On May 16, 2012, in the case of Fitzsimons v. California Emergency Physicians Medical Group, the California First District Court of Appeal held that a partner could sue her partnership under the California Fair Employment and Housing Act (“FEHA”) for retaliation based on the partner’s opposition to the sexual harassment of (or other unlawful employment practices against) the partnership’s non-partner employees. The Court affirmed the long-understood rule that a partner cannot sue her partnership under the FEHA for alleged harassment or discrimination against the partner herself, or for retaliation for opposing
harassment or discrimination against the partner herself. The Court also affirmed the long-understood rule that a partner cannot sue her partnership for harassment, discrimination or retaliation of any kind under Title VII of the federal Civil Rights Act. But, in Fitzsimons, the Court reasoned that the FEHA is broad enough to allow a partner to bring an action against her partnership for retaliation against the partner due to the partner’s opposition to the partnership’s perceived illegal treatment of its employees. The Court based its holding on the technical language of the FEHA (which is different from the language of Title VII) which prohibits an employer’s retaliation against any “person” who opposes that employer’s unlawful harassment or discrimination against its employees, even if the complaining person is not an employee herself. The Court states in its opinion that this is a “unique circumstance” and implies, therefore, that lawsuits like these will not arise very often. But, this decision constitutes a material broadening of the scope of the FEHA’s prohibition against retaliation, which was previously understood to apply only the employer-employee relationship. This broad interpretation could in turn lead to a flood of retaliation lawsuits filed by any “persons” at all associated with an employer, including partners, members, shareholders, investors, consultants, contractors, vendors, joint-venturers, lenders, customers, and even occasional passers-by. If one of these “persons” witnesses something she believes to be harassment or discrimination by an employer against its employee, and if this “person” complains and is in some way negatively treated by the employer, this “person” now can be a FEHA plaintiff. –Adam K. Treiger
Court Decision Broadens The FEHA’s Prohibition Against Retaliation To Allow Non-Employees To Be FEHA Plaintiffs
CA Supreme Court Holds Attorneys’ Fees Not Recoverable In Lawsuits For Missed Break Periods
On April 30, 2012, the California Supreme Court held in Kirby v. Immoss Fire Protection, Inc., that neither employees nor employers may recover attorneys’ fees when they prevail in an action for failing to provide rest breaks under California Labor Code section 226.7. It is clear under California law that only employees who win lawsuits for minimum wage or overtime compensation may recover their attorneys’ fees. Labor Code section 1194. If an employer wins such a suit, they have to bear their own attorneys’ fees. It is also clear that either an employer or an employee, when such party wins a lawsuit concerning wages (other than minimum wages or overtime), fringe benefits, or health and welfare or pension fund contributions, may recover their attorneys fees. Labor Code section 218.5. What was not clear was whether a lawsuit for missed break periods was a lawsuit concerning wages (other than minimum wages or overtime), fringe benefits, or health and welfare or pension fund contributions. In the Kirby case, the employer won the case, and was awarded its legal fees, because the lower court thought that a lawsuit for missed break periods was a lawsuit concerning wages (other than minimum wages or overtime). But, the CA Supreme Court reversed, and held that that neither section 1194 nor section 218.5 authorizes an award of attorney’s fees to any party (employee or employer) that prevails on a section 226.7 claim for missed break periods. Although this case did not turn out very well for the employer Immoss Fire Protection, the Kirby decision does represent a significant victory for employers in California, as it reduces the potential up-side and case value for plaintiff-employees when they file lawsuits that include claims for missed break periods. – Adam K. Treiger
Landmark California Supreme Court Case on Meal and Rest Periods
On April 12, 2012, the California Supreme Court issued its opinion in Brinker Restaurant Corporation v. Superior Court, resolving certain important questions about how California employers must provide meal periods and rest breaks for their employees. The opinion is 54 pages long, so I will only try to summarize its most important points here. Absent from consideration in this blog are Brinker’s many important holdings regarding the certification of class action lawsuits in California, as I think those holdings are more important to litigation lawyers than to employers and employees themselves.
Rest Breaks:
Brinker did not significantly change the law regarding rest breaks in California. Brinker confirmed that Employers need only provide the opportunity for employees to take their rest breaks, but need not ensure that employees take those provided breaks. Moreover, Brinker confirmed that employees are entitled to one 10-minute paid rest break for shifts from 3.5 to 6 hours in length, two 10-minute rest breaks for shifts from more than 6 hours to 10 hours in length, three 10-minute rest breaks for shifts from more than 10 hours to 14 hours in length, and so on. Nothing new here, but the Supreme Court did reject the plaintiff’s argument that rest periods must be provided before any meal period.
