• NEW LAWS FOR 2015

    The following is a quick summary of the most significant changes in the law impacting California businesses.

    Paid Sick Leave for All California Employees – Effective July 15, 2015, employers doing business in California must provide paid sick days to almost all employees. Full-time and part-time employees will accrue 1 hours of paid sick leave for every 30 hours worked. California’s paid sick leave begins accruing as soon as the employee starts to work , although an employer can prohibit an employee from using accrued paid sick leave in the first 90 days of employment. Employers may “limit an employee’s use of paid sick days to 24 hours or three days in each year of employment.” Unused paid sick days carry over to the following year, but employers can place a 6-day(48-hour) cap on the paid sick day accrual. Some cities have ordinances that allow a higher cap, and employers have to comply with whichever laws are most favorable to employees. Employers must also provide written notice of the accrued and used sick leave, either on the pay stub or in a separate document, with every paycheck.

    City Paid Sick Leave Ordinances –San Francisco, Oakland and San Diego passed city-wide ordinances requiring paid sick leave for certain employees. The city ordinances are similar to California’s new paid sick leave law, but typically provide additional benefits for employees working within city limits.

    Federal Regulations Regarding Companions Goes Into Effect – Although the Department of Labor has said it will not enforce the new regulations until mid-year, effective January 1, 2015, companions will be entitled to overtime when they work more than 40 hours in a week, unless otherwise exempt from the Fair Labor Standards Act. While some personal attendants may still be exempt if the household owner employs the companion directly and the duties are limited to providing companionship and protection, caregivers employed by third-party employers and caregivers that provide care in addition to companionship and protection are now covered by the FLSA. Although personal attendants in California have been entitled to overtime after 9 hours in a day or 45 hours in a week, Californians using caregivers may need to pay weekly overtime after 40 hours in a week.

    Additional Protections Under the Fair Employment and Housing Act –

    Unpaid Interns Are Protected from Unlawful Harassment – Effective January 1, 2015, the Fair Employment and Housing Act extends protection to unpaid interns. Keep in mind that the Labor Commissioner and the Department of Labor only allow unpaid interns in a few limited situations, typically when the intern is receiving school credit and the employer receives very little benefit from the work. If you use interns, now is a good time to examine whether the interns are actually entitled to wages.

    Anti-Bullying Module for Sexual Harassment Prevention Training – All employers with 50 or more employees are required to provide 2 hours of sexual harassment prevention training to all supervisory employees every 2 years. Although “bullying” is not strictly prohibited by law, AB 2053 now requires the sexual harassment prevention training include a module on anti-bullying.

    No Discrimination Against Workers with Special Drivers Licenses – The DMV must issue an original driver’s license to California residents even if the person cannot lawful residence in the United States.  AB 1660 prohibits discrimination against an individual because he or she holds or presents a driver’s license issued under these provisions, or to require a person to present a driver’s license, except in specific situations. Additionally, FEHA’s definition of “national origin” now includes discrimination on the basis of possessing a driver’s license granted under Section 12801.9 of the Vehicle Code.  The new laws do not alter an employer’s rights or obligations regarding obtaining proof of lawful residency prior to employment. Any action taken by an employer that is required by the federal Immigration and Nationality Act (8 U.S.C. Sec. 1324a) is not a violation of law. Driver’s license information obtained by an employer must be treated as private and confidential, is exempt from disclosure under the California Public Records Act, and can not be disclosed to any unauthorized person or used for any purpose other than to establish identity and authorization to drive.

    Employers Using Third-Party Employers Are Liable for Wages and Workers’ Compensation Insurance – Labor Code section 2810.3 requires a “client employer” to share with a “labor contractor” all civil legal responsibility and civil liability for all workers supplied by that labor contractor for the payment of wages and the failure to obtain valid workers’ compensation coverage.  In other words, if your company receives workers through a contracting agency, and that agency fails to pay the worker or fails to maintain valid workers’ compensation coverage, your company could be responsible for any unpaid wages or workers’ compensation claims. Employers can still include indemnification language in their contracts, but they cannot avoid liability by hiring the worker through a third-party employer.

