If you are in any of the following businesses you are now required to post a Human Trafficking Notice as required by Civil Code Section 52.6:

1. On-sale general public premises licensees under the Alcoholic Beverage Control Act (Division 9 (commencing with Section 23000) of the Business and Professions Code).
2. Adult or sexually oriented businesses, as defined in subdivision (a) of Section 318.5 of the Penal Code.
3. Primary airports, as defined in Section 47102(16) of Title 49 of the United States Code.
4. Intercity passenger rail or light rail stations
5. Bus stations.
6. Truck stops. For purposes of this section, “truck stop” means a privately owned and operated facility that provides food, fuel, shower or other sanitary facilities, and lawful overnight truck parking.
7. Emergency rooms within general acute care hospitals.
8. Urgent care centers.
9. Farm labor contractors, as defined in subdivision (b) of Section 1682 of the Labor Code.
10. Privately operated job recruitment centers.
11. Roadside rest areas.
12. Businesses or establishments that offer massage or bodywork services for compensation and are not described in paragraph (1) of subdivision (b) of Section 4612 of the Business and Professions Code.

More information is available at http://oag.ca.gov/human-trafficking/sb1193

The model notice can be obtained by going to http://oag.ca.gov/sites/all/files/agweb/pdfs/ht/HumanTraffickMandate_ENG.pdf

The bill itself can be found at http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_1151-1200/sb_1193_bill_20120924_chaptered.html

We were recently asked about the propriety in California of deducting wages from an employee’s paycheck for damage they were caught on video causing. The bill was over $1,500! Here was my response:

First of all please remember to look at the BNA state law summaries on HR That Works.

Here’s what it says:

Employers cannot deduct from employee wages for any cash shortages, breakages, or loss of equipment, unless the shortages, breakages, or losses are caused by employees’ dishonest or willful acts or gross negligence.

[Note: In enforcing this prohibition, the Department of Labor Standards Enforcement takes so narrow a view of the definition of “gross negligence” that an act must be criminal to qualify. Employers are advised to get a ruling from the DLSE before making deductions from wages on the basis of employee negligence, because a misjudgment can result in an employee's recovery of wages due and penalties. (Dept. of Labor Standards Enforcement Letter No. 2003.02.24 (2003)]

So I dug even further. The DIR website says the same thing but in more detail and throws in a big time caution:

Q.        If I break or damage company property or lose company money while performing my job, can my employer deduct the cost/loss from my wages?

 A.       No, your employer cannot legally make such a deduction from your wages if, by reason of mistake or accident a cash shortage, breakage, or loss of company property/equipment occurs. The California courts have held that losses occurring without any fault on the part of the employee or that are merely the result of simple negligence are inevitable in almost any business operation and thus, the employer must bear such losses as a cost of doing business. For example, if you accidentally drop a tray of dishes, take a bad check, or have a customer walkout without paying a check, your employer cannot deduct the loss from your paycheck.

There is an exception to the foregoing contained in the Industrial Welfare Commission Wage Orders that purports to provide the employer the right to deduct from an employee’s wages for any cash shortage, breakage or loss of equipment if the employer can show that the shortage, breakage or loss is caused by a dishonest or willful act, or by the employee’s gross negligence. What this means is that a deduction may be legal if the employer proves that the loss resulted from the employee’s dishonesty, willfulness, or grossly negligent act. Under this regulation, a simple accusation does not give the employer the right to make the deduction. The DLSE has cautioned that use of this deduction contained in the IWC regulations may, in fact, not comply with the provisions of the California Labor Code and various California Court decisions. Furthermore, DLSE does not automatically assume that an employee was dishonest, acted willfully or was grossly negligent when an employer asserts such as a justification for making a deduction from an employee’s wages to cover a shortage, breakage, or loss to property or equipment.

Labor Code Section 224 clearly prohibits any deduction from an employee’s wages which is not either authorized by the employee in writing or permitted by law, and any employer who resorts to self-help does so at its own risk as an objective test is applied to determine whether the loss was due to dishonesty, willfulness, or a grossly negligent act. If your employer makes such a deduction and it is later determined that you were not guilty of a dishonest or willful act, or grossly negligent, you would be entitled to recover the amount of the wages withheld. Additionally, if you no longer work for the employer who made the deduction and it’s decided that the deduction was wrongful, you may also be able to recover the waiting time penalty pursuant to Labor Code Section 203.

