Cal Pecs 2019 Updated (002) - Seyfarth Shaw

Cal-Peculiarities

2019 | HOW CALIFORNIA EMPLOYMENT LAW IS DIFFERENT

SEYFARTH SHAW LLP

About Our Cover

Yes, we know: California is a contiguous part of the North American continent. Yet seventeenth-century mapmakers saw it otherwise. When they outlined the western contours of our region, they extended the Gulf of California far north, to make California appear as a yam-shaped island in the Pacific Ocean.

If such maps are now historical oddities, they still reflect the persistent view that California is a world apart. Carey McWilliams explored this theme in his 1946 classic, Southern California: An Island on the Land. He argued that Southern California is, metaphorically, an island in profound cultural ways. Much the same is true of California writ large when it comes to labor and employment law. So while early maps were cartographically incorrect, their symbolism remains powerful.

Any picture of California as an island apart is especially vivid as of 2019. While the executive branch of our national government remains generally more friendly toward business, every branch of California's government is extraordinarily solicitous to the interests of employees, labor unions, and the plaintiffs' bar.

So much for the island. What about the star and the grizzly bear? Discerning readers will recall that these figures adorn our state flag, where they appear above the logo "California Republic." All these features harken back to 1846, when American settlers in Mexican Alta California staged the Bear Flag Revolt to declare a republic independent from Mexico. (The star and logo pay homage to the Lone Star Republic of Texas, which broke free of Mexico in 1836.) The California rebels got lucky: the Mexican-American War soon intervened to dislodge the California territory from Mexican control. California, in 1850, became our thirty-first state.

The legacy of the Bear Flag Revolt continues today: fiercely independent state politicians--especially since the 2016 election--have proclaimed California's right to chart its own course on such vital matters as the environment, health care, immigration, and the right to use marijuana.

And perhaps nowhere is Californian independence more prominent than in the area of employment law. Federal labor law hit high tide in the 1930s, with the National Labor Relations Act and the Fair Labor Standards Act. The high tide returned in the 1960s--bringing us the Equal Pay Act, Title VII, and the Age Discrimination in Employment Act--and returned yet again in the 1990s, bringing us the Americans with Disabilities Act and the Family and Medical Leave Act. In the Golden State, meanwhile, the waves of employment regulation have risen ever higher, even while federal regulations have ebbed. This book highlights differences between federal and California law in key areas of interest to employers that operate both in California and in the rest of America. In virtually every case, the California version more heavily favors employees, plaintiffs, and labor unions, at the expense of business. The point, of course, is that companies used to doing business elsewhere can find California employment law a real bear.

Hence our cover.

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Authors' Note

At annual intervals since the turn of this century, we've cataloged how California law deviates from prevailing American labor and employment law. The result--this steadily growing volume--summarizes legislative, judicial, and regulatory developments that have made California a uniquely challenging environment for private employers. (We do not address special challenges facing public employers or government contractors.) We highlight these California peculiarities to help corporate counsel and human resources professionals avoid legal pitfalls, without treating what is provided here as the final word (a point emphasized in the disclaimer that follows).

