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Advising California Employers and Employees

Be ready to deal with virtually any workplace issue your clients may face.

Be ready to deal with virtually any workplace issue your clients may face.

  • Hiring guidelines and employment contracts
  • Immigration law for employers
  • Wages and hours; family and medical leave
  • Employee handbooks
  • Protecting trade secrets; noncompetition covenants
  • Privacy issues in the workplace
  • Employer liability for employee acts; insurance coverage
  • Discrimination, harassment, and retaliation claims
  • Whistleblower issues and workplace investigations
  • Wrongful termination; reductions in force
  • Mediation and arbitration of employment disputes
  • Auditing your client’s workplace practices
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Be ready to deal with virtually any workplace issue your clients may face.

  • Hiring guidelines and employment contracts
  • Immigration law for employers
  • Wages and hours; family and medical leave
  • Employee handbooks
  • Protecting trade secrets; noncompetition covenants
  • Privacy issues in the workplace
  • Employer liability for employee acts; insurance coverage
  • Discrimination, harassment, and retaliation claims
  • Whistleblower issues and workplace investigations
  • Wrongful termination; reductions in force
  • Mediation and arbitration of employment disputes
  • Auditing your client’s workplace practices

1

Hiring Guidelines and Pitfalls

Lawrence J. Gartner

Stefanie M. Gushá

  • I.  OVERVIEW  1.1
  • II.  RECRUITING
    • A.  Avoiding Discrimination Claims
      • 1.  Using Employment Agencies and Hiring Halls  1.2
      • 2.  Recruiting at Schools and Colleges  1.3
      • 3.  Newspaper Advertisements  1.4
    • B.  Recruiting During a Labor Dispute  1.5
    • C.  Raiding Other Employers  1.6
    • D.  Foreign Labor Contractors  1.6A
  • III.  JOB QUALIFICATIONS
    • A.  Hiring Standards Must Pass Business-Necessity Test  1.7
    • B.  Age  1.8
    • C.  Citizenship, National Origin, and Ancestry  1.9
    • D.  Sex, Sexual Orientation, and Gender Expression  1.10
    • E.  Financial Circumstances  1.11
    • F.  Dress and Personal Appearance Standards  1.12
    • G.  Rehabilitated Drug and Alcohol Users  1.13
    • H.  Education Requirements  1.14
    • I.  English Fluency  1.15
    • J.  Physical Abilities and Mental Health  1.16
    • K.  Medical Condition  1.17
    • L.  Spouses and Family Members Working Together  1.18
    • M.  Veterans  1.19
    • N.  Caregivers  1.19A
  • IV.  APPLICATIONS AND PRE-EMPLOYMENT INTERVIEWS
    • A.  Applications
      • 1.  Application Form Is Source of Useful Information  1.20
      • 2.  Applicant’s Copy  1.21
    • B.  Interview Restrictions
      • 1.  Non-Job-Related Questions  1.22
      • 2.  Specific Topics
        • a.  Age  1.23
        • b.  Marital Status  1.24
        • c.  Pregnancy  1.25
        • d.  Disability or Medical Condition
          • (1)  Prohibited Inquiries  1.26
          • (2)  Permitted Inquiries Concerning Ability  1.27
        • e.  Religion  1.28
        • f.  Criminal Record: California’s “Ban the Box” Law  1.29
        • g.  Questions About Discipline for Sexual Harassment Permitted  1.30
        • h.  Salary History  1.30A
      • 3.  Agency Form: Employment Inquiries: What Can Employers Ask Applicants and Employees? (DFEH-161)  1.31
  • V.  REFERENCES AND BACKGROUND CHECKS
    • A.  References From Former Employers  1.32
    • B.  Credit History and Other Background Checks
      • 1.  Governing Law  1.33
      • 2.  Federal Requirements for Employers  1.34
      • 3.  California Law
        • a.  Consumer Credit Reporting Agencies Act  1.35
        • b.  Lab C §1024.5  1.35A
        • c.  Investigative Consumer Reporting Agencies Act  1.36
      • 4.  Procedural Requirements  1.37
        • a.  Notice of Intention to Obtain Report  1.38
          • (1)  Under Fair Credit Reporting Act  1.39
          • (2)  Under Consumer Credit Reporting Agencies Act  1.40
          • (3)  Under California Investigative Consumer Reporting Agencies Act  1.41
        • b.  Applicant’s Authorization  1.42
        • c.  Employer Certification of Compliance  1.43
        • d.  Employer Obligation to Provide Applicant With Copy of Report  1.44
        • e.  Employer’s Obligations When Employment Is Denied on Basis of Consumer Report  1.45
      • 5.  Information That May Not Be Included in Consumer Report  1.46
      • 6.  Form: Notice and Disclosure  1.47
      • 7.  Form: Certification to Credit Reporting Agency  1.48
      • 8.  Form: Certificate of Compliance by Agency  1.49
      • 9.  Form: Notification of Request for Investigative Consumer Report  1.50
      • 10.  Form: Authorization to Obtain Investigation Reports  1.51
      • 11.  Form: Pre-Adverse Action Disclosure  1.52
      • 12.  Form: Summary of Rights Under Fair Credit Reporting Act  1.53
      • 13.  Form: Post-Adverse Action Disclosure  1.54
      • 14.  Form: Notification of Intent to Procure Investigative Consumer Report  1.55
    • C.  Employee Misrepresentations  1.56
  • VI.  PRE-EMPLOYMENT TESTING
    • A.  General Education or Intelligence Tests  1.57
    • B.  Psychological Tests  1.58
    • C.  Polygraph Tests
      • 1.  Federal Law  1.59
      • 2.  California Law  1.60
    • D.  Voice Stress Analysis  1.61
    • E.  Fingerprints and Photographs  1.62
    • F.  Medical and Physical Examinations Given Only After Job Offer  1.63
    • G.  AIDS Testing  1.64
    • H.  Drug Tests Permissible  1.65
  • VII.  RECOMMENDATIONS FOR REDUCING THE RISK OF LIABILITY
    • A.  Statements Made During Recruitment  1.66
      • 1.  Avoiding Claims of Misrepresentation  1.67
        • a.  Do Not Falsely Induce Employee Relocation  1.68
        • b.  Covenant of Good Faith and Fair Dealing Is Implied in Employment Offer  1.69
        • c.  Use Checklist of Terms of Employment  1.70
      • 2.  Avoiding Claims of Implied Contract
        • a.  Use Written At-Will Provisions  1.71
        • b.  Do Not Assure Term of Job  1.72
    • B.  Follow Step-by-Step ADA/FEHA Hiring Guidelines  1.73
    • C.  Use Care in Hiring  1.74
  • VIII.  CHECKLISTS
    • A.  Checklist: Paperwork for New Employees  1.75
    • B.  Checklist: Trade Secret Concerns in Interviewing Applicant  1.76
    • C.  Checklist: Issues to Consider Before Implementing Employee Testing  1.77
  • IX.  FORMS
    • A.  Form: Application for Employment  1.78
    • B.  Form: Applicant’s Statement  1.79
    • C.  Form: Notification of Rejection of Application  1.80
    • D.  Form: Employment Offer Letter  1.81
    • E.  Form: Mutual Agreement to Arbitrate Claims  1.82
    • F.  Form: Authorization for Job-Related Medical Examination and Drug-Testing and for Release of Information  1.83
    • G.  Form: Sample Job Description Questionnaire  1.84
    • H.  Form: Sample Job Description for Receptionist  1.85

2

Employment Contracts and Executive Compensation

Margaret Hart Edwards

Kate West Rowan

Michael Pedhirney

  • I.  GENERAL CONSIDERATIONS IN USE OF EMPLOYMENT CONTRACTS
    • A.  Overview of Benefits to Employer  2.1
      • 1.  Anticipating Termination of Employment  2.2
      • 2.  Exercising Business Control Over an Employee  2.3
      • 3.  Attracting and Retaining Employees for a Period or Purpose  2.4
      • 4.  Protecting the Employer’s Intellectual Property  2.5
      • 5.  Agreeing on Alternative Forums for Dispute Resolution  2.6
    • B.  Drafting Considerations
      • 1.  Gathering Relevant Background Information  2.7
      • 2.  Other Legal Considerations
        • a.  Reporting Requirements  2.8
        • b.  Conflicts of Interest  2.9
  • II.  EMPLOYMENT CONTRACT PROVISIONS
    • A.  General Comment on Use of Forms  2.10
    • B.  Preliminary Matters
      • 1.  Form: Preamble to Employment Contract  2.11
      • 2.  Recitals
        • a.  Purpose  2.12
        • b.  Form: Recitals  2.13
    • C.  Term of Employment
      • 1.  Drafting Considerations  2.14
        • a.  At-Will Employment
          • (1)  Erosion of At-Will Nature of Employment  2.15
          • (2)  Including At-Will Clause in Employment Contract  2.16
        • b.  Indefinite Term  2.17
        • c.  Specified Term  2.18
      • 2.  Form: Term of Employment  2.19
    • D.  Form: Place of Employment  2.20
    • E.  Employee’s Duties and Authority
      • 1.  Describing Duties in Broad Terms  2.21
      • 2.  Form: Employee’s Duties and Authority  2.22
    • F.  Employee’s Outside Business Activities
      • 1.  Duty Not to Engage in Conflicting Activities  2.23
      • 2.  Drafting Considerations  2.24
      • 3.  Form: Outside Business Activities Precluded or Restricted  2.25
      • 4.  Form: Reasonable Time and Effort Required  2.26
      • 5.  Form: Covenant Not to Compete During Employment Term  2.27
      • 6.  Form: Morality Clause  2.28
      • 7.  Consulting Arrangement
        • a.  Drafting Considerations  2.29
        • b.  Form: Consulting Services  2.30
    • G.  Employee’s Compensation and Benefits
      • 1.  Planning Executive Compensation  2.31
        • a.  Salary  2.32
        • b.  Deferred Compensation  2.33
        • c.  Incentives  2.34
        • d.  Benefits  2.35
      • 2.  Form: Base Salary  2.36
      • 3.  Form: Adjustment to Base Salary  2.37
      • 4.  Form: Incentive Compensation  2.38
      • 5.  Form: Stock Bonus  2.39
      • 6.  Form: Stock Options  2.40
      • 7.  Form: Cash Bonus  2.41
      • 8.  Form: Commissions  2.42
      • 9.  Form: Royalties  2.43
      • 10.  Form: Deferred Compensation  2.44
      • 11.  Additional Benefits  2.45
        • a.  Form: Additional Benefits  2.46
        • b.  Form: Vacation  2.47
        • c.  Board Membership  2.48
        • d.  Form: Board Membership  2.49
        • e.  Expenses
          • (1)  Drafting Considerations  2.50
          • (2)  Form: Expense Reimbursement  2.51
        • f.  Form: Automobile Allowance  2.52
        • g.  Form: Life Insurance  2.53
      • 12.  Repayment of Compensation Held Excessive
        • a.  Tax Considerations in Drafting  2.54
        • b.  Form: Repayment of Compensation Held Excessive  2.55
    • H.  Ownership of Intangibles
      • 1.  Drafting Considerations  2.56
      • 2.  Form: Ownership of Intangibles  2.57
        • a.  Proprietary Information Obligations  2.58
          • (1)  Protecting Confidential Information  2.59
          • (2)  Restraint of Unfair Competition After Employment Termination  2.60
      • 3.  Form: Proprietary Information Obligations  2.61
      • 4.  Form: Noninterference  2.62
      • 5.  Form: Noncompetition [Deleted]  2.63
      • 6.  Form: Use of Employee’s Name and Image  2.64
    • I.  Indemnification of Employee
      • 1.  Need for Indemnification Provisions  2.65
      • 2.  Form: Indemnification by Employer  2.66
      • 3.  Form: Employer-Provided Indemnity Insurance  2.67
      • 4.  Form: Qualification for Surety Bond  2.68
      • 5.  Form: Indemnification by Employee  2.69
    • J.  Termination of Agreement
      • 1.  Provisions Regarding Termination
        • a.  Termination of Employment  2.70
        • b.  Effect of Mergers, Transfers of Assets, or Dissolutions  2.71
      • 2.  Form: Termination of Employment; Termination Date  2.72
        • a.  Form: Involuntary Termination  2.73
          • (1)  Form: Termination Payment  2.74
          • (2)  Form: Termination of Employment by Employee  2.75
        • b.  Form: Termination for Cause  2.76
        • c.  Form: Termination on Resignation  2.77
        • d.  Form: Termination on Retirement  2.78
        • e.  Form: Termination Because of Disability  2.79
        • f.  Form: Termination on Death  2.80
      • 3.  Form: Employer Has Right to Terminate or Assign Agreement  2.81
      • 4.  Form: Agreement Survives Combination or Dissolution  2.82
      • 5.  Form: Rights and Obligations After Notice of Termination  2.83
      • 6.  Duty of Cooperation After Termination  2.84
      • 7.  Form: Other Benefits  2.84A
      • 8.  Form: IRC §409A  2.84B
    • K.  Resolving Disputes
      • 1.  Arbitration
        • a.  Drafting Considerations  2.85
        • b.  Form: Arbitration  2.86
      • 2.  Injunction
        • a.  Drafting Considerations  2.87
        • b.  Form: Injunction  2.88
      • 3.  Liquidated Damages
        • a.  Drafting Considerations  2.89
        • b.  Form: Liquidated Damages for Employer  2.90
        • c.  Form: Liquidated Damages for Employee  2.91
      • 4.  Form: Statute of Limitations  2.91A
    • L.  Miscellaneous Provisions
      • 1.  Form: Integration  2.92
      • 2.  Form: Choice of Law  2.93
      • 3.  Form: Notices  2.94
      • 4.  Form: Severability  2.95
      • 5.  Form: Employee’s Representations  2.96
      • 6.  Form: Counterparts  2.97
      • 7.  Form: Successors and Assigns  2.98
      • 8.  Form: Attorney Fees  2.99
      • 9.  Form: Amendments  2.100
      • 10.  Form: No Third Party Rights  2.101
    • M.  Form: Execution  2.102
  • III.  EXECUTIVE COMPENSATION
    • A.  Types of Compensation Generally  2.103
    • B.  Cash Compensation  2.104
      • 1.  Base Salary  2.105
      • 2.  Cash Commissions  2.106
      • 3.  Bonuses and Incentive Bonus Plans  2.107
    • C.  Equity or Equity-Related Compensation  2.108
      • 1.  Publicly Traded Company Considerations  2.109
      • 2.  General Tax Rules  2.110
      • 3.  Restricted Stock  2.111
      • 4.  Stock Options  2.112
        • a.  Incentive Stock Options  2.113
        • b.  Nonqualified Stock Options  2.114
      • 5.  Phantom Stock and Stock Appreciation Rights (SARs)  2.115
    • D.  Deferred Compensation  2.116
    • E.  Other Types of Compensation
      • 1.  Severance Benefits  2.117
      • 2.  Below-Market Loans  2.118
    • F.  Miscellaneous Issues
      • 1.  Parachute Payments  2.119
      • 2.  Excess Employee Remuneration  2.120

3

Independent Contractors, Leased Workers, and Outsourcing

Arthur Chinski

  • I.  SCOPE OF CHAPTER  3.1
  • II.  TERMINOLOGY  3.2
  • III.  ADVISING CLIENT ON ADVANTAGES AND DISADVANTAGES OF USING INDEPENDENT CONTRACTORS
    • A.  Preliminary Considerations  3.3
    • B.  Potential Advantages in Using Independent Contractors  3.4
    • C.  Disadvantages in Using Independent Contractors  3.5
  • IV.  CHART: TESTS THAT DETERMINE WHETHER WORKER IS INDEPENDENT CONTRACTOR OR EMPLOYEE  3.6
    • A.  California Law
      • 1.  State Income Tax Withholding  3.7
        • a.  Restatement Test  3.8
        • b.  Common-Law-Based Control Factors Determining Employment Status  3.9
      • 2.  California Unemployment and Disability Insurance
        • a.  Taxes and Contributions  3.10
        • b.  Common-Law Control Test Applied for Unemployment and Disability Insurance Purposes  3.11
      • 3.  California Workers’ Compensation  3.12
        • a.  Definitions of “Employer” and “Employee” in California Workers’ Compensation Law  3.13
        • b.  Presumption of Employment  3.14
        • c.  Licensed Contractor  3.15
        • d.  Definition of Independent Contractor in California Workers’ Compensation Law  3.16
        • e.  Test Under the Borello Decision  3.17
      • 4.  Areas Other Than Workers’ Compensation Where Borello Test May Apply  3.18
    • B.  Federal Law
      • 1.  Payroll Taxes
        • a.  Social Security and Medicare Contributions (FICA)  3.19
        • b.  Federal Unemployment Tax  3.20
        • c.  Tests Determining Worker Classification for Federal Payroll Tax Purposes
          • (1)  Classification by IRS Based on Common-Law Control Test  3.21
            • (a)  Revenue Ruling 87–41: Source of 20 “Control of Work” Factors  3.22
            • (b)  The “Safe Harbor” Provision  3.23
          • (2)  Classification of Corporate Officers as Statutory Employees  3.24
          • (3)  Other Statutory Employees  3.25
      • 2.  Title VII of the Civil Rights Act (EEOC)
        • a.  Prohibited Acts  3.26
        • b.  Definitions of Employer, Employee, and Independent Contractor Under Title VII
          • (1)  Employer  3.27
          • (2)  Employee  3.28
          • (3)  Independent Contractor  3.29
        • c.  Tests Determining Status Under Title VII
          • (1)  “Economic Realities” Test  3.30
          • (2)  EEOC Test  3.31
      • 3.  National Labor Relations Act  3.32
        • a.  Employees and Independent Contractors Under the NLRA  3.33
        • b.  Common-Law Agency Test  3.34
      • 4.  Fair Labor Standards Act  3.35
        • a.  Employer, Employee, and Independent Contractor Under the FLSA  3.36
        • b.  Ninth Circuit “Economic Realities” Test  3.37
    • C.  The “Smell Test”  3.38
  • V.  EMPLOYING LEASED WORKERS
    • A.  Increasing Use of Leased Workers  3.39
    • B.  Risk of Joint-Employer Status  3.40
      • 1.  Applicability of Title VII to Joint Employers  3.41
      • 2.  Applicability of Fair Labor Standards Act to Joint Employers  3.42
      • 3.  Applicability of Family Medical Leave Act to Joint Employers  3.43
      • 4.  Applicability of National Labor Relations Act to Joint Employers  3.44
      • 5.  Special Employment and Workers’ Compensation Liability  3.45
      • 6.  California Unemployment and Disability Compensation  3.46
      • 7.  Tax Liability  3.47
  • VI.  POTENTIAL PENALTIES FOR MISCLASSIFICATION  3.48
    • A.  Chart: Penalties for Misclassifying Employee as Independent Contractor  3.49
    • B.  Failure to Withhold/Contribute Payroll Taxes
      • 1.  IRS Sanctions  3.50
      • 2.  EDD Sanctions  3.51
      • 3.  Severity of Combined State and Federal Penalties; IRS Authority to Compromise Assessments  3.52
      • 4.  Statutes of Limitations  3.53
    • C.  Potential Penalties Imposed by Workers’ Compensation Appeals Board  3.54
    • D.  Penalties Under National Labor Relations Act  3.55
    • E.  Liability for Minimum Wages and Overtime
      • 1.  Potential Penalties  3.56
      • 2.  Statutes of Limitations  3.57
    • F.  Employee Benefits  3.58
  • VII.  AUDIT CONSIDERATIONS
    • A.  IRS and EDD Usually Audit  3.59
    • B.  EDD Audit Procedures
      • 1.  Investigation  3.60
      • 2.  Assessment  3.61
      • 3.  Appeal  3.62
    • C.  IRS Audit Procedures
      • 1.  Investigation  3.63
      • 2.  Appeal of Determination  3.64
      • 3.  Correcting Retirement Plan Errors  3.64A
  • VIII.  DATA SUMMARIZING LEGAL STATUS OF EMPLOYMENT RELATIONSHIPS
    • A.  Chart: Industry-Specific Rulings and Guidelines  3.65
    • B.  Chart: California and Federal Statutory Exceptions to General Rules Governing Employees  3.66
  • IX.  FORMS
    • A.  Form: Sample Independent Contractor Data Sheet  3.67
    • B.  Form: Sample Agreement Between Principal and Independent Contractor  3.68

4

Immigration Law Requirements for Employers

Mitchell L. Wexler

Michael H. Boshnaick

  • I.  SCOPE OF CHAPTER  4.1
  • II.  TO WHOM DOES IRCA APPLY?  4.2
  • III.  REQUIREMENTS FOR EMPLOYERS
    • A.  Summary  4.3
    • B.  Hiring Obligations  4.4
      • 1.  Acceptable Documents  4.5
        • a.  To Establish Both Identity and Employment Authorization  4.6
        • b.  To Establish Identity Only  4.7
        • c.  To Establish Employment Authorization Only  4.8
        • d.  Receipts in Place of Required Documents  4.9
      • 2.  Employer Document Examining Procedures  4.10
      • 3.  Form I-9 is Evidence of Compliance  4.11
      • 4.  Form: Employment Eligibility Verification (Form I-9)  4.12
    • C.  Document Retention Requirements; DHS Inspection  4.13
    • D.  I-9 Electronic Signatures and Storage  4.14
    • E.  Social Security Administration “Mismatch Letters”  4.14A
    • F.  E-Verify; IMAGE Program  4.14B
  • IV.  EMPLOYEE STATUS
    • A.  Who Is an “Unauthorized Alien”?  4.15
    • B.  Aliens Eligible for Employment  4.16
    • C.  Restricted Categories  4.17
    • D.  Independent Contractors  4.18
    • E.  Employees Hired From State Employment Agency  4.19
  • V.  RECRUITERS AND REFERRERS  4.20
  • VI.  INVESTIGATIONS  4.21
  • VII.  PENALTIES  4.22
    • A.  Hiring Violations  4.23
    • B.  Paperwork Violations  4.24
    • C.  Criminal Violations
      • 1.  “Pattern or Practice” Violations  4.25
      • 2.  Penalties: Fines, Imprisonment, Civil Sanctions  4.26
    • D.  Indemnification Against Employer Liability Prohibited  4.27
  • VIII.  ANTIDISCRIMINATION PROVISIONS
    • A.  Prohibited Conduct  4.28
    • B.  Exceptions  4.29
    • C.  Penalties  4.30
  • IX.  CALIFORNIA UNFAIR IMMIGRATION PRACTICES  4.30A
  • X.  CALIFORNIA IMMIGRANT WORKER PROTECTION ACT  4.30B
  • XI.  CHECKLIST: ESTABLISHING EMPLOYMENT PRACTICES THAT COMPLY WITH IMMIGRATION LAWS  4.31
  • XII.  CHECKLIST: IDENTITY AND EMPLOYMENT AUTHORIZATION DOCUMENTS  4.32
  • XIII.  HIRING FOREIGN NATIONALS  4.33
    • A.  Client Representation  4.34
    • B.  Temporary Categories: Nonimmigrant Visa Categories  4.35
    • C.  Nonimmigrant Status Categories That Require Petition to USCIS
      • 1.  H-1B Specialty Occupations  4.36
        • a.  Dual Intent Permitted  4.37
        • b.  Prevailing Wage Requirement  4.38
        • c.  Labor Condition Application  4.39
        • d.  Filing Petition With USCIS  4.40
        • e.  Authorized Work Period  4.41
        • f.  Where to Obtain H-1B Visas  4.42
        • g.  Change of Status  4.43
        • h.  Presumption of Fraud  4.44
        • i.  Extension of H-1B Status  4.45
      • 2.  L-1 Intracompany Transferee  4.46
        • a.  Qualification for L-1 Status  4.47
        • b.  Procedure for Applying for L-1 Status  4.48
      • 3.  O-1 Extraordinary Ability or Achievement  4.49
    • D.  Nonimmigrant Status Categories That Do Not Require Petition to USCIS
      • 1.  Generally  4.50
      • 2.  E-1 and E-2: Treaty Traders and Treaty Investors  4.51
      • 3.  E-3: Australian Specialty Occupation Workers  4.51A
        • a.  Methods for Obtaining Visa  4.52
          • (1)  Treaty Trader (E-1) Status  4.53
          • (2)  Treaty Investor (E-2) Status  4.54
        • b.  Specific Procedures for E Status  4.55
      • 4.  J-1 Exchange Visitors  4.56
        • a.  Procedure  4.57
        • b.  Requirement to Return to Home Country  4.58
        • c.  Application to Waive J-1 Home Return Requirement  4.59
      • 5.  F-1 Students  4.60
      • 6.  B-1 Business Visitors  4.61
      • 7.  TN Canadian and Mexican Professionals  4.62
      • 8.  Other Nonimmigrant Visa Categories  4.63
  • XIV.  PERMANENT RESIDENCE; IMMIGRATION THROUGH EMPLOYMENT  4.64
    • A.  Immigrant Visa Categories
      • 1.  First Preference: Priority Workers  4.65
        • a.  Persons With Extraordinary Ability  4.66
        • b.  Outstanding Professors and Researchers  4.67
        • c.  Multinational Executives and Managers  4.68
      • 2.  Second Preference: Workers With Advanced Degrees or Exceptional Ability  4.69
        • a.  Advanced Degree Professionals  4.70
        • b.  Persons of Exceptional Ability  4.71
      • 3.  Third Preference: Skilled or Unskilled Workers Without Advanced Degrees  4.72
        • a.  Skilled Workers  4.73
        • b.  Professional Workers Without Advanced Degree  4.74
        • c.  Unskilled Workers  4.75
    • B.  Labor Certification  4.76
      • 1.  Schedule A  4.77
      • 2.  Filing PERM Labor Certification Applications  4.78
      • 3.  Ban on Sale, Barter, or Purchase of Labor Certifications, and on Certain Payments  4.79
      • 4.  PERM Prefiling Recruitment  4.80
      • 5.  DOL Audits  4.81
    • C.  Immigrant Petition  4.82
    • D.  Immigrant Visa Application  4.83
      • 1.  Consular Processing  4.84
      • 2.  Adjustment of Status  4.85

