Category: Employment Law

Many California employers could face another minimum wage increase on July 1^st. Earlier this year, California’s minimum wage was raised to $15.50 for all employers. However, local entities (such as cities and counties) may establish a higher minimum wage for employees working within their jurisdiction. As of July 1, 2023, several locations will increase the minimum wage.

The following chart summarizes these changes:

Impact on Remote Workers

Employers should use this as an opportunity to confirm where any of their remote (minimum wage) employees are working, as they may be subject to a higher local minimum wage than if they were working onsite.

Notification requirements

In addition, many of the local regulations contain specific reporting requirements. Required posters typically must be placed in a conspicuous location in the workplace and generally require notice to be provided in multiple languages. Note that for employers with remote workers, Senate Bill #657 allows employers to comply with notification requirements by sending email notices to their remote workers. Employers with remote workers must email their remote employees the necessary notice to confirm that all employees, including those working from home, will have access to the necessary information related to the minimum wage increase.

Impact on Minimum Wage Requirements for Exempt Employees

Notably, these local minimum wage increases do not affect minimum wage requirements for California employees who are exempt from executive, administrative, or professional exemptions. These requirements are based on the state minimum wage (not the minimum wage for a specific locality) and require an employee to earn at least double the state minimum wage, or $64,480.00 annually.

Apprenticeship

If California employers have employees working in any of the above locations, they must review their employees’ hourly wages and make any necessary changes by July 1^st be in compliance.

In the wake of the decision of the National Council for Labor Relations in McLaren Macomb, which invalidated most confidentiality and non-disparagement clauses in several employment contracts (as discussed here and here), NLRB General Counsel Jennifer Abruzzo (the “GC”) issued GC Memorandum 23-08 on May 30 2023, announcing that, in its opinion, the provision, maintenance and enforcement of non-compete provisions violates Section 8(a)(1) of the National Labor Relations Act (the “Act”), except in very limited circumstances . This direct challenge to the legality of commonly used non-compete agreements mirrors the recent proposal by the Federal Trade Commission (“FTC”) regulation that would prohibit employers from imposing such agreements on their workers and follows the Board’s memoranda of understanding with the FTC and the Antitrust Division of the Department of Justice, both of which address the anticompetitive effects of noncompete agreements (discussed here).

The GC requests Regions to refer to the Advisory Division of the NLRB all cases involving non-compete provisions that are arguably illegal and suggests that Regions seek full relief for statutory employees who, due to their employer’s unlawful maintenance of a non-competition clause broad competition provision, may demonstrate that they have lost opportunities for further employment, even in the absence of further conduct on the part of the employer to enforce the provision.

GC’s view that most non-competitors will violate the law

The GC advances the new theory that most non-compete agreements it could could reasonably be construed by employees to interfere with the exercise of employees’ rights under Section 7 of the Act, because these agreements tend to deny employees “the ability to resign or change jobs, cutting off their access to other employment opportunities for who are qualified on the basis of their experience, skills and preferences as to the type and place of work”. This, according to the GC, prevents employees from exercising or engaging in their Section 7 rights because employees “know that they will have a greater difficulty replacing their lost income if they are discharged for exercising their statutory rights to organize and act together to improve working conditions. ” The GC’s view is that most non-compete agreements undermine employees’ bargaining power in the context of lockouts, strikes and other labor disputes because former employees are unlikely to reunite at the workplace of a local competitor and, therefore, they are unable to leverage their previous relationships. The GC also believes that such agreements discourage employees from threatening to resign to demand better working conditions or making threats to resign or otherwise resign to secure better working conditions. The GC also believes that these agreements prevent union organizers, known as salts, from organizing workers in a workplace because they would be prevented from organizing by a competing target employer.

To reinforce its ever-expanding view of Section 7, the GC cited the Board’s recent decision to McLaren Macomb, 372 NLRB No. 58, slip op. at 4, 7 (2023), which concluded that non-disparagement and confidentiality clauses in termination agreements violate the Act, providing that “the ‘future rights of employees, as well as the rights of the public, may not be negotiated’ in a way that requires ‘tolerance of the future. . . concerted activities.’”