Meal Periods:
Brinker held that an employer must relieve the employee of all duty for the designated meal period, but need not ensure that the employee does not work during that period. This is a serious change in the interpretation of law, which, until now, was through to require that the employer not only provide the meal period, but also ensure that the employee do no work during that period (or be subject to a penalty/premium pay). In the words of the Supreme Court: “An employer’s duty with respect to meal breaks is an obligation to provide a meal period to its employees. The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so. . . . On the other hand, the employer is not obligated to police meal breaks and ensure no work thereafter is performed. Bona fide relief from duty and the relinquishing of control satisfies the employer’s obligations, and work by a relieved employee during a meal break does not thereby place the employer in violation of its obligations and create liability for premium pay . . . .”
Don’t forget though, if an employee chooses to work through a meal period, and if the employer knows or should have known of this work, the employer must still pay the employee straight time pay for that work. The only way out of this would be if the employer did not know, nor should the employer have known, of the work being performed during the meal period. Also, the employer should never coerce or even suggest that the employee work through a meal period; to do either may entitle the employee to both straight time pay and premium pay. If an employee who is entitled to a meal period wants to waive that period and work instead, and if the employer agrees, it would be advisable for the employer to obtain that waiver in writing, each time a meal period is waived.
Meal Period Timing:
The Supreme Court also held that, absent waiver, the law requires a first meal period no later than the end of an employee’s fifth hour of work, and a second meal period no later than the end of an employee’s 10th hour of work. The Court rejected the plaintiff’s argument that a second meal period be provided no later than five hours after the end of the first meal period. The Court held also that the law imposes no other timing requirements than as set forth above, and so, it appears that a meal period may be provided by the employer anytime before the end of the fifth hour of work, including soon after the beginning of an employee’s shift.
Conclusion:
The Brinker decision indeed should be a welcome one for employers and employees alike. It clears up confusion that has lingered for years over the issues it addresses, it allows greater flexibility at the workplace, and it provides protection of employees’ meal and break period rights as well as protection against excessive liability for employers. –Adam K. Treiger
Supreme Court Finds Called Teacher to be an Exempt Minister Under Civil Rights Laws
On October 5, 2011, I blogged about the case of Perich v. Hosanna-Tabor Evangelical Lutheran Church and School, in which a federal appeals court found that a called teacher in a Lutheran Church – Missouri Synod church school was not a minister under the Ministerial Exception to the federal civil rights laws, and thus could sue her church employer for disability discrimination. On January 11, 2011, the United States Supreme Court reversed the appellate court’s decision, and held that the plaintiff called teacher was a minister under the Ministerial Exception, and therefore was not able to sue her church employer for violation of the American with Disabilities Act (or for violation any other federal employment discrimination law related to her dismissal).
The US Supreme Court held that both the Free Exercise Clause and the Establishment Clause of the First Amendment mandate that (i) the government cannot become involved in a church’s ecclesiastical decisions by contradicting a church’s determination of who can act as its ministers, and (ii) a religious group has the right to shape its own faith and mission through its appointments of its own ministers. Moreover, the Supreme Court held that the purpose of the Ministerial Exception is not to safeguard a church’s decision to fire a minister only when it is made for a religious reason, but rather is to ensure that the authority to select and control who will minister to the faithful is the church’s alone.
The Supreme Court also held that the Ministerial Exception is not limited to the head of a religious congregation, and that there is no rigid formula for deciding when an employee qualifies as a minister, leaving the door open for future litigation between churches and those they call ministers. But, the Supreme Court found that in this case, the plaintiff was a minister because (i) her title as a called teacher represented a significant degree of religious training followed by a formal process of commissioning, (ii) the plaintiff held herself out as a minister by, for example, accepting the formal call to religious service, and (iii) the plaintiff conveyed the Church’s message and mission through religious instruction. The Supreme Court held that the appeals court did not give enough weight to the fact that the plaintiff was a commissioned minister, gave too much weight to the fact that lay teachers at the school performed the same religious duties as the plaintiff, and placed too much emphasis on the plaintiff’s performance of secular duties.
This unanimous decision of the US Supreme Court is a big win for advocates of religious freedom in this country, as it reaffirms at least part of the wall between church and state, and as tells the government, including its courts, that it has no place in choosing who will be employed as a religious minister. However, this decision should not be read too broadly. It is still up to the courts to determine if someone is a minster or not, before the Ministerial Exception can be applied. Thus, although the called teacher in this case was found to be a minister, it is possible that in other contexts the outcome would not be the same, especially if the called teacher’s ecclesiastical duties were more modest than those of Ms. Perich. — Adam Treiger
Wage and Hour Issues When Closing Between Christmas and New Years
During the holiday season, many California employers wish to close down between the Christmas holiday and the New Years holiday. That is fine, but there are a few wage and hour laws that need to be considered. First, regarding non-exempt employees, such employees do not have to be paid for hours they do not work. Thus, such employees need not be paid during the closure. If non-exempt employees have paid vacation time accrued but unused, they should be given the opportunity to use that paid vacation time during the closure, but they should not be forced to do so. Of course, if the employer has a policy offering paid holidays for Christmas and New Years Day, employees should be paid for those two days and should not have to use their vacation time.