5

Wage and Hour Laws

Richard S. Rosenberg

Matthew T. Wakefield

Stephen R. Lueke

  • I.  OVERVIEW OF APPLICABLE LAW  5.1
    • A.  Basic Federal Statutes  5.2
    • B.  California Regulatory Scheme: Wage Orders  5.3
  • II.  APPLICATION OF THE FLSA
    • A.  Requires Employer-Employee Relationship  5.4
    • B.  Joint Employer Relationship  5.4A
    • C.  “In Commerce” Requirement  5.5
      • 1.  Employee Test  5.6
        • a.  “Engaged in Commerce”  5.7
        • b.  “Engaged in the Production of Goods for Commerce”  5.8
        • c.  Employees of Not-for-Profit Organizations  5.9
      • 2.  Enterprise Test  5.10
        • a.  Family Business Exception  5.11
        • b.  Public Entities  5.12
        • c.  Indian Tribes  5.12A
  • III.  COVERAGE UNDER CALIFORNIA LAW  5.13
  • IV.  WAGE REQUIREMENTS
    • A.  Employers May Not Rely on Applicant’s Salary History in Hiring  5.13A
    • B.  Information to Be Provided to Employees on Hire  5.13B
    • C.  Employment Agreement Requirements  5.13C
    • D.  Pay Periods  5.14
    • E.  Method of Payment  5.14A
    • F.  Itemized Wage Statements  5.14B
    • G.  Sick Pay Statements   5.14C
    • H.  Pay for Reporting to Work  5.15
    • I.  Split-Shift Premiums  5.15A
    • J.  Payment of Wages on Termination of Employment  5.16
    • K.  Payment of Commissions on Termination of Employment  5.16A
    • L.  Payment of Bonuses and Other Incentives on Termination of Employment  5.16B
    • M.  Minimum Wage
      • 1.  Basic Rate
        • a.  Adult Employees  5.17
        • b.  Minors and Learners  5.18
      • 2.  Crediting of Tips Toward Minimum Wage
        • a.  Under the FLSA  5.19
        • b.  Under California Law  5.20
      • 3.  Meal and Lodging Credits  5.21
    • N.  Overtime Compensation
      • 1.  General Rules
        • a.  Under California Law  5.22
        • b.  Under the FLSA  5.23
      • 2.  The Workweek
        • a.  Under the FLSA and California Law  5.24
        • b.  Alternative Workweek Arrangements in California  5.25
        • c.  Make-Up Time Exception in California  5.26
      • 3.  The Regular Rate
        • a.  Hourly Employees  5.27
        • b.  Salaried Employees  5.28
        • c.  Fluctuating Workweek
          • (1)  Under the FLSA  5.29
          • (2)  Not Permitted Under California Law  5.30
          • (3)  Example Illustrating Differences Between Federal and State Approach  5.31
        • d.  Piece-Rate Employees  5.32
        • e.  Different Rates of Pay for Different Types of Work
          • (1)  Under California Law  5.33
          • (2)  Under the FLSA  5.34
        • f.  Noncash Wages and Commissions  5.35
      • 4.  Exclusions From the Regular Rate
        • a.  Gifts and Special Occasion Bonuses  5.36
        • b.  Payment for Hours Not Worked or Expenses  5.37
        • c.  Discretionary Bonuses and Payments to Certain Benefit Plans  5.38
        • d.  Other Benefit Plan Contributions  5.39
        • e.  Stock Options and Other Equity Devices  5.40
        • f.  Premium Pay for Overtime  5.41
      • 5.  Different Overtime Rules for Different Industries  5.42
    • O.  Equal Pay for Substantially Similar Work, Regardless of Gender, Race, or Ethnicity  5.42A
    • P.  Compensatory Time Off  5.43
    • Q.  Tips  5.44
  • V.  DETERMINING HOURS WORKED
    • A.  Generally
      • 1.  Under California Law  5.45
      • 2.  Under the FLSA  5.46
    • B.  Preparatory and Concluding Activities  5.47
    • C.  Rest, Recovery, and Meal Periods
      • 1.  Under California Law  5.48
      • 2.  Under the FLSA  5.49
    • D.  Waiting Time/On-Call Time  5.50
    • E.  Sleeping Time  5.51
    • F.  Travel Time
      • 1.  California Law  5.52
      • 2.  Federal Law  5.53
    • G.  Training Time  5.54
    • H.  Trainees and Interns  5.54A
    • I.  Volunteers  5.54B
    • J.  Rounding of Time Entries  5.54C
    • K.  Off-the-Clock Work  5.54D
    • L.  Other Limitations on Time Worked  5.55
  • VI.  EXEMPTIONS FROM MINIMUM WAGE AND OVERTIME REQUIREMENTS
    • A.  California Exemptions  5.56
      • 1.  Executive Exemption  5.57
      • 2.  Administrative Exemption  5.58
      • 3.  Professional Exemption  5.59
      • 4.  Exempt Treatment of Other Particular Occupations
        • a.  Computer-Related Professionals  5.60
        • b.  Outside Salespersons  5.61
        • c.  Commissioned Salespersons  5.61A
        • d.  Other Exemptions  5.61B
    • B.  Under Federal Law  5.62
      • 1.  Executive Exemption  5.63
        • a.  Salary Basis  5.64
        • b.  Primary Duty  5.65
        • c.  Supervisory Position  5.66
        • d.  Authority to Hire or Fire  5.67
      • 2.  Administrative Exemption  5.68
        • a.  Salary Basis  5.69
        • b.  Primary Duty  5.70
        • c.  Exercise of Discretion and Independent Judgment  5.71
      • 3.  Professional Exemption
        • a.  Learned Professional  5.72
          • (1)  Salary Basis  5.73
          • (2)  Primary Duty  5.74
        • b.  Creative Professional  5.75
      • 4.  Exempt Treatment of Other Particular Occupations
        • a.  Computer-Related Professionals  5.76
        • b.  Outside Salespersons  5.77
        • c.  Commissioned Employees  5.77A
        • d.  Certain Agricultural Workers  5.78
      • 5.  Miscellaneous Exemptions
        • a.  From Both Minimum Wage and Overtime Requirements  5.79
        • b.  From Overtime Requirements Only  5.80
  • VII.  CHILD LABOR
    • A.  California Law
      • 1.  Limitations on Employment  5.81
      • 2.  Wages and Hours  5.82
    • B.  Federal Law
      • 1.  Application of the FLSA  5.83
      • 2.  Prohibition Against “Oppressive Child Labor”  5.84
        • a.  Hazardous Occupations  5.85
        • b.  Limited Occupations for Minors 14 and 15 Years Old  5.86
        • c.  Waivers  5.87
    • C.  Chart: Child Labor Laws  5.88
  • VIII.  RESPONSIBILITY FOR UNIFORMS, EQUIPMENT, PROPERTY LOSS, AND SALES ADJUSTMENTS
    • A.  Employee/Employer Responsibility
      • 1.  Uniforms  5.89
      • 2.  Tools and Equipment  5.89A
      • 3.  Shortages, Breakage, or Losses  5.89B
      • 4.  Adjustments, Charge Backs, or Deductions  5.89C
      • 5.  Indemnification  5.89D
      • 6.  Employer-Provided Training Costs  5.89E
  • IX.  MANDATORY WORKING CONDITIONS
    • A.  Changing Rooms and Resting Facilities  5.89F
    • B.  Seating  5.89G
    • C.  Temperature  5.89H
    • D.  Other Requirements  5.89I
  • X.  ENFORCEMENT
    • A.  California Wage and Hour Laws
      • 1.  Investigation and Hearings  5.90
      • 2.  Enforcement of Judgments by Labor Commissioner  5.90A
      • 3.  Subpoenas  5.91
      • 4.  Civil Actions; Remedies Available  5.92
      • 5.  Unfair Competition Claims  5.92A
      • 6.  Class Actions  5.93
      • 7.  Class Actions and Arbitration  5.93A
      • 8.  Class Action Settlements  5.93B
      • 9.  Statute of Limitations  5.94
      • 10.  Criminal Actions  5.95
      • 11.  Civil Penalties  5.96
      • 12.  Labor Code Private Attorneys General Act  5.97
        • a.  More Serious Violations  5.98
        • b.  Other Labor Code Violations  5.99
        • c.  Health and Safety Violations  5.100
      • 13.  Punitive Damages  5.100A
      • 14.  Settlements and Releases of Claims Under California Law  5.100B
      • 15.  Successor Liability Under California Law  5.100C
      • 16.  Joint Employer Liability With Labor Contractor  5.100D
      • 17.  Joint Employer Liability of Construction Contractors  5.100E
      • 18.  Owner, Director, Officer, or Managing Agent Liability  5.100F
    • B.  Federal Enforcement of Wage and Hour Laws
      • 1.  Investigations and Inspections  5.101
      • 2.  Civil Actions
        • a.  Remedies Available in Suits by the Department of Labor  5.102
        • b.  Remedies Available in Private Suits  5.103
        • c.  Successor Liability Under Federal Law  5.103A
        • d.  Union Employees May Bypass Grievance and Arbitration Procedure  5.104
        • e.  Statute of Limitations  5.105
      • 3.  Criminal Actions  5.106
      • 4.  Settlements and Releases of Claims Under Federal Law  5.106A
  • XI.  WAGE AND HOUR REQUIREMENTS FOR GOVERNMENT CONTRACTORS
    • A.  Walsh-Healey Public Contracts Act  5.107
    • B.  Davis-Bacon Act  5.108
    • C.  Copeland Act  5.109
    • D.  Contract Work Hours Standards Act  5.110
    • E.  McNamara-O’Hara Service Contract Act  5.111
  • XII.  WAGE GARNISHMENTS
    • A.  Earnings Withholding Orders  5.112
    • B.  Employees and Earnings Subject to Order  5.113
    • C.  Service of Withholding Orders  5.114
    • D.  Employer’s Procedure After Service
      • 1.  Notice to Employee  5.115
      • 2.  Determining Withholding Periods, Amounts; Priority
        • a.  Withholding Period  5.116
        • b.  Amount to Be Withheld  5.117
        • c.  Priorities of Conflicting Levies and Assignments  5.118
      • 3.  Employer’s Return  5.119
      • 4.  Remitting Withheld Earnings  5.120
    • E.  Notice of Termination or Modification  5.121

6

Vacations, Family and Medical Leave, and Other Time Off

Deborah Crandall Saxe

  • I.  VACATIONS
    • A.  Right to Paid Vacation Benefits
      • 1.  Employer Agreement Requirement  6.1
      • 2.  Waiting Period  6.2
      • 3.  “Use It or Lose It” Policy  6.3
      • 4.  Limit on Accrual of Vacation  6.4
      • 5.  Accelerating Accrual  6.5
      • 6.  Payment on Termination of Employment  6.6
      • 7.  Recovery of Vacation Pay Advances  6.7
    • B.  Employee Actions for Unpaid Vacation Benefits  6.8
    • C.  Funded Vacation Plans and ERISA  6.9
    • D.  Checklist: Guidelines for Drafting Vacation Policy  6.10
  • II.  SICK LEAVE
    • A.  All California Employers Must Provide Paid Sick Leave  6.11
      • 1.  Covered Employees  6.11A
      • 2.  Permissible Uses of Sick Leave  6.11B
        • a.  Use for Family Member  6.11C
        • b.  Minimum Amount and Limit  6.11D
        • c.  Notice to Employer  6.11E
      • 3.  Accrual  6.11F
      • 4.  Carryover of Unused Sick Leave  6.11G
      • 5.  Reinstatement of Accrued and Unused Sick Leave  6.11H
      • 6.  No Discrimination or Retaliation for Use of Sick Leave  6.11I
    • B.  Posting and Recordkeeping Requirements  6.12
    • C.  Enforcement and Penalties  6.13
    • D.  No Preemption of Greater Requirements  6.13A
    • E.  Exemption for Certain Existing Sick Leave Policies  6.14
    • F.  Kin Care Leave  6.14A
  • III.  PAID TIME OFF  6.15
  • IV.  HOLIDAYS
    • A.  Table: Legal Holidays  6.16
    • B.  Floating Holidays  6.16A
    • C.  Checklist: Guidelines for Drafting Holiday Pay Policy  6.17
    • D.  Day of Rest  6.18
  • V.  PREGNANCY DISABILITY LEAVE
    • A.  Covered Employers  6.19
    • B.  Eligible Employees  6.20
    • C.  Length of Pregnancy Disability Leave  6.21
    • D.  Intermittent or Reduced Work Schedule Leave  6.22
    • E.  Employee and Employer Notices
      • 1.  Employee Notice of Leave  6.23
      • 2.  Required Employer Notices  6.24
    • F.  Medical Certification
      • 1.  When Required  6.25
      • 2.  Medical Certification and HIPAA  6.26
    • G.  Pay During Pregnancy Disability Leave  6.27
    • H.  Benefits Available During Pregnancy Leave  6.28
    • I.  Reinstatement to Same or Comparable Position  6.29
    • J.  Relationship to Family and Medical Leave  6.30
  • VI.  NEW PARENT LEAVE
    • A.  Employers Subject to Coverage  6.30A
    • B.  Employee Qualification for Leave  6.30B
    • C.  Employer Obligations  6.30C
    • D.  Relationship to Pregnancy Disability Leave  6.30D
    • E.  When Both Parents Work for Same Employer  6.30E
    • F.  CFRA Regulations Incorporated  6.30F
    • G.  Pilot Mediation Program  6.30G
  • VII.  FAMILY AND MEDICAL LEAVE UNDER THE FAMILY AND MEDICAL LEAVE ACT (FMLA) AND CALIFORNIA FAMILY RIGHTS ACT (CFRA)  6.31
    • A.  Basic Requirements  6.32
    • B.  Reasons for Leave
      • 1.  FMLA Leave  6.33
      • 2.  California Variation: Pregnancy Exception  6.34
      • 3.  California Variation: Domestic Partners  6.35
    • C.  Employers Covered by FMLA and CFRA
      • 1.  Private Employers  6.36
      • 2.  Public Agencies  6.37
    • D.  Eligibility Requirements for Employees
      • 1.  In General  6.38
      • 2.  Medical Need Requirement for Leave to Care for Relative  6.39
    • E.  Definitions
      • 1.  “Spouse”  6.40
      • 2.  “Child” or “Son or Daughter”  6.41
      • 3.  “Parent”  6.42
      • 4.  “Serious Health Condition”  6.43
      • 5.  “Needed to Care for” a Family Member  6.44
      • 6.  “Health Care Provider”  6.45
      • 7.  “Continuing Treatment”  6.46
      • 8.  “Incapacity”  6.47
    • F.  Length of Family and Medical Leave  6.48
      • 1.  Calculating 12 Weeks of Leave  6.49
      • 2.  12-Month “Leave Year”  6.50
      • 3.  Limits on Leave for Birth or Child Care  6.51
      • 4.  Combined Leave for Spouses Under the FMLA  6.52
      • 5.  California Variation: Combined Leave for Parents of Child  6.53
    • G.  Intermittent and Reduced-Time Leave
      • 1.  When Appropriate  6.54
      • 2.  California Variation: Intermittent Leave for Child Care  6.55
    • H.  Employer Designation as FMLA/CFRA Leave  6.56
      • 1.  Basis for Employer’s Designation  6.57
      • 2.  When Employee Merely Requests Paid Time Off  6.58
      • 3.  Preliminary Designation While Awaiting Confirming Information [Deleted]  6.59
      • 4.  Timing and Form of Employer’s Designation  6.60
      • 5.  Retroactive Designation  6.61
        • a.  Exception: Employer Learns FMLA Purpose for Leave After Leave Has Begun [Deleted]  6.62
        • b.  Exception: Employer Learns FMLA or CFRA Purpose for Leave After Employee Returns [Deleted]  6.63
      • 6.  Effect of Employer’s Failure to Notify Employee of FMLA Leave Designation  6.64
    • I.  Employee Responsibilities
      • 1.  Notice of Need for Leave  6.65
        • a.  Form of Notice  6.66
        • b.  Form: Notice of Intent to Take Family or Medical Leave  6.67
        • c.  Form: Notice of Eligibility and Rights and Responsibilities (DOL Form WH-381)  6.68
      • 2.  Medical Certification  6.69
        • a.  Contents of Medical Certifications  6.69A
        • b.  Recertifications  6.69B
        • c.  Second and Third Opinions  6.70
        • d.  California Variation: Second or Third Opinion  6.71
        • e.  Medical Certification Forms  6.72
          • (1)  Form: Certification of Health Care Provider for Employee’s Serious Health Condition (DOL Form WH-380-E)  6.73
          • (2)  Form: Certification of Health Care Provider for Family Member’s Serious Health Condition (DOL Form WH-380-F)  6.73A
          • (3)  Form: Certification of Health Care Provider for Employee’s Serious Health Condition  6.74
      • 3.  Fitness-for-Duty Report  6.75
    • J.  Employee’s Right to Reinstatement After Leave
      • 1.  Right to Same Position  6.76
        • a.  Notice of Guarantee of Reinstatement  6.77
        • b.  Waiver of Rights; Light Duty Assignment  6.78
        • c.  Inability to Perform Essential Function on Return From Leave  6.79
        • d.  Layoff While on Leave  6.80
      • 2.  Special Reinstatement Rules for Key Employees
        • a.  “Key Employee” Defined  6.81
        • b.  Potential Denial of Reinstatement and Benefit Maintenance  6.82
    • K.  Relationship of FMLA and CFRA Leave to California Paid Family Leave  6.83
    • L.  Pay During FMLA/CFRA Leave  6.84
      • 1.  Substitution of Accrued Employer-Provided Paid Leave
        • a.  Under the FMLA  6.85
        • b.  Under the CFRA  6.86
      • 2.  Limitation on Substitution of Accrued Employer-Provided Paid Leave  6.87
      • 3.  Exempt Status and Deductions From Salary for Unpaid FMLA Leave  6.88
    • M.  Effect of FMLA/CFRA Leave on Employee Status and Benefits
      • 1.  Health Insurance
        • a.  Employer Obligation to Maintain  6.89
        • b.  Payment of Premiums  6.90
        • c.  When Employee Chooses Not to Retain Health Insurance During Leave  6.91
        • d.  When Employee Does Not Return to Work  6.92
        • e.  When Employee Takes Combined Pregnancy Leave  6.93
      • 2.  Benefit Levels, Vesting, and Seniority  6.94
      • 3.  Other Benefits  6.95
    • N.  Notice and Recordkeeping Requirements for Employers
      • 1.  Notices
        • a.  Leave Rights Notice  6.96
          • (1)  Form Notice: Your Rights Under the Family and Medical Leave Act of 1993 (DOL WH Publication 1420)  6.97
          • (2)  Form Notice: Family Care and Medical Leave (CFRA Leave) and Pregnancy Disability Leave  6.98
          • (3)  Form Notice: Your Rights and Obligations as a Pregnant Employee  6.99
        • b.  Specific Notices From Employer to Employee  6.100
          • (1)  Mandatory Provisions in the Rights and Responsibilities Notice  6.101
          • (2)  Optional Inclusions in Rights and Responsibilities Notice  6.102
      • 2.  Personnel Manuals [Deleted]  6.103
      • 3.  Recordkeeping Required of Employers Under the FMLA  6.104
    • O.  Effect on Other Laws or Benefits  6.105
    • P.  Prohibited Acts and Remedies  6.106
      • 1.  Remedies Under the FMLA  6.107
      • 2.  Individual Liability Under the FMLA  6.108
      • 3.  Remedies Under the CFRA  6.109
  • VIII.  LEAVES REQUIRED BY OTHER STATE AND FEDERAL LAWS PROTECTING INDIVIDUALS WITH DISABILITIES
    • A.  ADA and FEHA
      • 1.  Comparison of Acts
        • a.  Application of Acts  6.110
        • b.  Definitions
          • (1)  “Physical Disability”  6.111
          • (2)  “Mental Disability”  6.112
          • (3)  “Limits on Major Life Activities”  6.113
          • (4)  “Reasonable Accommodation”  6.114
          • (5)  “Undue Hardship”  6.115
      • 2.  Effect on Employer Leave Policy  6.116
    • B.  Rehabilitation Act  6.117
  • IX.  ACCOMMODATION OF RELIGIOUS BELIEFS  6.118
  • X.  ACCOMMODATION OF EMPLOYEES WHO VOLUNTARILY ENTER DRUG OR ALCOHOL REHABILITATION PROGRAMS  6.119
  • XI.  ACCOMMODATION OF EMPLOYEES WHO ENROLL IN ADULT LITERACY EDUCATION PROGRAMS  6.120
  • XII.  ACCOMMODATION OF CIVIC RESPONSIBILITIES
    • A.  Voting  6.121
    • B.  Service as Election Official  6.122
    • C.  Service as Juror or Witness  6.123
    • D.  Leave for Emergency Duty as Volunteer Firefighter, Reserve Peace Officer, or Emergency Rescue Person  6.124
    • E.  Training Leave for Volunteer Firefighter, Reserve Peace Officer, or Emergency Rescue Person  6.125
    • F.  Leave for Military Service
      • 1.  State Law  6.126
      • 2.  Federal Law: USERRA
        • a.  Application  6.127
        • b.  Employee Obligations
          • (1)  Notice of Leave  6.128
          • (2)  Notice of Intention to Return to Work  6.129
          • (3)  Documentation  6.129A
        • c.  Employer Obligations
          • (1)  Pay Issues  6.130
          • (2)  Benefits  6.131
          • (3)  Reinstatement of Employee  6.132
        • d.  Discrimination and Termination Protections  6.133
        • e.  Remedies  6.134
    • G.  FMLA Leave to Care for a “Covered Servicemember”  6.134A
      • 1.  Definition of “Covered Servicemember”  6.134B
      • 2.  Definition of “Serious Injury or Illness” and “Outpatient Status”  6.134C
      • 3.  Definition of “Son or Daughter”  6.134D
      • 4.  Definition of “Next of Kin”  6.134E
      • 5.  FMLA Leave Allowed to Care for a “Covered Servicemember”  6.134F
      • 6.  Certification  6.134G
      • 7.  Effect of Other FMLA Regulations  6.134H
    • H.  FMLA Leave Due to a Qualifying Exigency  6.134I
      • 1.  Definition of “Son or Daughter”  6.134J
      • 2.  Definition of “Covered Active Duty”  6.134K
      • 3.  Definition of “Contingency Operation”  6.134L
      • 4.  Definition of “Qualifying Exigency”  6.134M
      • 5.  Amount of FMLA Leave Allowed for Qualifying Exigencies  6.134N
      • 6.  Certification  6.134O
      • 7.  Effect of Other FMLA Regulations  6.134P
    • I.  Leave for Spouses of Military Personnel  6.134Q
  • XIII.  SCHOOL LEAVES
    • A.  Leave for School Suspension  6.135
    • B.  Leave for Participation in School Activities  6.136
  • XIV.  LEAVES FOR VICTIMS OF DOMESTIC VIOLENCE, SEXUAL ASSAULT, OR STALKING  6.137
  • XV.  LEAVE FOR VICTIMS OF SERIOUS OR VIOLENT FELONIES AND THEIR RELATIVES  6.138
  • XVI.  LEAVE FOR ORGAN AND BONE MARROW DONATION  6.138A
  • XVII.  FORMS
    • A.  Form: Sample Policy for FMLA/CFRA Leave  6.139
    • B.  Form: Sample Policy for Pregnancy Disability Leave  6.139A
    • C.  Form: Sample Policy for Disability Leave [Deleted]  6.140
    • D.  Form: Sample Policy for Personal Leave  6.141
    • E.  Form: Sample Policy for Bereavement Leave  6.142
    • F.  Form: Sample Policy for Leave for Spouses of Military Personnel  6.143
  • XVIII.  CHART: OVERVIEW OF LEAVE LAWS  6.144

7

Tax Compliance

Richard A. Saffir

  • I.  OVERVIEW  7.1
    • A.  Importance of Tax Compliance  7.2
    • B.  Role of Attorney and Accountant  7.3
    • C.  Notifying Taxing Authorities  7.4
      • 1.  Notifying IRS  7.5
      • 2.  Notifying California Employment Development Department  7.6
      • 3.  Notifying California Franchise Tax Board  7.7
      • 4.  Notifying California State Board of Equalization  7.8
      • 5.  Notifying Local Taxing Authorities  7.9
    • D.  Establishing Recordkeeping Procedures
      • 1.  Organizing Information  7.10
      • 2.  Collecting Employee/Payee Information  7.11
        • a.  Employees  7.12
        • b.  Other Payees  7.13
      • 3.  Use of Computers and Electronic Storage Data  7.14
    • E.  Withholding and Employment Taxes
      • 1.  Who Withholds and Pays Employment Taxes
        • a.  Federal  7.15
        • b.  California  7.16
      • 2.  Calculation of Withholding and Employment Taxes
        • a.  Federal  7.17
        • b.  California  7.18
          • (1)  Personal Income Tax (PIT) Withholding  7.19
          • (2)  State Disability Insurance (SDI)  7.20
          • (3)  Unemployment Insurance (UI)  7.21
          • (4)  Employment Training Tax (ETT)  7.22
        • c.  Deposits of Federal Employment Taxes  7.23
          • (1)  Monthly Deposits  7.24
          • (2)  Semiweekly Deposits  7.25
          • (3)  One-Day Rule  7.26
          • (4)  Reporting Deposits  7.27
        • d.  Deposits of California Employment Taxes  7.28
        • e.  Penalties for Failure to Withhold, Deposit, or Pay Taxes  7.29
        • f.  Work Opportunity Tax Credit  7.29A
      • 3.  California Sales and Use Tax
        • a.  Sales Tax Coverage and Exemptions
          • (1)  Retailers Pay Sales Tax  7.30
          • (2)  Tax Measured by Gross Receipts  7.31
          • (3)  Tax on Tangible Personal Property  7.32
          • (4)  Use Tax on Consumption or Storage of Property  7.33
          • (5)  Tangible Personal Property Not Subject to Sales Tax  7.34
          • (6)  Resale Exemption  7.35
          • (7)  Occasional Sale Exemption  7.36
        • b.  Sales Tax on Transfers of Property to Start-Up; Mergers  7.37
        • c.  Sales and Use Tax Returns and Payment
          • (1)  Due Dates of Returns and Payments  7.38
          • (2)  State Board of Equalization Tax Returns  7.39
          • (3)  Prepayment of Sales and Use Tax  7.40
        • d.  Penalties  7.41
      • 4.  Property Taxes
        • a.  Property Tax Coverage and Exemptions  7.42
          • (1)  Real Property  7.43
          • (2)  Personal Property  7.44
        • b.  Assessment of Tax  7.45
        • c.  Filing Property Statements  7.46
        • d.  Payment of Tax  7.47
        • e.  Purchase and Change in Ownership  7.48
          • (1)  Transfers of Property Between Legal Entities  7.49
          • (2)  Transfers of Ownership Interests in Legal Entities  7.50
        • f.  Protesting or Adjusting Assessed Values  7.51
      • 5.  Documentary Transfer Tax
        • a.  Assessment of Transfer Tax  7.52
        • b.  Tax Rate  7.53
      • 6.  Local Business Taxes  7.54
      • 7.  Excise and Miscellaneous Taxes
        • a.  What Businesses Pay Excise and Miscellaneous Taxes  7.55
        • b.  Compliance With Excise Tax  7.56
    • F.  Information Returns and Reporting Obligations
      • 1.  Activities and Payments That Must Be Reported; Required Forms  7.57
        • a.  Wages  7.58
        • b.  Individual Retirement Information  7.59
        • c.  Dividends  7.60
        • d.  Interest  7.61
        • e.  Service Fees, Commissions, Rentals, and Royalties  7.62
        • f.  Retirement Plan Distributions  7.63
        • g.  Real Estate Transactions  7.64
        • h.  Brokers and Barter Exchanges  7.65
        • i.  Restaurants, Tips  7.66
        • j.  Cash Transactions  7.67
        • k.  Other Transactions  7.68
      • 2.  Failure to File Information Returns  7.69
  • II.  TABLES AND LISTS
    • A.  Taxes Imposed on Different Forms of Business Entities  7.70
    • B.  Tax Forms Commonly Used by Business Entities  7.71
      • 1.  Sole Proprietorship Income Tax Forms  7.72
      • 2.  Corporation Income Tax Forms  7.73
      • 3.  Partnership and LLC Income Reporting Forms  7.74
      • 4.  Business Activities Reporting Forms  7.75
      • 5.  Employment Tax Forms  7.76
      • 6.  California Sales Tax Forms  7.77
      • 7.  Excise Tax Forms  7.78
      • 8.  Miscellaneous Tax Forms  7.79
    • C.  IRS Tax Compliance Publications
      • 1.  General Guides  7.80
      • 2.  Guides for Specific Transactions or Businesses  7.81
  • III.  COMBINED CALIFORNIA AND FEDERAL TAX CALENDAR
    • A.  Overview
      • 1.  Standard Filings for Calendar Year Taxpayers  7.82
      • 2.  Filings and Payment Obligations Without Fixed Due Dates
        • a.  Filings Triggered by an Event  7.83
        • b.  Recurring Monthly or Semiweekly Employment Tax Deposit Obligations  7.84
        • c.  Formation and Qualification Fees and Taxes  7.85
    • B.  January  7.86
    • C.  February  7.87
    • D.  March  7.88
    • E.  April  7.89
    • F.  May  7.90
    • G.  June  7.91
    • H.  July  7.92
    • I.  August  7.93
    • J.  September  7.94
    • K.  October  7.95
    • L.  November  7.96
    • M.  December  7.97
  • IV.  AFFORDABLE CARE ACT COMPLIANCE
    • A.  Overview  7.98
      • 1.  Calculating “Large” Employer Status and “Full-Time” Employee Status  7.99
      • 2.  Aggregation Rules and “Large” Employer Status  7.100
      • 3.  “Affordability” and Three Safe Harbor Calculation Methods   7.101
    • B.  Excise Tax Penalties  7.102
    • C.  Information Reporting Provisions  7.103
    • D.  Employer Tax Credits  7.104
    • E.  California Health Insurance Marketplace  7.105
    • F.  Market Reform and Essential Benefits  7.106
    • G.  Wellness Programs  7.107
    • H.  Implementation  7.108