This 2019 edition contains contributions from many Seyfarth lawyers, all members or friends of our California Workplace Solutions Group: Rachel Abanonu, Michael Afar, Nabeel Ahmad, Pantea Ahmadi, Brian Ashe, Nicole Baarts, Jeff Berman, Candace Bertoldi, Holger Besch, Dan Birnbaum, Jonathan Brophy, Bob Buch, Debbie Caplan, Mehga Charalambides, Caitlyn Crisp, Chris Crosman, Justin Curley, Catherine Dacre, Phillip Ebsworth, Chantelle Egan, Pam Devata, Tim Fisher, Lindsay Fitch, Kerry Friedrichs, Amanda Fry, Nick Geannacopulos, Rachel Gradstein, Mattt Graffigna, Jaclyn Gross, Carrie Grove, Minal Haymond, Josh Henderson, Christine Hendrickson, Ari Hersher, Gaye Hertan, Eric Hill, Timothy Hix, Timothy Hoppe, Dana Howells, Christopher Im, Jessica Jensen, Gregory Kantor, Michael Kopp, Namrata Kotwani, Kristina Launey, Lara Levine, Paul Leaf, Patty Lee, Lauren Leibovitch, Elizabeth Levy, Leo Li, Eric Lloyd, Brian Long, Allison Loomis, Zaher Lopez, Aaron Lubeley, Laura Maechtlen, Elizabeth MacGregor, Eric May, Ryan McCoy, Chelsea Mesa, Robert Milligan, Jennifer Mora, Ilana Morady, Jennifer Murikami, Jennifer Nunez, Meagan O'Dell, Angelo Paparelli, Beth Pelliconi, Kristen Peters, Dana Peterson, Jamie Pollaci, Jill Porcaro, Monica Rodriguez, David Rosenberg, Eric Ruehe, Timothy Rusche, Michelle Scannell, Joshua Salinas, Sam Schwartz-Fenwick, Emily Schroeder, Josh Seidman, Tatyana Shmygol, Joan Smiles, Jared Speier, Michael Stevens, Pritee Thakarsey, Tiffany Tran, Christopher Truxler, Coby Turner, Annette Tyman, Ryan Tzeng, Parnian Vafaeenia, Pamela Vartabedian, Bethany Vasquez, Jinouth Vasquez Santos, Myra Villamor, Olivia Wada, Michael Wahlander, Elisabeth Watson, Geoffrey Westbrook, Shireen Wetmore, Daniel Whang, Mason Winters, Simon Yang, Julie Yap, Fontaine Yuk, and Ann Marie Zaletel.

To keep up with the latest peculiarities of California employment law, please subscribe to Seyfarth's awardwinning California Peculiarities Employment Law Blog: subscribe.

David Kadue and Colleen Regan, Co-Editors in Chief

Important Disclaimer

We have been representative, not exhaustive, in cataloging California peculiarities. This book is general commentary, not legal advice. We disclaim liability as to anything done or omitted in reliance on this publication. Readers should refrain from acting on any discussion in this publication without obtaining specific advice applying current law to particular circumstances. Thus, while we aim to provide authoritative information, this book is not legal advice. (From A Declaration of Principles adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations.)

Legal Notice

Copyright ? 2019. All rights reserved. Apart from fair use for private study or research permitted under copyright law, no part of this publication may be reproduced or transmitted without the prior written permission of Seyfarth Shaw LLP.

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Table of Contents

About Our Cover....................................................................................................................... i

Authors' Note ................................................................................................................................................... ii Important Disclaimer........................................................................................................................................ ii Legal Notice ..................................................................................................................................................... ii

Glossary ................................................................................................................................... 1

Introduction.............................................................................................................................. 3

"Bounty Hunter" or "Sue Your Boss" Lawsuits ....................................................................................................3 Leaves .................................................................................................................................................................4 Employee Privacy--Protected Activities and Confidential Information ...............................................................4 Arbitration Agreements........................................................................................................................................5 Litigation Issues...................................................................................................................................................5 Immigrant Workers ..............................................................................................................................................6 Discrimination ......................................................................................................................................................7 Disability Discrimination ......................................................................................................................................7 Age Discrimination ..............................................................................................................................................7 Harassment .........................................................................................................................................................7 National Origin Discrimination .............................................................................................................................8 Pay Equity ...........................................................................................................................................................8 Sex Discrimination...............................................................................................................................................9 Religious Discrimination ......................................................................................................................................9 Wage and Hour ...................................................................................................................................................9 Vacation............................................................................................................................................................ 10 Employee Access to Information...................................................................................................................... 11 Covenants Not to Compete .............................................................................................................................. 11 Workers' Compensation ................................................................................................................................... 11 Independent Contractors.................................................................................................................................. 11

Preface to the 2019 Edition ................................................................................................... 12

New Legislation and Regulations ..................................................................................................................... 12 Judicial Developments ..................................................................................................................................... 15 Issues Pending Review in 2019 Before the Supreme Court:........................................................................... 18

1.

