January 2016

AGENCY UPDATES

Minimum Wage Established for Contractors

The Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) established that as of January 1, 2016, all employees covered by the Fair Labor Standards Act, Davis-Bacon Act, or Service Contract Act performing work on or in connection with a covered contract or subcontract must pay contractors an hourly wage of $10.15.

EEOC Provides Guidance Regarding Americans with Disabilities Act Protection from Workplace Discrimination and Harassment Based on HIV Infection

EEOC, Living with HIV Infection: Your Legal Rights in the Workplace under the ADA (December 1, 2015) (as of January 6, 2016).

On December 1, 2015, the U.S. Equal Employment Opportunity Commission (EEOC) published a Fact Sheet regarding the rights of individuals living with HIV pursuant to the Americans with Disabilities Act (ADA).  In this Fact Sheet, the EEOC explains that applicants and employees are protected from workplace discrimination and harassment based on their HIV infection, and that they have a right to reasonable accommodations at work.  The Fact Sheet also addresses applicant and employee privacy rights, and provides guidance regarding obtaining a reasonable accommodation. 

JUDICIAL DEVELOPMENTS

Ninth Circuit Tosses Aside “Manager Rule” for Fair Labor Standard Act Retaliation Cases

Rosenfield v. Globaltranz Enters. (9th Cir. Ariz. Dec. 14, 2015) 2015 U.S. App. LEXIS 21558

An employee was initially hired by her employer as a Human Resources Manager, and eventually promoted to a director position.  Throughout her employment, the employee reported to her superiors that the employer was not compliant with the Fair Labor Standard Act (FLSA), and she repeatedly sought changes to attain statutory compliance.  After the employee was fired, she filed suit alleging the employer had violated the FLSA’s anti-retaliation provision, 29 U.S.C. § 215(a)(3), by firing her for complaining about FLSA non-compliance. 

The district court granted summary judgment, finding the employee had not filed a protected complaint because she was a manager at the time.  The ninth circuit reversed, rejecting application of the “manager rule” developed in sister circuits, and instead finding the U.S. Supreme Court’s “fair notice” test from Kasten  v. Saint-Gobain Performance Plastics Corp. (2011) 563 U.S. 1 controlled:  “To fall within the scope of the antiretaliation provision,  a complaint must be sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection.”  The ninth circuit held that the “employee’s job title and responsibilities—in particular, whether he or she is a manager—form an important part of that ‘context.’”  This is because managers are generally in a different position vis-à-vis the employer than are other employees because employers expect managers to voice work-related concerns and suggest changes in policy.  However, the court made clear the issue must be resolved on a case-by-case basis, with an employee’s managerial position being only one consideration.  The court also noted that “manager” status is not binary, and there may be differences between first-level managers in charge of day to day operations and a high-level manager in charge of FLSA compliance.

As applied to the facts of the case, the ninth circuit found that even though the employee’s position would generally be tasked with employment-related decisions, such that compliance reports would not ordinarily put an employer on notice, it was critical that “ensuring compliance with the FLSA was not Employee’s responsibility.”  Instead, the employee’s supervisor considered himself solely responsible for FLSA compliance, and was unhappy that the employee brought the issue to his attention on numerous occasions, including at least 27 weekly and monthly reports.  The court held that a reasonable jury could find the employee’s advocacy reached the requisite degree of formality to constitute protected activity under the FLSA.

Plaintiff Adequately Alleged Wrongful Termination in Violation of Public Policy Against Disability Discrimination

Prue v. Brady Co./San Diego, Inc. (2015) 242 Cal.App.4th 1367

An employee alleged he was wrongfully terminated in violation of public policy after he sustained work-related injuries (i.e., musculoskeletal injuries/hernia).  The trial court granted summary judgment in favor of the employer concluding the employee had not sufficiently pled a violation of Labor Code section 132a, which prohibits retaliation against an employee who files a workers’ compensation claim.  The trial court also held the claim was barred by the one-year statute of limitations applicable to the 132a claim and the employee’s request to amend the complaint to allege a public policy violation based on the Fair Employment and Housing Act (FEHA) was untimely. 

