to a full-duty administrative position, thus forcing him to retire. The police officer acknowledged that because of his heart attack and diabetes, he could not perform certain physically strenuous duties of a full duty police officer (e.g., making forcible arrests, pursuing fleeing suspects and responding to emergency situations) identified in the job description, but he argued these were not essential job functions since he would not have to perform them frequently in an administrative position. The trial court and the appellate court found in the employer’s favor on the grounds these were essential job functions of a police officer position even if such officers placed in administrative positions might not frequently perform the full range of these functions. At trial and on appeal, the employer argued that to return to work, even in an administrative position, the employee had to be able to perform the essential functions of the full duty police officer position. The essential functions were described in the employer’s essential job function list (EJF List) which was formally adopted by the employer and the union and contained groupings of duties, some of which include physically strenuous tasks. The employer also presented evidence that that it only employed a limited number of full duty officers and that it needed to be able to mobilize as many full duty police officers as possible (including those in administrative positions) to respond to mass celebrations, demonstrations, earthquakes and other large-scale emergencies, during which the officers would be required to perform the types of duties listed in the EJF List. The court of appeal agreed with the trial court and the employer that the strenuous activities listed by the department were essential functions of administrative positions because the employer had a limited number of officers available to perform those functions and thus had a legitimate need to be able to deploy administrative officers in the event of emergencies and other mass mobilizations, even though administrative officers were not frequently required to engage in those activities. The court of appeal provided considerable deference to the employer’s judgment of what it considered the position’s essential functions stating that the employer’s formal adoption of the EJF List in itself supported a conclusion that the enumerated functions were essential and that absent evidence to the contrary, it would not “second-guess [the City’s] judgment.” The court also clarified that to prevail on both a failure to accommodate and failure to engage claim, the employee “was
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California

While almost every legislative session draws considerable employer attention, the just-commenced 2013 session may be particularly noteworthy since a single party has super-majorities in both legislative chambers, as well as a governor from the same party. As a New Year’s resolution, employers might consider getting more involved earlier in the legislative process rather than waiting until items reach the Governor’s desk for signature or veto.

This newsletter will continue to highlight the key employment bills of general application as they move forward, including the following:

Annual Minimum Wage Adjustments Proposed (AB 10)

This bill would increase California’s minimum wage by specified amounts for three consecutive years beginning in 2014, with annual adjustments tied to inflation thereafter. Specifically, this bill would increase California’s minimum wage to $8.25 beginning on January 1, 2014, to at least $8.75 in 2015, and to at least $9.25 in 2016. This bill would also provide for annual adjustments beginning in 2017 to maintain employee purchasing power, calculated by using the California Consumer Price Index. The bill would also specifically prohibit the Industrial Welfare Commission from adjusting the minimum wage downward in years with negative inflation levels.

Similar versions of this bill are introduced annually and have repeatedly stalled in recent years, but the early introduction of this bill suggests it may be a legislative priority. This fact, coupled with minimum wage increases in several California municipalities and in numerous states, suggests a minimum wage increase is likely in 2013.

Social Media Password Prohibitions to Extend to Public Employers (AB 25)

Last year, AB 1844 was signed into law prohibiting private employers from requiring or requesting an employee or applicant for employment to disclose a username or password for the purpose of accessing personal social media. This bill would amend the newly-enacted Labor Code section 980 to specify that its various prohibitions apply to both public and private employers.

Since AB 1844 passed unanimously last year, and since many likely assumed these prohibitions already applied to both private and public employers, this bill seems likely to pass quickly and be signed into law.

Federal

Employment Law Aspects of “Fiscal Cliff” Deal

While most of the attention focused on the increased income tax rates, there are several noteworthy employment-related items in the American Taxpayer Relief Act of 2012 (H.R. 8) which has already been signed into law. For instance, this bill did not extend the two percent payroll tax cut of the Social Security (FICA) employee tax. Thus, while the employer-paid portion of these taxes remains unchanged at 6.2 percent, the employee-paid portion increases from 4.2% to 6.2% as of January 1, 2013. The Internal Revenue Service has already issued revised tax withholding tables for employers (www.irs.gov/pub/irs-pdf/n1036.pdf), and suggested employers should start using these revised tables as soon as possible but no later than February 2013.