Bottom line: I’m not sure you want to invite the DIR to your company to make sure your deduction is proper. But since it was recorded it would be hard to say it is not willful. Problem is even the DIR says the regulations may not comply with the law! So while you may be able to make the deduction without permission, the safest thing to do is to ask them to voluntarily agree to a paycheck deduction, get a ruling from the DLSE first, or sue them in small claims!

While much is being made about the NLRB aggressively enforcing Section 7 and 8 employee rights, the fact is the California Labor Code, and maybe that your state as well, carries similar provisions:

232.  No employer may do any of the following:

(a) Require, as a condition of employment, that an employee refrain from disclosing the amount of his or her wages.

(b) Require an employee to sign a waiver or other document that purports to deny the employee the right to disclose the amount of his or her wages.

(c) Discharge, formally discipline, or otherwise discriminate against an employee who discloses the amount of his or her wages.

232.5.  No employer may do any of the following:

(a) Require, as a condition of employment, that an employee refrain from disclosing information about the employer’s working conditions.

(b) Require an employee to sign a waiver or other document that purports to deny the employee the right to disclose information about the employer’s working conditions.

(c) Discharge, formally discipline, or otherwise discriminate against an employee who discloses information about the employer’s working conditions.

(d) This section is not intended to permit an employee to disclose proprietary information, trade secret information, or information that is otherwise subject to a legal privilege without the consent of his or her employer.

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&group=00001-01000&file=200-243

Bottom line: If an employee complains about working conditions talk to a lawyer before you reprimand or fire them!

In the long awaited case of Harris v. City of Santa Monica the California Supreme Court rules as follows:

“When a plaintiff has shown by a preponderance of the evidence that discrimination was a substantial factor motivating his or her termination, the employer is entitled to demonstrate that legitimate, nondiscriminatory reasons would have led it to make the same decision at the time. If the employer proves by a preponderance of the evidence that it would have made the same decision for lawful reasons, then the plaintiff cannot be awarded damages, backpay, or an order of reinstatement. However, where appropriate, the plaintiff may be entitled to declaratory or injunctive relief. The plaintiff also may be eligible for an award of reasonable attorney‘s fees and costs under section 12965, subdivision (b)….. In light of today’s decision, a jury in a mixed-motive case alleging unlawful termination should be instructed that it must find the employer‘s action was substantially motivated by discrimination before the burden shifts to the employer to make a same-decision showing, and that a same-decision showing precludes an award of reinstatement, backpay, or damages.”

Back in 2008, the California Supreme Court in Edwards v. Arthur Anderson, 44 Cal 4th 937 stretched Labor Code Section 16600 to invalidate agreements containing provisions that restrain employees from engaging in competitive employment practices after leaving a former employer, including the solicitation of former clients. That statute states:

16600.  Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.

Until the decision in Edwards, it was at least hoped that while non-competition clauses were dead, non-solicitation ones were not.  Edwards put that fantasy to rest. Not only are these policies unenforceable, they can also lead to additional violations of California law.

A clause that is void under section 16600 may also violate California’s Unfair Practices Act set forth in sections 17200 et seq. of the California Business and Professions Code. As a result, an employer who includes restrictive covenants in California agreements not only risks having the clause declared unenforceable, but also risks being found to have committed an unlawful business practice.

It may surprise out of state employers that the risk posed by restrictive covenants extends beyond the employer’s California employees. In Application Group, 29 Cal 4^th 697 (2003) the court found that section 16600, and by extension section 17200, broadly applied to any “employment in California.” According to the court “employment in California” applies to (1) employees living in state; (2) employees living out of state, but hired by California employers; and (3) employees living out of state but performing services in state. (Not dissimilar to the EDD memo mentioned below). As a result, the court in Application Group struck down the non-compete of a Maryland employer with a former employee living in Maryland who was hired by a California employer.

One of the strategies of former employees with unenforceable restrictive covenants, and the California employers who hire them, is to sue the former employer for declaratory relief to declare the agreement void and to assert unfair business practices. In many instances, this can be an effective preemptive attack on restrictive covenants.

