Hunton Employment & Labor Perspectives

California lawmakers are considering passing a bill that would give employees the “right to disconnect” by ignoring after-hours calls, emails, and other communications from their employers.  The bill, AB 2751, introduced by Assemblyman Matt Haney (D-San Francisco), would add a Section 1198.2 to the Labor Code that would effectively prevent employers from contacting employees outside of working hours, with limited exceptions.

On February 15, 2024, California lawmakers introduced the bill AB 2930.  AB 2930 seeks to regulate use of artificial intelligence (“AI”) in various industries to combat “algorithmic discrimination.”  The proposed bill defines “algorithmic discrimination” as a “condition in which an automated decision tool contributes to unjustified differential treatment or impacts disfavoring people” based on various protected characteristics including actual or perceived race, color, ethnicity, sex, national origin, disability, and veteran status. 

The legal path between employee arbitration agreements under the Federal Arbitration Act (“FAA”) and representative claims under the California Private Attorney General Act (“PAGA”) has been anything but smooth. A new (albeit unpublished and uncitable) case, Piran v. Yamaha Motor Corp., et al., No. G062198, 2024 WL 484845 (Cal. Ct. App. Feb. 8, 2024)(unpub.) (“Yamaha”), helps to illustrate the challenges and unanswered questions lingering in the wake of this rapidly-developing area of law.

California law requires employers with at least 100 employees and at least one California employee, to annually report pay, demographic, and other workforce data to the Civil Rights Department (“CRD”). This reporting is required under Government Code section 12999, and is part of the State’s efforts to promote equal pay. 

Hunton Andrews Kurth LLP is pleased to announce that labor and employment partner Julia Trankiem was recently honored as a 2023 Diversity & Inclusion Visionary in The Los Angeles Times’ third annual Diversity, Equity, Inclusion & Accessibility magazine.

California employers must revamp their sick leave policies ahead of the New Year.  On October 4, 2023, Governor Newsom signed SB 616 into law, thereby amending the Healthy Workplaces, Healthy Families Act of 2014.  The new law goes into effect January 1, 2024.

Courts have repeatedly upheld California’s “strong public policy” prohibiting agreements that restrain individuals from “engaging in a lawful profession, trade, or business of any kind.”  Indeed, under Section 16600 of the California Business and Professions Code, these agreements—generally referred to as noncompete agreements—are generally void.  California now seeks to enshrine additional laws strengthening its prohibition on noncompete agreements.

California employers: take notice.  On July 24, 2023, the Office of Administrative Law approved changes to the Fair Employment and Housing Act (FEHA) regulations governing how California employers can use and consider criminal history in employment decisions.  These new changes, modifying Cal. Code Regs. Tit. 2, § 11017.1, go into effect on October 1, 2023.

HuntonAK Labor and Employment partner Emily Burkhardt Vicente was honored as a finalist for Mentor of the Year by the Los Angeles Business Journal at their 2023 Women’s Leadership Symposium and Awards.

HuntonAK Labor and Employment partner Emily Burkhardt Vicente was honored by the Los Angeles Business Journal's 2023 Diversity, Equity + Inclusion Awards as a nominee for Diversity, Equity + Inclusion Executive of the Year.

California’s new bereavement leave law, which became effective beginning January 1, 2023, requires most employers to allow their employees to take up to five days of leave upon the death of certain family members.  Although previous bills providing for bereavement leave had been stymied by vetoes, Governor Gavin Newsom signed the new legislation—Assembly Bill (“AB”) 1949—into law as an “important step” to ensure that low-wage workers “can access the time off they’ve earned while still providing for their family.”  The new law makes California one of the few states requiring employers to provide bereavement leave.

As we reported in September, effective January 1, 2023, employers face a host of pay disclosure and recordkeeping obligations.  The DLSE, the agency in charge of implementing the new law (codified at California Labor Code section 432.3), recently published guidance on the parameters of the new law.

HuntonAK Labor and Employment partner Emily Burkhardt Vicente was named as a 2022 “Go-To Thought Leader” by the National Law Review.

Among the new employment laws in effect this new year is the expansion of the California Fair Employment and Housing Act (“FEHA”) to include “reproductive health decision-making” in the list of classifications protected by the FEHA.  Accordingly, the FEHA now expressly prohibits discrimination, harassment, and retaliation based on employees’ reproductive health-decision-making.  The FEHA also makes it unlawful for an employer to require, as a condition of employment, continued employment, or a benefit of employment, the disclosure of information relating to an applicant’s or employee’s reproductive health decision-making.