However, the bill permanently extends the employer-provided education benefits available under Internal Revenue Code section 127 which allow employees to exclude from income up to $5,250 per year in educational assistance at the undergraduate and graduate levels. The bill also increases the pre-tax benefit for public transportation and vanpool expenses from $125 to $240 per month, thus making it the same monthly pre-tax benefit for commuter parking expenses.

AGENCY

California

California’s New Regulations Concerning Pregnancy Leave and Accommodation are Now Effective

On December 30, 2012, the Fair Employment and Housing Commission’s pregnancy regulations took effect. The full text of the approved pregnancy regulations is available at www.fehc.ca.gov/act/pregnancyregulations.asp, but some of the more substantive items are discussed below.

California employers with five or more employees must make pregnancy disability leave (PDL) available to employees. The regulations clarify and, in some instances, expand the PDL protections afforded to employees. Specific clarifications in the regulations include a change to the definition of “four months” as related to pregnancy leave. Under the PDL law, “four months” is equivalent to 17-1/3 weeks, not 16 weeks. Further, the amended regulations provide examples of how to calculate the four-month period if the employee works less than a full-time schedule or works a variable schedule.

The regulations also list examples of “related medical conditions” that are protected under FEHA, and for the first time include “lactation.” Significantly, the regulations place a duty on employers to reasonably accommodate breastfeeding or expressing breast milk. As an example, this definition could result in an employee requesting (and receiving) changed or reduced hours, or more or longer breaks, as a “lactation accommodation.” The proposed regulations, however, do not place limitations on the length of the time necessary to accommodate lactation. The practical effect of the regulation is that a lactating woman may request reduced or modified hours to accommodate lactation for an indeterminate period of time.

Moreover, the regulations clarify an employer’s responsibilities regarding reasonable accommodation or transfer of employees affected by pregnancy, childbirth or related medical conditions. If an employer has a policy, practice, or collective bargaining agreement requiring or authorizing the transfer of temporarily disabled employees to less strenuous positions or duties, including disabilities or conditions resulting from on-the-job injuries, the policy must also apply to transfer employees who are disabled by pregnancy. This is an important distinction from federal law, which only requires employers to provide light-duty programs to pregnant employees if they have a policy in place for employees with non-work related injuries.

The regulations also provide for an expanded definition of when a woman is “disabled by pregnancy.” The revised definition includes such examples as post-partum depression, “morning sickness,” and time off for “loss or end of pregnancy.” Therefore, the regulations place a duty on employers to reasonably accommodate post-partum depression, severe morning sickness and loss or end of pregnancy. Importantly, the regulations also require employers to reasonably accommodate “medical conditions” related to pregnancy, even if not “disabled” by pregnancy. Further, the regulations include that it is unlawful to discriminate against or harass an applicant or employee based on “perceived pregnancy.” Perceived pregnancy is defined as being regarded or treated by an employer as being pregnant or having a related medical condition. There is no further guidance and it is unclear how this definition will be interpreted by the Department of Fair Employment and Housing or the courts.

The regulations also require employers to respond to an employee’s request for reasonable accommodation, transfer, or pregnancy disability leave “as soon as practicable, and, in any event no later than ten calendar days after receiving the request.”

Mandatory changes have also been made to Notices “A” and “B,” which provide information for employees about their rights and responsibilities under pregnancy disability leave (Notice “A”) and the California Family Rights Act (Notice “B”). Interestingly, the regulations have included a form Certification of Health Care Provider for Pregnancy Disability Leave, Transfer, and/or Reasonable Accommodation, which employers can provide to their employees. Although employers may use their own forms, use of the form provided by the Fair Employment & Housing Commission guarantees compliance with the pregnancy regulations.

NOTE: Employers are encouraged to review their policies and procedures to reflect these new regulations.