    Longer Statute of Limitations for Liquidated Damages and Failure to Timely Pay Final Wages – Existing law provides for criminal and civil penalties for certain wage violations and authorizes the Labor Commissioner to recover liquidated damages for minimum wage violations. AB 1723 expands Labor Code section 1197.1 to allow the Labor Commissioner to issue citations and seek penalties for the willful failure to timely pay wages of a resigned or discharged employee (e.g., waiting time penalties).

    Several Cases Cause Employers to Reconsider Mandatory Arbitration Provisions – For years employers had difficulty requiring employees to agree to resolve all dispute through arbitration. Recent U.S. Supreme Court and California court decisions make it easier for employers to require binding arbitration for some employment law claims. Employers should evaluate whether binding arbitration is the right decision for their business. There are many pros and cons to resolving cases through binding arbitration, and employers must still be careful when drafting arbitration agreements. Just because you find an arbitration agreement on line does not mean it will be enforceable.

    Minimum Wage Increase By Various Cities – Several cities passed their own ordinances requiring a higher minimum wage for employees working within certain geographical limits:

    City Rate Effective
    Berkeley $10.00$11.00 1/1/1510/1/15
    Menlo Park $10.30 7/1/15
    Oakland $12.25 3/2/15
    Richmond $9.60 1/1/15
    San DiegoRepealed/delayed by voter action $9.75 1/1/15
    San Francisco $11.05$12.25 1/1/155/1/15
    San Jose $10.30 1/1/15
    Sunnyvale $10.30 1/1/15

    We expect to see more cities adopt similar legislation, and California legislators are trying to pass a higher California minimum wage by the end of the year (currently slated to increase to $10.00 per hour on January 1, 2016).

    Employers need to update their employment handbooks and their policies to comply with the new laws. There is no better time to review your policies and practices with a knowledgeable employment attorney. The New Year affords employers the opportunity to start the year in compliance, and avoid potentially costly mistakes.

    If you have any questions about the new laws, or any employment-related matter, contact our office and speak with one of our attorneys. Let us help you figure out how to employ your workers correctly, so you can focus on growing your business.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • An Interesting Way to Resolve a Case: mediation/binding baseball arbitration

    I previously discussed some of my concerns regarding binding arbitration agreements.  Arbitration has its place, and it can be a very useful tool in resolving cases.  As much of my practice involves employment disputes, drafting an enforceable arbitration agreement can be difficult, and I believe arbitration oftentimes does not meet the objectives that it is intended to achieve (i.e., lower costs, quicker resolution, lower awards, etc.).  There are many variants to the typical arbitration or mediation options, and a recent case caught my eye because it presented one of the more unique variants.

    In Bowers v. Raymond J. Lucia Companies, Inc. (No. D059333), the parties were in the middle of binding arbitration, when they decided to dismiss the arbitration and the accompanying state court action, and participate in “mediation/binding baseball arbitration.”  According to the record, the plan was to:

    participate in a full day mediation. If, at the end of that mediation, the Parties have failed to reach an agreement, the Plaintiffs (Bowers, Seward, and LaBerge) shall provide to the mediator their last and final demand, which demand shall be some amount between $100,000 and $5,000,000, and the Defendants (Companies, Wealth Management, and Enterprises) shall provide to the mediator their last and final offer which offer shall be some amount between $100,000 and $5,000,000. The mediator shall then be empowered to set the amount of the judgment in favor of Plaintiffs against Raymond J. Lucia Companies, Inc. by choosing either Plaintiffs’ demand or Defendants’ offer, such binding mediator judgment to then be entered as a legally enforceable judgment

    At the end of the mediation, the mediator decided to award the plaintiffs the full $5,000,000.00.  That’s right, the “mediator” awarded the money.  This is unusual because typically mediators do not have the power or authority to “award” anything.  The mediator typically helps the parties reach a resolution, but if the parties are unable to reach an amicable (or unamicable?) resolution, the mediator’s job is done.  Because the parties in Bowers agreed the mediator could make a binding award if the mediation failed, the trial court and the appellate court upheld the award. Parties can agree to allow a third party to decide what the parties will pay, even if the evidence is not presented in a typical trial or arbitration setting.

