Impact on Employers of California’s New Law Authorizing Driver Privileges for Illegal Immigrants

Governor Jerry Brown signed AB 60 into law on October 3, 3013.  The law allows individuals without immigration status to obtain driver privileges (DP) and to obtain a DP identification from DMV.  The law goes into effect on January 1, 2015 in order to give DMV sufficient time to publish regulations and procedures and to staff up to meet the expected demand.

CDF reminds employers that the DP identification will not satisfy I-9 requirements.  While a state issued driver license is an acceptable List B document, a DP card will not be.  By definition, anybody who applies for the DP identification is most likely not work authorized.

It is the opinion of this author that Congress will eventually grant employment authorization documents (EAD’s) sometime during the next two years to this same population segment – however it remains to be seen when.  Until then, employers are reminded to remain vigilant regarding accepting proper I-9 documentation for new hires and reverifications.

For more information on the new DP, click here.

For information on other immigration matters, please contact Attorney Greg Berk, Chair of the CDF Immigration Practice Group.

Effect of Shutdown on Federal Employment-related Agencies

With the shutdown of the federal government, employers should be aware of the extent to which key employment-related agencies will continue to operate during the shutdown.  The following is a list of key agencies and their contingency plans:

1. Department of Homeland Security:  Employers should be aware that the E-Verify system used to verify I-9 work authorization is unavailable during the shutdown.   The DHS has instructed employers not to take any final action on tentative non confirmations that are still pending during this period.  Employers will be given the opportunity to do late E-Verify verifications once the system is up and running again.   For more information from the DHS website, click here

2. EEOC:  The EEOC has announced that it will continue processing charges of discrimination, but will not be conducting investigations or participating in scheduled mediations.  In cases of pending litigation, the EEOC will participate as necessary if requests for stays are not granted by the courts.  The EEOC’s contingency plan announcement is available here

3. NLRB:  The NLRB has announced that it generally is not processing charges and that representative elections and hearings are postponed.  However, the NLRB has advised that in certain instances filings should be faxed to NLRB regional offices.  For more information, click here

4. Department of Labor:  The Wage and Hour Division has announced that it will generally only continue operations as necessary to respond to emergencies involving the safety of human life or protection of property.  The WHD will investigate incidents involving serious injury or death of a minor while employed or any transportation accident or any housing safety violation involving serious injury or death of a farm worker.  For more information, click here

5.  Federal courts:  Federal courts are expected to continue operating normally for about 10 business days.  If the shutdown lasts longer than that, federal courts are expected to be impacted.

California Governor Approves Minimum Wage Hike, Domestic Worker Bill of Rights, and Expansion of Paid Family Leave Benefits

This week, California's Governor signed into law legislation (1) increasing the state minimum wage, (2) providing overtime compensation for many household employees, and (3) expanding the scope of California's paid family leave insurance program.   With respect to minimum wage (which is currently $8/hour in California), AB 10 increases the minimum wage to $9/hour effective July 1, 2014, and further increases it to $10/hour effective January 1, 2016.  Currently, the only state with a higher minimum wage than California's upcoming $9/hour is Washington, where the minimum wage is $9.19/hour.

The Governor also signed into law AB 241, which adds section 1450 to the California Labor Code and is known as the Domestic Worker Bill of Rights.  Under this new law, individuals who work in many household occupations are now required to be paid overtime compensation at a rate of one and one-half times their regular rate for all hours worked in excess of 9 hours per day or 45 hours per week.  The law excludes "casual babysitters" whose work is intermittent or irregular as well as babysitters who are under age 18, and further excludes individuals who work in residential care facilities.  The law would apply to nannies, housekeepers, and individuals who provide care for the elderly and/or disabled within a private household.  This new law takes effect January 1, 2014.

Finally, the Governor signed into law SB 770, which expands the scope of California's family temporary disability insurance program.  Under the current program, employees who take time off to care for a seriously ill child, spouse, parent or domestic partner, or for baby bonding, are entitled to partial wage replacement benefits through this state insurance program administered by the EDD.  Under the new law, these benefits are expanded to also be provided to employees who take time off to care for a seriously ill grandparent, grandchild, sibling or parent-in-law.  This new law takes effect July 1, 2014.  To be clear, this new law is not a leave statute and does not require California employers to provide leaves of absence to employees for any of these circumstances, much less to provide employees pay for such leaves.  An employer's leave obligations are governed by the employer's policies and the employer's coverage under other applicable laws such as the FMLA and CFRA.