FEHC Adopts Amended Disability Regulations

Also on December 30, 2012, the Fair Employment and Housing Commission’s disability regulations took effect. The full text of the approved disability regulations are posted on the FEHC's Disability Regulations Page,www.fehc.ca.gov/act/disabilityregulations.asp. but a brief summary of the substantive changes are provided below.

First, the regulations broaden the definition of disability to include any disorder that affects a person’s mental or bodily functions and limits a major life activity. “Limiting” a major life activity merely means that the conditions makes achieving a major life activity “difficult.” Consistent with the federal ADAAA regulations, the California regulations advise courts to focus on what accommodations can be provided to the employee and whether the employer engaged in the interactive process with the employee, instead of what constitutes a disability.

The regulations also clarify the employer's ability to request additional medical information where the information provided by the employee is not complete, and to provide only those accommodations supported by the medical documentation provided, until additional information is provided.

The regulations also provide that an employee can show discrimination if the disability was just one of the factors that influenced the employer to make the adverse employment action, as opposed to the sole or dominant cause of the adverse employment action. (Note that this may change depending upon an upcoming California Supreme Court case, Harris v. City of Santa Monica in which the Court is evaluating the applicability of the so-called “mixed motive” affirmative defense in FEHA discrimination cases).

The regulations also follow California case law in determining what may be considered an essential job function, and what evidence may be used to determine an essential job function.

Finally, the regulations provide a non-exhaustive list of possible “reasonable accommodations,” including the use of assistive animals, providing a modified work schedule, modifying an employer policy, providing additional training, or permitting an employee to work from home. Again, the regulations conform with case law and EEOC guidance.

Federal

IRS Increases Mileage Reimbursement Rate for 2013

As a reminder, effective January 1, 2013, the 2013 optional standard mileage reimbursement rate for business purposes has increased from 55.5 to 56.5 cents per mile for business miles driven. While this reflects the Internal Revenue Service’s optional standard reimbursement rate, taxpayers retain the option of calculating the actual costs of using their vehicle.

DOT Responds to “Recreational Marijuana” Laws Passed in Several States

During November’s election, several states passed laws permitting marijuana usage for “recreational purposes,” prompting considerable discussion about how this may impact employers generally and drug-testing programs specifically. The Department of Transportation (DOT) has recently issued a notice making it “perfectly clear” that these state laws will have no impact upon the DOT’s regulated drug-testing program for safety-sensitive transportation employees. The DOT’s notice stated that its Drug and Alcohol Testing Regulation (49 CFR Part 40) does not authorize the use of Schedule 1 drugs, including marijuana, for any reason including “recreational.” Accordingly, its Medical Review Officers will not verify a drug test as negative upon learning the employee used “recreational” or “medical” marijuana in states that have passed such initiatives.

The full text of the DOT Notice is available athttp://content.govdelivery.com/bulletins/gd/USDOT-5fa546.

JUDICIAL

California

Supreme Court Depublishes Two Appellate Decisions Applying Brinker; District Courts of Appeal Reverse Prior Rulings in Two Others

In the three and one-half years that the California Supreme Court was considering the nature and scope of an employer’s obligation to “provide” a meal period in the case of Brinker v. Sup. Ct., it granted review in at least eight other cases and deferred briefing and decisions in those cases until after its resolution of Brinker. After the court issued its opinion in Brinker in April 2012, it remanded the cases to the various courts of appeal with instructions to those courts to vacate their prior decisions and reconsider the cases “in light of Brinker.” The courts of appeal have begun to do so and the Supreme Court appears not to like the result, at least in some of them.

In Lamps Plus Overtime Cases, Hernandez v. Chipotle Mexican Grill, Inc., andTien v. Tenet Healthcare Corp., Division Eight of the Second District Court of Appeal again affirmed the trial courts’ denial of class certification. In doing so, it arguably applied a more expansive definition of what it means to provide a meal; one that can be viewed as less burdensome for employers to comply with: “employers must only provide meals, meaning make them available.” On December 12, 2012, the Supreme Court signaled its disapproval of the court of appeal’s approach by ordering both the opinions in Lamps Plus andChipotle depublished. As a result, while the ruling in those cases remains, neither opinion can be cited or relied on by attorneys or courts in subsequent cases. A request for depublication in Tien is pending.