California Employment Law Agencies ................................................................................................... 21

1.1 The Department of Fair Employment and Housing (DFEH), Enforcing the Fair

Employment and Housing Act (FEHA) .......................................................................................... 21

1.2 The Labor and Workforce Development Agency (LWDA) ............................................................ 22

1.3 Department of Industrial Relations (DIR) ...................................................................................... 23

1.4 Industrial Welfare Commission (IWC) ........................................................................................... 23

1.5 The California Labor Commissioner .............................................................................................. 23

1.5.1 Complaints for unpaid wages with the Division of Labor Standards Enforcement

(DLSE) .............................................................................................................................. 23

1.5.2 Complaints for retaliation.................................................................................................. 25

1.5.3 Records inspection ........................................................................................................... 25

1.5.4 The DLSE Manual ............................................................................................................ 25

1.5.5 DLSE opinion letters......................................................................................................... 26

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1.5.6 Compliance Monitoring Unit ............................................................................................. 26 1.5.7 Labor Commission enforcement enhanced...................................................................... 26 1.6 California Employment Development Department (EDD) ............................................................. 27 1.6.1 General administration ..................................................................................................... 27 1.6.2 Payroll tax audits regarding independent contractor classifications ................................ 27 1.6.3 EDD regulations and checklists........................................................................................ 27 1.7 California Unemployment Insurance Appeals Board (UIAB)......................................................... 27 1.8 Division of Workers' Compensation (DWC) .................................................................................. 28 1.9 Workers' Compensation Appeals Board (WCAB) ......................................................................... 28 1.10 Division of Occupational Safety and Health (DOSH) .................................................................... 28

2.

Leave and Accommodation Statutes ..................................................................................................... 31

2.1 Pregnancy Disability Leave ........................................................................................................... 31

2.2 Lactation Accommodation ............................................................................................................. 31

2.3 Family Care and Medical Leave .................................................................................................... 32

2.3.1 Employee right to rely on spokesperson while on leave? ................................................ 32

2.3.2 Expansive definition of serious health condition............................................................... 33

2.3.3 Expansive construction of requests for CFRA leave........................................................ 33

2.3.4 Employer response obligations clarified........................................................................... 33

2.3.5 Leave granted to care for same-sex spouse .................................................................... 33

2.3.6 Absence of "honest belief" defense?................................................................................ 34

2.3.7 San Francisco work arrangement leave........................................................................... 34

2.4 Paid Family Leave ......................................................................................................................... 34

2.4.1 San Francisco Paid Parental Leave Ordinance ............................................................... 35

2.5 Accommodation of Addicts and Illiterates ..................................................................................... 35

2.6 Time Off for Court Appearances (Jury Duty, Witness Leave, etc.) ............................................... 35

2.6.1 Jury duty ........................................................................................................................... 36

2.6.2 Victim-related court appearances..................................................................................... 36

2.7 Victimhood Accommodation .......................................................................................................... 36

2.7.1 Safety accommodations ................................................................................................... 36

2.7.2 Medical leaves .................................................................................................................. 36

2.8 Time Off for Good Deeds and Training for Same.......................................................................... 36

2.9 Voting Leave.................................................................................................................................. 37

2.10 School Parent Leave ..................................................................................................................... 37

2.11 Kin Care Leave .............................................................................................................................. 37

2.12 Military Leave................................................................................................................................. 38

2.13 Military Spousal Leave .................................................................................................................. 38

2.14 Paid Sick Leave ............................................................................................................................. 39

2.14.1 California Paid Sick Leave Law........................................................................................ 39

2.14.2 San Francisco Paid Sick Leave Ordinance ...................................................................... 40

2.14.3 Oakland Paid Sick Leave Ordinance................................................................................ 41

2.14.4 Emeryville Paid Sick Leave Ordinance ............................................................................ 42

2.14.5 Berkeley Paid Sick Leave Ordinance ............................................................................... 42

2.14.6 Los Angeles Paid Sick Leave Ordinance ......................................................................... 42

2.14.7 Santa Monica Paid Sick Leave Ordinance ....................................................................... 43

2.14.8 San Diego Paid Sick Leave Ordinance ............................................................................ 43

2.15 Paid Leave for Organ or Bone Marrow Donation .......................................................................... 44

3.