    It’s easy to armchair quarterback this one and second-guess the thinking behind agreeing to such an unusual form of dispute resolution.  Going into the process the parties had to know that the plaintiff’s “last and final demand” was going to be $500,000.00, just like the defendant’s “last and final offer” was going to be $100,000.00.  The case does not provide a lot of facts regarding the underlying claims or liabilities (we only know that it was some kind of defamation claim), but I presume liability was not much of a question, and that the real issue was the amount of damages.  The big risk for each side is that, knowing the other side’s “last and final” number is likely going to be the highest or lowest allowed by the parties’ agreement, the resulting mediator’s “award” was essentially going to be an all or nothing deal.  I suppose there was the possibility that had the parties stuck with the original arbitration the arbitrators could have awarded significantly more than the $5,000,000.00 ceiling to which the parties agreed, but it seems like a pretty high risk given the fact that the mediator receives information differently than an arbitrator, a judge or a jury.

    I am a big proponent of mediation.  Given the costs and risks involved in litigation, mediation offers the parties the opportunity to have a say in the outcome of the resolution.  I’m not so sure I would be willing to hand that control over to the mediator.  The process of presenting my case in mediation differs significantly to how I present my case to the trier of fact.  I’m not sure how my presentation would have to change if I knew that at the end of the day the mediator was going to “decide” the case.

    If you want to read the case, you can find it here.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • New Laws Regarding California Employers and Employees

    There are several new laws and amendments currently under consideration by the Governor of California, as well as the legislature.

    The Recorder reports that three bills, AB 267, AB 325, and AB 559, are currently sitting before the Governor Brown.

    • AB 267 prohibits “choice of law” or “forum selection” clauses in employment contracts if those clauses require the use of non-California law or litigation outside of California.
    • AB 325 would allow up to 3 days bereavement leave and would prohibit discrimination against employees who take time off for the  death of a spouse, child, parent, sibling, grandparent, grandchild, or domestic partner.  A successful plaintiff could recover back wages and attorneys’ fees.
    • AB 559 would modify a rule denounced by the California Supreme Court (Chavez v. City of Los Angeles, 47 Cal.4th 970) granting courts the authority to limit attorneys’ fees awards when the case could have been brought in limited jurisdiction as opposed to unlimited jurisdiction.

    The California Chamber of Commerce and other pro-employer entities oppose these bills, and in the past have successfully defeated similar bills while Schwarzenegger was in office.

    Governor Brown has already signed into law the following bills affecting employers and employees in California:

    • AB 240 Compensation recovery actions: liquidated damages.
    • AB 587 Public works: volunteers.
    • SB 117 Public contracts: prohibitions: discrimination based on gender or sexual orientation.
    • SB 374 Gambling control: key employee licenses.
    • SB 559  Discrimination: genetic information.
    • SB 609 Public Employment Relations Board: final orders.

    Of course we can’t forget about AB 889 regarding domestic workers, which I’ve discussed before.

    If you work or do business in California, especially if you do business on any public works projects, you should familiarize yourself with any new requirements applicable to your industry.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • Arbitration Clause in Independent Contractor Agreement Invalid

    Employers doing business in California know, or should know, that arbitration agreements are oftentimes thrown out as being “unconscionable.”  See Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, and its progeny.  If the employment arbitration agreement is procedurally and substantively unconscionable the courts will not enforce the agreement.  In the typical employer-employee context, the courts oftentimes have no trouble deciding the agreement is procedurally unconscionable because the employer drafts the agreement and gives it to the employee on a take-it-or-leave-it basis.  The courts believe an employee’s option to find a job elsewhere does not mitigate the inequality of bargaining power between the employer and employee.

    But what about an arbitration clause between a company and an independent contractor?  Does the same analysis apply and will the court be more or less likely to find the agreement procedurally unconscionable?  In Wherry v. Award, Inc.  (11 C.D.O.S. 2413), a California Appellate Court decided that the fact that “plaintiffs are independent contractors and not employees makes no difference in this context.”