Second, regarding exempt employees, such employees are entitled to be paid an entire week’s salary for any week in which they do any work, subject to a few exceptions that I won’t go into here. But, if an exempt employee is directed not to work for an entire week, and is not allowed to do so, he or she is then not entitled to be paid for that week. (Just as with non-exempt employees, exempt employees can use their accrued vacation time if they want to during that time, but they should not be forced to do so.) Thus, in determining whether to pay an exempt employee during a closure between the Christmas and New Years, the employer has to first determine what its regular workweek is, and then determine if the closure time spans and entire week.
The default rule in California is that a work week is from Sunday through Saturday. Assuming this is the applicable work week, this year there should be no problem with not paying exempt employees during most of the holiday closure because most employers will be closed from Sunday, December 25 through Saturday, December 31, a full work week. But, assuming the employer re-opens on January 3, exempt employees would still be entitled to be paid their entire weekly salary for the first week in January, even though that week is shortened by a day. For comparison purposes, if Christmas falls on a Wednesday and New Years falls on a Monday, and the employer is closed from Wednesday through Monday, exempt employees who work Monday and Tuesday of the Christmas week, and come back to work on Tuesday after New Years, would lose no pay. The employer in this example would have to close the entire week, from December 22nd through December 28th, if they wanted not to pay exempt employees for that week. – Adam K. Treiger
The Professional Exemption Can Apply to Unlicensed Accountants and Lawyers
The California professional exemption provides that employees can be exempt from overtime laws if, among other things, they are either (i) licensed by the State of California to practice law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or (ii) primarily engaged in an occupation commonly recognized as a learned or artistic profession. Until now it has been unclear whether an unlicensed accountant or lawyer could be exempt under the professional exemption. Two recent cases, one state, one federal, have answered that question by holding that they can be. The federal case, Campbell v. PricewaterhouseCoopers, LLP, 642 F.3d 820, decided by the Ninth Circuit Court of Appeals on June 15, 2011, held that unlicensed accountants (i.e., persons who perform accounting functions assisting licensed accountants but who are not themselves licensed) could be so exempt. The California case, Zelasko-Barrett v. Brayton-Purcell, LLP, 198 Cal. App. 4th 58, decided by the California Court of Appeal for the First District on August 17, 2011, held that unlicensed lawyers (i.e., persons who have graduated from law school and who perform legal services assisting licensed lawyers but who have not themselves passed the bar), could be so exempt. Both of these cases hold that the professional exemption can apply because these types of employees work in occupations commonly recognized as learned professions. Of course, accounting firms and law firms still need to be cautious in classifying such employees as exempt, because for the exemption to apply, the employer still has the burden to prove that the employee in question (a) was primarily engaged on a weekly basis in exempt duties, (b) was paid the requisite monthly salary (i.e., twice minimum wage), (c) customarily and regularly exercised independent discretion and judgment in his or her job, and (d) was otherwise treated as an exempt employee. For example, it is unclear whether under Zelasko-Barrett a law clerk who is still in law school could be exempt under the professional exemption (though it has been well settled that a paralegal could not be). Thus, even with the new precedent set by Campbell and Zelasko-Barrett, there is still enough subjectivity and “grey-area” inherent in the professional exemption to allow unlicensed accountants and lawyers to sue for overtime and other non-exempt employee wages, penalties and benefits. — Adam Treiger
Three More New CA Employment Laws
SB 272: Organ Donor/Bone Marrow Leave of Absence. This leave of absence already existed, but the new amendments make it clear that the 30 day leave for organ donation is 30 business days, not calendar days, and that during this leave seniority and benefits, including vacation, continue to accrue.
SB 299: Health Insurance Coverage for Pregnancy Disability Leave (“PDL”). Under the old law, if an employer had fewer than 50 employees, the employer did not have to pay for health insurance for employees out on PDL. Moreover, if an employer had 50 or more employees within a 75 mile radius, the employer had to pay for health insurance coverage for employees out on PDL, but only for 3 months, not 4. The new law provides that all employers with 5 or more employees must pay for health insurance coverage for employees out on PDL for the full duration of the PDL, which can be up to 4 months.
AB 22: Credit Checks. Under the old law, employers could use employee’s credit reports to make hiring decisions, as long as the potential employee was notified. Now, Employers may not use credit checks at all, except when hiring for certain specified positions, such as managers and persons who will have access to the employer’s trade secrets or funds.
