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Archive for the ‘Employment Law Blog – CA’ Category

Employers May Need to Submit EEO-1 Pay Data As Early As May 31, 2019, Although the EEOC is Advocating for a Later Deadline of September 30, 2019

Posted on: April 15th, 2019

By: Paige Pembrook

Last month, the U.S. District Court for the District of Columbia reinstated the Equal Employment Opportunity Commission (EEOC) rule requiring employers to report pay information by race, ethnicity and sex with their EEO-1 Report. However, employers still wait for an answer on when they will have to actually file the pay data. If employee advocacy groups have their way, it could be as soon as May 31, 2019. However, the EEOC is pushing for later deadline of September 30, 2019.

The EEO-1 Report is mandatory for businesses with at least 100 employees and federal contractors with at least 50 employees and a federal government contract of $50,000. Such employers must report the number of employees who work for the business by job category, race, sex, and ethnicity on the EEO-1 Report.

In 2016, the EEOC adopted additional EEO-1 pay data collection requirements commanding employers to report employee wages and hours worked by race, ethnicity and sex. In 2017, the Office of Management and Budget (OMB) stayed the pay data requirements. Employee advocacy groups sued to challenge the stay on the basis that the OMB provided inadequate reasoning to support its decision.

On March 4, 2019, the U.S. District Court Judge agreed with the employee advocates and ordered, “the previous approval of the revised EEO-1 form shall be in effect,” including the pay data collection requirements. (National Women’s Law Center v. Office of Management and Budget, No. 17-cv-2458). The Judge also ordered the EEOC to describe when and how it will comply with the order lifting the stay on the EEO-1 pay data collection.

Employers must be aware that the ruling could take immediate effect and require employers to submit pay data as early as May 31, 2019, along with the other 2018 EEO-1 information. However, the EEOC is pushing for a later deadline of September 30, 2019, to allow employers more time to collect the required data.

On April 3, 2019, the EEOC filed court documents proposing that employers be required to submit pay data to the agency by September 30, 2019. The EEOC’s filing also proposed that employers only be required to submit pay data for 2018, rather than 2017 and 2018, and describes the EEOC’s plan to use a data and analytics contractor to develop a new reporting program to collect the data.

On April 8, 2019, the employee advocacy groups told the judge that they want the EEOC to collect employers’ pay data by the same May 31, 2019, deadline that employers must submit other EEO-1 information or show why that is impossible.

After a hearing on April 16, 2019, the Judge will have the final say on the deadline. FMG will continue to watch the EEO-1 Report developments and provide updates to keep employers informed. In the meanwhile, employers should prepare to collect and report the required pay data as soon as possible.

If you have any questions or would like more information, please contact Paige Pembrook at [email protected].

Jeff Bezos Just Challenged Amazon’s Retail Rivals To Match Its $15 Minimum Wage – Is Bezos’ Challenge Checkmate or Checkout For the Push To Increase Minimum Wage?

Posted on: April 15th, 2019

By: Brad Adler and Matthew Jones

Five months ago, in November, 2018, Amazon raised its minimum wage to $15/hour. Now, Amazon’s leader is challenging his competitors in the retail sector to do the same.  In a letter to shareholders that was submitted to the SEC on April 11, 2019, Jeff Bezos stated “Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage… Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.”

Bezos’ aggressive challenge comes in the midst of an undercurrent of momentum for an increase in both federal and state minimum wage laws. That momentum seems to be leading to some changes at the state level. For instance, on January 1, 2019, California’s minimum wage was increased to $12/hour for companies with 26 or more employees. Likewise, Maine increased its minimum wage from $10,00 to $11.00 in 2019 and Massachusetts raised its minimum wage rate from $11.00 to $12.00.

So what effect, if any, will Bezos’ challenge and the state movements have on the federal minimum wage? Currently, the federal minimum wage is $7.25/hour, which is significantly lower than the minimum wage rate in many states (including Arizona, Arkansas, Colorado, Connecticut, Florida, Illinois, Maryland, New York and New Jersey). Just recently, the House Education and Labor Committee passed the “Raise the Wage Act,” which proposes to increase the federal minimum wage to $15/hour over the next six years. Most commentators believe that the likelihood that this bill will become law is very low, but it nevertheless is a reminder to all of the stakeholders, including employers, that the issue of minimum wage isn’t going away anytime soon.

Of course, not everyone takes kindly to the billionaire’s $15/hour challenge. In response to the challenge, Walmart’s executive vice president of corporate affairs Dan Bartless tweeted out: “Hey retail competitors out there (you know who you are) how about paying your taxes?”

If you have any questions or would like more information, please contact Brad Adler at [email protected] or Matthew Jones at [email protected].

Navigating the Employee v. Independent Contractor Landscape in a Post-Dynamex World

Posted on: March 25th, 2019

By: Ariel Brotman

In a post-Dynamex world, hiring entities are finding it increasingly difficult to determine whether or not to classify a worker as an independent contractor or an employee.

On April 30, 2018, the California Supreme Court issued its decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles. The Court established an ABC test requiring all parts to be met in order to classify a worker as an independent contractor. A hiring entity must prove: “(A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact and (B) that the worker performs work that is outside the usual course of the hiring entity’s business and (C) that the worker is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.” (Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903, 957.) 