In January 2021, the Ninth Circuit upheld a 2018 ruling by the Federal Motor Carrier Safety Administration (“FMCSA”), which found that federal law preempts California state meal and rest break laws as applied to drivers of property-carrying commercial motor vehicles.  A few months later, the United States Supreme Court denied a petition challenging the Ninth Circuit’s decision.  We previously wrote about the Ninth Circuit’s ruling, and the Supreme Court’s denial, in a post that you can read here.

The New Year usually means new laws for California employers.  This year, a new privacy law goes into effect with new mandates for employers to ensure that workers have more control over the collection and use of their personal information.

Come January 1, 2023, companies that employ California residents need to make sure they have taken the required steps to comply with the California Privacy Rights Act (“CPRA”), which amends the landmark California Consumer Privacy Act (“CCPA”) by expanding its protections to employees, job applicants, and independent contractors.

On September 18, 2022, California Governor Gavin Newsom signed into law Assembly Bill (“AB”) 2188, which prohibits employer discrimination based on employees’ use of cannabis off the job and away from the workplace.  While recreational use of cannabis, or marijuana, has been legal in California since 2016, the new law goes farther in specifically providing protections for employees who consume the substance.  AB 2188 makes California the most recent state to provide workplace protections for use of marijuana away from the workplace.  The bill will become effective beginning January 1, 2024.

On September 27, 2022, Governor Gavin Newsom signed Senate Bill 1162, which amends California Labor Code section 432.3, expanding employers’ pay disclosure and record keeping requirements in California.  

Editor’s Note: The California legislature failed to enact the proposed CCPA exemption amendments to Assembly Bill 1102.

On August 16, 2022, California Assembly Member Cooley introduced amendments to Assembly Bill 1102 that would extend the California Consumer Privacy Act’s (“CCPA’s”) temporary exemptions for HR and B2B data for an additional two years – until January 1, 2025. Under the CCPA, these exemptions are set to expire on January 1, 2023, when the amendments to the CCPA made by the California Privacy Rights Act (“CPRA”) become operative.

Yesterday, a California State Assembly Committee killed a bill that would have extended collective bargaining rights to a larger group of state employees – namely, legislative staffers. Existing state law excludes certain state employees from collective bargaining. The Legislature Employer-Employee Relations Act would “provide employees of the Legislature the right to form, join, and participate in the activities of employee organizations of their own choosing for the purpose of representation on all matters of employer-employee relations.” If passed, the bill would extend collective bargaining rights to nearly 2,000 California legislative employees. California’s Public Employment and Retirement Committee rejected the bill in a 2-3 vote this Wednesday, due to unresolved “procedural, legal, and administrative problems,” according to the Committee Chair.

On June 8, 2022, the California Department of Public Health (CDPH) issued an Order with definitions for “close contact” and “infectious period” that conflict and abrogate the definitions for these terms within the California Division of Occupational Safety and Health’s (Cal/OSHA) current COVID-19 Emergency Temporary Standards (ETS).  Employers must comply with the new CDPH definitions, even where they differ from the text of the California ETS or federal Centers for Disease Control guidance.

San Francisco has significantly expanded its Family Friendly Workplace Ordinance to guarantee flexible or predictable work arrangements for employees with qualifying caregiver responsibilities when the employee provides notice of their preferred arrangement, unless the employer can demonstrate an undue hardship to the employer.

On June 15, 2022, the U.S. Supreme Court issued its decision on Viking River Cruises, Inc. v. Moriana (Case No. 20-1573) reversing the California Court of Appeal’s decision to affirm the denial of Viking’s motion to compel arbitration Moriana’s “individual” PAGA claim and to dismiss her other PAGA claims.

On May 7, 2022, the California Occupational Safety and Health Standards Board (“Cal/OSHA”) released guidance, in the form of updated FAQs and fact sheets, concerning the revised COVID-19 Prevention Emergency Temporary Standards (“ETS”) that were adopted on April 21, 2022, and became effective on May 6, 2022.  This ETS applies to non-remote workers in California, except those who work alone and those covered by the Aerosol Transmissible Diseases standard, and will remain in effect until December 31, 2022. 

Cal/OSHA’s recently issued guidance provides additional ...