Employee Privacy--Protected Activities ............................................................................................... 48

3.1 Off-Duty, Off-Premises Lawful Conduct--Including Marijuana Use.............................................. 48

3.2 Disclosure of Wages...................................................................................................................... 48

3.3 Disclosure of Working Conditions ................................................................................................. 49

3.4 Right to Designate Counsel........................................................................................................... 49

3.5 Employee Whistleblowing.............................................................................................................. 49

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3.5.1 Labor Code ? 1102.5--general whistle blower statute .................................................... 49 3.5.2 Labor Code ? 98.6(a)--reports to Labor Commissioner .................................................. 50 3.5.3 Labor Code ? 1197.5(k)--reports under the Fair Pay Act................................................ 50 3.5.4 Labor Code ?? 6310-6311--safety and health reports .................................................... 50 3.5.5 Government Code ? 12940(h)--FEHA complaints .......................................................... 51 3.5.6 Business and Profession Code ? 2056--health care advocacy by physician ................. 51 3.5.7 Health and Safety Code ? 1278.5--healthcare advocacy ............................................... 51 3.5.8 Retaliation by reporting immigration issues because of exercise of rights ...................... 51 3.6 Refusal to Undergo Medical Treatment or Exam .......................................................................... 51 3.6.1 Protection for refusing to provide certain medical information ......................................... 51 3.6.2 Fitness-for-duty exam upon return from medical leave .................................................... 52 3.7 Changing personal information...................................................................................................... 52

4.

Employee Privacy--Protection From Intrusions................................................................................... 54

4.1 Drug Testing .................................................................................................................................. 54

4.1.1 Privacy issues................................................................................................................... 54

4.1.2 Disability discrimination issues ......................................................................................... 54

4.2 Questions about Certain Arrests and Convictions......................................................................... 54

4.2.1 State law ........................................................................................................................... 54

4.2.2 San Francisco ordinance limiting inquiries into criminal history ....................................... 55

4.2.3 Los Angeles ordinance limiting inquiries into criminal history .......................................... 56

4.3 Polygraph Tests............................................................................................................................. 56

4.4 HIV Testing .................................................................................................................................... 56

4.5 Genetic Testing ............................................................................................................................. 56

4.6 Tape Recording and Videotaping .................................................................................................. 56

4.6.1 Confidential communications............................................................................................ 56

4.6.2 Restrooms, locker rooms, changing rooms...................................................................... 57

4.6.3 Secret videotaping in open areas ..................................................................................... 57

4.7 Medical Records ............................................................................................................................ 57

4.7.1 Civil Code ? 56 ................................................................................................................. 57

4.7.2 Labor Code ? 3762--workers' compensation insurers .................................................... 57

4.8 Social Security Numbers and Other Personal Information............................................................ 58

4.8.1 Limits on use of SSNs ...................................................................................................... 58

4.8.2 Duty to protect personal information ................................................................................ 58

4.8.3 Social media password and access protections............................................................... 58

4.8.4 Other personal information ............................................................................................... 58

4.9 Duty to Disclose Security Breaches of Computerized Personal Information ................................ 59

4.10 Personnel Records ........................................................................................................................ 59

4.11 Background Checks ...................................................................................................................... 60

4.11.1 Credit reports .................................................................................................................... 60

4.11.2 Investigative consumer reports ........................................................................................ 60

4.12 Psychological Tests....................................................................................................................... 63

4.13 Fingerprinting................................................................................................................................. 63

4.14 Photographing ............................................................................................................................... 63

4.15 Subcutaneous Identification Devices ............................................................................................ 63

4.16 Email Usage .................................................................................................................................. 64

5.