Interestingly, the Seventh Division of the Second District Court of Appeal came to the same conclusion on December 5, 2012 in its unpublished opinion in Brookler v. RadioShack Corp. though on different grounds. In that case, the appellate court reversed its prior ruling that a class should have been certified, finding that the standard that it had applied — that an employer who “does not ensure compliance with meal period requirements… violates the Labor Code” — had been “squarely rejected” by Brinker. Rather, in its post-Brinker review, the appellate court found that, in decertifying the class, the trial court had applied the correct standard and upheld its decision.

Finally, in the “grant and hold” case of Bradley v. Networkers International, LLC, Division One of the Fourth District Court of Appeal appeared more cautious in light of Brinker. In its original decision in 2009, that court had affirmed the trial court’s denial of certification. In applying Brinker, the court reversed its prior ruling and held that “the trial court erred in refusing to certify the class with respect to each of plaintiffs’ claims [for overtime, meal and rest breaks, inaccurate wage statements, and waiting time penalties] except for claims based on alleged off-the-clock violations.” 2012 Cal.App. LEXIS 1261, *2. In particular, the court found that Brinker instructed that an employer’s uniform lack of a meal and rest break policy, as was the case there, was a predominant common issue that made the case amenable to class treatment.

California Supreme Court Upholds Labor Union’s Right to Picket on Privately Owned Walkway in Front of Grocery Store

A supermarket owner sought a court injunction to prevent a labor union from picketing on the privately owned walkway in front of the only customer entrance to its store. In response, the union argued that two statutory provisions — Code of Civil Procedure section 527.3 (the Moscone Act) and Labor Code section 1138.1 (section 1138.1) — prohibited issuance of an injunction under these circumstances. Quickly summarized, the Moscone Act recognizes the importance of picketing during labor disputes, while section 1138.1 prohibits the issuance of an injunction during a labor dispute absent essentially a mini-trial involving live testimony demonstrating unlawful acts, the lack of an otherwise adequate remedy, and that the public officers are unable or unwilling to provide adequate protection. The trial court denied relief, ruling that the supermarket owner had failed to satisfy section 1138.1’s requirements for obtaining an injunction against labor picketing.

The court of appeal reversed. It held that the walkway fronting the supermarket’s entrance was not a public forum under the California Constitution’s provision protecting liberty of speech, and therefore the store owner could regulate speech in that area. It further held that both the Moscone Act and section 1138.1, because they give speech regarding a labor dispute greater protection than speech on other subjects, violate the free speech guarantee of the federal Constitution’s First Amendment and the equal protection guarantee of the federal Constitution’s Fourteenth Amendment.

The Supreme Court agreed with the court of appeal that the supermarket’s privately owned entrance area is not a public forum under the California Constitution’s liberty of speech provision. The Court observed that to be a public forum under the liberty of speech provision, “an area within a shopping center must be designed and furnished in a way that induces shoppers to congregate for purposes of entertainment, relaxation, or conversation, and not merely to walk to or from a parking area, or to walk from one store to another, or to view a store’s merchandise and advertising display.” For this reason, a union’s picketing activities in a privately owned entrance area does not have state constitutional protection.

However, the Court held these picketing activities do have statutory protection under the Moscone Act and section 1138.1, and the Court rejected the appellate court’s conclusion these statutes were unlawful. Specifically, the Supreme Court held these state laws afford both substantive and procedural protections to peaceful union picketing on a private sidewalk outside a targeted retail store during a labor dispute, and such union picketing may not be enjoined on the ground that it constitutes trespass. The state law permitting employees and labor unions to picket on privately owned areas outside the entrances to shopping center supermarkets is justified by the state’s interest in promoting collective bargaining to resolve labor disputes, the recognition that union picketing is a component of the collective bargaining process, and the understanding that the area outside the entrance of the targeted business often is the most effective point of persuasion. The Court further held that these provisions do not violate the federal Constitution’s free speech or equal protection guarantees on the ground that they give speech regarding a labor dispute greater protection than speech on other subjects. (Ralphs Grocery Company v. Union Food and Commercial Workers Union Local 8 (2012) Cal. .)

