New California Employment Laws for 2019—The “Big Four”

Undoubtedly, we all have 🎵It’s the Holiday Season🎵 echoing in our minds and ears as the year comes to a close. However, those with responsibility for employees cannot be lulled into believing the holiday season will serve as protection for not changing policies and practices immediately due to new laws coming in 2019.

This is especially true in California. 2018 was littered with landmines when it came to changes in statutes, regulations, or the court’s interpretation of existing standards. As we all know, California had the dubious honor of serving as the battlefront in the #MeToo movement.

Below, please find a listing of the most impactful changes, which we call the “Big Four”.  While not comprehensive, this list does provide you with a quick index to review to see if your business needs to make any changes — applications, employee handbooks, employment agreements, independent contractor agreements, severance agreements, etc. Otherwise, if those changes are not incorporated in the coming weeks, your business could be at risk of a visit from the Labor Commissioner or a process server come January 2.

Four Major Court Decisions

It seemed like every month in 2018, California employers were hit with a new court case that greatly impacted the way they went about their business. However, a number of them left so many unanswered questions that it was particularly difficult for employers (and counsel!) to discern and implement reliable new standards. In fact, the Dynamex decision on employment misclassification has already experienced two subsequent cases revising its impact—Curry and Garcia—and is awaiting a decision in a third on a motion for summary judgment—Western States Trucking Association—that identifying the explicit change in law moving forward would be an educated guess at best.

Happily, the below identifies four (4) court decisions that provided some definitive guidance on issues that impact employers throughout the state. Review these decisions, update your practices and training, and you will be in a good position heading into the new year.

1. Standard Disciplinary Actions Cannot Constitute Constructive Discharge Unless they Involve Continuous Patterns of Mistreatment or Aggravating Working Conditions

In Simers v. Los Angeles Times Commc’ns, LLC, Plaintiff, a well-known sports columnist, sued defendant Los Angeles Times alleging disability and age discrimination, and constructive termination. The California Court of Appeal affirmed the dismissal of the constructive termination claim, and held that the use of standard employer disciplinary actions – e.g., criticism, investigation, demotion, performance plan – cannot constitute constructive discharge, even if undertaken for reasons later found to involve discrimination, unless they were employed in an unusually aggravated manner or involved a pattern of continuous mistreatment.

Take Away: Establish objective and impartial discipline procedures and document, document and document!

2. Disclosure of Sensitive Personnel Information to Nonsupervisory Employees can Lead to Liability under Privacy Laws—for the Employer and Supervisor 

In Hurley v. Cal. Dep’t of Parks & Recreation, an employee overheard her supervisor discussing details of her personnel file with a nonsupervisory employee. The supervisor mentioned plaintiff’s probation at a prior job, a health insurance issue, and that her psychologist recommended that she take leave for one month. The employee filed an internal complaint and the supervisor acquired the employee’s supervisory drop file in anticipation of being interviewed, only to subsequently retire with the file still in the supervisor’s possession.

The employee filed a complaint in state court against her employer and supervisor alleging various employment related causes of action, including intentional infliction of emotional distress against defendant and her supervisor.  After learning that the supervisor never returned the file, the employee amended the complaint to include claims for invasion of privacy, violation of the California Information Practices Act (“IPA”), and breach of medical confidentiality.

After the defendants lost at trial, they appealed and lost again. The California Court of Appeal noted that the disclosure of records covered by the IPA is not limited to personnel files, and the file at issue qualified.  Further, the file was improperly disclosed on multiple occasions and the disclosures were sufficient to have caused emotional distress.

Take Away: While a violation of the IPA is limited to public entities only, employers are cautioned that employee information (personnel file, leaves of absence forms, etc.) needs to be protected and should be disclosed on a need to know basis only.

3. Standard Workers Compensation Compromise and Release Agreements Do Not Release all Potential Claims

In Camacho v. Target Corp., the employee and employer settled a workers compensation claim using a standardized compromise and release form, providing that the release applies only to the workers compensation and related claims. The parties then added an addendum that specified additional particular claims. Shortly thereafter, the employee filed a civil complaint alleging harassment against the employer, and the employer argued unsuccessfully that the form release covered that claim.

The California Court of Appeals found that the language in the release was not sufficiently clear to put plaintiff on notice that he was signing a general release of liability.

Take Away: If an employer wants to resolve all claims at the same time as a workers’ compensation settlement, the employer should use an appropriate agreement containing general release language and waivers to ensure there is no ambiguity to what is being released.

4. Timekeeping System that Rounds Time is Legal so Long as System Does Not Systematically Undercount

In AHMC Healthcare, Inc. v. Superior Court, the Court of Appeal reaffirmed the rule that a rounding policy is lawful if it is facially neutral, consistently applied, and does not favor the employer to a significant degree.  Further, rounding policies are not analyzed on an individual employee basis: even if an individual employee is undercompensated, so long as all employees as a group are compensated fairly, the policy is lawful.

Take Away: While a rounding policy may be lawful, it is expensive to defend as an expert needs to be retained to analyze all employee time records.  Since most employers use time clocks or POS systems to record time and not manual paper records, there is no real need to round anymore. This practice should be discontinued.