We will continue to keep you updated on any additional legislative developments.

Prevailing Employer In Wage Case Can Only Recover Attorneys’ Fees If Claim Was Brought In Bad Faith

Employers may recall recent publicity in California over the extent to which an employer may recover its attorneys’ fees after prevailing in a wage and hour action.  This is because Labor Code section 218.5 on its face provides that the prevailing party in any action brought for nonpayment of wages “shall be awarded” its reasonable costs and attorneys’ fees.  Thus, Labor Code section 218.5’s fee-shifting provision on its face applies equally to a prevailing employee and employer.  Based on this language, in Kirby v. Immoos, a trial court awarded attorneys’ fees to an employer who prevailed in a wage case alleging, among other things, meal and rest break violations.  A California court of appeal thereafter affirmed the employer’s fee award.  However, the California Supreme Court ultimately reversed this outcome and held that Labor Code section 218.5 does not apply to meal and rest break claims, reasoning that these claims are not claims alleging “non-payment of wages.”  The Court’s ruling left open the possibility that a prevailing employer could recover attorneys’ fees in certain other types of wage-related actions.

To avoid this result, the California Legislature introduced a bill, SB 462, to amend Labor Code section 218.5 to provide that a prevailing employer may only recover attorneys’ fees if a trial court finds that the employee brought the wage action in bad faith.  The legislature recently passed this bill and yesterday California’s Governor signed it into law.  With this amendment, it will be even more difficult and rare for a prevailing employer to recover attorneys’ fees in wage and hour actions in California.

California Legislative Watch:  Pending Labor and Employment Bills

There are a number of bills being considered by the California Legislature this session that are of interest to California employers.  With the Democratic supermajority in both legislative houses, as well as a Democratic Governor, it is quite likely that more employee-friendly bills will be passed and signed into law than in recent years.  The following are some of the notable pending bills:

SB 404 (FEHA/familial status):  This bill would expand the list of protected categories for employment discrimination purposes under FEHA, to include “familial status.”  “Familial status” is defined to include individuals who provide medical or supervisory care to a family member (child, parent, spouse, domestic partner, or parent-in-law).  If signed into law, this will expand the scope of lawsuits and potential liability against employers for alleged discrimination against applicants or employees based on their familial status.

AB 556 (FEHA/military and veteran status):  This bill would add “military and veteran status” to the list of protected categories for employment discrimination purposes under FEHA.

SB 400 (domestic violence/stalking):  This bill would expand employment protections provided to victims of domestic abuse (Labor Code section 230) by adding a provision that prohibits employers from discriminating against applicants or employees based on their known status as victims of domestic violence, sexual assault or stalking, and would also require employers to provide time off to employees who need to attend court proceedings dealing with stalking (the law already provides for time off for proceedings relating to domestic violence and assault).  Most notably, the law would require employers to provide “reasonable accommodation” to victims of domestic violence, sexual assault and/or stalking in the form of implementing safety measures for the employee while at work.

SB 655 (FEHA/mixed motive cases):  This bill is intended to codify the California Supreme Court’s recent decision in Harris v. Santa Monica, specifically to codify the burden-shifting framework and remedies available in cases where there are mixed motives for an adverse employment action in a FEHA discrimination case.  Under this bill, a plaintiff in a discrimination case will prevail if he/she proves that his/her protected status/activity was a “substantial motivating factor” for the employer’s decision to take adverse employment action against the plaintiff.  However, the employer can try to limit its liability by pleading and proving that it would have made the same adverse employment decision even without consideration of the protected characteristic/activity.  If the employer proves this, the employer will not be liable for economic damages (back pay/front pay).  However, the employer will still be liable for non-economic damages (emotional distress damages), attorneys’ fees, expert witness fees, a penalty of $15,000, and possibly injunctive relief. 