Employers headquartered outside of California often include choice of law and forum selection clauses in all of their agreements. However, California courts will generally not enforce such provisions. The employer may, however, be able to enforce such claims in their home state. This may also lead to messy, and expensive, litigation in two states. California courts do not have the authority to enjoin or in any way interfere with litigation on the same subject matter occurring in other states. While an employer may be able to obtain a favorable result in its home state, it may be a pyrrhic victory as collecting on the judgment in California will be impossible.

Most California lawyers agree that about the only thing left capable of protection of trade secrets. Confidential information is also protected by privacy laws and HIPAA. So in the end, good luck enforcing anything in a contract other than trade secret info…which means it has to be treated as trade secret info. The statute says:

“Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

   (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and

   (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

What in your business have you or could you protect under a trade secret standard?

Final note: The challenge for out of state employers or out of state employees working in California is further addressed by the EDD for payroll tax purposes. Click here to read an EDD memo on it.

The Fair Employment and Housing Commission has been cleaning up its regulations and laws in the area of pregnancy, disability and family and medical leave. They just released the final regs for pregnancy disability that you can get here. It’s actually a very clear document that you probably should save or take the time to read. Thankfully, no big surprises. Remember, this leave applies to any company with 5 or more employees. Updated policies are posted in the California Policies area of the Personnel Forms on HR That Works.

They are working on a final doc for disability accommodation regs…which does hold a few surprises. We’ll get that to you too once finalized.

“We conclude a violation of section 132a cannot be the basis of a tort action for wrongful termination.”

Keeping with the theme of work comp exclusivity a California Appellate court ruled in Dutra v. Mercy against an employee’s effort to broaden the scope of work comp retaliation. Known in California as a 132a claim, the court declined to expand liability to a full blown wrongful termination claim (which is in fact allowed in many other states) . You could not have picked a more wonderful employee to be brave enough to make such a claim after she was fired for gossiping when she should be working, for check fraud and falsifying her time card.

Note: City of Moorpark did hold that Labor Code section 132a does not provide an exclusive remedy against disability discrimination and does not preclude an employee from pursuing remedies under the Fair Employment and Housing Act (FEHA) and common law wrongful termination remedies. (City of Moorpark, supra, 18 Cal.4th at p. 1158.)

While Maryland was the first state to pass a Social Media account access protection law, California now has one too and many states plan to follow. Here’s the statutory language:

SECTION 1. Chapter 2.5 (commencing with Section 980) is added to Part 3 of Division 2 of the Labor Code, to read:

Chapter 2.5. Employer Use of Social Media

980. (a) As used in this chapter, “social media” means an electronic service or account, or electronic content, including, but not limited to, videos, still photographs, blogs, video blogs, podcasts, instant and text messages, e-mail, online services or accounts, or Internet Web site profiles or locations.

(b) An employer shall not require or request an employee or applicant for employment to do any of the following: (1) Disclose a user name or password for the purpose of accessing personal social media.

(2) Access personal social media in the presence of the employer.

(3) Divulge any personal social media.

(c) Nothing in this section is intended to affect an employer’s existing rights and obligations to investigate allegations of employee misconduct or employee violation of applicable laws and regulations.

(d) Nothing in this section precludes an employer from requiring or requesting an employee to disclose a username, password, or other method for the purpose of accessing an employer-issued electronic device.

(e) An employer shall not discharge, discipline, threaten to discharge or discipline, or otherwise retaliate against an employee or applicant for not complying with a request or demand by the employer that violates this section. However, this section does not prohibit an employer from terminating or otherwise taking an adverse action against an employee or applicant if otherwise permitted by law.

To understand what all of that means I suggest you look at the bill analysis by both the Senate and Assembly labor committees.  Interestingly, the only opposition to the bill came from the securities and financial sector claiming it conflicted with obligations they have under Federal statutes. HR That Works Members should view the Social Media Training Module.

AB 1844 (Passed):  This bill would prohibit an employer from requiring or requesting that an employee or applicant disclose user name or password information for personal social media, or to divulge any personal social media.

Chapter 2.5. Employer Use of Social Media

980.  (a)  As used in this chapter, “social media” means an electronic service or account, or electronic content, including, but not limited to, videos, still photographs, blogs, video blogs, podcasts, instant and text messages, email, online services or accounts, or Internet Web site profiles or locations.