Assembly Bill 1651 or the Workplace Technology Accountability Act, a new bill proposed by California Assembly Member Ash Kalra, would regulate employers, and their vendors, regarding the use of employee data.  Under the bill, data is defined as “any information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular worker, regardless of how the information is collected, inferred, or obtained.”   Examples of data include personal identity information; biometric information; health, medical, lifestyle, and wellness information; any data related to workplace activities; and online information.  The bill confers certain data rights on employees, including the right to access and correct their data.

On October 4, 2021, the United States Supreme Court denied certiorari on a petition challenging the Ninth Circuit’s ruling that California’s strict meal and rest period rules do not apply to commercial truck drivers engaged in interstate commerce.  The Court’s denial of the petition leaves in place a decision that came as a welcome sigh of relief for employers in the trucking industry.

The California Supreme Court has clarified that state whistleblower retaliation claims should not be evaluated under the McDonnell Douglas test, but rather under the test adopted by the California legislature in 2003, thus clarifying decades of confusion among the courts.

SB 606, which took effect January 1, 2022, greatly increases the California Division of Occupational Safety and Health’s (“Cal/OSHA’s”) enforcement powers by creating two new violation categories – “enterprise wide” and “egregious” violations.

On December 16, 2021, the California Occupational Safety and Health Standards Board (“Cal/OSHA”) adopted revisions to the current COVID-19 Prevention Emergency Temporary Standards (“ETS”).  The Cal/OSHA ETS were first approved on November 30, 2020, adopted again with modifications on June 17, 2021, and recently readopted with additional revisions.  The newest version of the ETS will go into effect on January 14, 2022, and will apply to all non-remote workers in California except those covered by the Aerosol Transmissible Diseases standard, such as healthcare workers.

The United States Supreme Court has agreed to take a closer look at the enforceability of arbitration agreements that bar representative claims brought under PAGA, a California law that allows individual employees to police labor code violations.

A California appellate court recently upended a representative PAGA and class action settlement because the named plaintiff did not exhaust administrative remedies under PAGA because he failed to identify each separate theory of liability.

Last month, a judge out of the Alameda County Superior Court ruled California’s Proposition 22 unconstitutional, constituting a significant legal obstacle to this young statute.

Proposition 22 (formally the Protect App-Based Drivers and Services Act, Bus. & Prof. Code, §§ 7448, et seq.) was a ballot initiative passed by a majority of California voters in the November 2020 election, which primarily aimed to classify application-based transportation and delivery companies’ drivers as independent contractors rather than employees. Proposition 22 arose in response to Assembly Bill 5, 2019 legislation codifying the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court, which created a new “ABC” test for determining whether workers are properly classified as independent contractors. (More information on AB 5 can be found in this previous Hunton Employment & Labor Perspectives post.)

California employers will need to reconsider the way they calculate premium payments for meal and rest break violations following a recent decision of the California Supreme Court.

Over the past six months, the California Supreme Court as well as the State’s appellate courts have published a number of important decisions in the area of California labor and employment law. The California Supreme Court’s decisions published earlier this year in Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58 and Vazquez v. Jan-Pro Franchising International, Inc. (2021) 10 Cal.5th 944 were previously covered in Hunton Labor & Employment perspectives. (See Link 1 & Link 2 [discussing the Ninth Circuit’s earlier 2019 decision].)

Beginning June 15, 2021, Governor Newsom moved forward with his plan to lift public health restrictions on businesses, including capacity limitations, physical distancing, and face coverings.  In response, Cal/OSHA also has issued new workplace standards for COVID-19 prevention.

On April 16, 2021, Governor Newsom approved S.B. 93, a statewide COVID right-to-recall law that faltered on its first attempt last October.  In the interim, a number of counties and cities (including the Cities of Los Angeles, Oakland, San Francisco, San Diego, and Pasadena, and Los Angeles County) passed almost identical measures, which will remain in effect to the extent they are more generous than the state law.

Like the local ordinances, the state law is time-limited and directed to the industries with workforces most decimated by COVID: hotels, event centers, private clubs, airport hospitality operations, airport service providers and janitorial, maintenance and security services for commercial buildings. Through December 31, 2024, employers in those industries are required to notify those laid off because of COVID about newly-available positions, and offer them to the laid-off employees based on a qualification-based preference system. Post-layoff changes in ownership, the form of the organization, or the location of the business will not excuse an employer from these recall protocols, as long as the business conducts the same or substantially similar operations as it did before the pandemic.