Litigation Issues ....................................................................................................................................... 67

5.1 Special Rules for California Jury Trial ........................................................................................... 67

5.1.1 Employers can't avoid jury with mandatory predispute jury waivers ................................ 67

5.1.2 Employers sometimes can be deprived of a jury trial....................................................... 68

5.2 California's Hostility to Arbitration of Employment Disputes ......................................................... 68

5.2.1 The U.S. Supreme Court's rejections of California decisions hostile to arbitration.......... 68

5.2.2 Unconscionability doctrine used to invalidate arbitration agreements ............................. 69

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5.2.3 Judicial reluctance to find employee consent to arbitration.............................................. 73 5.2.4 Using California public policy to discriminate against arbitration agreements ................. 73 5.2.5 Qualified aversion to meaningful judicial review of arbitration awards............................. 75 5.3 Hostility to Employer Mandated Forum Selection and Choice of Law .......................................... 76 5.4 Public Policy Claims for Wrongful Employment Actions ............................................................... 77 5.4.1 Broad definition of public policy........................................................................................ 77 5.4.2 Examples of absence of public policy .............................................................................. 77 5.4.3 Retaliatory discharge claims............................................................................................. 78 5.4.4 Other wrongful discharge claims ...................................................................................... 79 5.4.5 Wrongful actions short of termination............................................................................... 80 5.4.6 Protection of registered sex offenders--Megan's Law..................................................... 80 5.5 Claims for Breach of Contract of Continued Employment............................................................. 81 5.5.1 Implied contracts to dismiss only for good cause............................................................. 81 5.5.2 Standard for "good cause"................................................................................................ 82 5.6 Claims for Breach of Implied Covenant of Good Faith and Fair Dealing ...................................... 82 5.7 Limited Effectiveness of Common Defenses and Procedural Devices ......................................... 82 5.7.1 Workers' compensation preemption................................................................................. 82 5.7.2 Exclusive statutory remedies--not ................................................................................... 83 5.7.3 Summary judgment--not so fast ...................................................................................... 83 5.7.4 Plaintiff's income tax returns privileged from discovery ................................................... 84 5.7.5 Limits to statutes of limitations.......................................................................................... 84 5.7.6 Statute of Frauds not a defense ....................................................................................... 85 5.7.7 Federal labor preemption generally not a defense........................................................... 85 5.7.8 Limits on cross-complaints ............................................................................................... 85 5.8 Defamation Claims ........................................................................................................................ 86 5.8.1 Self-compelled publication................................................................................................ 86 5.8.2 References by former employers ..................................................................................... 86 5.8.3 Privileges inspired by #MeToo movement ....................................................................... 86 5.9 Misrepresentation Claims .............................................................................................................. 87 5.9.1 Employer liability for fraudulent inducement..................................................................... 87 5.9.2 Employer liability for too-generous references: negligent referral.................................... 87 5.9.3 Employer liability for blackballing ..................................................................................... 87 5.10 Employer Liability for Employee Torts........................................................................................... 87 5.10.1 Negligent retention ........................................................................................................... 87 5.10.2 Good Samaritan protection............................................................................................... 87 5.10.3 Intentional torts ................................................................................................................. 88 5.10.4 Unintentional torts............................................................................................................. 88 5.11 Employment Discrimination Litigation ........................................................................................... 89 5.11.1 No caps on damages........................................................................................................ 89 5.11.2 Additional claims for physical violence ............................................................................. 89 5.11.3 Far greater scope of liability for employment discrimination ............................................ 89 5.12 Anti-Employer Attorney Fees Provisions ....................................................................................... 89 5.12.1 Wage claims ..................................................................................................................... 89 5.12.2 Court-enhanced attorney fees by use of multipliers ......................................................... 90 5.12.3 Attorney fees awarded even if plaintiff doesn't win .......................................................... 90 5.12.4 Attorney-fee awards can dwarf actual recoveries ............................................................ 91 5.12.5 Windfall fees for plaintiffs' attorneys in class action settlements...................................... 91 5.13 Unfair Competition Claims............................................................................................................. 92 5.13.1 The Unfair Competition Law (UCL) .................................................................................. 92 5.13.2 Proposition 64................................................................................................................... 92 5.14 The Wage and Hour Class Action Explosion ................................................................................ 92 5.14.1 California peculiarities favoring wage and hour class actions.......................................... 92 5.14.2 Judicial endorsement of wage and hour class actions ..................................................... 93 5.14.3 Some limits to use of the class device ............................................................................. 95