(b)   An employer shall not require or request an employee or applicant for employment to do any of the following:

(1)      Disclose a username or password for the purpose of accessing personal social media.

(2)      Access personal social media in the presence of the employer.

(3)      Divulge any personal social media, except as provided in subdivision (c).

(c)    Nothing in this section shall affect an employer’s existing rights and obligations to request an employee to divulge personal social media reasonably believed to be relevant to an investigation of allegations of employee misconduct or employee violation of applicable laws and regulations, provided that the social media is used solely for purposes of that investigation or a related proceeding.

(d)   Nothing in this section precludes an employer from requiring or requesting an employee to disclose a username, password, or other method for the purpose of accessing an employer-issued electronic device.

(e)    An employer shall not discharge, discipline, threaten to discharge or discipline, or otherwise retaliate against an employee or applicant for not complying with a request or demand by the employer that violates this section. However, this section does not prohibit an employer from terminating or otherwise taking an adverse action against an employee or applicant if otherwise permitted by law.

SB 1255 (Signed):  This bill would specify circumstances under which “injury” would be presumed to an employee as a result of an employer not providing wage statements, or providing incomplete wage statements.  Presumed injury would allow the employee to recover penalties and/or actual damage.  Presumed injury could be shown by the failure to provide a wage statement at all, or by the failure to include the employee’s name and last 4 digits of the social security number.  It could also be shown by failing to provide complete wage information, causing the employee to be unable to determine (from the statement alone) gross and net wages earned, deductions therefrom, and the name and address of the employer.

“An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not to exceed an aggregate penalty of four thousand dollars ($4,000), and is entitled to an award of costs and reasonable attorney’s fees.

AB 1744 (Signed, effective July 1, 2013):   This bill would require temporary services employers to include additional information on itemized wage statements for employees, including the rate of pay for each assignment, the name and address of the entity that secured the services and total hours worked for each entity.

AB 2103 (Signed): Payment of a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee’s regular, non-overtime hours, notwithstanding any private agreement to the contrary.

AB 2674 (Signed):  This bill would amend section 1198.5 of the Labor Code relating to employee rights to inspect personnel files.  The bill would require employers to maintain employee personnel files for at least 3 years following termination of employment, and to permit current and former employees (or their designated representatives) to inspect and copy personnel records, within 30 days of a request to do so by the employee.  The bill specifies that an employer is not required to comply with more than 50 requests for copies of personnel records by a representative of employee(s) in one calendar month.

Resources:

Labor Commission www.dir.ca.gov
Dept. of Fair Employment and Housing www.dfeh.ca.gov
EDD www.edd.ca.gov

And of course, HR That Works!

According to the bill, this amendment to the Fair Employment and Housing Act AB 1964 would clarify that undue hardship, as defined in the Definitions section of the Fair Employment and Housing Act, will also apply to the Religious Discrimination section, clearing up legal confusion of federal vs. state definitions of “undue hardship”. The bill would also specify that religious clothing and hairstyles qualify as a religious belief or observance and that segregating an employee from customers or the public is not a reasonable accommodation of an employee’s religious beliefs now protects “religious dress practice” shall be construed broadly to include the wearing or carrying of religious clothing, head or face coverings, jewelry, artifacts, and any other item that is part of the observance by an individual of his or her religious creed. “Religious grooming practice” shall be construed broadly to include all forms of head, facial, and body hair that are part of the observance by an individual of his or her religious creed.

The bill, sponsored by The Sikh Coalition would clarify that undue hardship, as defined in the Definitions section of the Fair Employment and Housing Act, will also apply to the Religious Discrimination section, clearing up legal confusion of federal vs. state definitions of “undue hardship”. The bill would also specify that religious clothing and hairstyles qualify as a religious belief or observance and that segregating an employee from customers or the public is not a reasonable accommodation of an employee’s religious beliefs.

To learn more about the bill’s passage, go to http://asmdc.org/members/a08/religious-freedom?layout=category  To read an interesting article chronicling the passage of the bill go to http://www.hyphenmagazine.com/blog/archive/2012/08/what-unity-looks-ab-1964