AB 263/SB 666 (wage complaints and immigration practices):  These bills would amend Labor Code 98.6 to make clear that written or oral complaints regarding wages the employee believes are owed him/her are protected activities for purposes of the prohibition on retaliation against an employee for engaging in protected conduct.  These bills would also make clear that an employee may, but is not required to, exhaust administrative remedies before filing a lawsuit.  These bills would also add sections 1019 et seq. to the Labor Code, delineating certain unfair and unlawful immigration-related practices.  “Unfair immigration practices” include requesting more or different documents of an applicant than are allowed under federal I-9 rules; refusing to honor documents that appear genuine on their face; using the federal E-verify program to check authorization status of a person at a time or in a manner not required or authorized under the program procedures; and threatening to file or filing a false police report.  The new law would also prohibit retaliation against applicants/employees who complain about the employer’s non-compliance with these provisions and/or inform others of their rights in this regard, or who even seek information from the employer about its compliance.  The new law would provide a rebuttable presumption that adverse action taken against an employee within 90 days of such protected activity is retaliatory.

AB 442 (liquidated damages for wage violations):  This bill would expand the remedies available to employees who file claims with the Labor Commissioner for payment of a wage lower than minimum wage.  The bill would permit the Labor Commissioner to award liquidated damages (employees can already recover liquidated damages in a civil lawsuit), in addition to unpaid wages, penalties, and interest.

AB 729 (privilege for communications with union agent):  This bill would create an evidentiary privilege (similar to the attorney-client privilege) to protect from disclosure confidential communications between a union agent and a represented employee or former employee.

AB 218 (limits state/local agency inquiries into applicant criminal history):  This bill would add section 432.9 to the Labor Code and would generally prevent state and local agency employers from asking applicants to disclose criminal history information, via application or otherwise, until after it is first determined that the applicant meets the minimum qualifications for the position.

AB 241 (domestic workers/wages):  This bill, which was introduced but unsuccessful last year, is back.  This bill would add certain wage protections for domestic workers, such as babysitters and house cleaners.  With certain exceptions, the bill would require payment of daily and weekly overtime and compliance with other wage order requirements, for most household workers.  With respect to babysitters, the law would exempt babysitters under age 18 and would also exempt "casual" babysitters who work no more than 6 hours per week in any given month (these employees are still entitled to minimum wage for all hours worked, however).  The law also sets forth specific requirements for live-in household employees.

AB 10 (minimum wage increases):  This bill provides for state minimum wage increases as follows:  $8.25/hour on January 1, 2014; $8.75/hour on January 1, 2015; $9.25/hour on January 1, 2016; $9.50/hour on January 1, 2017; and $10.00/hour on January 1, 2018.

AB 25 (social media/public employers):  Last year, a new law was passed prohibiting private employers from requiring applicants or employees to disclose usernames/passwords for social media and/or requiring employees to access or divulge social media.  This bill would extend these provisions to public employers.

SB 770 (paid family leave expansion):  This bill would expand California's paid family leave partial wage replacement program (administered through EDD) to provide wage replacement benefits to an employee who takes time off to care for a seriously ill grandparent, grandchild, sibling, or parent-in-law, effective July 1, 2014.  (Current law already provides such benefits to employees who take time off to care for a spouse, child, parent, or domestic partner.)

In addition to the foregoing bills being considered by the California Legislature, the Legislature already passed and the Governor already signed into law SB 292, which "clarifies" that a plaintiff claiming sexual harassment under FEHA need not prove that the harassment was motivated by sexual desire in order to prove "sexual" harassment.  This is not really a change in the law, but the bill was aimed at curtailing the effect of a recent California Court of Appeal decision, Kelley v. Conco, 196 Cal.App.4th 191 (2011), which had some language suggesting that in a same-sex harassment case, evidence that the alleged harasser was heterosexual and not motivated by sexual intent or desire could defeat a harassment claim.

The full text of each of these bills, along with information on the bills' sponsors, is available here.  Wondering why this list does not include all of the employer-friendly bills pending before the Legislature?  (Of course there aren't any--they were all defeated early on in the session.)

The California Legislature has until September 13 to pass bills this session, and the Governor thereafter has until October 13 to sign or veto such bills.