8

Unemployment Compensation and State Disability Insurance

Terence R. Savage

Eric Hendrickson

  • I.  FEDERAL-STATE SYSTEM  8.1
    • A.  Governing Laws  8.2
    • B.  Entitlement to Unemployment Compensation and Disability Insurance Benefits Generally  8.3
  • II.  OBLIGATION TO PAY OR WITHHOLD TAXES  8.4
    • A.  Employer-Employee Relationship Required  8.5
    • B.  Location of Employment  8.6
      • 1.  Services Localized in California  8.7
      • 2.  Services Deemed Performed in California  8.8
    • C.  Definition of “Employer”  8.9
    • D.  Definition of “Employee”  8.10
    • E.  Effect of Contract Language  8.11
    • F.  Services Included or Excluded by Statute  8.12
      • 1.  Excluded Services  8.13
        • a.  Specific Exclusions  8.14
        • b.  Directors of a Corporation  8.15
        • c.  Domestic Services  8.16
          • (1)  Wage Threshold for Unemployment Insurance Contribution  8.17
          • (2)  Wage Threshold for Disability Insurance Contribution  8.18
        • d.  Real Estate and Direct Salespersons  8.19
        • e.  Consultants  8.20
      • 2.  Exclusions Contingent on Similar Exclusions Under FUTA  8.21
      • 3.  Excluded Services for Public Entities or Nonprofit Organizations  8.22
      • 4.  Included Services  8.23
        • a.  Public Entities  8.24
        • b.  Leasing or Temporary Services Employers  8.25
        • c.  Substitute and Assistant Workers Hired by Employee  8.26
        • d.  Agricultural Employment  8.27
        • e.  Exempt Religious, Charitable, and Other Organizations  8.28
        • f.  Elective Employer Coverage  8.29
    • G.  Both Exempt and Nonexempt Services  8.30
  • III.  TAX WITHHOLDING AND PAYMENT
    • A.  Returns and Reports  8.31
      • 1.  Work Records  8.32
      • 2.  Filing Returns and Reports  8.33
      • 3.  New Employee Report Required for Certain “Transient” Occupations  8.34
      • 4.  Notices Required by Employer  8.35
    • B.  Employer Contributions to the Unemployment Fund
      • 1.  Contributions Rate  8.36
      • 2.  Wages as the Basis of Contribution
        • a.  Included Remuneration  8.37
          • (1)  General Inclusions  8.38
          • (2)  Taxable Value of Board and Lodging  8.39
          • (3)  Tips  8.40
          • (4)  Deferred Compensation Plans  8.41
        • b.  Excluded Remuneration
          • (1)  Business Expenses  8.42
          • (2)  Insurance  8.43
          • (3)  Payments to or From a Trust  8.44
          • (4)  Miscellaneous Exemptions  8.45
          • (5)  Other Exclusions  8.46
        • c.  Taxable Amount of Wages  8.47
      • 3.  Reserve Accounts  8.48
        • a.  Annual Statement of Account  8.49
        • b.  Protest of Charges  8.50
      • 4.  Quarterly Payments  8.51
      • 5.  Reimbursable Financing  8.52
    • C.  Assessments
      • 1.  When Assessments May Be Made  8.53
      • 2.  Penalties and Interest  8.54
      • 3.  When Assessments Become Final  8.55
      • 4.  Jeopardy Assessments  8.56
      • 5.  Cancellation of Erroneous Assessments  8.57
      • 6.  Statute of Limitations  8.58
    • D.  Liens and Successor Liability
      • 1.  Liens  8.59
      • 2.  Successor Liability  8.60
      • 3.  Liability of Corporate Officers  8.61
    • E.  Refunds and Overpayments
      • 1.  Claims for Credit or Refund of Overpayment  8.62
      • 2.  Notice of Denial of Claim  8.63
      • 3.  Reversal of Erroneous Denial  8.64
      • 4.  Recovery of Erroneous Refund  8.65
    • F.  Administrative Appellate Review
      • 1.  Review by Administrative Law Judge  8.66
      • 2.  Review of Jeopardy Assessments  8.67
      • 3.  Review by Unemployment Insurance Appeals Board  8.68
    • G.  Judicial Review  8.69
    • H.  Use of Information Obtained  8.70
      • 1.  Confidentiality  8.71
      • 2.  Purposes for Which Information May Be Used  8.72
        • a.  Exchange of Information With Other Governmental Agencies  8.73
        • b.  Exchange of Information With Law Enforcement Agencies and Others  8.74
  • IV.  CLAIMS FOR UNEMPLOYMENT COMPENSATION BENEFITS
    • A.  “Unemployment” as Basis for Benefits  8.75
      • 1.  Distinctions Between Total Unemployment and Partial Unemployment  8.76
      • 2.  “Wages” for Purposes of Defining “Unemployed”  8.77
    • B.  Maximum Benefits Payable  8.78
      • 1.  “Benefit Year” Defined  8.79
      • 2.  “Base Period” Defined  8.80
    • C.  Conditions of Eligibility
      • 1.  Availability for Work  8.81
      • 2.  Search for Suitable Work  8.82
      • 3.  Requirement of 1-Week Waiting Period  8.83
    • D.  Factors Not Affecting Eligibility
      • 1.  Physical or Mental Illness or Injury  8.84
      • 2.  Court-Related Duties  8.85
      • 3.  Emergency Hospitalization  8.86
      • 4.  Student Status  8.87
      • 5.  Death in Immediate Family  8.88
      • 6.  Unexpired Leave Time on Discharge From Armed Services  8.89
    • E.  Ineligible Persons
      • 1.  Aliens  8.90
      • 2.  Strikers  8.91
      • 3.  Recipients of Temporary Total Disability Indemnity  8.92
      • 4.  Persons Convicted of Making False Statements  8.93
    • F.  Disqualification for Voluntarily Quitting or Discharge for Misconduct  8.94
      • 1.  Presumption of Nondisqualifying Conduct  8.95
      • 2.  Definition of “Most Recent Work”  8.96
      • 3.  Voluntarily Leaving Work Without Good Cause
        • a.  What Constitutes “Voluntary” Leaving  8.97
        • b.  “Constructive” Quitting  8.98
        • c.  “Good Cause” Defined  8.99
        • d.  Employee’s Duty to Preserve Employment Relationship  8.100
        • e.  Situations Deemed “Good Cause” by Statute
          • (1)  Compulsory Retirement  8.101
          • (2)  Election to be Laid Off Under Collective Bargaining Agreement  8.102
          • (3)  Deprivation of Equal Employment Opportunities  8.103
          • (4)  Sexual Harassment  8.104
          • (5)  Accompanying Spouse or Domestic Partner to Another Location  8.105
          • (6)  Domestic Violence Abuse  8.106
        • f.  Application of Good-Cause Principles to Factual Examples
          • (1)  Religious or Ethical Reasons  8.107
          • (2)  Concerns for Health, Safety, or Morals  8.108
          • (3)  Dissatisfaction With Earnings  8.109
          • (4)  Transportation Difficulties  8.110
          • (5)  Attendance at School  8.111
          • (6)  Domestic Circumstances  8.112
          • (7)  Other Reasons  8.113
      • 4.  Discharge for Misconduct; What Constitutes “Misconduct”  8.114
        • a.  Requirement That Misconduct Be Connected With Most Recent Work  8.115
        • b.  Situations Giving Rise to Issues of Misconduct  8.116
      • 5.  Duration of Disqualification From Eligibility to Receive Benefits
        • a.  Misconduct or Voluntary Quit  8.117
        • b.  Refusal of Suitable Work  8.118
        • c.  False Statements  8.119
        • d.  Intoxication  8.120
    • G.  Effect of Remuneration During Period of Unemployment on Amount of Benefits
      • 1.  Reduction of Benefits by Amount of Retirement Pay  8.121
      • 2.  Employer Payments to Supplement Unemployment Compensation; Severance or Dismissal Pay  8.122
      • 3.  Vacation Pay  8.123
      • 4.  Holiday Pay  8.124
      • 5.  Sick Pay  8.125
    • H.  Claims Procedure
      • 1.  Types of Claims  8.126
        • a.  New Claim  8.127
        • b.  Continued Claim  8.128
        • c.  Partial Claim  8.129
        • d.  Additional Claim  8.130
        • e.  Reopened Claim  8.131
      • 2.  Steps in EDD’s Processing of Claims  8.132
        • a.  Filing of Claim and Notice to Last Employer  8.133
        • b.  Computation of Benefits  8.134
          • (1)  Notice of Computation  8.135
          • (2)  Protest of Computation  8.136
        • c.  Continued Claim Statement  8.137
        • d.  Determination of Eligibility and Notice of Determination  8.138
        • e.  Periodic Eligibility Review  8.139
        • f.  Attachment of Unemployment Benefits for Child Support  8.139A
      • 3.  Reconsideration of Determinations or Computations  8.140
    • I.  Payment of Claims  8.141
    • J.  Liability for Overpayment of Benefits  8.142
      • 1.  Notice of Overpayment and Assessment Determination  8.143
      • 2.  Appeal of Overpayment  8.144
      • 3.  Recovery of Overpayments
        • a.  Civil Action by the EDD  8.145
        • b.  Summary Judgment  8.146
        • c.  Offset  8.147
      • 4.  Penalties  8.148
    • K.  Invalidity of Waiver or Assignment of Benefits  8.149
  • V.  ADMINISTRATIVE APPEALS AND JUDICIAL REVIEW  8.150
    • A.  Appeals to Administrative Law Judge  8.151
    • B.  Appeals to Appeals Board
      • 1.  Appeals Procedure  8.152
      • 2.  Payment of Benefits During Appeals Procedure  8.153
        • a.  Before Administrative Law Judge Decision  8.154
        • b.  After Administrative Law Judge Decision  8.155
    • C.  Judicial Review of Appeals Board Decisions  8.156
      • 1.  Review of Benefit Determination by Administrative Mandate Proceedings  8.157
      • 2.  Scope of Judicial Review  8.158
  • VI.  CLAIMS FOR DISABILITY INSURANCE BENEFITS
    • A.  Governing Law  8.159
      • 1.  Statutes and Regulations  8.160
      • 2.  Case Law  8.161
    • B.  Nature and Source of Disability Benefits  8.162
      • 1.  State Disability Plan  8.163
      • 2.  Voluntary Plans  8.164
      • 3.  Elective Coverage  8.165
    • C.  What Constitutes a Disability  8.166
    • D.  Eligibility for Benefits  8.167
      • 1.  Departmental Medical Examination  8.168
      • 2.  Other Conditions of Eligibility  8.169
      • 3.  Physician and Practitioner Defined  8.170
    • E.  Ineligibility for Benefits
      • 1.  Employee Covered by Approved Voluntary Plan  8.171
      • 2.  Entitlement to Unemployment Compensation Benefits  8.172
      • 3.  Entitlement to Workers’ Compensation Benefits  8.173
        • a.  When Rate Is Less Than Disability Insurance Rate  8.174
        • b.  Payment of Disability Insurance Benefits While Workers’ Compensation Claim Is Pending  8.175
    • F.  Disqualifications
      • 1.  Alcoholism or Drug Addiction  8.176
      • 2.  Incarceration  8.177
      • 3.  Disqualification Under Certain Unemployment Compensation Provisions  8.178
    • G.  Amount of Benefits
      • 1.  Weekly Benefit Amount  8.179
      • 2.  Base Period  8.180
      • 3.  Maximum Benefits During One Disability Period  8.181
      • 4.  Reduction of Benefit Amount by Wages Received  8.182
      • 5.  Waiting Period  8.183
      • 6.  Disability Insurance Weekly Benefits  8.184
    • H.  Claim Procedures
      • 1.  Filing and Notice of Claim  8.185
      • 2.  Late Filing  8.186
      • 3.  Determination and Notice of Determination  8.187
      • 4.  Computation and Notice of Benefit Amount  8.188
      • 5.  Protest of Computation  8.189
      • 6.  Reconsideration  8.190
      • 7.  Continued Claims  8.191
      • 8.  Overpayments and Penalties  8.192
    • I.  Administrative Review  8.193
    • J.  Judicial Review  8.194
  • VII.  FAMILY TEMPORARY DISABILITY INSURANCE  8.195

9

Notice-Posting, Training, and Recordkeeping Requirements

Margaret Hart Edwards

Michael G. Pedhirney

  • I.  INTRODUCTION  9.1
  • II.  POSTING REQUIREMENTS  9.2
    • A.  Postings Related to Wages, Hours, and Working Conditions
      • 1.  Federal Law
        • a.  Fair Labor Standards Act  9.3
        • b.  Davis-Bacon Act  9.4
        • c.  Walsh-Healey Public Contracts Act  9.5
        • d.  Service Contract Act  9.6
        • e.  Migrant and Seasonal Agricultural Worker Protection Act  9.7
        • f.  Shipping Act  9.8
        • g.  American Recovery and Reinvestment Act of 2009  9.8A
        • h.  National Labor Relations Act  9.8B
      • 2.  California Law
        • a.  Payday Notice  9.9
        • b.  Security for Payroll: Certain Occupations  9.10
        • c.  Labor Disturbances  9.11
        • d.  Wage Orders  9.12
        • e.  California MW-2017 Minimum Wage Poster  9.13
        • f.  California Sick Leave  9.14
    • B.  LHWCA and Workers’ Compensation Postings
      • 1.  Federal Longshore and Harbor Workers’ Compensation Act  9.15
      • 2.  California Workers’ Compensation Act  9.16
    • C.  Occupational Safety and Health Postings  9.17
      • 1.  General Posting Requirements Under Cal/OSHA
        • a.  Overall Safety and Health Obligations in the Workplace  9.18
        • b.  Hazardous Substances  9.19
        • c.  Posting of Citations  9.20
        • d.  Posting After Investigation of Accident  9.21
        • e.  Notice of Exposure  9.22
        • f.  Annual Summary  9.23
        • g.  Notice of Unsafe Condition  9.24
        • h.  Notice of Access to Medical and Exposure Records  9.25
        • i.  Permits  9.26
        • j.  Injury and Illness Prevention Program Code of Safe Practices  9.27
        • k.  Emergency Action Plan and Telephone Numbers  9.28
        • l.  Fire Protection Plan  9.29
        • m.  Smoking Prohibition  9.30
      • 2.  Chart: Specific Posting Requirements for Certain Industries or Activities  9.31
    • D.  Antidiscrimination Law Postings
      • 1.  Federal Law
        • a.  Civil Rights Act of 1964, Title VII  9.32
        • b.  Age Discrimination in Employment Act  9.33
        • c.  Americans With Disabilities Act  9.34
      • 2.  California Fair Employment and Housing Act  9.35
    • E.  Affirmative Action Notice Postings
      • 1.  Under Executive Order No. 11246  9.36
      • 2.  For Vietnam Era Veterans  9.37
      • 3.  For Individuals With Disabilities  9.38
    • F.  Leave-of-Absence Postings
      • 1.  Family and Medical Leave Act  9.39
      • 2.  California Family Rights Act  9.40
      • 3.  Pregnancy Leave  9.41
      • 4.  Family Temporary Disability Leave  9.42
      • 5.  State Disability Insurance and Unemployment  9.43
      • 6.  Military Leave  9.44
    • G.  Miscellaneous Postings
      • 1.  Federal Law
        • a.  Posting of ERISA Plan “Notice to Interested Parties” Required by IRS  9.45
        • b.  Employee Polygraph Protection Act  9.46
        • c.  Drug-Free Workplace Act  9.47
        • d.  Union Elections  9.48
        • e.  Intention to Use Foreign Nationals  9.49
      • 2.  State Law
        • a.  Time Off to Vote  9.50
        • b.  California Drug-Free Workplace Act of 1990  9.51
        • c.  Organizing Agricultural Workers  9.52
        • d.  Whistleblower Hotline  9.53
        • e.  Sex Trafficking  9.53A
      • 3.  Local Ordinances  9.54
  • III.  TRAINING REQUIREMENTS  9.55
    • A.  Ethics Training Under Sarbanes-Oxley and Foreign Corrupt Practices Act  9.56
    • B.  Drug-Free Workplace Act Training
      • 1.  Federal Drug-Free Workplace Act  9.57
      • 2.  California Drug-Free Workplace Act  9.58
    • C.  Safety Training
      • 1.  Federal OSHA  9.59
      • 2.  California OSHA  9.60
    • D.  Discrimination Prevention Training
      • 1.  California Sexual Harassment Prevention Training  9.61
      • 2.  Harassment Training for Farm Labor Contractors   9.61A
      • 3.  Protections for Janitorial Service Workers  9.61B
      • 4.  Discrimination Prevention Training Generally  9.62
      • 5.  As Part of Affirmative Defense to Federal Claims  9.63
      • 6.  As Part of Affirmative Defense to California Law Discrimination Claims  9.64
      • 7.  As Defense Against Punitive Damages Under Federal Law  9.65
      • 8.  Affirmative Action Training Requirements  9.65A
    • E.  Health Insurance Portability and Accountability Act  9.66
  • IV.  RECORDKEEPING REQUIREMENTS  9.67
    • A.  Records Relating to Wages, Hours, and Working Conditions
      • 1.  Federal Law
        • a.  Fair Labor Standards Act  9.68
        • b.  Labor-Management Reporting and Disclosure Act  9.69
      • 2.  California Law
        • a.  Employee Wage Records  9.70
        • b.  Public Works Contractors  9.71
        • c.  Industrial Homeworkers  9.72
        • d.  Garment Manufacturing  9.73
        • e.  Car Wash and Polishing  9.73A
        • f.  Janitorial Service Workers  9.73B
        • g.  Records for Unemployment Insurance Purposes  9.74
        • h.  Gratuities  9.75
        • i.  Employment of Minors  9.76
        • j.  Wage Orders  9.77
        • k.  Deductions From Cash Payment of Wages  9.78
    • B.  Occupational Safety and Health Records
      • 1.  Federal OSHA Form 300  9.79
      • 2.  California Occupational Safety and Health Act  9.80
        • a.  Monitoring Exposure to Hazardous Materials  9.81
        • b.  Training Records  9.82
        • c.  Records of Illnesses and Injuries  9.83
        • d.  Records of Workers’ Compensation Claims
          • (1)  Claim File  9.84
          • (2)  Claim Log  9.85
    • C.  Records Relating to Antidiscrimination Laws
      • 1.  Federal Law
        • a.  Records of Title VII Actions  9.86
        • b.  Records Required by ADEA  9.87
        • c.  Records Required by ADA  9.88
        • d.  Records Required by GINA  9.88A
      • 2.  California Law
        • a.  Records Required by FEHA  9.89
        • b.  Records for Monitoring Wage Discrimination on Basis of Gender, Race, or Ethnicity  9.90
    • D.  Affirmative Action Records Required of Government Contractors
      • 1.  Records Relating to Required Affirmative Action Programs  9.91
      • 2.  Records Relating to Veterans and Individuals With Disabilities  9.92
    • E.  Records Relating to Family and Medical Leave
      • 1.  FMLA Requirements  9.93
      • 2.  CFRA Requirements  9.94
    • F.  Tax Records
      • 1.  Federal Law
        • a.  Records Relating to Taxable Income  9.95
        • b.  Income Tax Withholding Records  9.96
        • c.  Federal Unemployment Tax Records  9.97
        • d.  FICA Contributions Records  9.98
      • 2.  California Income Tax Records  9.99
    • G.  Miscellaneous Recordkeeping Requirements
      • 1.  Federal Law
        • a.  Records Related to Immigration Law  9.100
        • b.  Polygraph Test Records  9.101
        • c.  Supply Contractor Records (Walsh-Healey Act)  9.102
        • d.  Service Contractor Records (Service Contract Act)  9.103
        • e.  Contractor Records (Davis-Bacon Act)  9.104
        • f.  Records on Migrant and Seasonal Agricultural Workers  9.105
        • g.  Shipping Records  9.106
        • h.  Records Relating to ERISA Benefits  9.107
        • i.  Bioterrorism Preparedness Act  9.108
        • j.  Fair and Accurate Credit Transactions Act of 2003  9.109
        • k.  HIPAA Records  9.110
      • 2.  California Law
        • a.  California Public Work Contracts  9.111
        • b.  Specialized Employers  9.112
    • H.  Additional Recordkeeping Recommendations
      • 1.  Chart: Retention of Personnel Records  9.113
      • 2.  Records Not to Be Kept in Personnel File  9.114
      • 3.  Spoliation of Evidence  9.115
    • I.  Chart: Summary of Posting Requirements  9.116
    • J.  Chart: Summary of Recordkeeping and Retention Requirements  9.117

10

Employee Handbooks

Denise N. Brucker

Lisa A. Frank

William B. Sailer

  • I.  INTRODUCTION
    • A.  Scope of Chapter  10.1
    • B.  Employee Handbooks Distinguished From Personnel Policy Manuals  10.2
    • C.  Advantages and Disadvantages  10.3
  • II.  LEGAL EFFECT OF EMPLOYEE HANDBOOKS
    • A.  Effect of Employer’s Policies on Employment Contract  10.4
    • B.  At-Will Disclaimers and Employee Handbooks  10.5
      • 1.  Contractual Effect of Handbook Receipt  10.6
        • a.  Agreement to At-Will Employment  10.7
        • b.  Disclaimer of Other Agreements  10.8
      • 2.  Form: Employee Handbook Receipt Acknowledgment  10.9
  • III.  POLICIES TO INCLUDE IN THE EMPLOYEE HANDBOOK
    • A.  Assessing Current Policies for Inclusion in Handbook  10.10
    • B.  Checklist: Potential Inclusions  10.11
    • C.  Introductory Comments  10.12
    • D.  Equal Employment Opportunity
      • 1.  Compliance With Statutory Prohibitions  10.13
      • 2.  Form: Equal Opportunity Employment Policy  10.14
    • E.  Employment At Will
      • 1.  Reaffirmation of Policy  10.15
      • 2.  Form: At-Will Employment Policy  10.16
    • F.  Introductory Period
      • 1.  May Create Implied-in-Fact Contract of Employment  10.17
      • 2.  Form: Introductory Period Policy  10.18
    • G.  Policy Against Discrimination, Harassment and Retaliation
      • 1.  Governing Law  10.19
      • 2.  Guidelines for Drafting a Policy Against Discrimination, Harassment, and Retaliation  10.20
    • H.  Dispute Resolution Policy
      • 1.  Advisability of Inclusion; Caveats  10.21
      • 2.  Guidelines for Drafting Dispute Resolution Policy  10.22
    • I.  Confidential Information  10.23
    • J.  Inspection of Work Stations, Personal Belongings, or Electronic Data  10.24
    • K.  Pay Policies and Practices
      • 1.  Employee Classifications  10.25
      • 2.  Work Hours, Payroll, and Other Issues  10.26
    • L.  Employee Benefits  10.27
    • M.  Leave Policies  10.28
    • N.  Employment of Relatives  10.29
    • O.  Regulation of Outside Employment  10.30
    • P.  Standards of Performance and Conduct
      • 1.  Topics to be Covered in Handbook
        • a.  Punctuality and Attendance  10.31
        • b.  Solicitation Rules  10.32
        • c.  Dress and Grooming Standards  10.33
        • d.  Customer Relations  10.34
        • e.  Use of Drugs and Alcohol  10.35
        • f.  Performance Reviews and Evaluations  10.36
      • 2.  General Considerations Regarding Standards of Performance, Discipline, and Termination  10.37
        • a.  Specific Drafting Guidelines  10.38
        • b.  Form: Performance Standards; Misconduct, Discipline, and Termination  10.39
    • Q.  References  10.40
    • R.  Policies Relating to Workplace Safety and Health
      • 1.  Workplace Safety Program
        • a.  Required Elements  10.41
        • b.  Guidelines for Drafting Workplace Safety Policy  10.42
      • 2.  Workplace Violence
        • a.  OSHA Guidelines  10.43
        • b.  Drafting Workplace Violence Policy  10.44
      • 3.  Smoking in the Workplace  10.45
      • 4.  Cell Phone and Wireless Devices Policy  10.46

11

Trade Secrets Protection and Unfair Competition

Sean A. O’Brien

  • I.  IMPORTANCE OF PROTECTING TRADE SECRETS AND PREVENTING UNLAWFUL COMPETITIVE BUSINESS PRACTICES  11.1
  • II.  FEDERAL DEFEND TRADE SECRETS ACT OF 2016; IMPACT ON EXISTING STATE TRADE SECRETS LAW   11.1A
  • III.  THE UNIFORM TRADE SECRETS ACT  11.2
    • A.  Defining Trade Secret Under UTSA  11.3
      • 1.  Information That Has Economic Value Because Not Generally Known
        • a.  In General  11.4
        • b.  Customer List/Information Cases  11.5
        • c.  Professional or New Job Announcement Exception  11.5A
        • d.  Special Rules for Financial Advisors and Brokers Subject to FINRA: The “Protocol for Broker Recruiting”  11.5B
      • 2.  Reasonable Efforts to Maintain Secrecy  11.6
      • 3.  TROs and Preliminary Injunctions—A Word of Caution [Deleted]  11.6A
    • B.  Defining Misappropriation Under UTSA; How Misappropriation Can Occur and Who Can Be Liable  11.7
      • 1.  Requirement That the Misappropriating Party Actually “Use” the Trade Secret  11.7A
      • 2.  Reverse Engineering Not Misappropriation  11.8
      • 3.  Avoiding Misappropriation When Hiring Competitor’s Employees  11.9
      • 4.  Inevitable Disclosure Doctrine  11.10
      • 5.  Obtaining Personal Jurisdiction Over Out-of-State Defendants [Deleted]  11.11
    • C.  Loss of Trade Secret Protection Through Public Disclosure  11.12
      • 1.  Through Publication on the Internet or in Trade Journals  11.13
      • 2.  Through Patent Applications  11.14
      • 3.  Under Copyright Laws  11.15
      • 4.  Disclosure to Governmental Agencies Under Disclosure Laws  11.16
      • 5.  Disclosure Through Licensing Agreements  11.16A
      • 6.  Inadvertent Disclosure in Litigation or to Third Parties  11.17
      • 7.  Form: Protective Language for Submissions  11.18
    • D.  Security Measures to Protect Trade Secrets  11.19
      • 1.  When Hiring or Contracting With Another
        • a.  Areas of Concern  11.20
        • b.  Use of Indemnity Agreements  11.20A
        • c.  Conflicts of Interest  11.20B
        • d.  Form: Sample Offer or Hire Letter to New Employee  11.21
        • e.  Safeguard Measures  11.22
      • 2.  During Period of Employment or Contractual Relationship  11.23
        • a.  Use of Confidentiality, Nondisclosure, and Antisolicitation Agreements  11.24
        • b.  Identification of Trade Secret Information  11.25
        • c.  Implementation of Plant and Workplace Security Procedures  11.26
        • d.  Use of Confidential Stamps and Legends  11.27
        • e.  Use of Confidentiality or Secrecy Agreements With Customers, Clients, and Third Parties  11.28
        • f.  Information Inadvertently Disclosed to Others  11.29
        • g.  Protecting Digital or Electronically Stored Information; Computer Database Security Measures  11.30
        • h.  Importance of Implementing “BYOD” Policies  11.30A
        • i.  Other Technological Issues  11.31
        • j.  Forms for Ensuring Confidentiality and Nondisclosure
          • (1)  Form: Visitor Log-In  11.32
          • (2)  Form: Receipt Acknowledgment  11.33
          • (3)  Form: Confidentiality Legend  11.34
          • (4)  Form: Sample Approval of Information Release  11.35
          • (5)  Form: Notice for Facsimile Transmission  11.36
      • 3.  When Terminating Employment or Contractual Relationship  11.37
        • a.  Exit Interview: Reaffirmation of Confidentiality Obligations Through “Termination Certificate”  11.38
        • b.  Form: Employee Termination Certificate  11.38A
        • c.  Letter to Exiting Employee’s New Employer and to Existing Customers  11.39
        • d.  Form: Letter to Employee Confirming Exit Interview  11.40
        • e.  Form: Letter to New Employer  11.41
      • 4.  Investigation of Employees and Privacy Concerns  11.41A
        • a.  Eavesdropping, Recording Telephone Conversations, Video Surveillance, and Use of GPS Tracking Devices  11.41B
        • b.  Monitoring and Retrieving Computer Data or Accessing Employee’s Private Social Media or Email Accounts  11.41C
        • c.  Discovery From Third Parties Into Social Media Sites and Private Internet or “Cloud” Accounts  11.41D
        • d.  Searching Property, Offices, and Trash  11.41E
        • e.  Interrogating Persons; Physical Searches  11.41F
        • f.  Pretexting: Obtaining Personal Information Through False Pretenses  11.41G
        • g.  Use of Private Investigators  11.41H
        • h.  Form: Company Policy for Use of Company Computers, Internet, E-Mail, and Personal or Cloud-Based Electronic Storage Devices   11.41I
    • E.  Remedies Available to Plaintiff Whose Trade Secrets Have Been Misappropriated  11.42
    • F.  Recovery of Attorney Fees in Trade Secret Litigation  11.42A
    • G.  TROs and Preliminary Injunctions: A Word of Caution  11.42B
    • H.  Asserting Claims for Trade Secret Misappropriation in Litigation: The Compulsory Counterclaim Trap for the Unwary  11.42C
    • I.  Obtaining Personal Jurisdiction Over Out-of-State Defendants in Trade Secret/Unfair Competition Litigation  11.42D
    • J.  Use and Enforceability of Employment-Related Arbitration Contracts in Trade Secret Litigation  11.42E
    • K.  Protecting Against Unwanted Disclosure During Litigation
      • 1.  Disclosure of Trade Secrets at Outset of Case
        • a.  Trade Secret Must Be Identified With Reasonable Particularity  11.43
        • b.  Requisite Degree of Specificity  11.43A
      • 2.  Protective Orders  11.44
      • 3.  Sealing of Court Records  11.44A
      • 4.  Trade Secret Privilege  11.45
      • 5.  Preservation of Trade Secrets and Evidence  11.46
      • 6.  Managing the Burden and Expense of Electronic Discovery  11.46A
      • 7.  Protocols for Conducting Forensic Discovery of Electronic/Digital Stored Information  11.46B
    • L.  Insurance Coverage for Defense of Trade Secret Misappropriation and Unfair Competition Claims  11.47
    • M.  Employer’s Duty to Defend and Indemnify the Newly Hired Employee  11.47A
  • IV.  EMPLOYEE INVENTIONS
    • A.  Overview of Trade Secret and Invention Ownership Law  11.48
    • B.  Contractual Assignments of Employee Inventions  11.49
    • C.  Enforcement of Ownership Rights  11.50
  • V.  CONTRACTUAL RESTRAINTS ON COMPETITION AND THEIR ENFORCEABILITY  11.51
    • A.  Covenants Not to Compete  11.52
    • B.  Attempts to Circumvent California’s Strong Public Policy Against Covenants Not to Compete
      • 1.  “Sham” Employee Stock Sale or Repurchase Transactions  11.53
      • 2.  Postemployment “Forfeiture” of Benefits  11.54
      • 3.  Use of Choice of Law, Forum Selection, or Contractual Arbitration Clauses  11.54A
        • a.  Choice of Law  11.55
        • b.  Forum Selection Clauses and Their Enforceability  11.55A
        • c.  Contractual Arbitration  11.55B
      • 4.  Use of Narrowly Drawn Noncompete Provisions  11.56
    • C.  Antisolicitation Agreements
      • 1.  Employee Solicitation and No-Hire/No-Poaching Agreements  11.57
      • 2.  Customer Solicitation  11.58
    • D.  Confidentiality Agreements and Covenants Not to Disclose  11.59
    • E.  Remedies for Breach of Contractual Restraints  11.60
  • VI.  STATUTORY UNFAIR COMPETITION CLAIMS AND BUSINESS-RELATED TORTS  11.61
    • A.  Preemption by UTSA  11.61A
    • B.  Statutory Unfair Competition (Bus & P C §§17200–17210)  11.62
    • C.  Criminal Sanctions for Theft of Trade Secrets  11.63
    • D.  Common Law Misappropriation  11.64
    • E.  Breach of Confidence  11.65
    • F.  Inducing Breach of Contract; Interference With Prospective Business and Economic Advantage  11.65A
      • 1.  Tortious Interference With Contractual Relations  11.66
      • 2.  Tortious Interference With Prospective Economic or Business Relations  11.67
    • G.  Breach of Fiduciary Duty and Duty of Loyalty  11.68
      • 1.  Competing With Company  11.69
      • 2.  Corporate Opportunity Doctrine  11.70
      • 3.  Constructive Fraud Based on Fiduciary Relationship  11.71
    • H.  Trade Libel  11.72
    • I.  Conversion of Personal Property  11.73
    • J.  Civil Remedies for Theft, Destruction, or Misuse of Computer Data  11.74
    • K.  Civil Conspiracy and Aiding and Abetting Liability  11.74A
  • VII.  EMPLOYEE AGREEMENT: PROPRIETARY INFORMATION AND ASSIGNMENT OF INVENTIONS
    • A.  General Comment  11.75
    • B.  Form: Short Agreement for Protection of Proprietary Information  11.76
    • C.  Form: Long Agreement for Protection of Proprietary Information and Assignment of Inventions
      • 1.  Form: Introductory Provisions  11.77
      • 2.  Form: Definitions  11.78
      • 3.  Form: Duty of Trust and Confidentiality  11.79
      • 4.  Form: No Disclosure or Misappropriation of Proprietary Information  11.80
      • 5.  Provisions Regarding Invention Assignment
        • a.  Form: Assignment of Proprietary Information and Inventions  11.81
        • b.  Form: Proprietary Right Registrations; Execution of Necessary Documents  11.82
        • c.  Form: Exception to Assignment of Inventions  11.83
        • d.  Form: Disclosure of Inventions and Maintenance of Records  11.84
      • 6.  Form: Provisions Regarding Noncompetition and Nonsolicitation
        • a.  Form: Conflicting Employment or Business Opportunities  11.85
        • b.  Form: Nonsolicitation of Employees  11.86
        • c.  Form: Nonsolicitation of Customers  11.87
        • d.  Form: Noncompetition  11.88
      • 7.  Provisions Regarding Obligations on Termination of Employment
        • a.  Form: Returning Company Documents and Other Tangible Items  11.89
        • b.  Form: Reaffirmation of Obligations on Termination of Employment  11.90
        • c.  Form: Notification to New Employer  11.91
      • 8.  Miscellaneous Provisions
        • a.  Form: Representations and Warranties  11.92
        • b.  Form: At-Will Employment  11.93
        • c.  Form: Equitable Remedies  11.94
        • d.  Form: Choice of Law  11.95
        • e.  Form: Enforceability and Severability  11.96
        • f.  Form: No Waiver  11.97
        • g.  Form: Attorney Fees  11.98
        • h.  Form: Amendment and Modification  11.99
        • i.  Form: Entire Agreement  11.100
        • j.  Form: Successors and Assigns  11.101
        • k.  Form: Word Usage  11.102
        • l.  Form: Exhibits  11.103
        • m.  Form: Effective Date  11.104
      • 9.  Form: Conclusion  11.105
      • 10.  Form: Execution  11.106
      • 11.  Form: Exhibit A—California Labor Code §2870  11.107
      • 12.  Form: Exhibit B—Existing Inventions and Improvements  11.108
      • 13.  Form: Exhibit C—Termination Certificate  11.109