Exceptions to the non-compete ban found only in “special circumstances” under the GC’s view

In the GC’s estimation, non-compete provisions that are narrowly tailored to special circumstances that justify the violation of employees’ rights may not violate the law. While the precise boundaries of these “special circumstances” were not explained by the GC, the memo acknowledged that certain non-compete agreements cannot reasonably be construed to prohibit an employee’s acceptance of employment relationships under the Act and therefore are permitted, such as provisions that clearly only restrict the managerial or ownership interests of individuals in a competing business, or true and properly classified relationships of independent contractors. Likewise, employers are likely to be safe in limiting the dissemination of proprietary and confidential information, provided such provisions are strictly tailored and serve a legitimate business interest. Critically, a general desire to avoid competition from a former employee is no it will be a legitimate business interest that can excuse a non-compete provision and support a special circumstances defense. Likewise, commercial interests in retaining employees or protecting special investments in employee training will not justify non-competition, according to the GC.

main conclusions

While GC memo 23-08 does not carry the weight of the law, employers should expect to see their non-compete agreements (and other restrictive employee agreements) closely scrutinized by NLRB regional offices, with a corresponding increase in unfair labor practices. charges. Complaints are likely to start pouring in from various regions based on the GC’s view, and it is very possible that the Board will eventually adopt the GC’s position on the validity of non-compete agreements under Section 7 of the Act.

For those employers who do not wish to wait and see the approach, employers should consider reviewing any non-compete clauses and other restrictive clauses for non-supervisory employees with their employment lawyer and consider the business justification for such restrictive clauses and their general tolerance for risk. In addition, employers may want to consider implementing changes to their restrictive agreement practices to protect business interests, such as the GC’s suggestion to offer longevity bonuses for employee retention and investments in employee training, and strictly adapting workplace to protect property and/or trade secret information.

On May 16, 2023, National Council on Labor Relations General Counsel Jennifer Abruzzo (the “GC”) issued revisions to her original July 6, 2020 memorandum of suggested manual election protocols for use during the COVID-19 pandemic. , found here. Council policies generally favor manual elections, but that rule has been overturned by the COVID-19 pandemic. During the onset of COVID-19, manual elections were halted entirely, and when elections resumed, they were held by mail-in ballot to ensure the safety of participants. As the pandemic progressed and more workers and employers learned how to safely return to the physical workplace, the Council issued its initial suggestions for how to safely conduct a manual election, signaling a desire to return to the status quo.

In its 2020 decision to Aspirus Keweenaw370 NLRB No. 45 (2020) the NLRB reiterated the duty of the Regional Director to exercise discretion inside of the guidelines and parameters established by the Board; and the GC guidance, which is incorporated into one of the Board’s test factors for determining the appropriateness of mail-in elections. The NLRB has determined that when Regional Directors decide between a mail-in election and a manual election, they must consider six factors: (1) whether the agency office is under “mandatory telecommuting,” (2) whether the 14-day trend confirmation Cases of COVID-19 are increasing or if the positivity rate in the area is 5% or higher,(1) (3) if the manual polling place cannot be established in compliance with state and local health orders regarding maximum meeting sizes, (4) if the employer fails or refuses to comply with protocols set forth in the General Council Memorandum 20-10, (5) whether there is a current outbreak at the facility or the employer refuses to disclose the current status, and (6) other equally compelling considerations. When one or more factors were present, a reality for most of 2020-2021, Regional Directors almost reflexively directed elections by mail.

With the end of the US national COVID-19 emergency, the federal declaration of a COVID-19 public health emergency, and the global health emergency as mandated by the World Health Organization, the GC has revised its initial manual election protocols suggested, signaling a likely return to the NLRB’s longstanding preference for manual elections. While the GC noted that decisions about election procedures and the safety of all participants in an election remain at the discretion of the Regional Director, the new GC protocols are significantly less restrictive than the parties previously faced:

1. Individuals should not attend a manual election if they have symptoms of COVID-19;
2. If an individual who participated in a manual election tests positive for COVID-19 or develops symptoms of COVID-19 within 10 days of the election (or an election-related in-person meeting), he must notify the Council agent of the case;
3. If there is a local or state mask requirement, all individuals in attendance at the manual election must wear a mask – Region or Employer must provide masks if they are available;
4. Individuals participating in manual elections are encouraged to maintain reasonable physical distance and avoid overcrowding; It is
5. Individuals will be encouraged to use hand sanitizer where available.

Finally, as workplaces return to more sustained personal involvement, the updated GC manual election protocols align with this reality and signal the Board’s return to its outworn preference for manual elections.

*Jasmine Cooper is a summer associate of the Trabalho e Emprego group and helped with the writing of this article.