California recently enacted Assembly Bill 1867, requiring all private employers with 500 or more employees to provide COVID-19 supplemental paid sick leave for their California employees.  Employers must begin providing supplemental sick leave, under the new law, no later than September 19, 2020.  The law will remain in effect until the later of December 31, 2020 or expiration of any federal extension of the Families First Coronavirus Response Act.

Los Angeles (LA) Mayor Eric Garcetti has issued an emergency order modifying the City’s recently passed COVID-19 supplemental paid sick leave requirements.  The prior ordinance, adopted on March 27, 2020, by the LA City Council, had required LA employers with 500 + employees nationally, to provide up to 80 hours of supplemental paid sick leave.  In a nod to the instrumental role employers will play in the City’s revival in the aftermath of the coronavirus crisis, Mayor Garcetti modified the paid leave requirements in a number of key ways.

In the face of unprecedented challenges due to COVID-19, employers have been forced to balance the need to mitigate current health risks against the need to protect their future financial viability.  Last week, the Los Angeles City Council made navigating that balance more difficult for some employers.

California’s law against arbitration remains in doubt after Eastern District Judge Kimberly Mueller extended the TRO issued on December 31, prohibiting the state of California from enforcing the law against agreements covered by the Federal Arbitration Act.  That law, known as AB 51, seeks to prohibit companies in California from requiring arbitration agreements as a condition of employment.

In the last days of 2019, New Jersey Governor Phil Murphy signed a law that bans employers from discriminating against employees based on hairstyles that are associated with race. In doing so, New Jersey joined New York and California—both of which enacted similar legislation earlier in 2019—in prohibiting hair discrimination in the workplace.

This month, California Governor Gavin Newsom signed several employment-related bills into law. The laws go into effect January 1, 2020, and include an extension to the deadline to file certain state discrimination claims and address harassment training and prevention, as well as mandatory arbitration agreements.

The Ninth Circuit Court of Appeals upheld a District Court’s ruling in favor of employer Medtronic, Inc. in a lawsuit alleging Medtronic unlawfully terminated employee Jose Valtierra’s employment because he was morbidly obese, in violation of the Americans with Disabilities Act (“ADA”).  In doing so, the Court declined to decide whether morbid obesity is a disability, leaving this issue unsettled in the Ninth Circuit.

The California Labor Code requires employers to reimburse employees for certain expenses, but it’s not always clear which expenses should be reimbursed by the employer, and which expenses should be borne by employees.  Here’s a list of Five Things to Remember About Employee Reimbursements to help California employers navigate this area of the law.

In a positive development for employers, the California Court of Appeals affirmed summary judgment for an employer in a class action alleging willful violations of the Federal Fair Credit Reporting Act (“FCRA” or “Act”).  In Culberson v. Walt Disney Parks and Resorts, the plaintiffs alleged Disney willfully violated two provisions of the FCRA: (1) plaintiffs alleged Disney’s disclosures letting job applicants know they may be subject to a consumer report were not contained in a standalone document; and (2) plaintiffs alleged Disney rejected some applicants based on information in their consumer reports without first providing the notice required by the FCRA.  In affirming summary judgment, the court concluded that it need not decide whether Disney violated the FCRA, because the court found that any such violation was not willful. 

In AHMC Healthcare, Inc. v. Superior Court of Los Angeles County, No. B285655 (June 25, 2018) (“AHMC Healthcare”), California’s Second District Court of Appeals upheld an employer’s use of a payroll system that automatically rounds employee time up or down to the nearest quarter hour.  Although the California Supreme Court has not yet addressed this issue, AHMC Healthcare aligns with decisions from the federal Ninth Circuit Court of Appeals, many federal district courts, and California’s Fourth District Court of Appeals, which also upheld time-rounding practices.

California is the land of employment legislation, and 2018 is shaping up to be another year of change. We are less than six months into the year, and already several bills that could significantly impact California businesses—for better or for worse—are pending in the California legislature.

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When a franchisor provides a California franchisee with detailed instructions about how to operate the franchise business, but allows the franchisee to manage its own workforce, can the franchisor be held liable for the franchisee’s wage and hour violations?  The California Court of Appeals found the answer to be no under the facts in Curry v. Equilon Enterprises, LLC, 2018 WL 1959472 (Cal. Ct. App. Apr. 26, 2018).  There, the Court of Appeals concluded Equilon Enterprises, LLC, doing business as Shell Oil Products US (“Shell”), was not liable for the alleged wage and hour violations of the company that operated its Shell-branded gas stations throughout California.