Employer Generally Entitled to “Business Judgment” Instruction in FEHA Discrimination Case

An important and increasingly debated topic involves the appropriate jury instructions in FEHA discrimination cases. Specifically, whether an employee must demonstrate only that their protected classification was a “motivating reason” for the challenged decision, even if other non-discriminatory factors applied, or whether the employee must meet the higher standard of showing they were discriminated against “because of” this protected classification. The California Supreme Court is presently considering this precise issue inHarris v City of Santa Monica (S181004) and a final decision is expected early in 2013.

In the interim, a recent appellate court decision has held that employers are generally entitled to the so-called “business judgment” instruction which may provide a helpful counterweight to the “motivating reason” instruction often proposed by plaintiffs. In this FEHA pregnancy discrimination case, the trial court refused to provide the employer’s proposed instruction to the effect that it could only be liable if the jury concluded it had intentionally discriminated based on pregnancy, and not if it had “made a wrong or unfair decision” or “made an error in business judgment.” Instead, the trial court provided only the so-called “motivating factor” instruction authorizing liability if the pregnancy was one factor amongst several, and the plaintiff prevailed receiving a $100,000 verdict plus $1.2 million in attorneys’ fees. The appellate court reversed finding the trial court had prejudicially erred, noting that absent the business judgment instruction, the jury may erroneously base a finding of illegal discrimination merely on its views regarding the soundness of the employer’s business judgment, or its perception of fairness.
(Veronese v. Lucasfilm LTD (2012) ___ Cal.App.4th ___, 2012 Cal.App.LEXIS 1311.)

Employer’s Good Faith Belief of Employee Misconduct Not a Defense to CFRA Interference Claim

An employee discharged several weeks before his anticipated return from a CFRA leave, sued for CFRA interference. The employer argued it had terminated Plaintiff for violating its policies by working at another employer while on CFRA leave, and that even if it had drawn the wrong conclusion about his other work, its honest belief that he had violated its policies precluded any argument it had intended to violate CFRA. The arbitrator and trial court accepted the employer’s argument and concluded that just as in the FEHA intentional discrimination context, an employer’s honest belief (even if mistaken) regarding an employee’s misconduct would justify non-reinstatement under CFRA.

A California court of appeal, however, reversed holding that while the good faith belief may justify termination in the FEHA intentional discrimination context and potentially even in the CFRA retaliation context, it does not apply in the CFRA interference context. The court noted that CFRA and FMLA do not simply authorize time off from work but, except in certain very narrow circumstances, guarantee reinstatement to the same or comparable position. Drawing upon the statutory language and many federal opinions (including the ninth circuit), the court observed an employee shall not even be deemed to have been granted leave unless the employee is ultimately reinstated from the leave, and that an employer who fails to grant leave or to provide reinstatement can be sued for CFRA interference (as opposed to CFRA retaliation which would occur if an employer subsequently takes an adverse employment action against a reinstated employee). The court noted this reinstatement right is such that an employer’s interference with this right violates CFRA (and FMLA) regardless of the employer’s intent to do so.

The court also noted the applicable statutes expressly provide that an employer has the burden of proving by a preponderance of evidence that the employer would not otherwise have been employed at the time reinstatement is requested in order to deny reinstatement. The court then noted that theMcDonnell-Douglas shifting burdens standard, in which the employee has the final burden of rebutting the employer’s proffered business rationale, even a mistaken one, by demonstrating sufficient evidence of pretext to support a finding of intentional discrimination, is inapplicable in the CFRA interference claim. Thus, in the CFRA interference context, the employee does not need to demonstrate the employer intended to violate CFRA; rather, the employer has the burden of actually establishing that one of the several statutory exceptions for denying reinstatement apply. In this case, the court noted that while an employer can deny reinstatement based upon proven employee misconduct that would have resulted in termination, this employer’s “superficial” investigation and “imprecisely worded and inconsistently applied company policy” failed to carry its burden of proving actual disqualifying misconduct.
(Richey v. Autonation, Inc. (2012) 210 Cal.App.4th 1516, 2012 Cal.App.LEXIS 1177.)