12

Workplace Safety

Fred Walter

Lisa Prince

  • I.  SCOPE OF CHAPTER  12.1
  • II.  NEW AND NOTEWORTHY  12.1A
  • III.  FEDERAL OVERVIEW
    • A.  Applicable Law: The Occupational Safety and Health Act of 1970
      • 1.  General Mandate to Employers; Historical Context  12.2
      • 2.  Jurisdiction  12.3
      • 3.  Federal Preemption; Cal/OSHA  12.4
    • B.  Navigating the Federal OSHA  12.5
      • 1.  Rulemaking  12.6
      • 2.  Enforcement  12.7
      • 3.  Adjudication and Administrative Appeals  12.8
        • a.  Appeals of Administrative Hearing Officer’s Decisions  12.9
        • b.  Appeals of Commission Decisions  12.10
  • IV.  NAVIGATING CAL/OSHA
    • A.  Applicable Law: California Occupational Safety and Health Act of 1973
      • 1.  General Mandate to Employers  12.11
      • 2.  Scope of Act  12.12
      • 3.  Regulatory and Administrative Scheme  12.13
    • B.  Occupational Safety and Health Standards Board
      • 1.  Authority and Composition  12.14
      • 2.  Adoption of Standards  12.15
      • 3.  Employer-Requested Variances
        • a.  Permanent Variance  12.16
          • (1)  Applying for Interim Variance [Deleted]  12.17
          • (2)  Before Hearing  12.18
            • (a)  Disqualification of Hearing Officer  12.19
            • (b)  Prehearing Motions, Discovery, and Evidence  12.20
          • (3)  Hearing Procedure  12.21
            • (a)  Party Representation  12.22
            • (b)  Admission of Evidence During Hearing  12.23
            • (c)  Continuances and Defaults  12.24
          • (4)  Posthearing Procedure  12.25
        • b.  Requesting Temporary Variances  12.26
          • (1)  Hearings  12.27
          • (2)  Appeals of Temporary Variances  12.28
    • C.  The Division of Occupational Safety and Health  12.29
      • 1.  Investigations Following Workplace Injury, Illness, or Death
        • a.  Notification of Serious Injury or Illness or Death  12.30
        • b.  Complaints About the Workplace  12.31
          • (1)  Formal Complaints  12.31A
          • (2)  Informal Complaints  12.31B
          • (3)  Discrimination  12.31C
      • 2.  Bureau of Investigations  12.32
      • 3.  Workplace Inspections
        • a.  Basis for Inspections  12.33
        • b.  Inspection Process  12.34
        • c.  Pros and Cons of Insisting on a Warrant  12.35
      • 4.  Citations
        • a.  Issuance of Serious Citation (1BY Letter)  12.35A
        • b.  Grounds for Issuance  12.36
        • c.  Multiemployer Worksite Liability  12.37
          • (1)  Exposing Employer Defense  12.37A
          • (2)  Controlling Employer "Due Diligence” Defense  12.37B
        • d.  Types and Degrees of Violations: Regulatory Definitions
          • (1)  Willful Violation  12.38
          • (2)  Repeat Violation  12.39
          • (3)  Serious Violation  12.40
          • (4)  General Violation  12.41
          • (5)  Regulatory Violation  12.42
        • e.  Notice in Lieu of Citation  12.43
        • f.  Information Memorandum  12.44
        • g.  Orders and Special Orders
          • (1)  Temporary Restraining Orders  12.45
          • (2)  Order Prohibiting Use  12.46
            • (a)  Notice Procedure  12.47
            • (b)  Contesting Order  12.48
          • (3)  Special Orders  12.49
      • 5.  Order to Take Special Action  12.50
      • 6.  Posting Requirements  12.51
      • 7.  Civil Penalties
        • a.  Service of Notice of Proposed Penalty  12.52
        • b.  Amounts of Civil Penalties  12.53
          • (1)  Basis for Assessing Penalty Amounts  12.54
          • (2)  Penalty Adjustment: Abatement Credit and Waiver  12.55
          • (3)  Chart: Violations Subject to Fixed Penalties or Mandatory Minimums  12.56
        • c.  Abatement  12.57
        • d.  Failure to Pay Civil Penalties  12.58
      • 8.  Criminal Penalties  12.59
        • a.  Summary: Criminal Liability Under Cal/OSHA  12.60
        • b.  Corporate Criminal Liability Act  12.61
  • V.  APPEALING CAL/OSHA CITATIONS
    • A.  Filing an Appeal
      • 1.  California Occupational Safety and Health Appeals Board  12.62
      • 2.  Initiating Appeal  12.62A
    • B.  Appealable Issues and Posting Requirements  12.63
    • C.  Expedited Hearing Process  12.63A
    • D.  Prehearing Procedure  12.64
    • E.  Settlement  12.65
    • F.  Mandatory Settlement Conference [Deleted]  12.65A
    • G.  Discovery  12.66
    • H.  The Hearing  12.67
      • 1.  Representation, Evidence, Oral and Written Argument  12.68
      • 2.  Failure to Appear  12.69
      • 3.  Division’s Burden  12.70
    • I.  Defenses to Citations  12.71
      • 1.  Independent Employee Act  12.72
      • 2.  Unforeseeable Isolated Employee Act  12.73
      • 3.  Void for Vagueness  12.74
      • 4.  Exposing Employer Defense  12.75
      • 5.  Logical Time Not Yet Reached  12.75A
    • J.  Findings and Order  12.75B
    • K.  Petition for Reconsideration  12.76
      • 1.  Grounds for Reconsideration  12.77
      • 2.  Pleadings, Service Requirements, Answer  12.78
      • 3.  Disposition of Petition  12.79
    • L.  Appealing an OSHAB Decision
      • 1.  Prerequisite of Exhaustion of Administrative Remedies  12.80
      • 2.  Application for Writ of Mandate  12.81
      • 3.  Review by Superior Court  12.82
    • M.  Costs  12.83
  • VI.  INJURY AND ILLNESS PREVENTION PROGRAMS
    • A.  Overview  12.84
    • B.  Requirements
      • 1.  Generally  12.85
      • 2.  Recordkeeping Requirements  12.86
      • 3.  Employers With Fewer Than 20 Employees  12.87
      • 4.  Communicating With Employees  12.88
      • 5.  Joint Labor-Management Safety and Health Committees  12.89
      • 6.  Procedures for Enforcement of IIPP  12.90
      • 7.  Chart: Summary of Employer Duties Under the IIPP and Other Laws  12.91
      • 8.  Trade Secret Preservation When Employee Requests Medical Records  12.92
      • 9.  IIPP Compliance Checklist  12.93
  • VII.  HAZARDOUS SUBSTANCES INFORMATION AND TRAINING ACT
    • A.  Navigating the Act  12.94
      • 1.  Who Is Covered  12.95
      • 2.  When It Applies  12.96
      • 3.  Exemptions From the Act  12.97
    • B.  Safety Data Sheets (SDS)  12.98
      • 1.  Information Required  12.99
      • 2.  Exceptions to Providing SDS  12.100
      • 3.  California Hazard Communication Standard (8 Cal Code Regs §5194)  12.101
        • a.  Hazard Communication Program  12.102
        • b.  Duty to Collect SDSs for Hazardous Substances  12.103
        • c.  Notice to Employees  12.104
        • d.  Form: Notice to Employees of Right to SDSs  12.105
        • e.  Employee Training  12.106
        • f.  Employer Labeling  12.107
  • VIII.  CAL/OSHA FORM 300 LOG AND ANNUAL SUMMARY
    • A.  Log of Occupational Injuries and Illnesses  12.108
      • 1.  Recordable Illnesses and Injuries  12.109
      • 2.  Contents of Cal/OSHA Form 300  12.110
      • 3.  Completing the Injury and Illness Incident Report (Cal/OSHA Form 301)  12.111
    • B.  Annual Summary: Cal/OSHA Form 300A  12.112
    • C.  Reporting Occupational Injury and Illness  12.113
  • IX.  SUMMARY OF EMPLOYEE SAFETY AND HEALTH RIGHTS  12.114
  • X.  OTHER WORKPLACE HEALTH AND SAFETY ISSUES
    • A.  Smoking in the Workplace  12.115
      • 1.  Employer Duties  12.116
      • 2.  Places of Employment  12.116A
      • 3.  Places of Employment Not Covered  12.117
      • 4.  Applicable Penalties  12.118
    • B.  Prevention of Workplace Violence
      • 1.  Workplace Violence Prevention in Healthcare  12.118A
      • 2.  Other Theories of Liability  12.119
      • 3.  Workplace Violence Safety Act  12.120
      • 4.  Preventive Measures  12.121
    • C.  Workplace Ergonomic Requirements
      • 1.  Application  12.122
      • 2.  Required Program  12.123
  • XI.  USE OF CAL/OSHA CITATIONS IN CIVIL LITIGATION  12.124

13

Workplace Privacy

Everett F. Meiners

  • I.  SCOPE OF CHAPTER  13.1
  • II.  CONSTITUTIONAL AND COMMON-LAW PRIVACY ISSUES
    • A.  United States Constitutional Privacy Protections  13.2
    • B.  California Constitutional Privacy Protections  13.3
    • C.  Common-Law Privacy Rights  13.4
      • 1.  Unauthorized Appropriation of an Individual’s Name or Likeness  13.5
      • 2.  Unreasonable Intrusion Into an Individual’s Private Affairs  13.6
      • 3.  Public Disclosure of Private Facts About an Individual  13.7
      • 4.  False-Light Publicity  13.8
    • D.  Contractual Theories of Recovery  13.9
  • III.  SPECIFIC INFORMATION-GATHERING PRACTICES INVOLVING EMPLOYEE PRIVACY ISSUES
    • A.  Criminal History Inquiries
      • 1.  Arrests Versus Convictions  13.10
      • 2.  Remedies  13.11
    • B.  Fingerprints and Photographs  13.12
    • C.  Polygraph Examinations
      • 1.  Federal Law
        • a.  Application of Employee Polygraph Protection Act  13.13
        • b.  Limited Use of Polygraph Procedure  13.14
        • c.  Remedies  13.15
      • 2.  California Law  13.16
      • 3.  Summary of Factors to Consider Before Implementing Polygraph Testing  13.17
      • 4.  Form: Polygraph Consent Form  13.18
    • D.  Voice Stress Analysis  13.19
    • E.  Integrity Tests  13.20
    • F.  Eavesdropping on or Recording Confidential Communications
      • 1.  Federal Law  13.21
        • a.  Consent Exception  13.22
        • b.  Business Extension Exception  13.23
        • c.  Remedies  13.24
      • 2.  California Law
        • a.  Activities Prohibited  13.25
        • b.  Wiretapping  13.26
        • c.  Eavesdropping  13.27
        • d.  Penalties for Wiretapping or Eavesdropping  13.28
        • e.  Monitoring Employee’s Telephone Calls With the Public  13.29
    • G.  Retrieval of E-Mail, Voice-Mail, and Employee Information on Company Computer
      • 1.  Restrictions on Access  13.30
      • 2.  Internet Content  13.31
      • 3.  Blogging and Social Media  13.32
      • 4.  Form: Sample Computer/E-Mail Usage Policy  13.33
    • H.  Use of Two-Way Mirrors, Surveillance Cameras, and Audio Recording  13.34
    • I.  Investigations and Use of Private Investigators
      • 1.  Guidelines for Disciplinary Investigations  13.35
      • 2.  Potential Claims for False Imprisonment  13.36
      • 3.  Potential Claims for False Arrest  13.37
      • 4.  Use of Private Investigators  13.38
    • J.  Use of Undercover Shoppers  13.39
    • K.  Workplace Searches
      • 1.  Constitutional Limitations
        • a.  Public Employers  13.40
        • b.  Private Employers  13.41
      • 2.  Statutory Limitations  13.41A
      • 3.  Practical Advice About Searches  13.42
      • 4.  Form: Workplace Search Policy  13.43
    • L.  Medical and Physical Examinations
      • 1.  Limitation Under Constitutional Privacy Protection  13.44
      • 2.  Limitation Under Common-Law Privacy Protection  13.45
      • 3.  Potential Areas of Liability in Addition to Privacy Violation  13.46
      • 4.  Applicant Testing
        • a.  Constraints Imposed by FEHA and ADA  13.47
        • b.  HIV/AIDS Testing  13.48
    • M.  Medical Records
      • 1.  Federal Law  13.49
      • 2.  California Law
        • a.  Information Protected; Exceptions  13.50
        • b.  Written Authorization  13.51
        • c.  Effect of Separate Policy or Agreement  13.52
        • d.  Penalties for Unauthorized Disclosure  13.53
        • e.  Special Rules for Health Care Providers and Insurance Transactions  13.54
        • f.  Employee Assistance Program Records: Confidentiality Versus Required Disclosure  13.55
        • g.  Access by Government Agencies  13.56
        • h.  Inspection by Employee Representatives; Union Inspection  13.57
    • N.  Drug and Alcohol Issues
      • 1.  Employee Participation in Rehabilitation Program  13.58
      • 2.  Drug Testing
        • a.  Drug-Free Workplace Acts for Public Employers and Contractors  13.59
        • b.  Types of Testing
          • (1)  Applicant Testing  13.60
          • (2)  Random Testing
            • (a)  Private Employers  13.61
            • (b)  Government Employees and Government Contractors  13.62
            • (c)  Automatic Postaccident Testing  13.63
          • (3)  Reasonable-Suspicion Testing  13.64
        • c.  Potential Areas of Liability  13.65
        • d.  Form: Sample Drug and Alcohol Policy  13.66
        • e.  Guidelines for Implementing Drug- and Alcohol-Testing Policy  13.67
        • f.  Employee Consent to Testing and Release of Results  13.68
        • g.  Form: Sample Consent to Drug and Alcohol Test  13.69
      • 3.  Compassionate Use Act  13.69A
    • O.  Psychological Tests  13.70
    • P.  Checklist: Questions to Consider Before Implementing Any Form of Employee Testing  13.71
  • IV.  USE AND DISCLOSURE OF PRIVATE INFORMATION ABOUT EMPLOYEES
    • A.  Employee’s Right to Personnel Records  13.72
    • B.  Financial Records  13.73
    • C.  Disclosure to Persons Other Than Employee
      • 1.  Disclosure to Union  13.74
      • 2.  Disclosures to Prospective Employers  13.75
      • 3.  Voluntary Disclosure to Government Officials  13.76
      • 4.  Internal Dissemination  13.77
      • 5.  Mandatory Disclosures
        • a.  Required Disclosures to Government  13.78
        • b.  Subpoena Duces Tecum  13.79
    • D.  Negligent Maintenance of Employment Records  13.80
    • E.  Nondisclosure of Social Security Numbers  13.81
    • F.  Notice of Unauthorized Access  13.82
  • V.  ATTEMPTS TO REGULATE EMPLOYEE LIFESTYLES
    • A.  Limitations  13.83
    • B.  Dress and Grooming Standards
      • 1.  Valid Reason Required  13.84
      • 2.  Form: Sample Dress and Grooming Policy  13.85
    • C.  Moonlighting
      • 1.  Prohibition May Be Legitimate  13.86
      • 2.  Form: Sample Outside Employment Policy  13.87
    • D.  Employment of Spouses, Relatives, or Cohabitants
      • 1.  Employer’s Policy May Prohibit  13.88
      • 2.  Form: Sample Policy on Employment of Relatives  13.89
    • E.  Workplace Romances  13.90
    • F.  Sexual Activities or Sexual Orientation
      • 1.  Constitutional and Statutory Limitations  13.91
      • 2.  Local Ordinances and Regulations  13.92
    • G.  First Amendment Rights of Government Employees  13.93

14

Employer Liability for Acts of Employees

Joanie L. Roeschlein

Thomas G. Mackey

  • I.  TORT THEORIES OF EMPLOYER LIABILITY  14.1
    • A.  Agency Law—Employer Directs or Ratifies  14.2
    • B.  Negligent Hiring and Retention  14.3
    • C.  Respondeat Superior Doctrine  14.4
  • II.  WHO IS AN EMPLOYEE?
    • A.  Right-of-Control Test  14.5
    • B.  Borrowed and Leased Employees: Special and Dual Employment Situations  14.6
  • III.  TESTS FOR DETERMINING WHETHER TORTIOUS CONDUCT FALLS WITHIN SCOPE OF EMPLOYMENT
    • A.  General Rules and Interpretive Decisions
      • 1.  Interests of Employer Versus Employee’s Personal Motives  14.7
      • 2.  Narrowing of Scope of Respondeat Superior Liability  14.8
    • B.  Test to Determine Whether Injurious Conduct Falls Within Scope of Employment  14.9
      • 1.  Comparison to Workers’ Compensation Test  14.10
        • a.  The Going-and-Coming Rule  14.11
          • (1)  Special Mission Requested by Employer  14.12
          • (2)  Exception to Going-and-Coming Rule When Travel Time Is Compensated  14.13
          • (3)  Exception When Employer Substantially Benefits  14.14
          • (4)  Exception When Use of Automobile Is Required  14.15
          • (5)  Exception for Social Functions  14.16
          • (6)  Work-Related Risk  14.17
        • b.  Off-Duty and Break-Time Conduct  14.18
        • c.  Personal Business and Errands  14.19
        • d.  Use of Cell Phones or Other Mobile Devices  14.19A
      • 2.  Violation of Employer’s Rules and Regulations  14.20
  • IV.  LIABILITY FOR ACTIONS OF INDEPENDENT CONTRACTORS
    • A.  General Rule of No Liability  14.21
    • B.  Exception for Peculiar Risks  14.22
    • C.  Exception for Nondelegable Duties  14.23
    • D.  Possible Exception for Intentional Torts  14.24
  • V.  DAMAGES
    • A.  Availability of Punitive Damages Against Employer  14.25
    • B.  Noneconomic Damages Under Proposition 51: Joint and Several Liability  14.26
  • VI.  EMPLOYER LIABILITY FOR CONTRACTS ENTERED INTO BY EMPLOYEES
    • A.  Actual Authority
      • 1.  May Be Expressed or Implied  14.27
      • 2.  Equal Dignities Rule  14.28
    • B.  Ostensible Authority  14.29
    • C.  Ratification of Contracts  14.30
    • D.  Undisclosed Principal  14.31
    • E.  Employer’s Liability for Contracts in Excess of Employee’s Authority  14.32
    • F.  Employee-Agent’s Liability to Third Party  14.33
  • VII.  EMPLOYEE-AGENT’S RIGHT TO INDEMNIFICATION FROM EMPLOYER  14.34
  • VIII.  CORPORATE EMPLOYER’S LIABILITY FOR CRIMINAL ACTS OF EMPLOYEES  14.35