–Adam K. Treiger
More On AB 469 – “The Wage Theft Prevention Act of 2011”
Yesterday I blogged about a new California law known as AB 469, which imposes an obligation on employers to provide notice of certain information to new hires, and supplement those notices as information changes. I wanted to add a few more thoughts. First, this new notice requirement does not apply to exempt employees. So, as long as an employee is classified correctly as exempt, employers need not worry about this new law for these employees. Of course, if an employee is misclassified as exempt, this new law adds yet another layer of legal problems for an employer who is found liable for such misclassification. Second, the Labor Commissioner will be promulgating a form that employers can use to provide this notice. That will be helpful, but it won’t go very far to blunt the administrative burden this new law creates for employers. Third, this new law increases the statute of limitations for the DLSE to collect penalties from 1 to 3 years (but it does not increase the 1-year limitations period for penalties in private enforcement actions). Fourth, this new law does not take effect until January 1, 2012. So, Employers have about 2½ months to get ready for compliance. Fifth, this new law increases the penalties (both civil and criminal) for violation of the wage laws (as if the existing penalties were not bad enough). In this time of high unemployment, is this new law — especially the new notice requirements contained in it — really what is needed in California? I mean, if an employer is on the fence about hiring a new employee, and could go either way, why does the state want to impose this difficult notice requirement that only kicks in upon hiring a new employee? We should be thinking about ways to create jobs in this state. But, if we can’t do that, at least we should not pass unnecessary laws to discourage job creation. –Adam K. Treiger
California Has Three New Employment Laws This Week
First, SB 459. This new law increases the penalties ($5,000 to $25,000 per violation) for misclassification of a worker as an independent contractor, when the worker should have been classified as an employee. However, these new penalties only apply if the misclassification was “willful”. Willful is defined by the law as “voluntarily and knowingly misclassifying” an individual. Also, the new law adds a shame factor. If an employer is found to have willfully misclassified, the employer must display this fact prominently on its own website. An employer’s advisor (other than an employee or attorney) who knowingly advises the employer to misclassify a worker as an independent contractor may also have individual liability under the new law.
Second, AB 469: This new law requires that employers provide additional information to new employees at the time of hire, and supplement that information as it changes during the course of employment. The information that now must be provided is: (1) the pay rate and the basis, whether hourly, salary, commission or otherwise, as well as any overtime rate, (2) allowances, if any, claimed as part of the minimum wage, including meals or lodging, (3) the regular payday, (4) the name of the employer, including any “doing business as” names used by the employer; (5) the physical address and telephone number of the employer’s main office or principal place of business, and a mailing address if different, and (6) the name, address and telephone number of the employer’s workers’ compensation carrier.
Third, AB 887: The Fair Employment and Housing Act already outlaws gender indentify discrimination. But, this new law amends the act to include another protected classification to the list: “gender expression”. Gender expression refers to a person’s gender-related appearance and behavior, whether or not stereotypically associated with the person’s assigned sex at birth. –Adam K. Treiger
Are Called Teachers Exempt Ministers Under Federal Civil Rights Laws?
In 2005, a Lutheran Church and school in Michigan named Hosanna-Tabor, which is affiliated with the Lutheran Church-Missouri Synod, terminated Cheryl Perich, a called teacher, because she threatened to sue under the Americans with Disabilities Act (“ADA”), and because she did not try to resolve her dispute through internal church procedure. Perich taught third and fourth grades. Some subjects Perich taught were secular, and some religious. Perich sued under the ADA’s anti-retaliation provisions. The Church prevailed in the federal trial court, but that decision was overturned by the 11th Circuit Court of Appeals. The United States Supreme Court hears arguments on the case this week, and is expected to rule sometime next year. Under the ADA, it is clear that churches can discriminate on the basis of religion. And, under the Ministerial Exception to the federal civil rights laws, churches can discriminate against their ministers, and courts are not allowed to interpret or interfere with church doctrine. The main issue in the Perich case is whether Perich, a called teacher, is a minister, as the trial court found, or a secular employee, as the appeals court found. This question will not be easy to answer. On the one hand, Perich spent approximately six hours and fifteen minutes of her seven hour day teaching secular subjects, and using secular textbooks, without incorporating religion into the secular material. Moreover, the primary duties of called teachers at this church were identical to those of non-called teachers, who do not have the title of minister, and at least one non-called teacher who taught at the church was not Lutheran. On the other hand, Perich participated in and led religious activities throughout the day, Perich was required to be a “fine Christian role model”, Perich underwent extra religious training as a result of completing her colloquy, and Hosanna-Tabor gave Perich the title of “commissioned minister” and held her out to the world as a minister by bestowing this title upon her. There have been numerous cases that have ruled on the issue of whether a teacher at a church school is a minister. But, this will be the first time the Supreme Court will decide the issue. –Adam K. Treiger