Only the Named Plaintiff’s Claim in PAGA Action Can Be Considered for Purposes of Diversity Jurisdiction

Today the Ninth Circuit issued its decision in Urbino v. Orkin Services of California, Inc., addressing how to properly analyze whether the amount in controversy element is satisfied for purposes of diversity jurisdiction in a PAGA action.  As most California employers know, PAGA is a California statute that allows an employee to recover penalties (purportedly on behalf of the state) against an employer for various violations of the California Labor Code.  Worse, the employee who is the named plaintiff can seek to recover penalties on behalf of all aggrieved employees.  Most claims are filed in state court, but employers retain the option to remove the action to federal court if the requirements for diversity jurisdiction are met.  One of those requirements is that the amount in controversy must exceed $75,000.  In determining whether the amount in controversy meets this jurisdictional threshold, the question becomes whether courts should look only at the amount of the named plaintiff's claim, or whether courts should look at the aggregate amount of the claim as to all "represented" employees.  California district courts have disagreed over the answer to this question.  Today, the Ninth Circuit resolved the question, holding that only the claim of the named plaintiff (and not the aggregate claims of all aggrieved employees sought to be represented) may be considered in determining whether the amount in controversy requirement is satisfied.  The result of this decision will be that far fewer PAGA claims will be capable of removal to federal court based on diversity jurisdiction.  The full opinion of the court is here

Employer Sues to Stop Overly Aggressive EEOC Investigatory Efforts

Employers should be aware that, according to a recent lawsuit filed by an employer, the EEOC has engaged in a shocking new tactic as part of its “investigatory” power.  Specifically, under the guise of its “investigation” into a claim of alleged unlawful conduct on the part of the employer, the EEOC, without any advance notice, directly emailed over 1100 of the employer’s employees (at their employer’s email address) in an attempt to develop class members for a potential class action against the employer.

In response to the EEOC’s conduct, Case New Holland Inc. and CNH America LLC sued the EEOC on August 1, 2013 seeking injunctive relief and attorneys’ fees, claiming that the mass email interfered with its business operations, constituted contact with represented parties in violation of the Rules of Professional Conduct, and denied CNH the right to be present during communications with its employees.  The lawsuit further alleges that (1) no rule or regulation authorized the mass email, (2) the investigation was biased and violated statutory and constitutional rights, (3) the missive constituted a violation of the EEOC compliance manual, (4) violated the Fourth Amendment of the Constitution of the United States, and (5) violated the Fifth Amendment of the Constitution of the United States.

Employers should be concerned that even long after an investigation appears to have concluded, the EEOC could undertake such a tactic.  The Complaint alleges that the EEOC investigation of CNH commenced in 2011 and that over the course of the investigation, CNH cooperated by providing, among other things, approximately 5,707 pages of documents and over 600,000 electronic records to the EEOC.  The vast information was provided to the EEOC in January 2012 and, without any warning, about 18 months later on the morning of June 5, 2013, the EEOC made its direct contact with hundreds of CNH’s employees.  

If you are being investigated by the EEOC this could happen to you.  So once you learn of a potential investigation, engage counsel and press regularly for the termination of the investigation and conclusions reached by investigator.

California Legislation Pushing Evidentiary Privilege for Employee-Union Representative Communications

In 2003, the Second District Court of Appeal for California, in American Airlines, Inc. v.  Superior Court,  114 Cal.App.4th 881 (2003), refused to recognize a privilege for communications between a union representative and bargaining unit employee under the California Labor Code, the Railway Labor Act, common law privacy or any other provision.  In 2005, Illinois became the first state to enact a statute creating a privilege for such communications.  Last year, the Alaska Supreme Court in Peterson v. State, 280 P.2d 559 (Alaska 2012), created a new Alaskan common law privilege for certain communications between an employee and his/her union representative. 

The California Legislature is now attempting to overturn American Airlines, and follow Illinois by creating a statutory privilege for such communications through Assembly Bill 729.  AB 729 amends the California Evidence Code to create a privilege for confidential communications between an employee or former employee and his/her union agent that is similar to the attorney-client privilege.  AB 729 passed the full Assembly in May by almost a 2/3 majority.  Last week, the Senate Judiciary Committee voted in support of the bill 4-2.  AB 729 now moves to the Senate Appropriations Committee for consideration before being considered by the entire state Senate.  Unionized employers should play close attention to this piece of legislation.   We will continue to keep you advised on how this develops.

Immigration Consequences of DOMA Decision

The recent U.S. Supreme Court Case regarding the Defense of Marriage Act (Windsor v. Schlain, No. 12-307 (U.S. 2013)) has numerous immigration consequences for certain same-sex spouses that are married.  The June 26, 2013 decision opens the door for many immigration benefits for certain qualifying spouses.  