The court of appeal disagreed, holding the complaint adequately alleged facts to put the employer on notice the employee was alleging a common law cause of action for wrongful termination in violation of FEHA’s public policy against disability discrimination.  In particular, the appellate court noted the complaint alleged the employee suffered from a disability, he was capable of performing the essential functions of his position, he was subjected to an adverse employment action because of his disability, and the employer knew of employee’s disability when it decided to terminate employee’s employment.  Further, the court of appeal held the one-year statute of limitations for violations of the FEHA does not apply to a common law claim for wrongful termination.  Instead, the two-year limitations period under Code of Civil Procedure section 335.1 applies.  Finally, the court of appeal held the trial court erroneously denied employee’s leave to amend because such a request can be granted at any time prior to entry of judgment, including at the summary judgment motion hearing.

Residential Care Facility Employees’ Waiver of Meal Break Cannot Be Revoked at Any Time

Palacio v. Jan & Gail's Care Homes, Inc. (2015) 242 Cal. App. 4th 1133

Employee worked at a 24-hour residential health care facility for developmentally disabled individuals, and was among a workforce of fewer than 50 total workers.  Since the facility was open 24 hours, shifts ran from four to ten hours.  By law, the employees were required to give health and emergency care twenty-four hours per day, seven days per week.  As such, some workers were required to work through meal periods.  At time of hire, the employees signed agreements waiving their rights to uninterrupted meal periods and were told they would dine for free alongside patients.

The employee filed a meal and rest period class action, alleging the employer’s policy of requiring employees to waive their right to an uninterrupted meal period violated the Labor Code because the employer failed to inform employees they had a right to revoke their waiver at any time.  The court of appeal affirmed the trial court’s denial of a motion for class certification.  In particular, the court found employees of 24-hour health care providers, which fall under Wage Order 5 subdivision (E), could be required to work on-duty meal periods when certain conditions were met, as they were in this case.  The employer was not required to also comply with subdivision 11(A) which permits employees to revoke an on-duty meal period agreement at any time.  To allow employees in a residential care facility to revoke an on-duty meal period requirement at any time without notice would place such facilities in a precarious and potentially unsafe state.

Associate Attorney Bound by Arbitration Provision in Acquired Employer’s Offer Letter

Jenks v. DLA Piper Rudnick Gray Cary US LLP (2015) 243 Cal.App.4th 1

A law firm sent an employee an offer letter containing a provision requiring all claims relating to or arising out of the employment relationship be submitted to binding arbitration.  The employee accepted the associate attorney position with the law firm, which subsequently merged into another law firm.  A year after the merger, the employee signed a termination agreement wherein the employer agreed to continue providing certain benefits for six months until his employment terminated.  The termination agreement was silent with respect to dispute resolution. 

The employee eventually filed suit alleging the employer had violated the termination agreement by undervaluing his short-term disability benefits.  The employer filed a petition to compel arbitration, which the court granted.  The employee was awarded $86,000 in the arbitration, and the employer moved to confirm the arbitration award.  The court confirmed the award, rejecting the employee’s argument that the employer lacked standing to enforce the arbitration agreement because it was not a signatory to the agreement. 

On appeal, the court of appeal first held that the employee waived his non-signatory argument by failing to raise it in opposition to the petition to compel arbitration.  Even if the argument was not waived, the court held it failed on the merits because an employee’s continued employment with a successor employer serves as implied consent to preserving the original terms of employment with his former acquired employer, including an arbitration agreement.  The court also held that the merger caused the employer to automatically acquire the right to enforce the contractual rights of the previous firm.  The court rejected the employee’s argument that the employer modified the offer letter by distributing its own set of workplace rules and policies, which did not eliminate or modify the arbitration provision, and by publishing a document for the firm’s Welfare Benefit Plan, which was not a contract and was published after the employee’s employment had ended.  Finally, the court held that the termination agreement did not supersede the offer letter because the integration clause in the termination agreement was expressly limited to “the subject matter hereof,” and there were no provisions regarding dispute resolution in the termination agreement.