Employer’s Delay in Notifying Employee about Ineligibility for CFRA Leave does not Preclude it from Terminating Employee

An employee who was terminated after leaving to care for his mother despite being told he did not satisfy CFRA’s hours requirement and would be terminated, sued for wrongful termination in violation of public policy. The employee did not challenge the employer’s determination he had worked less than 1,250 hours needed for CFRA leave, but argued the employer was estopped from terminating him either because it expressly suggested his leave had been approved or unduly delayed in communicating its denial. The trial court and the appellate court both rejected the estoppel argument and ruled in the employer’s favor.

The court first rejected the employee’s claim that the employer had misrepresented by deed that his leave had been approved. The court noted that while the employer had previously granted non-CFRA leaves and had asked the employee to train his replacement prior to the contemplated leave, the employer had consistently maintained his leave would only be approved once Human Resources granted the leave request. As such, there was no basis to suggest the employer had intended to have plaintiff rely upon statements the leave was approved since it consistently stated the leave was not yet approved.

The employee next argued that since the employer had failed to notify him about his ineligibility within ten days of his leave request, its silence was tantamount to an approval precluding the employer from terminating him. While the court expressed displeasure with how long the employer took to calculate the hours worked, it noted the applicable regulations (Cal.Code Regs, tit. 2 § 7297.4) only required the employer to “respond” to a leave request within ten days, but did not require the employer to communicate a final approval or denial. Thus, provided the employer initially “responded” within the requisite ten day period, it may communicate its actual decision to grant or deny after the expiration of this ten-day window to respond. In this case, the employer had responded within the ten-day period by notifying the employee that additional medical information was needed so it had sufficiently “responded,” thus entitling it to communicate its final denial several weeks later. (Olofsson v. Mission Linen Supply (2012) ___ Cal.App.4th ___, 2012 Cal.App.LEXIS 1263.)

Appellate Court Concludes Functions Identified by Employer were Essential Job Functions Even if Not Frequently Required by all Police Officers

A police officer sued for FEHA disability discrimination and failure to accommodate after the police department failed to return him to a full-duty administrative position, thus forcing him to retire. The police officer acknowledged that because of his heart attack and diabetes, he could not perform certain physically strenuous duties of a full duty police officer (e.g., making forcible arrests, pursuing fleeing suspects and responding to emergency situations) identified in the job description, but he argued these were not essential job functions since he would not have to perform them frequently in an administrative position. The trial court and the appellate court found in the employer’s favor on the grounds these were essential job functions of a police officer position even if such officers placed in administrative positions might not frequently perform the full range of these functions.

At trial and on appeal, the employer argued that to return to work, even in an administrative position, the employee had to be able to perform the essential functions of the full duty police officer position. The essential functions were described in the employer’s essential job function list (EJF List) which was formally adopted by the employer and the union and contained groupings of duties, some of which include physically strenuous tasks. The employer also presented evidence that that it only employed a limited number of full duty officers and that it needed to be able to mobilize as many full duty police officers as possible (including those in administrative positions) to respond to mass celebrations, demonstrations, earthquakes and other large-scale emergencies, during which the officers would be required to perform the types of duties listed in the EJF List.

The court of appeal agreed with the trial court and the employer that the strenuous activities listed by the department were essential functions of administrative positions because the employer had a limited number of officers available to perform those functions and thus had a legitimate need to be able to deploy administrative officers in the event of emergencies and other mass mobilizations, even though administrative officers were not frequently required to engage in those activities. The court of appeal provided considerable deference to the employer’s judgment of what it considered the position’s essential functions stating that the employer’s formal adoption of the EJF List in itself supported a conclusion that the enumerated functions were essential and that absent evidence to the contrary, it would not “second-guess [the City’s] judgment.”

The court also clarified that to prevail on both a failure to accommodate and failure to engage claim, the employee “was

Employment Law News – January 2013

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