    Whether the company uses employees or independent contractors, arbitration agreements should be reviewed by knowledgeable counsel before using or executing the agreement.  I have my own view on whether arbitration clauses are a good idea in the first place, but if you do business in California you need to be aware of the issues that you will face should you enter into an arbitration agreement.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     

    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.

    Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • Arbitrator Not Allowed To Determine Validity of Arbitration Agreement

    Another California Appellate Court recently held that the court, not the arbitrator, can determine whether an arbitration clause in an employment agreement is valid. Because California courts have frequently refused to enforce arbitration agreements in the employment context, many employers have started inserting provisions that require the arbitrator, not the court, to determine the validity of the arbitration agreement.

    In Murphy v. Check ‘n Go of California, Inc. (2007) 156 Cal.App.4th 138, the court refused to uphold a similar provision, finding that “While the language of the agreement [regarding arbitration of unconscionability issues] could not be clearer, plaintiff’s alleged assent to this provision was vitiated by the fact that it was set forth in a contract of adhesion, i.e., a standardized contract drafted by the stronger party and presented to the weaker party on a take it or leave it basis [citation].” Now, a second appellate court came to the same conclusion. See Ontiveros v. DHL Express 08 C.D.O.S. 8379.

    The decision is not all that surprising, as arbitration agreements have taken a tough beating in the last decade. Under current laws many, if not most, arbitration agreements between employees and employers in California are unenforceable. Those that are enforceable usually require the employer to pay for the cost of arbitration. In many cases the costs of arbitration are greater than the amount the plaintiff would have been awarded in court.

    I know many employers desire arbitration agreements, but I don’t know that arbitration is necessarily a wise decision. There used to be two main benefits to arbitration: 1) Arbitration was considered less costly and less time-consuming and 2) Employers could avoid a runaway jury.

    Recent court decisions have eradicated the first benefit by requiring employers to pay for almost 100% of the arbitration costs and allowing virtually full discovery in the arbitration proceedings. Now, instead of allowing a judge or jury to decide the case for free or for nominal jury fees, the employer must pay an arbitrator between $450 to $750 per hour or more to review the case, rule on any applicable motions and decide the merits of the case. Our office handled one particularly contentious arbitration where the client paid over $200,000.00 in arbitrator fees alone.

    As to the other main benefit (avoiding the runaway jury), I’m not convinced this is sufficient justification to throw money at an arbitrator. Some assume that a jury tends to award more to a plaintiff than an arbitrator, but I have not seen any statistics supporting this assumption. Even if it is true, keep in mind that only 1% of the cases that are filed in court go all the way to trial. This statistic is essentially the same in arbitration. That means you are paying an arbitrator’s fees to avoid the 1% of cases that go to trial. Also keep in mind that, at least in many counties, more than half the cases that go to trial result in a defense verdict. So, really, the employer is paying the arbitrator’s fees in 100% of cases to avoid less than one-half of 1% of the cases that might possibly result in a runaway jury verdict.

    There are several other justifications for arbitration, but I can’t say I am convinced by any of them. Some argue that arbitrators are more likely to rule in favor of the employer because the employer is more likely to appear before that arbitrator in the future. Having spoken with numerous arbitrators and people that conduct arbitration on a frequent basis I have never heard of an instance where the “repeat-player” effect had any impact on a case. Because many lawyers still hold to this belief, or for some reason do not want to litigate in arbitration, some lawyers may avoid cases with enforceable arbitration agreements. Therefore, having an enforceable arbitration agreement may help decrease the number of lawsuits that actually get filed against the company. This is just an assumption and it’s not likely we could ever really find out how many cases were NOT filed as a result of an arbitration clause.

    Drafting an enforceable arbitration agreement is possible, but be careful what you wish for. Keep in mind that in order to be enforceable with respect to most of the claims an employee might bring, the employer will have to pay for the arbitration fees and afford the employee the same protections the employee would have in court. Employers should carefully considering the consequences before using arbitration agreements.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     

    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.

    Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.