15

Discrimination and Harassment

Teresa R. Tracy

  • I.  OVERVIEW  15.1
  • II.  PRINCIPAL STATUTES AND ORDERS
    • A.  Federal Laws  15.2
      • 1.  Civil Rights Act of 1964 (Title VII)
        • a.  Coverage  15.3
        • b.  Foreign Employment Issues  15.4
        • c.  What Is Prohibited  15.5
        • d.  Exceptions
          • (1)  Particular Organizations and Employees  15.6
          • (2)  Bona Fide Occupational Qualification  15.7
            • (a)  Customer Preferences Typically Do Not Excuse Discrimination  15.8
            • (b)  Employee Safety May Excuse Discrimination  15.9
          • (3)  Other Exceptions  15.10
      • 2.  Civil Rights Act of 1866: Contracts and Race (§1981)
        • a.  Coverage Broadened by Civil Rights Act of 1991  15.11
        • b.  What Is Prohibited  15.12
        • c.  Exceptions  15.13
      • 3.  Civil Rights Act of 1871 (§1983)
        • a.  Coverage  15.14
        • b.  What Is Prohibited  15.15
        • c.  Exceptions  15.16
      • 4.  Civil Rights Act of 1871 (§1985)  15.17
      • 5.  Equal Pay Act of 1963
        • a.  Coverage  15.18
        • b.  What Is Prohibited  15.19
        • c.  Exceptions  15.20
      • 6.  Age Discrimination in Employment Act
        • a.  Coverage  15.21
        • b.  What Is Prohibited  15.22
        • c.  Additional Protections of OWBPA  15.23
        • d.  Exceptions
          • (1)  Seniority System, Benefit Plan, Retirement Incentives  15.24
          • (2)  Efficiency and Safety Concerns  15.25
          • (3)  Other Factors  15.26
        • e.  Defenses  15.27
      • 7.  Immigration Reform and Control Act of 1986
        • a.  Coverage  15.28
        • b.  What Is Prohibited  15.29
        • c.  Exceptions  15.30
      • 8.  Americans with Disabilities Act
        • a.  Coverage  15.30A
        • b.  What Is Prohibited  15.30B
      • 9.  Genetic Information Nondiscrimination Act of 2008
        • a.  Coverage  15.30C
        • b.  What Is Prohibited  15.30D
      • 10.  Rehabilitation Act of 1973  15.30E
        • a.  Coverage  15.30F
        • b.  What Is Prohibited  15.30G
    • B.  California Laws
      • 1.  Fair Employment and Housing Act
        • a.  Coverage
          • (1)  Generally  15.31
          • (2)  Religious Entities  15.32
        • b.  What Is Prohibited  15.33
          • (1)  Issues Relating to Age  15.34
          • (2)  Issues Relating to Physical or Mental Disability  15.35
          • (3)  Issues Relating to Medical Condition  15.36
          • (4)  Issues Relating to Religion  15.37
          • (5)  Issues Relating to Marital Status  15.38
          • (6)  Issues Relating to Sexual Orientation  15.39
          • (7)  Issues Relating to Gender Identity  15.40
          • (8)  Veteran Status  15.40A
        • c.  Exceptions  15.41
          • (1)  Bona Fide Occupational Qualification  15.42
          • (2)  Business Necessity  15.43
          • (3)  Preemption and Other Defenses  15.44
        • d.  Failure to Prevent Discrimination  15.44A
      • 2.  California Constitution  15.45
      • 3.  California Family Rights Act of 1993  15.46
      • 4.  California Equal Pay Law  15.47
      • 5.  Unruh Civil Rights Act and Related Statutes  15.48
      • 6.  Bane Act  15.49
      • 7.  Local Laws  15.50
  • III.  APPLICATION OF EQUAL EMPLOYMENT LAW
    • A.  Who Is Protected
      • 1.  Employees, Unpaid Interns, Volunteers, and Independent Contractors  15.51
      • 2.  Partnership “Employees”  15.52
      • 3.  More Than One Employer  15.53
      • 4.  Immigration Status  15.53A
    • B.  Basic Theories of Unlawful Discrimination  15.54
      • 1.  Disparate Treatment  15.55
        • a.  Prima Facie Case  15.56
        • b.  Employer’s Rebuttal That Action Was Not Discriminatory  15.57
          • (1)  Nondiscriminatory Motive Shown by “Same Actor Inference”  15.58
          • (2)  Meeting Customer Preferences  15.59
          • (3)  “Cat’s Paw” Theory of Liability  15.59A
        • c.  Burden Shifts Back to Plaintiff  15.60
        • d.  Other Proof Issues  15.61
      • 2.  Disparate Impact
        • a.  Prima Facie Case  15.62
        • b.  Employer’s Rebuttal  15.63
        • c.  Plaintiff’s Showing That Nondiscriminatory Alternative Exists  15.64
      • 3.  Interplay of Theories: Ricci v DeStefano  15.64A
    • C.  Specific Prohibited or Restricted Practices
      • 1.  Recruiting  15.65
        • a.  Advertising  15.66
        • b.  Word-of-Mouth Referrals  15.67
      • 2.  Hiring Standards
        • a.  Reinstatement  15.67A
        • b.  Business Necessity Justification  15.68
        • c.  Testing  15.69
        • d.  Dress and Personal Appearance  15.70
        • e.  Physical Requirements  15.71
        • f.  Overqualification  15.72
        • g.  Test Scores  15.73
        • h.  Waivers  15.73A
      • 3.  Promotion
        • a.  Seniority Systems  15.74
        • b.  Grounds for Promotion  15.75
      • 4.  Other Terms and Conditions of Employment
        • a.  Pregnancy-Related Issues  15.76
        • b.  Age-Related Issues  15.77
        • c.  Sex and Gender-Related Issues  15.78
        • d.  Providing or Canceling Pension Benefits  15.79
        • e.  Language Requirements  15.80
        • f.  Accommodation of Religion  15.81
        • g.  Health Issues Not Amounting to Disability  15.81A
      • 5.  Retaliation  15.82
        • a.  Engaging in Protected Activity  15.83
        • b.  Adverse Employment Action  15.84
          • (1)  Federal Cases  15.85
          • (2)  California Cases  15.86
        • c.  Causal Link  15.87
        • d.  Anti-SLAPP Defense  15.87A
      • 6.  Reorganizations or Job Elimination Decisions  15.88
      • 7.  Workers With Caregiving Responsibilities  15.88A
    • D.  Harassment  15.89
      • 1.  Sexual Harassment
        • a.  Generally  15.90
        • b.  Form: Acknowledgment of Consensual Relationship  15.90A
        • c.  Same-Sex Harassment  15.91
        • d.  Welcomeness  15.92
        • e.  Failure to Take Steps to Prevent  15.92A
        • f.  Standard for Judging Sexual Harassment
          • (1)  Quid pro Quo  15.93
          • (2)  Hostile Environment  15.94
      • 2.  Sources of Liability
        • a.  Agents and Supervisors  15.95
        • b.  Employees and Third Parties  15.96
      • 3.  Affirmative Defense to Harassment  15.97
        • a.  No Tangible Employment Action  15.98
        • b.  Reasonable Care to Prevent and Promptly Correct Harassment  15.99
        • c.  Plaintiff’s Failure to Act  15.100
        • d.  California Law  15.101
      • 4.  Discovery Issues  15.102
      • 5.  Preventive Steps for Employers  15.103
      • 6.  Form: Sample Policy Prohibiting Harassment  15.104
      • 7.  Form: Complaint for Harassment  15.105
      • 8.  Sexual Harassment Brochure (DFEH-185)  15.106
      • 9.  Checklist: Suggested Action Plan for Employer  15.107
      • 10.  Nonmanagement Employees’ Liability for Harassment  15.108
  • IV.  DISCRIMINATION AGAINST INDIVIDUALS WITH DISABILITIES
    • A.  Americans With Disabilities Act
      • 1.  Coverage
        • a.  Employers  15.109
        • b.  Employees  15.110
      • 2.  What Is Prohibited
        • a.  Generally  15.111
        • b.  Selection Criteria That Screen Out Individuals With Disabilities  15.112
        • c.  Inappropriate Employment Tests  15.113
        • d.  Accommodation Requirements  15.114
        • e.  Limiting Job Classifications  15.115
        • f.  Discrimination Based on Association With Individual With Disability  15.116
        • g.  Relationships With Entities Whose Practices May Violate ADA  15.117
      • 3.  Key Terms
        • a.  Disability  15.118
          • (1)  Physical or Mental Impairment  15.119
          • (2)  Substantially Limiting  15.120
          • (3)  Major Life Activities  15.121
          • (4)  Past Record of Physical or Mental Impairment  15.122
          • (5)  Regarded as Disabled  15.123
        • b.  What Is Not a Disability?  15.124
        • c.  Qualified Individual  15.125
          • (1)  Employer’s Judgment About Essential Job Functions  15.126
          • (2)  EEOC Standards  15.127
      • 4.  Reasonable Accommodation Requirement
        • a.  General Principles  15.128
        • b.  Rules Developed by Courts and EEOC  15.129
        • c.  Specific Types of Reasonable Accommodations  15.130
          • (1)  Retrofitting  15.131
          • (2)  Job Restructuring  15.132
          • (3)  Part-Time or Modified Work Schedules and Medical Leave  15.133
          • (4)  Reassignment  15.134
          • (5)  Use of Interpreters  15.135
          • (6)  Acquisition or Modification of Equipment  15.136
          • (7)  Further Examples of Reasonable Accommodations  15.137
        • d.  Interactive Process  15.138
        • e.  Undue Hardship  15.139
      • 5.  Permissible Grounds for Making an Adverse Employment Decision  15.140
        • a.  Job-Related  15.141
        • b.  Business Necessity  15.142
        • c.  No Reasonable Accommodation Is Possible  15.143
        • d.  Direct Threat to Health and Safety  15.144
      • 6.  Benefits and Insurance Considerations  15.145
        • a.  Preexisting Condition Exclusions on Health Insurance Still Acceptable  15.146
        • b.  Insured Benefits Subject to Discrimination Provisions  15.147
        • c.  Pension Issues  15.147A
      • 7.  ADA Compliance Guidelines  15.148
    • B.  FEHA
      • 1.  Who Is Covered?  15.149
      • 2.  California Law More Protective Than ADA  15.150
      • 3.  State Remedies Are Broader Than ADA’s  15.151
  • V.  REMEDIES AND PROCEDURES UNDER EQUAL EMPLOYMENT LAWS
    • A.  General Overview  15.152
      • 1.  State  15.153
      • 2.  Federal  15.154
      • 3.  Choice of Jurisdiction  15.155
      • 4.  Effect of “After-Acquired Evidence” Doctrine  15.156
      • 5.  Effect of Arbitration Clauses  15.157
    • B.  State Administrative Procedures
      • 1.  Complaint  15.158
        • a.  Time for Filing  15.159
        • b.  Filing Procedure  15.160
        • c.  Parties Named in the Complaint  15.161
        • d.  Service  15.162
      • 2.  Investigation
        • a.  Fact Gathering by DFEH  15.163
        • b.  Discovery  15.164
        • c.  Confidentiality  15.165
      • 3.  Employer’s Response
        • a.  Position Statement  15.166
        • b.  Defenses  15.167
      • 4.  Disposition of the Complaint
        • a.  Pre-Determination Settlement  15.168
        • b.  Dismissal and Closure  15.169
        • c.  Dispute Resolution [Deleted]  15.170
        • d.  Accusation [Deleted]  15.171
        • e.  Right-to-Sue Notice  15.172
        • f.  Mandatory Dispute Resolution and DFEH Litigation  15.172A
      • 5.  Prehearing Procedures
        • a.  Parties [Deleted]  15.173
        • b.  Notice of Defense and Representation of Respondent [Deleted]  15.174
        • c.  Transfer to Court [Deleted]  15.175
        • d.  Discovery and Motions [Deleted]  15.176
      • 6.  Evidentiary Hearing
        • a.  Hearing Officer [Deleted]  15.177
        • b.  Prehearing Procedures [Deleted]  15.178
        • c.  The Hearing [Deleted]  15.179
        • d.  Posthearing Briefs and Motions [Deleted]  15.180
      • 7.  Decision and Order
        • a.  Proposed Decision [Deleted]  15.181
        • b.  FEHC’s Decision [Deleted]  15.182
        • c.  Reconsideration [Deleted]  15.183
        • d.  Relief That FEHC May Order [Deleted]  15.184
      • 8.  Judicial Review and Enforcement
        • a.  Review [Deleted]  15.185
        • b.  Enforcement [Deleted]  15.186
    • C.  Federal Procedures
      • 1.  The Charge or Complaint  15.187
        • a.  Who May File  15.188
        • b.  Time for Filing  15.189
        • c.  Filing Procedure  15.190
        • d.  Service  15.191
      • 2.  EEOC Investigation
        • a.  Workshare Arrangement With DFEH  15.192
        • b.  Mediation and Fact Gathering  15.193
        • c.  Subpoenas and Discovery  15.194
        • d.  Confidentiality  15.195
      • 3.  Employer’s Response
        • a.  Internal Investigation  15.196
        • b.  Position Statement  15.197
        • c.  Defenses  15.198
      • 4.  Disposition of Charge
        • a.  Settlement  15.199
        • b.  Withdrawal  15.200
        • c.  Formal Determination by the EEOC  15.201
        • d.  Conciliation  15.202
        • e.  Notice of Right to Sue  15.203
      • 5.  EEOC Litigation  15.204
        • a.  Administrative Prerequisites  15.205
        • b.  Statute of Limitations  15.206
        • c.  Intervention by the Employee  15.207
        • d.  Scope of the Litigation  15.208
  • VI.  LITIGATING STATE LAW CLAIMS  15.209
    • A.  Procedural Prerequisites
      • 1.  Jurisdiction  15.210
      • 2.  Venue  15.211
      • 3.  Exhaustion of DFEH Administrative Remedies  15.212
      • 4.  Statute of Limitations  15.213
      • 5.  Special Issues Related to Public Employees  15.214
    • B.  Preparing the Complaint
      • 1.  Parties
        • a.  Plaintiffs  15.215
        • b.  Defendants  15.216
      • 2.  Claims
        • a.  Grounds of Discrimination  15.217
        • b.  Discriminatory Practices  15.218
      • 3.  Remedies
        • a.  Full Range Available  15.219
        • b.  Back Pay  15.220
        • c.  Reinstatement, Promotion, and Injunctive Relief  15.221
        • d.  Front Pay  15.222
        • e.  Compensatory Damages  15.223
        • f.  Punitive Damages  15.224
        • g.  Attorney Fees, Costs, and Prejudgment Interest  15.225
        • h.  Training  15.226
        • i.  Injunction Under Unfair Competition Law  15.227
    • C.  Responding to the Complaint
      • 1.  Removal to Federal Court  15.228
      • 2.  Demurrer or Motion for Judgment on Pleadings  15.229
      • 3.  Answer  15.230
    • D.  Discovery, Motions, and Trial  15.231
      • 1.  Discovery  15.232
      • 2.  Dispositive Motions  15.233
      • 3.  Trial
        • a.  Right to Jury Trial  15.234
        • b.  Motions in Limine  15.235
        • c.  Expert Testimony  15.236
        • d.  Burdens of Proof  15.237
        • e.  Estoppel in Disability Claims  15.238
        • f.  Evidentiary Issues  15.239
    • E.  Differences for Litigation Under Equal Pay Act  15.240
      • 1.  Exhaustion of Remedies  15.241
      • 2.  Statute of Limitations  15.242
      • 3.  Parties  15.243
      • 4.  Burden of Proof  15.244
      • 5.  Remedies  15.245
    • F.  Public Policy Claims  15.246
    • G.  Expansion of State Court Litigation  15.247
  • VII.  LITIGATING FEDERAL CLAIMS  15.248
    • A.  Procedural Prerequisites
      • 1.  Jurisdiction  15.249
      • 2.  Venue  15.250
      • 3.  Exhaustion of Administrative Remedies  15.251
      • 4.  Statutes of Limitations  15.252
      • 5.  Special Issues Relating to Federal Employees  15.252A
    • B.  Preparing the Complaint
      • 1.  Parties
        • a.  Plaintiffs  15.253
        • b.  Defendants  15.254
        • c.  Pleading  15.255
      • 2.  Remedies  15.256
        • a.  Back Pay  15.257
        • b.  Reinstatement, Promotion, and Injunctive Relief  15.258
        • c.  Front Pay  15.259
        • d.  Compensatory and Punitive Damages  15.260
        • e.  Special Damage Provisions in Mixed Motive Cases  15.261
        • f.  Attorney Fees, Costs, and Prejudgment Interest  15.262
    • C.  Responding to the Complaint
      • 1.  Removal to Federal Court  15.263
      • 2.  Motion to Dismiss or Motion for Judgment on Pleadings  15.264
      • 3.  Answer  15.265
    • D.  Discovery  15.266
    • E.  Dispositive Motions  15.267
    • F.  Trial
      • 1.  Right to Jury Trial  15.268
      • 2.  Motions in Limine  15.269
      • 3.  Burdens of Proof  15.270
    • G.  Litigation Under Federal Discrimination Laws Other Than Title VII
      • 1.  Americans with Disabilities Act  15.271
      • 2.  Age Discrimination in Employment Act  15.272
        • a.  Jurisdiction  15.273
        • b.  Exhaustion of Administrative Remedies  15.274
        • c.  Statute of Limitations  15.275
        • d.  Parties  15.276
        • e.  Statistical Evidence and Other Circumstantial Evidence  15.276A
        • f.  Burden of Proof: The Decisive Factor Requirement  15.276B
        • g.  Remedies  15.277
        • h.  Jury Trial  15.278
      • 3.  Equal Pay Act  15.279
        • a.  Jurisdiction  15.280
        • b.  Exhaustion of Administrative Remedies  15.281
        • c.  Statute of Limitations  15.282
        • d.  Parties  15.283
        • e.  Summary Judgment  15.283A
        • f.  Remedies  15.284
        • g.  Jury Trial  15.285
      • 4.  Section 1981  15.286
        • a.  Jurisdiction  15.287
        • b.  Exhaustion of Administrative Remedies  15.288
        • c.  Statute of Limitations  15.289
        • d.  Parties and Pleading  15.290
        • e.  Remedies  15.291
        • f.  Jury Trial  15.292
      • 5.  Section 1983  15.293
    • H.  Bankruptcy Issues  15.293A
      • 1.  Immigration Reform and Control Act  15.294

16

Whistleblower Issues

Cynthia E. Fruchtman

  • I.  INTRODUCTION  16.1
  • II.  WHISTLEBLOWING AS PROTECTED ACTIVITY  16.2
  • III.  WHO QUALIFIES FOR WHISTLEBLOWER STATUS?  16.3
  • IV.  PUBLIC POLICY PROTECTS WHISTLEBLOWERS  16.4
  • V.  PRIVILEGE AND IMMUNITY EXCEPTIONS TO WHISTLEBLOWER PROTECTION
    • A.  Privilege of Confidentiality Is Breached or Trade Secrets Are Disclosed  16.5
    • B.  Privilege for Statements Made in Judicial or Official Proceedings  16.5A
    • C.  Tribal Immunity  16.5B
    • D.  Administrative Investigations  16.5C
  • VI.  SARBANES-OXLEY ACT  16.6
  • VII.  WHISTLEBLOWER’S MOTIVATION  16.7
  • VIII.  WHEN WHISTLEBLOWER PROTECTIONS ARISE  16.8
  • IX.  EMPLOYER MEASURES; WHISTLEBLOWER POLICY  16.9
  • X.  EXHAUSTION REQUIREMENT  16.9A
  • XI.  EMPLOYER RESPONSE TO WHISTLEBLOWING
    • A.  Inappropriate Response  16.10
    • B.  Appropriate Response  16.11
  • XII.  TIMELINESS OF WHISTLEBLOWER COMPLAINT  16.12
  • XIII.  PENALTIES FOR RETALIATION  16.13
  • XIV.  INSURANCE COVERAGE FOR DEFENSE OF WHISTLEBLOWER CLAIMS  16.14
  • XV.  PRACTICAL ADVICE  16.15

16A

Workplace Investigations

Patricia C. Perez

  • I.  INTRODUCTION
    • A.  Scope of Chapter  16A.1
    • B.  Duty to Investigate  16A.2
    • C.  Types of Claims Requiring Investigation; Scope  16A.3
  • II.  CASE LAW GOVERNING WORKPLACE INVESTIGATIONS  16A.4
  • III.  PRELIMINARY ISSUES TO CONSIDER BEFORE STARTING THE INVESTIGATION
    • A.  Ethical Considerations  16A.5
    • B.  Privacy Issues  16A.6
  • IV.  WHO SHOULD INVESTIGATE?  16A.7
  • V.  STARTING THE INVESTIGATION  16A.8
  • VI.  STRATEGIC PLANNING  16A.9
  • VII.  INTERVIEWS AND DOCUMENT REVIEW  16A.10
    • A.  Identity of Interviewee; Scheduling Interviews  16A.11
    • B.  Checklist: Suggested Interview Procedures and Questions  16A.11A
  • VIII.  REACHING FAIR AND WELL-REASONED CONCLUSIONS  16A.12
  • IX.  DRAFTING AN INVESTIGATION REPORT  16A.13
  • X.  INSTITUTING CORRECTIVE ACTION AND DOCUMENTING THE INVESTIGATION  16A.14
    • A.  Communicating the Results  16A.15
  • XI.  ADDITIONAL ISSUES
    • A.  Unionized Employees  16A.16
    • B.  Police Officers and Firefighters  16A.16A
    • C.  Litigation Issues  16A.17

17

Discipline and Termination

Douglas J. Farmer

James R. Moss, Jr.

Rodney Sorensen

  • I.  AT-WILL EMPLOYMENT
    • A.  Presumption in California  17.1
    • B.  Overcoming Presumption of Employer’s Right to Terminate at Will  17.2
      • 1.  Statutory Limitations on At-Will Terminations
        • a.  Equal Employment Opportunity Statutes  17.3
        • b.  Antiretaliation and Whistleblower Statutes  17.4
        • c.  Leave of Absence Statutes  17.5
        • d.  Labor Code Protections  17.6
      • 2.  Public Policy Limitations on At-Will Terminations  17.7
        • a.  “Fundamental” Public Policy Must Be at Stake  17.8
        • b.  Policy Must Benefit Public at Large  17.9
        • c.  Policy Must Apply to Defendant Employer  17.10
        • d.  Retaliatory Terminations Deemed to Violate Public Policy  17.11
          • (1)  Termination for Refusing to Further Employer’s Unlawful Conduct  17.12
          • (2)  Termination for Satisfying a Legal Obligation  17.13
          • (3)  Termination for Exercising a Legal Right  17.14
          • (4)  Termination for Opposing or Reporting Employer’s Unlawful Conduct  17.15
          • (5)  Termination for Engaging in “Protected Activity” Under NLRA  17.15A
        • e.  Private Disputes Not Protected  17.16
      • 3.  Contractual Limitations on At-Will Termination
        • a.  Express and Implied-in-Fact Contracts to Terminate Only for Good Cause  17.17
          • (1)  Express Contracts
            • (a)  Oral Contracts  17.18
            • (b)  Written Contracts  17.19
          • (2)  Implied-in-Fact Contract  17.20
            • (a)  Employment Policies  17.21
            • (b)  Past Employment Practices  17.22
            • (c)  Employee’s Length of Service  17.23
            • (d)  Promises of Job Security, Promotions, Raises, and Bonuses  17.24
            • (e)  Other Employer Writings  17.25
        • b.  Covenant of Good Faith and Fair Dealing  17.26
          • (1)  Violation of Good Cause Standard Is Prerequisite to Establishing Breach of the Covenant  17.27
          • (2)  No Tort Recovery for Bad Faith Denial of Existence of Contract  17.28
  • II.  ADVERSE EMPLOYER ACTIONS SHORT OF TERMINATION
    • A.  Constructive Termination  17.29
      • 1.  Intolerable Conditions
        • a.  Extraordinary and Egregious Conditions; Resignation Coerced  17.30
        • b.  Determination by Objective Standard
          • (1)  No Alternative But to Quit  17.31
          • (2)  Demotions, Transfers, Salary Decreases, and Performance Ratings Insufficient Alone to Support Claim  17.32
      • 2.  Actual Notice to Employer Required  17.33
      • 3.  Statute of Limitations  17.33A
    • B.  Wrongful Discipline  17.34
    • C.  Action Short of Termination May Support Retaliation or Discrimination Claim  17.34A
  • III.  CAUSES OF ACTION RELATED TO WRONGFUL TERMINATION
    • A.  Defamation
      • 1.  Elements  17.35
      • 2.  Defenses
        • a.  Preemption  17.36
        • b.  Privileged Communications  17.37
    • B.  Intentional and Negligent Infliction of Emotional Distress  17.38
    • C.  Interference With Contract or Prospective Economic Advantage  17.39
    • D.  Other Related Causes of Action
      • 1.  Fraud  17.40
      • 2.  Misrepresentation Preventing Former Employee’s Reemployment  17.41
      • 3.  Negligent Performance of Contractual Duty to Evaluate  17.42
      • 4.  Loss of Consortium or Negligent Infliction of Emotional Distress Claims by Employee’s Spouse  17.43
  • IV.  REMEDIES IN WRONGFUL TERMINATION ACTIONS
    • A.  Contract Damages  17.44
    • B.  Tort Damages
      • 1.  General Damages  17.45
      • 2.  Special Damages  17.46
      • 3.  Punitive Damages  17.47
    • C.  Mitigation of Damages  17.48
    • D.  Equitable Remedies  17.49
  • V.  DEFENSES TO A WRONGFUL TERMINATION ACTION
    • A.  Preemption by Statutory Remedy
      • 1.  Termination Involving Federal Labor Law Issues
        • a.  Engaging in Protected Activities  17.50
        • b.  Terminated Employee Covered by Collective Bargaining Agreement  17.51
        • c.  Claims Against Union by Former Union Employee  17.52
        • d.  Termination Claims by Railway Employee or Airline Worker  17.53
        • e.  Preemption by Federal Banking Laws  17.54
        • f.  Preemption by Immigration Reform and Control Act  17.54A
      • 2.  Termination Involving Discrimination Issues
        • a.  Preemption by FEHA  17.55
        • b.  Preemption by Federal Discrimination Statutes  17.56
      • 3.  Termination Involving Pension Benefits  17.57
      • 4.  California Workers’ Compensation Law  17.58
    • B.  Termination for Cause  17.59
    • C.  Termination Based on Good Faith Investigation  17.60
    • D.  After-Acquired Evidence of Employee Misconduct  17.61
    • E.  No Employment Relationship  17.62
    • F.  Statute of Limitations  17.63
  • VI.  INSURANCE COVERAGE FOR WRONGFUL TERMINATION CLAIMS  17.64
  • VII.  AVOIDING WRONGFUL TERMINATION CLAIMS
    • A.  Stress At-Will Policy of the Company  17.65
      • 1.  Include At-Will Language in Employment Applications  17.66
      • 2.  Form: Sample At-Will Statement and “After-Acquired Evidence” Clause for Employment Application  17.67
    • B.  Draft Offer Letters to Avoid “Good Cause” Presumption
      • 1.  Specific Language to Avoid  17.68
      • 2.  Form: Offer Letter  17.69
    • C.  Employment Agreements
      • 1.  Recommended Content  17.70
      • 2.  Form: Sample At-Will Provision for Employment Agreement  17.71
    • D.  Employee Handbooks
      • 1.  At-Will Statements in Employee Handbooks  17.72
      • 2.  “Introductory Period” Provisions  17.73
      • 3.  Discipline and Termination Policies
        • a.  Potential Consequences of Ill-Drafted Provisions  17.74
        • b.  “Progressive Discipline” Issues  17.75
    • E.  Performance Evaluations
      • 1.  Common Mistakes  17.76
      • 2.  Guidelines for Employee Evaluation  17.77
        • a.  Utilize Objective Standards  17.78
        • b.  Avoid Generic Preprinted “Check the Box” Forms  17.79
        • c.  Coordinate Evaluation Forms With Employee Job Descriptions  17.80
        • d.  Include Specific Examples of Strengths and Weaknesses  17.81
        • e.  Discuss Evaluation With Employee  17.82
        • f.  Allow Employee to Provide Feedback to the Evaluation  17.83
        • g.  Consider Review by More Than One Level  17.84
        • h.  Periodically Audit the Evaluation System  17.85
        • i.  Train and Evaluate the Evaluators  17.86
        • j.  Establish Effective Recordkeeping System  17.87
        • k.  Utilize Evaluation System to Prevent Lawsuits  17.88
    • F.  Grievance Policies  17.89
    • G.  Protecting Internal Investigations  17.90
    • H.  Discipline Checklist  17.91
  • VIII.  TERMINATION OF THE EMPLOYMENT RELATIONSHIP  17.92
    • A.  Termination Checklist  17.93
    • B.  Additional Preventive Measures in “High Risk” Situations  17.94
    • C.  Required Pamphlet and Notice of Termination  17.94A
    • D.  Termination Letter  17.95
    • E.  Termination Meeting  17.96
    • F.  Time Limit for Payment of Final Wages  17.97
    • G.  Exit Interview  17.98
    • H.  Severance Pay and Settlement Agreements  17.98A
    • I.  Avoiding Posttermination Liability  17.99
  • IX.  SEVERANCE AND SETTLEMENT AGREEMENTS
    • A.  Releases of Liability
      • 1.  General Principles  17.100
      • 2.  Unilateral or Mutual Release of Claims  17.101
      • 3.  Releases of Age Discrimination Claims Under the OWBPA  17.102
      • 4.  Releases of Wage Claims  17.103
      • 5.  Release of Workers’ Compensation Claims  17.104
      • 6.  No Waiver of Unemployment Insurance Claims  17.105
      • 7.  Waiver of Unknown Claims  17.106
    • B.  Tax Considerations
      • 1.  Settlement Amounts  17.107
      • 2.  Attorney Fees  17.108
    • C.  Confidentiality  17.109
    • D.  Employment References  17.110
    • E.  Waiver of Reemployment Rights  17.111
    • F.  Form: Sample Settlement Agreement and Mutual Release  17.112
    • G.  Form: Short Form Severance Agreement  17.113
  • X.  POSTTERMINATION ISSUES
    • A.  Employment References  17.114
      • 1.  No-Reference or Limited-Reference Policies  17.115
      • 2.  Truthful Reference Guidelines  17.116
    • B.  Unemployment Insurance Claims  17.117
  • XI.  SUMMARY OF LAWS GOVERNING TERMINATION AND DISCIPLINE
    • A.  Chart: Federal Statutes Limiting Termination and Discipline  17.118
    • B.  Chart: California Statutes Limiting Termination and Discipline  17.119

18

Reductions in Force and Plant Closings

Cynthia L. Jackson

  • I.  INTRODUCTION  18.1
  • II.  PLANNING A REDUCTION IN FORCE (RIF)  18.2
    • A.  Consider Alternatives to Layoff and Termination
      • 1.  Offering Incentives for Voluntary Termination  18.3
        • a.  Releases and Waivers of Claims
          • (1)  Basic Requirements for Standard Waiver  18.4
          • (2)  Requirements for Waiver by Employees Age 40 and Over: OWBPA  18.5
          • (3)  Waiver for Group RIF  18.6
            • (a)  No Ratification of Voidable Releases  18.7
            • (b)  Form: Release  18.8
        • b.  Claims Not Subject to Waiver  18.9
        • c.  Tax Issues in Releasing ADEA and Title VII Claims  18.10
      • 2.  Transfers, Bumping, and Recall  18.11
    • B.  Establish Selection Criteria for Termination
      • 1.  Neutral Criteria  18.12
      • 2.  Typical Criteria for Retaining or Laying Off Employees
        • a.  Merit  18.13
        • b.  Versatility  18.14
        • c.  Seniority  18.15
        • d.  Salary  18.16
      • 3.  Prohibited Criteria  18.17
    • C.  Notice  18.18
    • D.  Checklist: RIF Guidelines for Minimizing Litigation Risk  18.19
  • III.  WORKER ADJUSTMENT AND RETRAINING NOTIFICATION ACT (WARN)
    • A.  Background  18.20
    • B.  Covered Employers  18.21
      • 1.  Requisite Number of Employees
        • a.  Employees Counted  18.22
        • b.  Employees Not Counted  18.23
      • 2.  Application to Independent Contractors and Subsidiaries  18.24
      • 3.  Application on Sale or Acquisition  18.25
    • C.  Triggering Events  18.26
      • 1.  Definitions of “Plant Closing,” “Termination,” and “Mass Layoff”
        • a.  Duration; Number of Employees Affected  18.27
        • b.  Strikes and Other Exemptions  18.28
      • 2.  Definition of “Employment Loss” and “Layoff”  18.29
    • D.  Notice
      • 1.  Required Recipients  18.30
      • 2.  Contents  18.31
      • 3.  Timing of Notice
        • a.  General Rule  18.32
        • b.  Exceptions  18.33
          • (1)  Faltering Company Exception  18.34
          • (2)  Unforeseen Business Circumstance Exception  18.35
          • (3)  Natural Disaster Exception  18.36
      • 4.  Manner of Service  18.37
      • 5.  Forms  18.38
        • a.  Form: Notice to Employees or Representative re: Mass Layoff  18.39
        • b.  Form: Notice to Chief Elected Government Official, State Dislocated Worker Unit, or Workforce Investment Board re: Mass Layoff  18.40
        • c.  Form: Notice to Chief Elected Government Official or Dislocated Worker Unit re: Plant Closing/Termination or Relocation  18.41
    • E.  Liability for Violation of WARN Notice Requirements  18.42
    • F.  Defenses
      • 1.  Statute of Limitations  18.43
      • 2.  Waiver  18.44
  • IV.  CONTINUING HEALTH INSURANCE BENEFITS
    • A.  COBRA  18.45
    • B.  Labor Code §2807  18.46
  • V.  DISCRIMINATION CLAIMS
    • A.  Protected Categories  18.47
    • B.  Showing Necessary to Support Discrimination Action
      • 1.  Disparate Treatment
        • a.  Prima Facie Case  18.48
        • b.  Rebuttal  18.49
        • c.  Pretext  18.50
      • 2.  Disparate Impact
        • a.  Prima Facie Case  18.51
        • b.  Rebuttal  18.52
        • c.  Nondiscriminatory Alternatives  18.53
        • d.  Adverse Impact Analysis for Age Discrimination  18.54
    • C.  Defenses  18.55
  • VI.  BREACH OF CONTRACT AND RELATED CLAIMS  18.56
  • VII.  NLRA COMPLIANCE  18.57
    • A.  Subjects of Decision Bargaining  18.58
      • 1.  Total Plant Closings  18.59
      • 2.  Partial Plant Closings  18.60
      • 3.  Plant Relocations  18.61
      • 4.  Subcontracting to Nonunion Employees  18.62
    • B.  Subjects of Effects Bargaining  18.63
    • C.  The Duty to Bargain  18.64
      • 1.  Decision Bargaining  18.65
      • 2.  Effects Bargaining  18.66
    • D.  The Duty to Disclose  18.67
    • E.  NLRB-Imposed Remedies  18.68
      • 1.  Decision Bargaining  18.69
      • 2.  Effects Bargaining  18.70
    • F.  Third Party Liability
      • 1.  Parent-Subsidiary  18.71
      • 2.  Effect of Bankruptcy Proceedings  18.72
    • G.  Statute of Limitations  18.73
    • H.  Preemption of State Law Claims by LMRA  18.74
  • VIII.  BANKRUPTCY ISSUES  18.75
    • A.  Employer Bankruptcy
      • 1.  Priority for Certain Wages and Benefits Claims  18.76
      • 2.  Employee Benefit Plan Contributions  18.77
      • 3.  Retiree Benefits  18.78
      • 4.  Employee Contract Termination Claims  18.79
      • 5.  Collective Bargaining Agreements  18.80
      • 6.  Non-NLRA Employment Agreements  18.81
      • 7.  Labor Union Standing and Plan of Reorganization  18.82
      • 8.  Nondischargeable Claims  18.83
    • B.  Employee Bankruptcy  18.84