If the marriage takes place in a state that recognizes a same-sex marriage, then U.S. Citizenship & Immigration Services (US CIS) will allow the U.S. Citizen or permanent resident partner to sponsor their foreign national spouse for permanent residency in the U.S.   Currently, there are 14 states where the marriage will be recognized as valid for immigration purposes, including  California, Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont, Washington, Washington DC.

And the U.S. Citizen spouse could even sponsor the foreign national partner on a fiancé visa if they are overseas and plan to marry within 90 days of entry to the U.S.

In addition, it will allow non-immigrants who are applying for a temporary visa (such as H-1B, L-1, TN, etc.) to have their spouses join them on a derivative visa if their same-sex marriage is recognized as valid in the overseas country where the marriage took place.  Currently, there are 15 countries that recognize same sex-marriages including Argentina, Belgium, Brazil, Canada, Denmark, France, Iceland, Netherlands, New Zealand, Norway, Portugal, South Africa, Spain, Sweden, and Uruguay.

US CIS has indicated that the place of marriage (celebration) will dictate eligibility as opposed to the current place of residency.  For example, if a couple marries in California and then moves to Wyoming, then they will still be able to petition for permanent residency since the location of the ‘place of celebration” of the marriage controls. 

Spouses may also marry overseas in a country that recognizes same-sex marriages and US CIS will recognize that marriage for visa purposes.

US CIS is expected to provide more guidance on this in the months to come.  See here

For more information, please contact Greg Berk, Chair of the CDF Immigration Practice Group.

Supreme Court Issues Two Employer-Friendly Decisions Addressing Liability for Supervisor Harassment and the Standard for Proving Retaliation Under Title VII

Yesterday the United States Supreme Court issued two decisions important for employers litigating harassment and retaliation claims under Title VII.  In the first case, Vance v. Ball State University, the Court decided an important issue relating to an employer's liability for harassment of an employee by a "supervisor."  More specifically, the Court decided a dispute concerning what it means to be a "supervisor"--i.e. does the employee need to have authority to hire and fire and make similar decisions or is it enough if the employee directs the daily work of others(the latter approach being the approach endorsed by the EEOC)?  This issue is significant because employer liability for harassment under Title VII varies depending on whether the alleged harasser is a supervisory employee or a co-worker.  If the harasser is a supervisor, the employer generally is vicariously liable for the harassment.  If the harasser is not a supervisor but a co-worker of the victim, then the employer generally only is liable if it knew or should have known of the harassment and failed to take prompt and effective remedial action.  Prior to yesterday's decision, courts disagreed over the meaning of the term "supervisor" and thus parties to harassment suits under Title VII generally had to litigate whether the alleged harasser qualified as a supervisor (with Plaintiffs' attorneys of course arguing broadly for supervisor status, and employers urging a narrow view of supervisor status). 

In yesterday's 5-4 decision, the Supreme Court provided the needed clarification and guidance on this issue, defining the term "supervisor" narrowly in a way that benefits employers.  The Court held that to be considered a supervisor, the employee must be empowered by the employer to take "tangible employment actions against the victim."  This means that the employee must have the power to effect "a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits."  The Court rejected as "nebulous" the EEOC's (and many circuit court's) definition of a supervisor to include anyone with the ability to significantly direct another's daily work.

The Supreme Court's decision is a favorable one for employers because it narrows the circumstances under which employers can be held vicariously liable for harassment, and should reduce litigation costs that previously had to be expended litigating whether the alleged harasser was a supervisor or not.  The full decision in Vance is available here.

In another employer-friendly Title VII decision issued yesterday, University of Texas Southwestern Medical Center v. Nassar, the Court (also in a 5-4 decision) decided a split among the circuits concerning the standard for proving retaliation claims under Title VII (meaning claims that an employee was retaliated against for complaining about discriminatory practices in violation of Title VII).  Prior to yesterday's decision, some courts had held that an employee need only prove that a retaliatory motive was "a motivating factor" behind the adverse employment action.  Other courts held that an employee, in order to prevail, has a higher burden of proving that a retaliatory motive was the "but for" cause of the adverse employment action. The Supreme Court has now spoken and held that the standard for proving a retaliation claim under Title VII is "but for" causation.  This decision similarly is favorable for employers litigating Title VII retaliation claims because it makes it more difficult for the plaintiff to prove and prevail on the claim.  The full decision in Nassar is available here.

It has been a good week for employers on the United States Supreme Court front.