Four “Me-Too” Developments

The #MeToo moment transitioned into the #MeToo movement in 2018—most significantly in California. Many new bills were proposed and considered. Many were signed by Governor Brown. The bulk of the new statutes expand existing protections. Some added new restrictions and requirements around resolving workplace sexual harassment. Here are four  of the most notable changes:

1. FEHA Amendments (SB 1300)

The Fair Employment and Housing Act (FEHA) is amended as follows:

1. Employers now liable for any kind of unlawful harassment by non-employees where the employer knew or should have known of the harassment and failed to take appropriate corrective action;
2. Employers cannot require an employee to release a FEHA claim in exchange for a raise or bonus or as a condition of employment or continued employment;
3. Employer cannot  require an employee to sign a non-disparagement agreement or other document preventing the employee  from disclosing information about unlawful acts in the workplace;
4. Adds declarations clarifying the Legislature’s intent with regard to the application of the anti-harassment laws:
   1. A single incident, including a “stray remark” may be sufficient to create a triable issue regarding the existence of a hostile work environment.
   2. Statements uttered by a non-decisionmaker can be considered as part of the totality of the circumstances for hostile work environments Harassment cases are rarely appropriate for disposition on summary judgment.
   3. The legal standard for sexual harassment does not vary by type of workplace.

 

2. Expansion of Relationships Covered Under FEHA (SB 224)

SB 224 added, ““investor, elected official, lobbyist, director, and producer” among those listed persons who may be liable to a plaintiff for sexual harassment under Civil Code, § 51.9 of who may be personally liable for sexual harassment.

3. Sexual Harassment Training for All Employees and Small Employers (SB 1343)

SB 1343 expands the present requirement of employers to provide at least 2 hours of sexual harassment prevention training to all supervisors and managers every 2 years, or within 6 months of an employee becoming a supervisor or manager to include employers with at least 5 employees. Previously, it was limited to employers of 50 or more.  The amendment also requires employers to provide at least one hour of training to non-supervisory employees by January 1, 2020, and once every 2 years thereafter.

4. Female Directors on Corporate Boards (SB 826)

SB 826 requires publicly-held domestic and foreign corporations with principal executive offices in California to have a minimum of one female director on their boards by the end of 2019. This minimum gradually increases over the next years, depending upon the size of the entity.

Take Away:  We expect to see a rise in sexual harassment claims in 2019 based on the clarifications made by the Legislature.  Employers be aware and train, train, train, discipline, and train (and discipline) some more.

Four Other  Changes

Beyond #MeToo, there are a number of other statutory and regulatory changes that went into effect in 2018. These changes should spur employers to review and revise current employee handbooks, practices, policies, and training to ensure that they are compliant.

Here are four of those changes that could impact your business:

1. Expansion of National Origin Discrimination under FEHA

California law already prohibits discrimination on the basis of “national origin,” but new regulations were published that expanded the definition of this protected category, effective July 1, 2018. It now includes prohibiting discrimination, harassment, and retaliation regarding all of the following:

• Physical, cultural, or linguistic characteristics associated with a national origin group;
• Marriage to or association with persons of a national origin group;
• Tribal affiliation;
• Membership in or association with an organization identified with or seeking to promote the interests of a national origin group;
• Attendance or participation in schools, churches, temples, mosques, or other religious institutions generally used by persons of a national origin group; and
• Name that is associated with a national origin group.

The regulations also clarify that “national origin group” includes any ethnic groups, geographic places of origin, and countries that are not presently in existence. This may include micro-nations, which claim to be independent nations, or states that are not recognized in the international community.

In addition, the new regulations address language restriction policies, limited to circumstances where the restriction is justified as a business necessity, narrowly tailored, and employer documents communicating to employees the language restriction, when it applies, and what happens to employees who violate it.

2. Copy of Payroll Records (SB 1252)

SB 1252 amends Labor Code Section 226 to clarify that employees have the right “to receive” a copy within twenty-one (21) days of the request. The prior version of the section provided that employees solely had a right to inspect or copy their payroll records in that timeframe.

3. Lactation Accommodation (AB 1976)

AB 1976 amends Labor Code, § 1031 and requires an employer to make reasonable efforts to provide an employee with “use of a room or other location, other than a bathroom, to accommodate an employee desiring to express breast milk” for a child. The new law substitutes “bathroom” for “bathroom stall”.

4. Criminal History Inquiries (SB 1412)

SB 1412 amends the Labor Code to tighten the exception to the prohibition of criminal history inquiries to apply only where an employer is required by law to inquire into a “particular conviction,” or where the employer cannot by law hire someone with a “particular conviction.” A “particular conviction” is defined to mean “a conviction for specific criminal conduct or a category of criminal offenses prescribed by any federal law, federal regulation or state law that contains requirements, exclusions, or both, expressly based on that specific criminal conduct or category of criminal offenses.”

Contact Information”

Diane Aqui daqui@smithdollar.com

Glenn Smith gsmith@smithdollar.com

Justin Hein jhein@smithdollar.com