19

Insurance Coverage for Employment Claims

Larry M. Golub

  • I.  SCOPE OF CHAPTER  19.1
  • II.  COVERAGE UNDER STANDARD BUSINESS GENERAL LIABILITY POLICIES
    • A.  Overview of Coverage  19.2
    • B.  Specific Coverage Issues
      • 1.  Bodily Injury and Property Damage Coverage  19.3
      • 2.  Requirement of an “Occurrence”  19.4
      • 3.  Advertising Injury and Personal Injury Coverage Issues  19.5
      • 4.  General Liability Policy Exclusions  19.6
      • 5.  Nonstandard General Liability Policies  19.7
      • 6.  Employment-Related Practices Exclusion  19.7A
      • 7.   Is the Defendant an Insured?  19.7B
  • III.  COVERAGE UNDER EXCESS OR UMBRELLA POLICIES  19.8
  • IV.  COVERAGE UNDER WORKERS’ COMPENSATION POLICIES  19.9
  • V.  COVERAGE UNDER DIRECTORS AND OFFICERS LIABILITY POLICIES  19.10
  • VI.  COVERAGE UNDER ERRORS AND OMISSIONS POLICIES  19.11
  • VII.  COVERAGE UNDER EMPLOYMENT PRACTICES LIABILITY POLICIES  19.12
    • A.  Form: Employment Practices Liability Coverage (NAS Insurance Services Form 1808BO-0910)  19.13
    • B.  Form: Extension of Coverage for Defense Only of Wage and Hour Claims (NAS Insurance Services Form 1808B-0912)  19.13A
    • C.  Form: Employment Practices Liability Coverage Section (Chubb Form 14-02-3797)  19.14
    • D.  Form: Broad-Form Employment Practices Liability Insurance  19.15
  • VIII.  RESPONDING TO AN EMPLOYEE CLAIM
    • A.  Tender to All Potentially Applicable Insurers  19.16
    • B.  Form: Tender of Claim  19.17
    • C.  Factors to Consider in Analyzing Coverage  19.18
      • 1.  Occurrence Versus Claims-Made Coverage  19.19
      • 2.  Coverage Preclusion by Any Applicable Statutes  19.20
      • 3.  Defendants Named in the Action  19.21
        • a.  Is the Employee Covered?  19.22
        • b.  Is the Employer Covered?  19.23
      • 4.  Insurer’s Duty to Defend  19.24

20

Mediation and Arbitration of Employment Disputes

  • I.  OVERVIEW  20.1
  • II.  MEDIATION
    • A.  Available at All Stages of Dispute  20.2
    • B.  Factors to Consider in Deciding Whether to Mediate  20.3
    • C.  Selecting the Mediator  20.4
    • D.  Mediator’s Methodology  20.5
    • E.  Who Pays for Mediation?  20.6
    • F.  Checklist: Premediation Steps  20.7
    • G.  Mediation Session  20.8
    • H.  Practice Points: Strategies for Successful Mediation  20.9
    • I.  Mediated Settlement Agreement  20.10
    • J.  Terms to Include in Mediated Settlement Agreement
      • 1.  Recital of Settlement  20.11
      • 2.  Payment Terms  20.12
      • 3.  Release  20.13
      • 4.  Confidentiality  20.14
      • 5.  More Formal Agreement to Follow  20.15
      • 6.  Employment References  20.16
      • 7.  Controlling Law and Enforcement Provisions  20.17
      • 8.  Execution  20.18
      • 9.  Language Mandated by OWBPA  20.19
    • K.  Form: Sample Mediated Settlement Agreement  20.20
  • III.  ARBITRATION
    • A.  Practical Considerations in Deciding Whether to Compel Arbitration  20.21
      • 1.  Rule of Law  20.22
      • 2.  Competence and Bias of Decision-Maker  20.23
      • 3.  Discovery Rights  20.24
      • 4.  Statement of Decision  20.25
    • B.  Policy Considerations
      • 1.  When Arbitration Agreement Is Binding  20.26
      • 2.  Who Decides Whether Parties Agreed to Arbitrate  20.27
      • 3.  When Arbitration Agreement Is Not Enforceable
        • a.  “Contracts of Employment” Exclusion  20.28
        • b.  Title VII and Other Federal Claims  20.29
        • c.  Issues Outside Scope of Agreement to Arbitrate  20.30
        • d.  Unconscionability  20.31
        • e.  Class Action Waivers  20.31A
        • f.  Grounds for Rescission  20.32
        • g.  Waiver of Right to Arbitrate  20.33
      • 4.  Collective Bargaining Agreements  20.34
      • 5.  State Efforts to Regulate Arbitration Agreements  20.35
      • 6.  Effect of Arbitration Agreements on Administrative Claims  20.36
    • C.  Judicial Arbitration  20.37
    • D.  Selection of Arbitrator  20.38
      • 1.  Under California Arbitration Act  20.39
      • 2.  Under AAA and JAMS Rules
        • a.  AAA  20.40
        • b.  JAMS  20.41
    • E.  Prearbitration Discovery
      • 1.  Under California Arbitration Act  20.42
      • 2.  Under AAA and JAMS Rules
        • a.  AAA  20.43
        • b.  JAMS  20.44
    • F.  Arbitration Hearing
      • 1.  Under California Arbitration Act  20.45
      • 2.  Under AAA and JAMS Rules
        • a.  AAA  20.46
        • b.  JAMS  20.47
    • G.  Preparing for Arbitration Hearing  20.48
      • 1.  Pleadings  20.49
      • 2.  Arbitration Brief  20.50
      • 3.  Opening Statement  20.51
      • 4.  Witness Preparation  20.52
      • 5.  Examination of Opposing Party’s Witnesses  20.53
      • 6.  Closing Arguments  20.54
    • H.  Arbitrator’s Award
      • 1.  Requirements  20.55
      • 2.  Time for Making Award  20.56
      • 3.  Relief Granted  20.57
      • 4.  Correction of Award by Arbitrator  20.58
      • 5.  Collateral Effect of Award
        • a.  Res Judicata  20.59
        • b.  Unconfirmed Award as Contract  20.60
      • 6.  Court Review
        • a.  Confirmation, Vacation, or Correction of Award  20.61
        • b.  Pearson Dental Supplies, Inc. v Superior Court  20.61A
        • c.  Powers of Reviewing Court  20.62
        • d.  Review Procedure  20.63
    • I.  Alternative Arbitration Procedures
      • 1.  High-Low Arbitration  20.64
      • 2.  Baseball Arbitration  20.65
    • J.  Form: Sample Mediation/Arbitration Clause for Employment Agreement  20.66

21

Public Employment Issues

Bonnie Bogue

Erich Shiners

  • I.  LEGAL FRAMEWORK FOR PUBLIC EMPLOYEE COLLECTIVE BARGAINING  21.1
    • A.  State Executive Branch  21.2
    • B.  Local Government  21.3
    • C.  Public Schools  21.4
    • D.  Higher Education  21.5
    • E.  Public Transit  21.6
    • F.  Trial Courts  21.7
    • G.  Judicial Council  21.7A
  • II.  REPRESENTATION RIGHTS AND DUTIES
    • A.  Employees’ Right to Be Represented  21.8
    • B.  Self-Representation Right  21.9
    • C.  Managerial, Supervisory and Confidential Employees  21.10
    • D.  Union’s Right to Represent  21.11
    • E.  Union Access to Employees  21.12
    • F.  Union’s Duty of Fair Representation  21.13
    • G.  Organizational Security  21.14
  • III.  RECOGNITION PROCEDURES  21.15
    • A.  Unit Determination  21.16
      • 1.  Unit Determination Under PERB Regulations  21.17
      • 2.  Unit Determination Under MMBA and Trial Court Acts  21.18
    • B.  Representation Elections and Recognition Procedures  21.19
    • C.  Decertifying the Representative  21.20
  • IV.  COLLECTIVE BARGAINING RIGHTS  21.21
    • A.  Scope of Representation  21.22
    • B.  Duty to Bargain  21.23
      • 1.  Good Faith Bargaining  21.24
      • 2.  Unilateral Action  21.25
    • C.  Impasse Resolution  21.26
      • 1.  Mediation  21.27
      • 2.  Factfinding  21.28
      • 3.  Arbitration of Impasses  21.29
    • D.  Strikes  21.30
      • 1.  Right to Strike  21.31
      • 2.  Enjoining Strikes  21.32
      • 3.  Discipline of Strikers  21.33
    • E.  Agreements  21.34
  • V.  ENFORCEMENT OF STATUTORY RIGHTS AND OBLIGATIONS
    • A.  PERB-Administered Statutes  21.35
      • 1.  PERB Unfair Practice Procedures  21.36
      • 2.  Judicial Review of PERB Decisions  21.37
    • B.  Enforcement of Non-PERB Statutes  21.38
  • VI.  ENFORCEMENT OF CONTRACT RIGHTS  21.39
    • A.  Deferral to Arbitration  21.40
    • B.  Enforcement of Arbitration Awards  21.41
    • C.  Arbitrability  21.42

 

ADVISING CALIFORNIA EMPLOYERS AND EMPLOYEES

(1st Edition)

March 2018

TABLE OF CONTENTS

 

File Name

Book Section

Title

CH01

Chapter 1

Hiring Guidelines and Pitfalls

01-047

§1.47

Notice and Disclosure

01-048

§1.48

Certification to Credit Reporting Agency

01-049

§1.49

Certificate of Compliance by Agency

01-050

§1.50

Notification of Request for Investigative Consumer Report

01-051

§1.51

Authorization to Obtain Investigation Reports

01-052

§1.52

Pre-Adverse Action Disclosure

01-053

§1.53

Summary of Rights Under Fair Credit Reporting Act

01-054

§1.54

Post-Adverse Action Disclosure

01-055

§1.55

Notification of Intent to Procure Investigative Consumer Report

01-075

§1.75

Checklist: Paperwork for New Employees

01-076

§1.76

Checklist: Trade Secret Concerns in Interviewing Applicant

01-077

§1.77

Checklist: Issues to Consider Before Implementing Employee Testing

01-079

§1.79

Applicant’s Statement

01-080

§1.80

Notification of Rejection of Application

01-081

§1.81

Employment Offer Letter

01-082

§1.82

Mutual Agreement to Arbitrate Claims

01-083

§1.83

Authorization for Job-Related Medical Examination and Drug-Testing and for Release of Information

01-084

§1.84

Sample Job Description Questionnaire

01-085

§1.85

Sample Job Description for Receptionist

CH02

Chapter 2

Employment Contracts and Executive Compensation

02-011

§§2.11–2.102

Preamble to Employment Contract

 

§2.13

Recitals

 

§2.19

Term of Employment

 

§2.20

Place of Employment

 

§2.22

Employee’s Duties and Authority

 

§2.25

Outside Business Activities Precluded or Restricted

 

§2.26

Reasonable Time and Effort Required

 

§2.27

Covenant Not to Compete During Employment Term

 

§2.28

Morality Clause

 

§2.30

Consulting Services

 

§2.36

Base Salary

 

§2.37

Adjustment to Base Salary

 

§2.38

Incentive Compensation

 

§2.39

Stock Bonus

 

§2.40

Stock Options

 

§2.41

Cash Bonus

 

§2.42

Commissions

 

§2.43

Royalties

 

§2.44

Deferred Compensation

 

§2.46

Additional Benefits

 

§2.47

Vacation

 

§2.49

Board Membership

 

§2.51

Expense Reimbursement

 

§2.52

Automobile Allowance

 

§2.53

Life Insurance

 

§2.55

Repayment of Compensation Held Excessive

 

§2.57

Ownership of Intangibles

 

§2.61

Proprietary Information Obligations

 

§2.62

Noninterference

 

§2.64

Use of Employee’s Name and Image

 

§2.66

Indemnification by Employer

 

§2.67

Employer-Provided Indemnity Insurance

 

§2.68

Qualification for Surety Bond

 

§2.69

Indemnification by Employee

 

§2.72

Termination of Employment; Termination Date

 

§2.73

Involuntary Termination

 

§2.74

Termination Payment

 

§2.75

Termination of Employment by Employee

 

§2.76

Termination for Cause

 

§2.77

Termination on Resignation

 

§2.78

Termination on Retirement

 

§2.79

Termination Because of Disability

 

§2.80

Termination on Death

 

§2.81

Employer Has Right to Terminate or Assign Agreement

 

§2.82

Agreement Survives Combination or Dissolution

 

§2.83

Rights and Obligations After Notice of Termination

 

§2.84A

Other Benefits

 

§2.84B

IRC §409A

 

§2.86

Arbitration

 

§2.88

Injunction

 

§2.90

Liquidated Damages for Employer

 

§2.91

Liquidated Damages for Employee

 

§2.91A

Statute of Limitations

 

§2.92

Integration

 

§2.93

Choice of Law

 

§2.94

Notices

 

§2.95

Severability

 

§2.96

Employee’s Representations

 

§2.97

Counterparts

 

§2.98

Successors and Assigns

 

§2.99

Attorney Fees

 

§2.100

Amendments

 

§2.101

No Third Party Rights

 

§2.102

Execution

CH03

Chapter 3

Independent Contractors, Leased Workers, and Outsourcing

03-067

§3.67

Sample Independent Contractor Data Sheet

03-068

§3.68

Sample Agreement Between Principal and Independent Contractor

CH04

Chapter 4

Immigration Law Requirements for Employers

04-031

§4.31

Checklist: Establishing Employment Practices that Comply with Immigration Laws

04-032

§4.32

Checklist: Identity and Employment Authorization Documents

CH06

Chapter 6

Vacations, Family and Medical Leave, and Other Time Off

06-010

§6.10

Checklist: Guidelines for Drafting Vacation Policy

06-017

§6.17

Checklist: Guidelines for Drafting Holiday Pay Policy

06-067

§6.67

Notice of Intent to Take Family or Medical Leave

06-139

§6.139

Sample Policy for FMLA/CFRA Leave

06-139A

§6.139A

Sample Policy for Pregnancy Disability Leave

06-141

§6.141

Sample Policy for Personal Leave

06-142

§6.142

Sample Policy for Bereavement Leave

06-143

§6.143

Sample Policy for Leave for Spouses of Military Personnel

CH10

Chapter 10

Employee Handbooks

10-009

§10.9

Employee Handbook Receipt Acknowledgment

10-011

§10.11

Checklist: Potential Inclusions

10-014

§10.14

Equal Opportunity Employment Policy

10-016

§10.16

At-Will Employment Policy

10-018

§10.18

Introductory Period Policy

10-039

§10.39

Performance Standards; Misconduct, Discipline, and Termination

CH11

Chapter 11

Trade Secrets Protection and Unfair Competition

11-018

§11.18

Protective Language for Submissions

11-021

§11.21

Sample Offer or Hire Letter to New Employee

11-032

§11.32

Visitor Log-In

11-033

§11.33

Receipt Acknowledgment

11-034

§11.34

Confidentiality Legend

11-035

§11.35

Sample Approval of Information Release

11-036

§11.36

Notice for Facsimile Transmission

11-038A

§11.38A

Employee Termination Certificate

11-040

§11.40

Letter to Employee Confirming Exit Interview

11-041

§11.41

Letter to New Employer

11-041I

§11.41I

Company Policy for Use of Company Computers, Internet, E-Mail, and Personal or Cloud-Based Electronic Storage Devices

11-076

§11.76

Short Agreement for Protection of Proprietary Information

11-077

§§11.77–11.109

Introductory Provisions

 

§11.78

Definitions

 

§11.79

Duty of Trust and Confidentiality

 

§11.80

No Disclosure or Misappropriation of Proprietary Information

 

§11.81

Assignment of Proprietary Information and Inventions

 

§11.82

Proprietary Right Registrations; Execution of Necessary Documents

 

§11.83

Exception to Assignment of Inventions

 

§11.84

Disclosure of Inventions and Maintenance of Records

 

§11.85

Conflicting Employment or Business Opportunities

 

§11.86

Nonsolicitation of Employees

 

§11.87

Nonsolicitation of Customers

 

§11.88

Noncompetition

 

§11.89

Returning Company Documents and Other Tangible Items

 

§11.90

Reaffirmation of Obligations on Termination of Employment

 

§11.91

Notification to New Employer

 

§11.92

Representations and Warranties

 

§11.93

At-Will Employment

 

§11.94

Equitable Remedies

 

§11.95

Choice of Law

 

§11.96

Enforceability and Severability

 

§11.97

No Waiver

 

§11.98

Attorney Fees

 

§11.99

Amendment and Modification

 

§11.100

Entire Agreement

 

§11.101

Successors and Assigns

 

§11.102

Word Usage

 

§11.103

Exhibits

 

§11.104

Effective Date

 

§11.105

Conclusion

 

§11.106

Execution

 

§11.107

Exhibit A—California Labor Code §2870

 

§11.108

Exhibit B—Existing Inventions and Improvements

 

§11.109

Exhibit C—Termination Certificate

CH12

Chapter 12

Workplace Safety

12-093

§12.93

IIPP Compliance Checklist

12-105

§12.105

Notice to Employees of Right to SDSs

CH13

Chapter 13

Workplace Privacy

13-018

§13.18

Polygraph Consent Form

13-033

§13.33

Sample Computer/E-Mail Usage Policy

13-043

§13.43

Workplace Search Policy

13-066

§13.66

Sample Drug and Alcohol Policy

13-069

§13.69

Sample Consent to Drug and Alcohol Test

13-071

§13.71

Checklist: Questions to Consider Before Implementing Any Form of Employee Testing

13-085

§13.85

Sample Dress and Grooming Policy

13-087

§13.87

Sample Outside Employment Policy

13-089

§13.89

Sample Policy on Employment of Relatives

CH15

Chapter 15

Discrimination and Harassment

15-090A

§15.90A

Acknowledgment of Consensual Relationship

15-104

§15.104

Sample Policy Prohibiting Harassment

15-105

§15.105

Complaint for Harassment

15-107

§15.107

Checklist: Suggested Action Plan for Employer

CH16A

Chapter 16A

Workplace Investigations

16A-011A

§16A.11A

Checklist: Suggested Interview Procedures and Questions

CH17

Chapter 17

Discipline and Termination

17-067

§17.67

Sample At-Will Statement and “After-Acquired Evidence” Clause for Employment Application

17-069

§17.69

Offer Letter

17-071

§17.71

Sample At-Will Provision for Employment Agreement

17-091

§17.91

Discipline Checklist

17-093

§17.93

Termination Checklist

17-112

§17.112

Sample Settlement Agreement and Mutual Release

17-113

§17.113

Short Form Severance Agreement

CH18

Chapter 18

Reductions in Force and Plant Closings

18-008

§18.8

Release

18-019

§18.19

Checklist: RIF Guidelines for Minimizing Litigation Risk

18-039

§18.39

Notice to Employees or Representative re: Mass Layoff

18-040

§18.40

Notice to Chief Elected Government Official, State Dislocated Worker Unit, or Workforce Investment Board re: Mass Layoff

18-041

§18.41

Notice to Chief Elected Government Official or Dislocated Worker Unit re: Plant Closing/Termination or Relocation

CH19

Chapter 19

Insurance Coverage for Employment Claims

19-017

§19.17

Tender of Claim

CH20

Chapter 20

Mediation and Arbitration of Employment Disputes

20-007

§20.7

Checklist: Premediation Steps

20-020

§20.20

Sample Mediated Settlement Agreement

20-066

§20.66

Sample Mediation/Arbitration Clause for Employment Agreement

APP

Appendix

APPENDIX

APP

APP

Workplace Audit Checklist

 

Selected Developments

March 2018 Update

On December 22, 2017, the Tax Cuts and Jobs Act (HR 1) (official title: An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018) was signed by the President and became law. See Pub L 115–97, 131 Stat 2054. This update was too far advanced in production to include an analysis of the Act’s impact on some sections of this book, particularly in chapter 2 (Employment Contracts and Executive Compensation) and chapter 7 (Tax Compliance). For an overview of selected provisions, see Marilyn Barrett, A Summary of HR 1 (aka the Tax Cuts and Jobs Act), 39 CEB Cal Bus L Rep 64 (Jan. 2018).

Chapter 1: Hiring Guidelines and Pitfalls

When and how employers may consider criminal convictions continues to be a hot topic, both nationally and in California. Against this backdrop, AB 1008 amended the Fair Employment and Housing Act (FEHA) to preclude most employers from inquiring about an applicant’s criminal record or conviction history until after a conditional employment offer is made, and imposed new notice and disclosure requirements if this information is sought. See §1.29.

AB 168 added Lab C §432.3, to preclude employers from relying on an applicant’s salary history as a factor in determining whether to offer employment to the applicant and, if so, the salary to offer the applicant. The bill also precludes employers from inquiring orally or in writing, personally or through an agent, about an applicant’s salary history, including about compensation and benefits. See new §1.30A.

Chapter 2: Employment Contracts and Executive Compensation

California courts permit claims for wrongful termination if the employer terminates the employee for a legally impermissible reason, such as if the termination violates a public policy. Shaw v Superior Court (2017) 2 C5th 983. See §2.2.

In Farrar v Direct Commerce, Inc. (2017) 9 CA5th 1257, the court held an arbitration agreement to be substantively unconscionable in one aspect because it was one-sided, given that it excluded any claims arising from a confidentiality agreement the employee had also signed. See §2.6.

Private parties cannot agree in a predispute arbitration agreement to arbitrate claims under the Private Attorneys General Act of 2004 (PAGA) (Lab C §§2698–2699.5), because the state is the real party in interest. Bentacourt v Prudential Overall Supply (2017) 9 CA5th 439. However, whether PAGA claims can ever be arbitrated remains unclear. See Borelli v Black Diamond Aggregates, Inc. (ED Cal, Mar. 21, 2017, No. 2:14-cv-02093-KJM-KJN) 2017 US Dist Lexis 40834 (citing Sakkab v Luxottica Retail N. Am., Inc. (9th Cir 2015) 803 F3d 425 and finding that California Supreme Court expresses no preference regarding whether individual PAGA claims are litigated or arbitrated). Compare Tanguilig v Bloomingdale’s, Inc. (2016) 5 CA5th 665 (finding that because PAGA plaintiff acts as proxy for the state, PAGA claim cannot be ordered to arbitration without state’s consent). See §§2.6, 2.85.

The National Labor Relations Board (NLRB) continues to take the position that arbitration agreements barring class actions violate §7 of the National Labor Relations Act. The circuit courts of appeals have split on this issue (most recently, see NLRB v Alternative Entertainment, Inc. (6th Cir 2017) 858 F3d 393 (agreeing with NLRB); Cellular Sales of Mo., LLC v NLRB (8th Cir 2016) 824 F3d 772 (disagreeing). The United States Supreme Court has agreed to consider this issue in its current term. See §2.85.

An arbitration agreement that waives the right to public injunctive relief is contrary to California policy and is therefore unenforceable under California law. McGill v Citibank, N.A. (2017) 2 C5th 945. See §2.85.

The availability of class arbitration is based on what the parties agreed to in their prearbitration agreement, which is subject to interpretation under state contract law. Sandquist v Lebo Auto., Inc. (2016) 1 C5th 233. See §2.85.

When a court in California must first determine what state law applies in a contractual choice-of-law provision, it will evaluate the choice-of-law question before determining unconscionability. Doe v George St. Photo & Video, LLC (ND Cal, Dec. 19, 2016, No. 16-cv-02698-MEJ) 2016 US Dist Lexis 175329. See §2.93.

Chapter 3: Independent Contractors, Leased Workers, and Outsourcing

Although most federal circuits follow a version of the “economic realities” test for determining joint employment under the FLSA, the Fourth Circuit has held it is the wrong test, because it focuses on the relationship between the employee and the putative employer, rather than on the relationship between the putative joint employers. Salinas v Commercial Interiors, Inc. (4th Cir 2017) 848 F3d 125, 137. See §3.42.

The NLRB takes the position that two or more entities are joint employers of a single workforce if they exercise direct and immediate control over the workforce. Hy-Brand Indus. Contractors, Ltd. (2017) 365 NLRB No. 156. In Hy-Brand, the NLRB overruled its prior decision in Browning-Ferris Indust. of Cal., Inc. (Aug. 27, 2015, No. 32-RC-109684) 2015 NLRB Lexis 672, and stated that the new standard “serves labor law and collective bargaining well,” and is a standard that is “understandable and rooted in the real world.” Direct and immediate control is a prerequisite to a finding of joint employer status. See §3.44.

In 2017, the U.S. Secretary of Labor withdrew the Department of Labor’s 2015 and 2016 informal guidance on independent contractors and joint employment. However, this withdrawal does not change any requirements for employers under federal or state law. It likely represents the Department of Labor’s acquiescence to state labor departments’ pursuits of misclassification claims, as many state labor departments work with the U.S. Department of Labor concerning employee misclassification issues. See §3.48.

Chapter 4: Immigration Law Requirements for Employers

Fines for violations have been updated. See §§4.23, 4.24, 4.27, 4.39.

In October 2017, Governor Brown signed AB 450 (Stats 2017, ch 492) into law. Designated the California Immigrant Worker Protection Act, it adds new Govt C §§7285.1, 7285.2, and 7285.3 and Lab C §§90.2 and 1019.2. The law became effective January 1, 2018, and imposes a number of requirements on employers vis-à-vis enforcement actions by federal immigration agents. The law contains four general provisions: worksite access, records access, notice, and reverification. See new §4.30B.

There is one important caveat when applying to change nonimmigrant status: If a petition is submitted within 90 days after admission in another nonimmigrant visa status, the change of status may be denied, because under a State Department rule there is a presumption of willful mispresentation of intent to engage in status-compliant activity only. This was previously a 60-day rule; the 90-day rule became effective September 1, 2017. See §4.44.

In late 2017, in a reversal of prior practice, USCIS began denying Form I-131 Advance Parole applications where the applicant departs the United States while the I-131 application is pending. See §4.85.

Chapter 5: Wage and Hour Laws

In Goonewardene v ADP, LLC (review granted Feb. 15, 2017, S238941; superseded opinion at 5 CA5th 154), the California Supreme Court will decide: Does the aggrieved employee in a lawsuit based on unpaid overtime have viable claims against the outside vendor that performed payroll services under a contract with the employer? See §5.13.

California wage and hour laws apply to nonresidents of California who perform any work in the state. Sullivan v Oracle Corp. (2011) 51 C4th 1191 (residents of other states who perform work in California for California-based employer may pursue claims for overtime compensation under California law). California law also applies to employees that are undocumented aliens or that lack proper work authorization. Kao v Joy Holiday (2017) 12 CA5th 947, 955. See §5.13.

As of January 1, 2018, employers are prohibited from using an applicant’s salary history as a factor in deciding whether to offer employment, or the salary to offer the applicant. Lab C §432.3(a). See new §5.13A.

As of January 1, 2018, for any employee who is licensed under the Barbering and Cosmetology Act (Bus & P C §§7301–7426.5), which generally includes barbers, cosmetologists, estheticians, manicurists, and electrologists, wages that are paid to that employee for providing services for which such a license is required, when paid as a percentage or a flat sum portion of the sums paid to the employer by the client, and for selling goods, shall constitute commissions, provided that the employee is paid a regular base hourly rate of at least two times the state minimum wage rate for all hours worked in addition to commissions paid. Lab C §204.11. See §§5.13C, 5.17.

A “knowing and intentional failure” does not include an isolated and unintentional payroll error due to a clerical or inadvertent mistake. In Kao v Joy Holiday (2017) 12 CA5th 947, 961, the court held that an employer that knew it initially provided no wage statements to an employee, and later provided statements that did not contain the hours worked and rate of pay, engaged in a knowing and intentional violation. See §5.14B.

No vacation pay is owed when the employer requires a waiting period before vacation pay begins to accrue. The court of appeal reaffirmed this rule in Minnick v Automotive Creations, Inc. (2017) 13 CA5th 1000 (upholding employer policy that employees earned 1week of vacation after completion of 1 year of service, but did not earn or accrue vacation during first year). See §5.16.

The California minimum wage will increase from $11.00 per hour to $15.00 per hour between January 1, 2018, and January 1, 2023, depending on the size of the employer’s workforce. See §5.17.