The applicability of this seemingly strict ABC test was clarified in Garcia v. Border Tranportation LLC (2018) 28 Cal.App.5th 558. On October 22, 2018, the Court of Appeal released its opinion on Garcia v. Border Transportation Group, LLC. In Border Transportation, Plaintiff Garcia, a taxi driver, filed a complaint against Border Transportation Group, LLC for wrongful termination, overtime, waiting time penalties, unfair competition and various wage order claims based on his alleged misclassification as an independent contractor. Border Transportation filed a motion for summary judgment arguing that under the Borello test, which largely focuses on control, Garcia was properly classified as an independent contractor. The trial court agreed with Border Transportation. Garcia appealed the ruling granting the motion for summary judgment, and while the appeal was pending, the California Supreme Court released its opinion on Dynamex Operations West, Inc. v. Superior Court.

The Court of Appeal ultimately decided that in determining a worker’s status as an independent contractor, Dynamex only applies to wage order claims. As to all non-wage order claims, Borello remains the proper standard.  (Garcia v. Border Transportation LLC (2018) 28 Cal.App.5th 558, 570-71). Therefore, summary adjudication should not have been granted as to Garcia’s wage order claims but was proper as to his non-wage order claims.

Overall, although the Supreme Court has not ruled at this time, the Court of Appeal in Garcia v. Border Transportation LLC has provided an important exception to the strict Dynamex ABC test as it pertains to non-wage order claims. We will be paying close attention to further developments in the interpretation of this important exception.

If you have any questions or would like more information, please contact Ariel Brotman at [email protected]glaw.com.

Employers Reconsidering Forced Arbitration in Response to Protest

Posted on: March 4th, 2019

By: Hassan Aburish

In late 2017, the “Me Too” movement ignited after actress Ashley Judd publicly accused media mogul Harvey Weinstein of sexual harassment. Since then, the movement has led to vast changes in the workplace. Numerous industry leaders have fallen from grace. States are quickly passing legislation to attempt to curb sexual harassment and abuse in the workplace, and allegations of sexual harassment continue to rise. However, as Google employees proved last month, compliance with the law cannot be an employer’s only consideration.

When Andy Rubin stepped down from his executive role at Google in October of 2014, it appeared to be an amicable parting of ways. But three years later, a New York Times article revealed that Andy Rubin was forced to resign following a “credible” allegation of sexual harassment. The NYT also disclosed that Google gave Rubin an exit package worth approximately $90 million dollars, which was not required under his contract. Within days of learning this information, hundreds of Google employees staged a walk-out to protest their employer’s handling of alleged sexual misconduct.

In response to employee demands, Google CEO Sundar Pichai agreed not to enforce mandatory arbitration agreements with regard to claims of sexual harassment and assault. However, following their victory, Google employees began pushing for the arbitration clauses to be nixed entirely. On February 21, Google announced the end of its policy of forced arbitration and class action waivers for its employees.

There are many lessons we can learn from Google’s experience. First, never assume that resolution of a dispute will remain confidential. One of the most embarrassing aspects of this situation for Google—and what appears to have been the source of much employee infuriation—was the fact that Google could have terminated Rubin without paying him $90 million for allegations an internal investigation concluded to be credible.

Second, employers must weigh all costs and benefits of their policies regarding employees. While employers typically can require employees who have signed arbitration agreements to pursue their claims within the arbitration context, employers should also assess other factors in deciding how they handle the use of arbitration agreements with their workforce.

Third, sexual harassment continues to be a front-page issue. From giant tech companies to family-owned restaurants, allegations of sexual harassment are likely to make it into the news. So it is now more important than ever to ensure that employers get ahead of these issues by holding consistent harassment training, updating employee policies and manuals, and quickly and appropriately handling employee complaints.

If you have any questions or would like more information, please contact Hassan Aburish at [email protected].

Cal. Attorney Sanctioned $50,000 for Reckless and Malicious Conduct at Deposition

Posted on: February 18th, 2019

By: Jenny Jin

A California Court of Appeal upheld a $50,000 sanction against an attorney based on conduct at a deposition.

On February 4, 2019, the Court of Appeal issued its opinion in the case Anna Anka v. Louis Yeager. This case involved a child custody dispute between Paul Anka’s ex-wife, Anna Anka, and her first husband, Louis Yeager. As part of this dispute, the trial court had ordered that a confidential child custody and evaluation report be performed. Mrs. Anka was then subsequently involved in a second child custody dispute with her second husband/now ex-husband, Paul Anka.

Mrs. Anka was represented by the same attorney in both custody disputes. Mrs. Anka’s attorney took Mr. Yeager’s deposition as part of Mrs. Anka’s second custody dispute. During the deposition, Mrs. Anka’s attorney asked Mr. Yeager a series of questions to attempt to elicit confidential information regarding the contents of the evaluation and report from the first child custody dispute. Mr. Yeager testified that he could not recall the information. However, the trial court still sanctioned Mrs. Anka and her attorney $50,000 jointly and severally for her attorney’s reckless and malicious line of questioning that was orchestrated to elicit confidential child custody information.

The Court of Appeal affirmed the $50,000 sanctions against the attorney, but reversed the sanctions award as to Mrs. Anka. The Court found that the disclosure of confidential information was due solely to the attorney’s reckless and malicious conduct during the deposition. The Court opined that “besides being an advocate to advance the interest of the client, the attorney is also an officer of the court” and further that “counsel’s zeal to protect and advance the interest of the client must be tempered by the professional and ethical constraints the legal profession demands.” The Court held that the attorney’s conduct in eliciting confidential information during the deposition was not only reckless, but was intentional and willful.

The takeaway from this case is that in both California and across all states, there are real ethical limitations to zealous representation during depositions. Attorneys must remember to balance their duty to zealously represent their client’s interests with their duty as officers of the court to conduct themselves with integrity, courtesy, and professionalism.

If you have any questions or would like more information, please contact Jenny Jin at (415) 352-6451 or [email protected].