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5.14.4 Broad pre-certification class discovery............................................................................. 96 5.14.5 Tolerance for successive class actions tolling the limitations period ............................... 96 5.15 Bounty-Hunting (PAGA) Claims for Labor Code Violations .......................................................... 97 5.15.1 The PAGA legislation ....................................................................................................... 98 5.15.2 PAGA amendments.......................................................................................................... 98 5.15.3 Further PAGA peculiarities ............................................................................................... 99 5.16 "The Life Unlitigated is Not Worth Living" .................................................................................... 101 5.16.1 Encouragement of multiple claims ................................................................................. 101 5.16.2 No guarantee that plaintiffs need ever pay costs ........................................................... 101 5.16.3 Deficient jury instructions often wrongly favor plaintiffs.................................................. 102 5.17 Special Protections for Unauthorized Workers............................................................................ 102 5.17.1 Plaintiff protections ......................................................................................................... 102 5.17.2 General protection for unauthorized workers ................................................................. 104 5.17.3 California employers conscripted in resistance to federal law enforcement .................. 104 5.18 Employer's Attorney-Client Privilege ........................................................................................... 105 5.19 Limits to Protection for Attorney Work Product ........................................................................... 105 5.20 Employer's Obligation to Withhold Taxes Due on Damages Judgment ..................................... 106 5.21 Can Employees Seeking Unpaid Wages Bring Tort Claims? ..................................................... 106

6.

Employment Discrimination Legislation and Litigation ..................................................................... 120

6.1 Comparing California Antidiscrimination Law with Federal Statutes........................................... 120

6.2 Additional Protected Bases ......................................................................................................... 122

6.3 Special Rules for Disability Discrimination .................................................................................. 124

6.3.1 California's somewhat broader definition of "disability" .................................................. 124

6.3.2 Disability-related inquiries............................................................................................... 125

6.3.3 Does the employer or the employee have the burden of proof as to

qualifications? ................................................................................................................. 125

6.3.4 Drug testing .................................................................................................................... 126

6.3.5 The interactive process and reasonable accommodation.............................................. 127

6.4 Special Rules for Age Discrimination .......................................................................................... 128

6.4.1 Salary might not be an age-neutral criterion .................................................................. 128

6.4.2 Adverse impact theory, with no RFOA defense ............................................................. 128

6.4.3 Publishing ages of entertainment industry employees ................................................... 129

6.5 Special Rules for Discriminatory Workplace Harassment........................................................... 129

6.5.1 Special aspects of California harassment law................................................................ 129

6.5.2 Difficulties in distinguishing harassment from management activity .............................. 130

6.5.3 Duty to prevent and correct harassment, including mandatory training ......................... 130

6.5.4 Personal liability for perpetrators .................................................................................... 133

6.5.5 Employer liability for supervisor's harassment ............................................................... 133

6.5.6 Protection of independent contractors............................................................................ 134

6.5.7 Sexual assault statute .................................................................................................... 134

6.5.8 Stalking ........................................................................................................................... 134

6.5.9 Sexual harassment in business, service, and professional relationships ...................... 134

6.5.10 Special privacy protections for plaintiffs ......................................................................... 135

6.5.11 Sexual favoritism ............................................................................................................ 135

6.5.12 Sexual desire not necessary to prove ............................................................................ 136

6.5.13 #MeToo prohibitions on confidentiality clauses.............................................................. 136

6.5.14 Expanding liability exposure for harassment.................................................................. 136

6.6 Special Rules Relating to National Origin ................................................................................... 137

6.6.1 English-only work rules................................................................................................... 137

6.6.2 Protections for specially licensed individuals ................................................................. 139

6.6.3 Other protections for inadequately documented workers............................................... 139

6.7 Equal Pay .................................................................................................................................... 139

6.8 Pant Suits .................................................................................................................................... 142

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