In Douglas v Xerox Bus. Servs., LLC (9th Cir 2017) 875 F3d 884, the Ninth Circuit concluded that although employees may have earned less than the minimum wage in some hours due to Xerox’s “mind-numbingly complex payment plan,” the employer actually did comply with the FLSA when the workweek as a whole was evaluated. See §5.17.

In Vaquero v Stoneledge Furniture, LLC (2017) 9 CA5th 98, the court held that sales employees who are paid on commission under Wage Order No. 7–2001 (8 Cal Code Regs §11070) are entitled to receive separate compensation for rest periods. See §5.17.

Meal and lodging credits against the minimum wage have been updated. See §5.21.

In Brunozzi v Cable Communications, Inc. (9th Cir 2017) 851 F3d 990, the Ninth Circuit held that an employer violated the FLSA by paying piece-rate employees a “bonus” that was reduced for each overtime hour worked. See §5.32.

Over the course of a 4-year period commencing January 1, 2019, agricultural employees will receive on a phased-in basis the same rights to daily and weekly overtime as most other California employees. See §5.42.

AB 46 amended Lab C §1197.5 in 2017 to clarify that the “employer” subject to the Equal Pay Act means both public and private employers, but public employers are exempt from the statutory and misdemeanor penalties identified in Lab C §1199. See §5.42A.

In Oregon Restaurants & Lodging v Perez (9th Cir 2016) 816 F3d 1080, the court upheld the Department of Labor’s 2011 amendments to 29 CFR §§531.52, 531.54, 531.59, which prohibit employers, regardless of whether they take a tip credit, from requiring customarily tipped employees to participate in a tip pool that includes customarily nontipped employees. Compare the recent case of Marlow v New Food Guy, Inc. (10th Cir 2017) 861 F3d 1157, in which the 10th Circuit held that an employer that paid employees an hourly rate equal to or greater than minimum wage could retain their tips, and the DOL did not have authority to promulgate 29 CFR §531.52. On July 20, 2017, the DOL announced that it would no longer enforce the 2011 amendments and that it would be rescinding the amended regulations in the future. See §5.44.

In Frlekin v Apple, Inc. (9th Cir 2017) 870 F3d 867, 869, the Ninth Circuit certified the following question to the California Supreme Court: Is time spent on the employer’s premises waiting for, and undergoing, required exit searches of packages or bags voluntarily brought to work purely for personal convenience by employees compensable as “hours worked” within the meaning of Wage Order No. 7–2001 (8 Cal Code Regs §11070)? See §5.47.

No employer may require an employee to work during any rest period mandated by an applicable order of the Industrial Welfare Commission. Lab C §226.7(b). In Augustus v ABM Sec. Servs., Inc. (2016) 2 C5th 257, the California Supreme Court held that employees must be relieved of all duties during rest periods. Employers must relinquish any control over how employees spend their breaks. On-duty or on-call rest periods, such as those requiring employees to monitor pagers, radios, or phones, are not permitted. “A rest period, in short, must be a period of rest.” See §5.48.

In Vaquero v Stoneledge Furniture, LLC (2017) 9 CA5th 98, the court held that sales employees who are paid on commission under Wage Order No. 7–2001 (8 Cal Code Regs §11070) are entitled to receive separate compensation for rest periods. The employer had kept track of hours worked, including rest periods, and paid a guaranteed minimum hourly rate as an advance on commissions earned in later pay periods. However, that did not satisfy the employer’s obligation, because the formula for determining commissions did not include any component that directly compensated the employees for rest periods. Thus, employees incorrectly received the same amount of compensation regardless of whether they took rest periods. See §5.48.

In Gerard v Orange Coast Mem. Med. Ctr. (review granted July 12, 2017, S241655; superseded opinion at 9 CA5th 1204), the California Supreme Court will decide: (1) Did Senate Bill 327 (concerning health care employee meal period waivers) constitute a change in the law or a clarification in the law? (2) Is Wage Order No. 5–2001, §11(D) (8 Cal Code Regs §11050(11)(D)) partially invalid to the extent it authorizes health care workers to waive their second meal periods on shifts exceeding 12 hours? (3) To what extent, if any, does the language of Lab C §516 regarding the “health and welfare of those workers” affect the analysis? See §5.48.

In Silva v See’s Candy Shops, Inc. (2017) 7 CA5th 235, the court affirmed summary adjudication in favor of the employer on the plaintiff’s claims challenging the employer’s rounding and grace period policies. In addition to rounding timeclock entries up or down to the nearest six minutes (or 1/10th of an hour), the employer also allowed employees on a voluntary basis to punch in up to 10 minutes prior to their scheduled start time and punch out up to 10 minutes after their scheduled end time. Employees were paid based on their scheduled start and end times. The employer prohibited employees from working during the 10-minute grace periods. If, however, an employee was asked to perform work during a grace period, the manager would make a timekeeping adjustment to ensure the employee was properly paid. See §5.54C.

In Mendoza v Nordstrom, Inc. (2017) 2 C5th 1074, the California Supreme Court answered three certified questions from the Ninth Circuit as follows:

  • 1.

    A day of rest as required by Lab C §§551 and 552 is guaranteed for each workweek. Periods of more than 6 consecutive days of work that stretch across more than 1 workweek are not prohibited, but Lab C §554(a) requires that over the course of every calendar month, an employee must receive “days of rest equivalent to” 1 day’s rest in 7.

  • 2.

    The exemption in Lab C §556 for employees working shifts of 6 hours or less applies only to those who never exceed 6 hours of work on any day of the workweek. If on any 1 day an employee works more than 6 hours, a day of rest must be provided during that workweek, subject to other possible exceptions which may apply.

  • 3.

    An employer causes an employee to go without a day of rest when the employer induces the employee to forgo rest to which he or she is entitled. An employer may permit or allow an employee, fully apprised of the entitlement to rest, independently to choose not to take a day of rest.

Following the California Supreme Court’s decision, the Ninth Circuit in Mendoza v Nordstrom, Inc. (9th Cir 2017) 865 F3d 1261, affirmed the district court’s dismissal of the claims because neither plaintiff worked more than 6 consecutive days in any 1 workweek. See §5.55.

Nonmonetary benefits may not be included in the determination of whether an employee is paid the minimum salary. Kao v Joy Holiday (2017) 12 CA5th 947. See §5.56.

The executive exemption applies to any employee who, among other requirements, is primarily engaged in duties that meet the test of the exemption. In Batze v Safeway, Inc. (2017) 10 CA5th 440, 478, the court held that an employer need not provide an accounting of a manager’s activities for every workweek; inferences may be drawn from activities in the surrounding weeks to show that the manager was primarily engaged in exempt tasks. See §5.57.

See the Note in §5.62 for the current status of the Department of Labor’s “Final Rule.”

Hourly and salary exemption amounts have been updated to reflect 2018 requirements. See §§5.59–5.60.

Agreeing with the Second Circuit, but disagreeing with the Sixth Circuit, in McKeen-Chaplin v Provident Sav. Bank (9th Cir 2017) 862 F3d 847, the Ninth Circuit held that mortgage underwriters did not meet the administrative exemption requirements, because their duties went to the heart of the bank’s marketplace offerings, not to the internal administration of the bank. See §5.71.

In Freixa v Prestige Cruise Servs. (11th Cir 2017) 853 F3d 1344, the court held that an employer may not allocate an employee’s commissions to hours worked outside the periods in which the commissions were earned. See new §5.77A about commissioned employees who are exempt from federal overtime.

On remand from the U.S. Supreme Court, the Ninth Circuit held in Navarro v Encino Motorcars, LLC (2017) 845 F3d 7925 that a car dealership’s service advisors were not exempt from overtime, because they did not sell cars, stock parts, or perform mechanical work on cars. However, on September 28, 2017, the U.S. Supreme Court granted certiorari in Encino Motorcars, LLC v Navarro (2017) 198 L Ed 2d 780, to decide whether service advisors are exempt from overtime under 29 USC §213(b)(10)(A). See §5.80.

When an employer reimburses employee business expenses by paying enhanced compensation in the form of increases in base pay or commission rates, the employer is required to “communicate to employees the method or means of identifying the portion of compensation that is intended to provide expense reimbursement at or near the time of compensation.” Espejo v The Copley Press, Inc. (2017) 13 CA5th 329, 363. See §5.89A.

Labor Code §98.7 authorizes the Labor Commissioner to investigate discrimination and retaliation claims and order certain relief after an investigation and determination. SB 306 expanded these powers effective January 1, 2018, by authorizing the Labor Commissioner to proceed without a complaint: (1) in instances where suspected retaliation has occurred during the course of adjudicating a wage claim under Lab C §98; (2) during a field inspection pursuant to Lab C §90.5; or (3) in instances of immigration-related threats in violation of Lab C §§244, 1019, or 1019.1. See §5.90.

In OTO, L.L.C. v Kho (review granted Nov. 29, 2017, S244630; superseded opinion at 14 CA5th 691), the California Supreme Court will decide the following issues: (1) Was the arbitration remedy at issue in this case sufficiently “affordable and accessible” within the meaning of Sonic-Calabasas A, Inc. v Moreno (2013) 57 C4th 1109 to require the company’s employees to forego the right to an administrative Berman hearing on wage claims? (2) Did the employer waive its right to bypass the Berman hearing by waiting until the morning of that hearing, serving a demand for arbitration, and refusing to participate in the hearing? See §5.90.

In Stratton v Beck (2017) 9 CA5th 483, the court of appeal affirmed the trial court’s award of $31,365 in attorney fees against an employer that unsuccessfully appealed the Labor Commissioner’s award of $304 in unpaid wages plus $5,757 in liquidated damages, interest, and penalties. See §5.90.

In Cortez v Doty Bros. Equip. Co. (2017) 15 CA5th 1, the court held that when a collective bargaining agreement unmistakably required arbitration of claims arising under a Wage Order, that necessarily included parallel Labor Code provisions to enforce that Wage Order, such as claims for overtime, meal and rest breaks, reporting, and recordkeeping. See §5.92.

However, a broadly drafted arbitration provision will not ordinarily require arbitration or preclude a lawsuit. See Vasserman v Henry Mayo Newhall Mem. Hosp. (2017) 8 CA5th 236, 247 (collective bargaining agreement did not include explicitly stated, clear, and unmistakable waiver of judicial forum for employees’ statutory claims); §5.92.

In Voris v Lampert (review granted July 12, 2017, S241812; superseded opinion at 2017 Cal. App. Unpub. Lexis 2163 (Mar. 28, 2017)), the California Supreme Court will decide: Is conversion of earned but unpaid wages a valid cause of action? See §5.92.

In Williams v Superior Court (2017) 3 C5th 531, the California Supreme Court held that a plaintiff in a representative statewide action under PAGA is entitled to discovery of the names and contact information of other “aggrieved employees” at the beginning of the proceeding, without any showing of good cause. The court rejected the argument that providing home contact information of other employees—which “is generally considered private”—compelled a prohibition or limitation on discovery, such as requiring other employees to opt in. Such a limitation “may significantly hamper the ability of aggrieved employees, deputized by the state, to assist in broad and effective enforcement of the labor laws.” 3 C5th at 555. Instead, the court endorsed issuance of Belaire-West opt-out notices to other employees. See §§5.93, 5.97.

An arbitration agreement that purports to waive the statutory right to seek injunctive relief in any forum, as permitted by various California statutes, is contrary to California public policy, not preempted by the FAA, and thus unenforceable. McGill v Citibank, N.A. (2017) 2 C5th 945. See §5.93A.

In Sandquist v Lebo Automotive, Inc. (2017) 1 C5th 233, the court held that an arbitration provision that did not specify whether the availability of class arbitration was to be resolved by a court or the arbitrator had to be interpreted against the employer as the drafter of the provision, pursuant to CC §1654, when the employee argued that the issue was for the arbitrator to decide. See §5.93A.

An employee may be required to arbitrate claims against a nonsignatory employer under the doctrine of equitable estoppel. In Garcia v Pexco (2017) 11 CA5th 782, the employee had entered into an arbitration agreement with his primary employer, a temporary staffing agency. He then sued both the agency and Pexco, a company to which the agency had assigned him. When Pexco moved to compel arbitration, the employee asserted that he was not bound to arbitrate the claims against Pexco because it was not a signatory to his agreement with the agency. Under the doctrine of equitable estoppel, a nonsignatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate claims that are “intimately founded in and intertwined with his employment relationship” with the signatory defendant. 11 CA5th at 787. Additionally, given that the employee alleged that Pexco and the signatory defendant were agents of one another and every cause of action alleged identical claims against all defendants, the court held that the agency exception applied to bind the employee to arbitrate his claims against Pexco. See §5.93A.

In Julian v Glenair, Inc. (2017) 17 CA5th 853, the court held that an agreement to arbitrate a PAGA claim, entered into before an employee is statutorily authorized to bring such a claim on behalf of the state, is an unenforceable predispute waiver. An employee may not agree to arbitrate a PAGA claim until the Labor and Workforce Development Agency (LWDA) notifies the employer and the aggrieved employee that it does not intend to investigate the alleged violation or the agency’s time period to provide such notice has expired. See §5.97.

In Esparza v KS Indus., L.P. (2017) 13 CA5th 1228, the court concluded that for purposes of the Iskanian rule (Iskanian v CLS Transp. Los Angeles, LLC (2014) 59 C4th 348), PAGA representative claims for civil penalties are limited to those where a portion of the recovery is allocated to the LWDA, but claims for unpaid wages or other remedies that are not allocated in this manner are not exempted from arbitration under Iskanian. See §5.97.

In Hernandez v Ross Stores, Inc. (2017) 7 CA5th 171, the court held that an employer may not compel an employee to arbitrate individual aspects of a PAGA claim while maintaining a representative action in court. See also Betancourt v Prudential Overall Supply (2017) 9 CA5th 439; §5.97.

For contracts entered into on or after January 1, 2018, a direct contractor that erects, constructs, alters, or repairs a building, structure, or other private work is liable for any debt owed to a wage claimant (including unpaid wages, benefits, and interest, but not penalties or liquidated damages) for any labor of a subcontractor on the project. Lab C §218.7(a). The Labor Commissioner may bring a civil action to enforce that liability or use the procedures set forth in Lab C §98 or Lab C §1197.1. A third party owed fringe or other benefit payments on a wage claimant’s behalf may bring a civil action. Lab C §218.7(b). See new §5.100E.

In Arias v Raimondo (9th Cir 2017) 860 F3d 1185, the Ninth Circuit held that an undocumented alien could pursue an FLSA retaliation claim against his employer’s attorney, who sought to have the employee deported before the trial of the employee’s wage and hour claims. See §5.103.

Chapter 6: Vacations, Family and Medical Leave, and Other Time Off

An employer may adopt a policy that no vacation accrues during the first year of employment (or any other period), as long as the policy is not a pretense. Although vacation pay cannot be taken away once earned, an employer may control when the vacation benefit begins to accrue. Thus, if an employer’s policy is clearly stated, the employer may provide a waiting period before employees become eligible to earn vacation. Minnick v Automotive Creations, Inc. (2017) 13 CA5th 1000. See §6.2.

The New Parent Leave Act (Govt C §12945.6) became effective January 1, 2018. It require employers with 20 to 49 employees to provide up to 12 workweeks of job-protected leave for an employee to bond with a new child within 1 year of the child’s birth, adoption, or foster care placement. For discussion of the Act’s provisions, see new §§6.30A–6.30G.

A plaintiff can show “continuing treatment” under the Family and Medical Leave Act (FMLA) and California Family Rights Act (CFRA) in more than one way. See Soria v Univision Radio Los Angeles, Inc. (2016) 5 CA5th 570, 602. See §6.46.

Regardless of whether the employee’s need for leave is foreseeable or unforeseeable, the basic rule is that an employee’s notice must be sufficient to make the employer aware that the employee needs potentially FMLA- or CFRA-qualifying leave. See Bareno v San Diego Community College Dist. (2017) 7 CA5th 546, 566 (physician’s note placing employee “Off Work” and including onset date for condition and probable duration is sufficient notice under CFRA). See also Moore v Regents of Univ. of Cal. (2016) 248 CA4th 216, 249 (informing employer of need to take leave for surgery to implant device for heart condition was sufficient notice of need for CFRA-qualifying leave). See §6.65.

In Bareno v San Diego Community College Dist. (2017) 7 CA5th 546, the court of appeal concluded that it was error for the trial court to grant summary judgment to the college on an employee’s claim of retaliation under the CFRA. The court held that the question of whether notice is sufficient under the CFRA is a question of fact, and it found there were at least three disputed issues of material fact. See §6.66.

The penalty for a willful failure to post the FMLA notice has been increased from $110 to $166 for each separate violation. See §6.96.

AB 1710, enacted in 2017, amended Mil & V C §394 to include within its prohibitions discrimination in the terms, conditions, or privileges of employment. The amendment was intended to ensure that military service members are protected from a hostile work environment. See §6.126.

Members of the National Urban Search and Rescue Response System are considered part of the “uniformed services” for purposes of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). See §6.127.

An employer may compel arbitration of a returning service member’s claims under USERRA. Ziober v BLB Resources, Inc. (9th Cir 2016) 839 F3d 814. See also Ziober v BLB Resources, Inc. (9th Cir 2016) 839 F3d 814, 817 (USERRA does not supersede arbitration clauses in employment agreements when those clauses do not reduce, limit, or eliminate rights under USERRA). See §6.134.

As reported in last year’s update, effective January 1, 2017, an employer having 25 or more employees must inform each new employee of his or her right under Lab C §§230(c), (e), and (f) and 230.1 to take protected time off because of domestic violence, sexual assault or stalking. New employees must be notified of this right on hire, and current employees on request. The Labor Commissioner has since developed a form for this purpose. See §6.137.

Chapter 9: Notice-Posting, Training, and Recordkeeping Requirements

The Department of Industrial Relations has issued a new minimum wage poster for workplaces (MW-2017). See §9.13.

Effective January 1, 2018, all employers are required to display a poster about the workplace rights of transgender individuals. The poster, DFEH– EO4P, is available at https://www.dfeh.ca.gov/wp-content/uploads/sites/32/2017/11/DFEH_E04P-ENG-2017Nov.pdf. See §9.35.

FEHA presently requires employers with 50 or more employees to provide at least two hours of sexual harassment prevention training and education regarding sexual harassment and abusive workplace conduct to all supervisory employees within six months of hire or promotion and once every two years. SB 396 amended Govt C §12950.1 to require this training to include the prevention of harassment based on gender identity, gender expression, and sexual orientation. See §9.61.

A new §9.61A has been added, describing sexual harassment prevention requirements that apply to farm labor contractors.

Chapter 11: Trade Secrets Protection and Unfair Competition

The Defend Trade Secrets Act (DTSA) may be asserted when the alleged trade secrets misappropriation occurs outside the state boundaries and California’s version of the Uniform Trade Secrets Act (UTSA) does not reach the unlawful conduct because the bar of the “extraterritorial” doctrine may apply. See Cave Consulting Group, Inc. v Truven Health Analytics Inc. (ND Cal, Apr. 24, 2017, No. 15-cv-02177-SI) 2017 US Dist Lexis 62821. See §11.1A.

The DTSA does not apply to acts of misappropriation (disclosure and use) that occurred before the enactment of the statute. Cave Consulting Group, Inc., supra; Avago Technols. United States Inc. v NanoPrecision Prods., Inc., (ND Cal, Jan. 31, 2017, No. 16-cv-03737-JCS) 2017 US Dist Lexis 13484. Some courts have held, however, that a DTSA claim can be asserted if the wrongful acquisition of the trade secret occurred before the statute was enacted, but the disclosure or use occurred after the DTSA became law. See Sleekez, LLC v Horton (D Mont, Apr. 21, 2017, CV 16-09-BLG-SPW-TJC) 2017 U.S. Dist. LEXIS 71410. See §11.1A.

The existence of the DTSA does not preempt or preclude a companion trade secret misappropriation claim under a state-law version of the UTSA. See VIA Technols., Inc. v ASUS Computer Int’l (ND Cal, Feb. 7, 2017, No. 14-cv-03586-BLF) 2017 US Dist Lexis 45998. See §11.1A.

Since the DTSA applies only to services or products used, or intended for use, in interstate or foreign commerce, a DTSA claim may be challenged at the summary judgment (but not the pleading stage), for lack of the court’s subject matter jurisdiction. See Garfield Beach CVS LLC v Mollison Pharmacy (SD Cal, Aug. 22, 2017, No. 17-cv-00879-AJB-MDD) 2017 US Dist Lexis 135322. See §11.1A.

The DTSA uses the same statutory definition of “trade secret misappropriation,” and applies the same analysis, as the existing California version of the UTSA. Waymo LLC v Uber Technols., Inc. (ND Cal, May 15, 2017, No. C 17-00939-WHA) 2017 US Dist Lexis 73843; Veronica Foods Co. v Ecklin, (ND Cal, June 29, 2017, No. 16-cv-07223-JCS, 2017 US Dist Lexis 101325. See §11.1A.

The DTSA rejects the “inevitable disclosure” doctrine, just like California law. See Waymo LLC v Uber Technols., Inc. (ND Cal, Nov. 2, 2017, No. C 17_00939 WHA) 2017 US Dist Lexis 183688; §11.1A.

An actual showing of irreparable harm is necessary to obtain injunctive relief under the DTSA. See First W. Capital Mgmt. Co. v Malamed (9th Cir 2017) 874 F3d 1136. See §11.1A.

One recent decision held that a private right of action for “conspiracy” in the theft of trade secrets cannot be asserted under the DTSA. See Steves and Sons, Inc. v Jeld-Wen, Inc. (ED Va, Sept. 13, 2017, No. 3:16cv545) 2017 US Dist Lexis 148461. See §11.1A.

In Kapu Gems v Diamond Imports, Inc. (ND Cal, Aug. 12, 2016, No. 15-cv-03531-MMC) 2016 US Dist Lexis 107091, the court held that a special pricing list for certain customers was a trade secret. See §11.3.

Competitors often already have the same or overlapping customers, or lists of prospective customers, and that fact will make it much more difficult to claim that customer information is a trade secret of one competitor over another. See Beaulieu Group, LLC v Bates(CD Cal, Oct. 18, 2016, No. EDVC 15-1090 JGB (KKx)) 2016 US Dist Lexis 187630; §11.5.

Aggrieved employers may seek provisional injunctive relief for trade secret misappropriation from the courts even if the arbitration process of the Financial Industry Regulatory Authority (FINRA) applies to adjudicate the underlying claims. See Fidelity Brokerage Servs, LLC v Rocine (ND Cal, Sept. 7, 2017, No. 17-cv-4993-PJH) 2017 US Dist Lexis 145193. See §11.5B.

Alleging the mere possession of trade secrets is not enough; the misappropriating party must actually use the trade secrets for a claim to arise. Beaulieu Group, LLC v Bates (CD Cal, Oct. 18, 2016, No. EDVC 15-1090 JGB (KKx)) 2016 US Dist Lexis 187630. See §11.7A.

The constitutional right to publish anonymously is an aspect of the freedom of speech protected by the First Amendment. Thus, a plaintiff seeking discovery of the anonymous person’s identity must first make a prima facie showing that the post or commentary is defamatory. Yelp v Superior Court (2017) 17 CA5th 1; ZL Technols., Inc. v Does 1-7 (2017) 13 CA5th 603, 612. See §11.41D.

Restraints on the ability to compete after an agreement terminates—even only for a limited geographical region—are void under Bus & P C §16600. Artec Group v Klimov (ND Cal, Dec. 22, 2016, No. 15–cv–03449–RMW) 2016 US Dist Lexis 170194. See §11.52.

In Synthes, Inc. v Knapp (ED Cal 2017) 250 F Supp 3d 644, the action was originally filed in Pennsylvania district court and transferred to California under 28 USC §1404. The California district court applied Pennsylvania law to decide the plaintiff’s breach of nondisclosure agreement, breach of noncompete agreement, and breach of fiduciary duty and trade secrets claims. See §11.55.

Recent decisions in many jurisdictions (including California) have found UTSA preemption even when trade secret misappropriation is not specifically alleged or asserted in the complaint. See Avago Technols. United States Inc. v NanoPrecision Prods., Inc., (ND Cal, Jan. 31, 2017, No. 16-cv-03737-JCS) 2017 US Dist Lexis 13484 (UTSA preemption extends to claims based on misappropriation of confidential and proprietary information, regardless of whether it qualifies as trade secret). See §11.61A.

In Ixchel Pharma, LLC v Biogen Inc. (ED Cal, Sept. 12, 2017, No. 2:17-00715 WBS EFB) 2017 US Dist Lexis 147742, the court concluded there was no viable UCL claim absent a showing of actual or threatened harm to competition. See §11.62.

An employer-employee relationship, without more, is not a fiduciary relationship. Nevertheless, an employee (even one in a lower-level position) has similar duties of loyalty to the employer under principles of agency law. E.D.C. Technols., Inc. v Seidel (ND Cal 2016) 216 F Supp 3d 1012. See §11.68.

The Computer Fraud and Abuse Act (CFAA) provides two ways of committing a statutory violation of improperly accessing a protected computer: (1) obtaining access without authorization, and (2) obtaining access with authorization and then using that access improperly. Musacchio v United States (2016) 577 US __, 136 S Ct 709; hiQ Labs, Inc. v LinkedIn Corp. (ND Cal, Aug. 14, 2017, No 17-cv-03301-EMC) 2017 US Dist Lexis 129088. See §11.74.

The CFAA does not give rise to liability when an employee is authorized to access information while employed and later misuses the information, because it governs unauthorized access rather than use. Physician’s Surrogacy, Inc. v German (SD Cal, Aug. 23, 2017, No. 17 CV 0718-MMA) 2017 US Dist Lexis 135325. See §11.74.

The CFAA is not to be used or construed as a trade secret “misappropriation” statute, although lawyers have attempted to treat it as one in order to get their cases into federal court. See Physician’s Surrogacy, Inc. v German, (SD Cal, Aug. 23, 2017, No. 17 CV 0718-MMA) 2017 US Dist Lexis 135325 (“The CFAA is not meant to serve as a supplement or replacement for misappropriation claims”); §11.74.

Chapter 12: Workplace Safety

The Occupational Safety and Health Standards Board has approved several new regulations of significance. These include those regarding Respiratory Crystalline Silica (8 Cal Code Regs §§1532.3, 5155, 5204); Exposure to Beryllium (8 Cal Code Regs §§1535.1, 5155, 5205, 8359.1); Workplace Violence Prevention in Healthcare (8 Cal Code Regs §3342); and Process Safety Management for Petroleum Refiners (8 Cal Code Regs §5189.1). See §12.1A.

Civil penalties associated with Cal/OSHA citations have increased in some cases, as outlined by Lab C §§6427–6430 and 8 Cal Code Regs §336. See §§12.53, 12.56.

Chapter 15: Discrimination and Harassment

Under the Tax Cuts and Jobs Act (Pub L 115–97, 131 Stat 2054), no deduction is allowed for any settlement, payout, or attorney fees related to sexual harassment or sexual abuse, if such payments are subject to a nondisclosure agreement. IRC §162(q). This provision is effective for amounts paid or incurred after the date of enactment (December 22, 2017). See §15.103.

Chapter 16: Whistleblower Issues

Health and Safety Code §1278.5 has been amended to provide expanded protections for doctors and other medical staff who report quality-of-care concerns at health care facilities. The statute also prohibits discrimination and retaliation against a patient, employee, member of the medical staff, or any other health care worker of a health facility because that person has presented a grievance, complaint, or report to the facility, or has initiated, participated, or cooperated in an investigation or administrative proceeding related to the quality of care, services, or conditions at the facility. The amendment also increases the maximum fine for a misdemeanor violation of §1278.5 from $25,000 to $75,000. See §§16.2, 16.12.

The Ninth Circuit issued an opinion setting forth the standards for pleading plausible claims under Fed R Civ P 12(b)(6) in whistleblower cases filed under the False Claims Act in United States ex rel Campie v Gilead Sciences (9th Cir 2017) 862 F3d 890. In Campie, former employees of defendant Gilead Sciences alleged that Gilead made false claims regarding its compliance with Food and Drug Administration regulations about certain HIV drugs. The Ninth Circuit identified three theories for pleading violations of the FCA: (1) factual falsity; (2) implied false certification; and (3) promissory fraud. See §16.3.

The Department of Veteran Affairs Accountability and Whistleblower Protection Act of 2017 (Pub L 115–41, 131 Stat 862) created an office to look into claims made by whistleblowers at the VA and to protect them from retaliation. This Act allows the VA to take back bonuses paid to employees found guilty of misconduct and prohibits employees who are appealing discipline from being placed on paid administrative leave. See §16.8.

In Williams v Superior Court (2017) 3 C5th 531, the California Supreme Court held that an employee bringing a PAGA claim was entitled to discovery of the identity of all other employees statewide. See §16.8.

Effective January 1, 2018, amendments to Lab C §98.7 empower employees in whistleblower cases to obtain injunctions under a relaxed standard, and put the burden on employers to vacate the Labor Commissioner’s findings. See also Lab C §§1106.61–1106.62. See §§16.8, 16.9A.

Chapter 17: Discipline and Termination

In a recent Ninth Circuit decision, the court affirmed the district court’s order denying the defendant’s motion to dismiss a whistleblower claim brought under the Dodd-Frank Act’s antiretaliation provision (15 USC §78u-6(h)(1)(A)(iii)), reasoning that in using the term “whistleblower,” Congress did not intend to limit protections to those who disclosed information to the Securities and Exchange Commission (SEC), but rather, the antiretaliation provision also protected those who were fired after making internal disclosures of alleged unlawful activity under the Sarbanes-Oxley Act and other laws, rules, and regulations. Somers v Digital Realty Trust, Inc. (9th Cir 2017) 850 F3d 1045. This puts the Ninth Circuit at odds with the Fifth Circuit. See Asadi v G.E. Energy (USA), L.L.C. (5th Cir 2013) 720 F3d 620 (only report to SEC qualifies as whistleblowing). The Supreme Court has since granted certiorari in Somers. See Digital Realty Trust, Inc. v Somers (June 26, 2017, No. 16-1276) 2017 US Lexis 4190. See §17.4.

Chapter 18: Reductions in Force and Plant Closings

The occurrence of a plant closing or mass layoff depends on an “employment loss” as that term is used in the federal Worker Adjustment and Retraining Notification Act (WARN) (29 USC §§2101–2109), which defines it as applicable only to (29 USC §2101(a)(6))

  • Any employment termination that is not a discharge for cause, voluntary departure, or retirement;

  • A layoff of more than 6 months; or

  • A reduction in individual employees’ work hours of more than 50 percent during each month of any 6-month period.

California WARN (Lab C §§1400–1408), our state’s counterpart to the federal act, is triggered by a “layoff,” which is defined as “a separation from a position for lack of funds or lack of work.” Lab C §1400(c). Unlike the federal WARN, California’s act does not include a time component. In International Bhd. of Boilermakers, etc. v NASSCO Holdings, Inc. (2017) 17 CA5th 1105, the employer laid off about 90 employees for a period of approximately 4–5 weeks. The employer did not provide notice of the layoff to its employees, and when the employees sued, the employer argued that California WARN did not apply because the layoff was temporary only. The court rejected that argument. Under California WARN, a “separation from a position” can be permanent or temporary. There is no reasonable basis to conclude that a 4–5 week layoff does not constitute a “separation from position,” but a 6–7 month layoff does. The legislative history and underlying public policy support the conclusion that an employer has the obligation to provide notice even if the intended layoff is temporary and short term. See §18.29.

Chapter 19: Insurance Coverage for Employment Claims

An order for payment of wages unlawfully withheld from an employee is a restitutionary remedy. Espejo v The Copley Press, Inc. (2017) 13 CA5th 329, 341 n.7. See §19.12.

Chapter 21: Public Employment Issues

Effective January 1, 2018, certain employees of the Judicial Council of California have collective bargaining rights under the Judicial Council Employer-Employee Relations Act (JCEERA) (Govt C §§3524.50–3524.81). See new §21.7A.

Jurisdiction of the Public Employment Relations Board (PERB) over local government agencies does not extend to the City of Los Angeles or County of Los Angeles, which have created local employment relations bodies with powers and procedures similar to PERB’s, including procedures for hearing “unfair practice” charges. Judicial review of a local board’s decision may be sought through a writ of mandamus under CCP §1094.5. City of Los Angeles v City of Los Angeles Employee Relations Bd. (2016) 7 CA5th 150. See §21.38.

About the Authors

BONNIE BOGUE (Chapter 21: Public Employment Issues) has been an arbitrator and mediator since 1977 and is a member of the National Academy of Arbitrators. Formerly director of the California Public Employee Relations Program at the University of California, Berkeley, she contributed to its journal, CPER, from 1970 until 1994. She also is coauthor of several titles in CPER’s Pocket Guide Series. She is a past Chair of the Labor and Employment Law Section of the California State Bar.

DENISE N. BRUCKER (Chapter 10: Employee Handbooks) is a 1997 graduate of Northeastern School of Law and is associated with Paul, Plevin, Sullivan & Connaughton LLP in San Diego. She has over 6 years of experience in employment litigation and counseling. Ms. Brucker’s current practice is devoted to counseling management and human resource professionals on compliance issues and risk avoidance. Her areas of expertise cover a broad range of employment issues, including wage and hour, family and medical leaves, employment discrimination and harassment, trade secrets, and contract issues. Ms. Brucker also defends employers in administrative proceedings before the Department of Labor, DFEH, and EEOC.

ARTHUR CHINSKI (Chapter 3: Independent Contractors, Leased Workers, and Outsourcing) is a shareholder with the firm of Buchalter Nemer, P.C., in Los Angeles. Mr. Chinski graduated in 1967 from the University of California, Los Angeles, and received his law degree in 1970 from the University of California, Davis, School of Law. From 1971 to 1974, he was an attorney with the Region 21 office of the National Labor Relations Board in Los Angeles. For the Business Law Institute, he was Director and Chair of the Employment Regulations Program, Director of the Compensation and Benefits Program, and Director and Chair of the Human Resources Program. Mr. Chinski has served on the Executive Board of the Los Angeles County Bar Association’s Labor Law Section and has served as Vice-Chair and a member of the Executive Committee of the Bar Association’s Arbitration Committee. He is currently Adjunct Professor of Law at Southwestern University School of Law, where he teaches Entertainment Industry Labor and Employment Law in the School’s Biederman Media and Entertainment Law Institute, which offers a Masters in Law Degree in Entertainment Law.

MARGARET HART EDWARDS (Chapter 2: Employment Contracts and Executive Compensation and Chapter 9: Notice-Posting, Training, and Recordkeeping Requirements) is a shareholder in the firm of Littler Mendelson PC, San Francisco. Ms. Edwards graduated (cum laude) in 1972 from the University of Chicago and received her law degree (cum laude) in 1975 from Northwestern University. Ms. Edwards was a former member of the Board of Contributing Editors for the California Business Law Reporter. She is the author of Posting and Recordkeeping Requirements for Employers (Cal CEB Client Handbook Series 1997), A Model Employee Handbook for California Businesses (Cal CEB Client Handbook Series 1994), and Americans with Disabilities Act: A Practical Guide for Employers (Cal CEB Client Handbook Series 1994). In addition, Ms. Edwards has written over 30 articles on labor and employment topics for a wide range of publications. She has lectured before such groups as the Administrative Law Judges Association, the Employers Group, the Merchants and Manufacturers Association, the Northern California Human Resources Council, the Council on Education in Management, the Defense Research Institute, the California Continuing Education of the Bar, the American Council on International Personnel, the American Payroll Association, the California Hospitality and Lodging Association, the California Downtown Association, the California Mortgage Bankers Association, and a variety of legal professional organizations. Ms. Edwards is a member of the Board of Directors of the National Employment Center for the American Foundation of the Blind and served for 10 years as a member of the Board of Directors of the Legal Aid Society of San Francisco.

DOUGLAS J. FARMER (Chapter 17: Discipline and Termination) received his A.B. (magna cum laude) from Harvard University and his J.D. from Harvard Law School. Mr. Farmer is a partner with Sheppard, Mullin, Richter & Hampton LLP in San Francisco, where he specializes in employment law counseling and class action litigation. He was recently identified by Chambers USA as one of California’s leading employment lawyers. He is a former EEOC Trial Attorney, a frequent speaker for human resources groups nationwide, and the author of several employment law publications for lawyers. He created one of the first Spanish-language sexual harassment training programs, which has been used by California employers to train managers and employees throughout the Southwest. Mr. Farmer is a member of the San Francisco Bar Association’s Diversity Committee.

LISA A. FRANK (Chapter 10: Employee Handbooks) is co-founder of Kasper & Frank LLP. Ms. Frank advises employers on issues such as hiring, leaves of absence, disability accommodation, performance management, wage and hour compliance, reductions in force, and the protection of intellectual property. She also regularly provides management and human resources training and conducts workplace investigations and is a skilled litigator. Before founding Kasper & Frank, she served as partner at one of San Diego’s leading employment law firms, in-house counsel at the world’s largest independent biotechnology company, and associate at a prominent international law firm. Ms. Frank earned her B.A. (Phi Beta Kappa) from the University of California, Santa Cruz, in 1995, and her J.D. from the University of California, Berkeley, School of Law in 1999.

CYNTHIA E. FRUCHTMAN (Chapter 16: Whistleblower Issues) earned her B.A. from Northwestern University in 1979 and her J.D. from Chicago-Kent College of Law in 1986. She was a law clerk to The Honorable N. Fred Woods of the Los Angeles County Superior Court and to The Honorable Prentice H. Marshall of the U.S. District Court for the Northern District of Illinois. She has been in sole practice in Santa Monica since 1997. Ms. Fruchtman has served as a Guest Lecturer at the University of California, Los Angeles, School of Law and as an Adjunct Professor at California State University in Los Angeles and at Whittier Law School. She is a mediator and Judge Pro Tem for the Los Angeles County Superior Court. In addition, she was Co-Chair of the Los Angeles County Bar Association Bioethics Committee from 1998 to 2000 and is active in the bioethics field, having been appointed to the Joint Bioethics Committee of the Los Angeles County Bar Association and the Los Angeles County Medical Association and serving as a Board Member of The Center for Research and Training in Humane and Ethical Medical Care at the Santa Monica/UCLA Medical Center. Her practice focuses on labor law and civil litigation in the areas of employment, business, and real estate. She has written extensively on employment law and assisted-reproduction topics.

LAWRENCE J. GARTNER (Chapter 1: Hiring Guidelines and Pitfalls) is a partner with the firm of Ballard Spahr LLP in Los Angeles. Mr. Gartner graduated in 1967 from the University of California, Berkeley, and received his law degree in 1970 from Harvard Law School. He is a former trial attorney for the Equal Employment Opportunity Commission. In 1985–1986, he was the Chair of the Public Employment Committee of the Labor and Employment Law Section of the State Bar.

LARRY M. GOLUB (Chapter 19: Insurance Coverage for Employment Claims) is a partner with the firm of Hinshaw & Culbertson LLP in Los Angeles. Mr. Golub graduated magna cum laude in 1979 from the University of California, Los Angeles, and received his law degree magna cum laude in 1983 from the University of California, Hastings College of the Law, where he was the Note and Comment Editor of the Law Review. He served as a Judicial Extern to California Court of Appeals Justice Joseph Grodin in 1982. Among Mr. Golub’s insurance-related publications are the following: “Analyzing Coverage: Reading & Interpreting Insurance Policies” and “Claims Involving Excess Insurance,” both for California Liability Insurance Practice: Claims & Litigation (Cal CEB 1991); “Business General Liability Policies,” for California Insurance Law & Practice (LexisNexis 1992); “Products Liability Insurance,” for California Insurance Law & Practice (LexisNexis 1994); and “Identifying and Using Insurance Coverage in Business Litigation,” for a CEB business law program presented in 1986, 1989, 1991, and 1993. Mr. Golub also lectures extensively on insurance coverage issues, including the issue of insurance coverage for employment claims.

JOEL GROSSMAN (Chapter 20: Mediation and Arbitration of Employment Disputes) is a mediator and arbitrator with JAMS in Santa Monica. He graduated from the University of Pennsylvania with honors in 1972, received a Masters Degree in English from the University of California, Santa Barbara, in 1974, and received a J.D. from University of California, Los Angeles, School of Law in 1979, where he was elected to the Order of the Coif. He clerked for the Hon. Eugene Wright of the Ninth Circuit Court of Appeals and then joined the Los Angeles office of O’Melveny & Myers, where he practiced labor and employment law. During this period, he co-authored a leading treatise on employment law, The Modern Law of Employment Contracts, with Charles G. Bakaly Jr. After O’Melveny & Myers, Mr. Grossman was a partner with Selvin & Weiner, where he handled labor and litigation matters. In early 1989, he left private practice to become the head of the Labor Relations and Litigation Divisions of Sony Pictures Entertainment, a major studio that produces motion pictures and television. After nearly 15 years at Sony, he became a mediator at ADR Services, Inc., and then moved to JAMS, the nation’s leading provider of mediation and arbitration services. He has been selected five times as one of the top neutrals in California by the Daily Journal.

STEFANIE M. GUSHÁ (Chapter 1: Hiring Guidelines and Pitfalls) is Manager of Labor Relations with SUPERVALU INC. in Fullerton. She earned a B.A. degree from the University of California, Berkeley, in 2000 and a J.D. degree from Stanford Law School in 2003, where she served as an advocate for low-income students with disabilities during special education proceedings in conjunction with the Youth and Education Law Clinic. She also served as co-chairperson of academic affairs for the Stanford Law School Association and Senior Editor of the Stanford Law and Policy Review.

ERIC HENDRICKSON (Chapter 8: Unemployment Compensation and State Disability Insurance) is a Staff Counsel with the Legal Office of the Employment Development Department in Sacramento.

CYNTHIA L. JACKSON (Chapter 18: Reductions in Force and Plant Closings) is a partner with Baker & McKenzie LLP in the firm’s Palo Alto office. She is chair of the firm’s North America Compensation and Employment Law Practice Group and serves on both the Global Employment and North America Corporate Compliance steering committees. She has over 30 years of experience working on domestic and international employment counseling and litigation. Ms. Jackson has been consistently recognized as a leader in her field by Chambers USA, Legal 500, Best Lawyers of America, Northern California Super Lawyers, and America’s Leading Lawyers for Business. Her articles have appeared in numerous publications, including The San Francisco and Los Angeles Daily Journal and Financier Worldwide. She is also a frequent speaker for various seminars and institutions, such as the Association of Corporate Counsel, Bay Area Council, and Sciences Politiques (Paris). Ms. Jackson graduated in 1976 from Stanford University and received her law degree in 1979 from the University of Texas.

STEPHEN R. LUEKE (Chapter 5: Wage and Hour Laws) is a partner with the firm of Ballard, Rosenberg, Golper & Savitt LLP in Universal City. Mr. Lueke graduated cum laude in 1973 from the University of South Carolina and received his law degree in 1984 from Loyola Marymount University. He held a number of positions with the NLRB’s headquarters and field offices before entering private practice.

THOMAS G. MACKEY (Chapter 14: Employer Liability for Acts of Employees) is of counsel to Jackson Lewis in Los Angeles. Mr. Mackey graduated in 1991 from California State University at Northridge and received his law degree in 1994 from the University of California, Hastings College of the Law.

EVERETT F. MEINERS (Chapter 13: Workplace Privacy) is a senior member of the Labor and Employment Department of Parker, Milliken, Clark, O’Hara & Samuelian in Los Angeles. Mr. Meiners graduated in 1961 from the University of California, Riverside, and received his law degree in 1964 from the University of California, Los Angeles, School of Law, where he was the Chief Justice of the Moot Court Honors Program. He served as the law clerk to Justice Gordon L. Files of the California Court of Appeals from 1964 to 1965 and joined the law firm of Parker, Milliken in 1965. Mr. Meiners is a member of the Board of Directors of the Los Angeles Chapter of IRRA (Industrial Relations Research Association), an officer of the Orange County Chapter of IRRA, and a member and mentor for PIHRA (Professionals in Human Resources Association). He has spoken regularly at the Annual Labor Law Conference presented by Region 21 of the NLRB, the Orange County IRRA, and the Federal Mediation and Conciliation Service. He is a Member of the Southern California Mediation Association and a graduate of the Straus Institute for Dispute Resolution at Pepperdine University School of Law. Mr. Meiners is also a member of the Los Angeles Superior Court Mediation Panel and a Trustee of the San Fernando Valley Bar Association. He is a regular contributor to the CEB Topics website on issues concerning employment law and the editor of PMCOS Labor News. In 2005 and 2006, he was selected as a Super Lawyer by Los Angeles Magazine in the category of Employment Litigation.

SEAN A. O’BRIEN (Chapter 11: Trade Secrets Protection and Unfair Competition) is an attorney with the firm of Payne & Fears LLP and practices in Irvine. Mr. O’Brien graduated in 1983 from the University of California, Los Angeles, received an M.B.A. in 1986 from the University of California, Berkeley, and received his law degree in 1987 from the University of California, Berkeley, School of Law. (Mr. O’Brien can be contacted at sao@paynefears.com.)

MICHAEL PEDHIRNEY (Chapter 2: Employment Contracts and Executive Compensation and Chapter 9: Notice-Posting, Training, and Recordkeeping Requirements) is a shareholder in the San Francisco office of Littler Mendelson, P.C.. He received a B.A. from the University of Notre Dame in 2001, where he graduated magna cum laude, and a J.D. from the University of Washington School of Law in 2004. While attending law school, he worked as an extern at the Associate Regional Solicitor’s Office for the Department of Labor. He also served as an associate notes and comments editor for the Washington Law Review. Mr. Pedhirney specializes in the representation of management in all aspects of labor and employment law, including contract negotiations, collective bargaining, appellate matters, and arbitration and mediation.

PATRICIA C. PEREZ (Chapter 16A: Workplace Investigations) is founder and president of Puente Consulting, Inc. in San Diego. A graduate of the University of California, Los Angeles, School of Law and a certified Senior Professional in Human Resources, Ms. Perez has practiced employment law since 1992. A native Spanish speaker, she has worked in Mexico with judicial education programs; has trained thousands of HR, legal, and other professionals; and has extensive experience as an employment attorney and an HR executive. Ms. Perez is active in community and professional organizations, including the Society for Human Resource Management’s (SHRM) national and local chapters, the California State Bar and the San Diego County Bar Association (she is Chair of the Executive Committee of the Labor and Employment Law Section of the California State Bar), the UCLA Alumni Association (she is a past member of its Board of Directors), San Diego MANA (she is a member of its Advisory Board), and the National Association of Women Business Owners (NAWBO). Ms. Perez was a 2006 finalist for NAWBO’s Business Owner of the Year Award and was recently named one of San Diego Metropolitan Magazine’s “40 under Forty”—an award given to the region’s outstanding young business and civic leaders. Ms. Perez makes frequent presentations about HR and employment law topics, including recent speaking engagements for the California State Bar, the California Restaurant Association, and the Hospitality Human Resources Association. She was a featured speaker at SHRM’s 2006 Annual National Diversity Conference. Additionally, Ms. Perez has taught employment law at the University of California, San Diego.

LISA PRINCE (Chapter 12: Workplace Safety) is a partner with Walter & Prince LLP in Healdsburg. Ms. Prince earned her B.A. cum laude at Sonoma State University and her J.D. cum laude from Empire College School of Law in Santa Rosa. She is a member of the Sonoma County Bar Association and the American Society of Safety Engineers.

JOANIE L. ROESCHLEIN (Chapter 14: Employer Liability for Acts of Employees) is Director for Employment Law, Ethics & Compliance for Synopsys, Inc., in Mountain View. Ms. Roeschlein earned a B.A. degree from the University of California, Los Angeles, in 1994 and graduated summa cum laude from Southwestern University School of Law in 2000, where she was Managing Editor of the Law Review and a member of the Moot Court Honors Program. She received a first-place brief award and was a semifinalist oralist in the 1998–1999 Nationals Moot Court Competition. She has written articles for the Los Angeles Lawyer and for the 18th Annual Advanced ALI-ABA Course of Study on “Seeking and Defeating Summary Judgment in Light of Reeves v. Sanderson Plumbing Products and Its Progeny.”

RICHARD S. ROSENBERG (Chapter 5: Wage and Hour Laws) is one of the founding partners of Ballard, Rosenberg, Golper & Savitt LLP in Universal City. Mr. Rosenberg graduated in 1974 from the College of Industrial and Labor Relations at Cornell University and received his law degree magna cum laude from the University of Santa Clara in 1977, where he was an editor of the Law Review. He has devoted his entire career to the representation of employers in employment law matters and frequently lectures to management groups on the subject of wage hour law compliance and labor and employment law.

KATE WEST ROWAN (Chapter 2: Employment Contracts and Executive Compensation) is a shareholder of Littler Mendelson, practicing in its San Francisco office. Ms. Rowan advises employers on all aspects of the design, implementation, taxation, and administration of employee benefits and executive compensation arrangements, including stock-related compensation programs such as option plans, restricted stock plans, and employee stock purchase plans; retirement plans such as qualified retirement plans and deferred compensation arrangements; and welfare and fringe benefit programs such as health plans, cafeteria plans, and severance programs. She has extensive experience with fiduciary issues involved with benefit plan fund investment (including prohibited transactions and private equity investments). Ms. Rowan provides expertise to employers regarding benefits issues arising in the context of mergers, acquisitions, and other business transactions, including negotiating benefits representations, warranties and covenants, and handling golden parachute issues. She also has extensive experience advising employers regarding employment law issues, including WARN Act compliance. Ms. Rowan earned a B.A. degree from the University of California, Berkeley, in 1975, and a J.D. degree from the University of California, Hastings College of the Law, in 1982. Ms. Rowan coauthored “Age, Sex and Disability Discrimination in Employee Benefit Plans,” for the BNA Tax Management Portfolio, 2d ed., and served as contributor and coeditor for the chapter on ERISA Reporting and Disclosure in Employee Benefits Law, 2d ed., published by the American Bar Association Labor Section. Ms. Rowan is a member of the Employee Benefits Committees of the Labor and Tax Sections of the American Bar Association and serves on the Advisory Board for Practicing Law Institute. She is also a member of the Western Pension & Benefits Conference and the San Francisco Bar Association. She has been a speaker before numerous employer and professional groups on employee benefits topics, including, most recently, programs on stock option plans and 401(k) plans.

RICHARD A. SAFFIR (Chapter 7: Tax Compliance) received his B.A. in 1983 from State University of New York, Binghamton (Harpur College), his J.D. in 1986 from Albany Law School, and his LL.M. in 1987 from New York University. Mr. Saffir, who is licensed in New York and California, is Associate General Counsel for Imagine Media, Inc., in Brisbane. He specializes in tax and business planning for closely held start-up companies.

WILLIAM B. SAILER (Chapter 10: Employee Handbooks), is Senior Vice President, Legal Counsel for Qualcomm Incorporated in San Diego, where he supervises all employment law issues for the company. He was formerly a partner with the firm of Gray Cary Ware & Freidenrich, representing employers in all labor and employment law matters. Mr. Sailer graduated with Honors in 1982 from Swarthmore College and received his law degree cum laude in 1985 from the University of Michigan Law School. He is President of the California Employment Law Council, a past member of the State Bar’s Labor and Employment Law Section Executive Committee, past President of the San Diego Chapter of the Industrial Relations Research Association, and past Chair of the San Diego County Bar Association’s Labor and Employment Law Section. Mr. Sailer is a multiple recipient of the State Bar’s Wiley E. Manual Pro Bono Service Award and the San Diego Volunteer Lawyer Program Distinguished Service Award. He is a frequent speaker for CEB and other organizations on the subject of employment law and has written extensively on employment law issues.

TERENCE R. SAVAGE (Chapter 8: Unemployment Compensation and State Disability Insurance) is Staff Counsel III with the Legal Office of the Employment Development Department in Sacramento, where he is Supervisor of the Benefit Team responsible for Unemployment, Disability, and Paid Family Leave Benefits. Mr. Savage earned a B.A. degree in 1971 from La Grange College in Georgia, and a J.D. in 1975 from Widener College, The Delaware Law School, in Wilmington.

DEBORAH CRANDALL SAXE (Chapter 6: Vacations, Family and Medical Leave, and Other Time Off) is a partner in the Los Angeles office of Jones Day. Ms. Saxe graduated Phi Beta Kappa in 1971 from Pennsylvania State University. She received a Master’s Degree in Comparative Literature in 1973 from the University of California, Los Angeles, and her law degree in 1978 from the University of California, Los Angeles, School of Law, where she was a member of the Law Review. Ms. Saxe is the author of Family and Medical Leave: A Practical Guide for Employers (Cal CEB Handbook Series 1995). She is a frequent lecturer on employment and labor issues for business and professional groups. She is a Fellow in the College of Labor and Employment Lawyers and was selected by her peers to be included in the 2006 edition of Best Lawyers of America. Ms. Saxe also was ranked by Chambers & Partners USA as a “leading lawyer” in employment law (2004 and 2005) and was recognized by her peers as one of the top 50 female Super Lawyers in Los Angeles and Orange counties (2004 and 2005).

TERESA R. TRACY (Chapter 15: Discrimination and Harassment) is a partner with Freeman Freeman Smiley LLP in Los Angeles. Ms. Tracy graduated magna cum laude in 1974 from California State University, Northridge, and received her law degree cum laude in 1979 from Loyola University School of Law, where she was a member of the Law Review. She authored an article for the Law Review entitled “Comparative Fault and Intentional Torts.” She frequently writes articles on employment law topics and has participated in many national teleconferences addressing employers on such topics as discrimination and harassment, class actions, wage and hour cases, and noncompete agreements.

MATTHEW T. WAKEFIELD (Chapter 5: Wage and Hour Laws) is a partner with the firm of Ballard, Rosenberg, Golper & Savitt LLP in Universal City. Mr. Wakefield graduated in 1984 from California State University, Hayward, and received his law degree in 1994 from the University of San Diego Law School, where he was a member of the Order of the Coif and the Executive Editor of the Law Review. He is a recipient of the Brundage and Zellmann Award for Excellence in Labor Law and the American Jurisprudence Award for Civil Procedure.

FRED WALTER (Chapter 12: Workplace Safety) is a founding partner of Walter & Prince LLP in Healdsburg. He graduated in 1970 from San Jose State University with a B.A. in Political Science (honors colloquium) and obtained his J.D. in 1978 from Lincoln University School of Law in Sacramento.

MITCHELL L. WEXLER (Chapter 4: Immigration Law Requirements for Employers) is a partner and member of the Executive Committee of the worldwide immigration law firm Fragomen, Del Rey, Bernsen & Loewy, LLP, resident in its Irvine office. Mr. Wexler is certified in immigration and nationality law by the State Bar Board of Legal Specialization. He is past Vice Chair of that certifying body and past Chair of the Southern California Chapter of the American Immigration Law Association (AILA). He has written in excess of 200 articles on various immigration law-related topics and is a frequent speaker on employment-related immigration topics.

About the 2018 Update Authors

MICHAEL BOSHNAICK is one of the update authors of Chapter 4 (Immigration Law Requirements for Employers). Mr. Boshnaick is a partner in the Los Angeles office of Fragomen, Del Rey, Bernsen & Loewy, LLP. He received a B.A. from New York University in 1987 and a J.D. from Southwestern University School of Law in 1993. He is a guest lecturer in immigration law at Southwestern and a frequent speaker on employer sanctions and immigration topics for organizations such as the Employers Group and the Council for Global Immigration.

ARTHUR CHINSKI is the update author of Chapter 3 (Independent Contractors, Leased Workers, and Outsourcing). For biographical information, see About the Authors.

CYNTHIA E. FRUCHTMAN is the update author of Chapter 16 (Whistleblower Issues). For biographical information, see About the Authors.

LARRY M. GOLUB is the update author of Chapter 19 (Insurance Coverage for Employment Claims). For biographical information, see About the Authors.

SEAN A. O’BRIEN is the update author of Chapter 11 (Trade Secrets Protection and Unfair Competition). For biographical information, see About the Authors.

MICHAEL PEDHIRNEY is the update author of Chapter 2 (Employment Contracts and Executive Compensation) and Chapter 9 (Notice-Posting, Training, and Recordkeeping Requirements). For biographical information, see About the Authors.

LISA PRINCE is one of the update authors of Chapter 12 (Workplace Safety). For biographical information, see About the Authors.

ERICH W. SHINERS is the update author of Chapter 21 (Public Law Issues). Mr. Shiners, with Liebert Cassidy Whitmore in Sacramento, practices in the areas of labor and employment law, with an emphasis on traditional labor law. His practice includes representing public and nonprofit employers in appellate and trial court litigation, arbitration, unfair labor practice proceedings, and representation elections. From 2008 to 2011, he served as a Legal Adviser to a member of the Public Employment Relations Board, where he drafted Board decisions and represented the agency in appellate litigation. Mr. Shiners is an advisor to the Executive Committee of the Labor & Employment Law Section of the State Bar of California, and a former Co-Editor-in-Chief of the Section’s Labor & Employment Law Review. He also served a 3-year term on the Executive Committee of the Sacramento County Bar Association’s Labor & Employment Law Section. Besides his work on this publication, Mr. Shiners is an author and consultant for California Public Sector Labor Relations (LexisNexis). He received a B.A. degree from Sacramento State University and a J.D. degree from the University of the Pacific, McGeorge School of Law.

MATTHEW T. WAKEFIELD is the update author of Chapter 5 (Wage and Hour Laws). Mr. Wakefield now practices law in the Charlotte, North Carolina, office of Ballard, Rosenberg, Golper & Savitt LLP. For other biographical information, see About the Authors.

FRED WALTER is one of the update authors of Chapter 12 (Workplace Safety). For biographical information, see About the Authors.

MITCHELL L. WEXLER is one of the update authors of Chapter 4 (Immigration Law Requirements for Employers). For biographical information, see About the Authors.

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PRODUCT GROUP Publication
PRACTICE AREA Business Law
PRACTICE AREA Employment Law
PRACTICE AREA Public Law