FOOTNOTES

(1) Although the NLRB refused to take down Aspirus, in 2022 it clarified and realigned the factor two, using the CDC Community Level metric instead of the 14-day positivity rate, reasoning that the community metric was a much more risky measure. need for participants.

In People formerly Garcia-Brower v. Kolla’s, Inc., the California Supreme Court resolved a division between the Courts of Appeals for the First and Second Districts over whether a “disclosure” protected under Section 1102.5(b) of the Labor Code includes a report of illegal activity made to an employer or agency that already knew about the reported illegal activity. The Supreme Court held that yes.

Bottom

In June 2014, the Department of Labor Standards Enforcement (DLSE) filed a complaint against Kolla’s Inc., a nightclub in Orange County, California, and its owner. The DLSE alleged that after an employee complained that she was not paid for three shifts, Kolla’s landlord fired her and threatened to report her to immigration authorities. As Kolla’s and its owner refused to accept the remedies proposed by the DLSE, the Commissioner of Labor sued them in Superior Court for various violations of the Labor Code, including retaliation in violation of section 1102.5(b).

Kolla’s and its owner did not attend the proceedings. Thus, the lower court entered a default judgment against them on most of the Commissioner of Labor’s claims. But the lower court held that the Commissioner of Labor did not file a complaint under section 1102.5(b) of the Labor Code because the employee reported her complaints to her employer and not to a government agency.

The Commissioner of Labor appealed. On appeal, the Court of Appeals upheld the lower court’s judgment on the section 1102.5(b) claim. But he did it for a different reason. In a 2-to-1 opinion, the Court of Appeal held that a private official’s report of illegal activity is not a protected “disclosure” unless the official discloses new Information. According to the Court of Appeal, the employee’s report to Kolla’s owner about wrongdoing was not a protected whistleblowing activity because they already knew about their own wrongdoing.

The Court of Appeals decision crystallized a division among the intermediate courts regarding the meaning of “disclose” in section 1102.5(b). In 2012, the Court of Appeals for the First District also ruled that “disclose” under section 1102.5(b) does not include reports of known information. But in 2014, the Second District Court of Appeals ruled that section 1102.5(b) does not limit disclosures to information that is not already known. In check outthe Supreme Court would resolve this division.

California Supreme Court Retention

The Supreme Court reversed the Court of Appeals and found that “disclose,” as used in section 1102.5(b), includes claims that an employer or government agency already knows about.

To begin with, the Supreme Court explained that “disclosure” has several plausible meanings. As shown by the division between the Courts of Appeals, “disclose” can mean bringing new information into view or it can mean bringing into view information to which the discloser has special access. The Supreme Court adopted the broader definition of “disclosure,” which includes reporting illegal activities to an employer or agency that already knew of the violations.

According to the Supreme Court, legislative history supported a broad definition. When the Legislature passed section 1102.5(b) in 1984 and amended it in 2003 and 2013, it used the terms “report”, “inform” and “complain” interchangeably to describe disclosures protected by statute. Thus, the Supreme Court held that “disclose” meant “report,” inform, or “complain,” which the Supreme Court found readily to encompass the employee’s conduct in this case. Additionally, a bill amending section 1102.5(b) in 2013 stated that California public policy was to support workers “being able to report concerns without fear of retaliation or discrimination.” Additionally, in 2013, the Legislature expanded the coverage of section 1102.5(b) to prohibit retaliation by persons with authority to investigate or correct the violation. Based on this legislative history, the Supreme Court concluded that “disclosure” under section 1102.5(b) includes telling an employer information they already knew.

The Supreme Court also held that a broad definition of section 1102.5(b) supports its purpose to enhance employee protections. An employee may feel more comfortable approaching their employer regarding workplace safety risks or wage and hour violations knowing that a colleague has made a similar disclosure. The Supreme Court has suggested that an employer may be more likely to correct violations if multiple employees disclose the same wrongdoing. In addition, an employee without retaliation protection may be hesitant to discuss a violation that they know their co-worker has already disclosed. Denying protection to employees who make secondary disclosures would deny employers and government agencies proof of information. Consequently, the Supreme Court defined “disclose” more broadly to further section 1102.5(b)’s purpose of enhancing employee protections.

travel key

With this new clarity, employers should continue to document all concerns raised by employees. The Supreme Court reiterated that an employer may rebut a whistleblower’s allegation of retaliation by presenting clear and compelling evidence that a legitimate non-retaliation interest supported the employer’s decisions. Therefore, an employer can protect itself by using best practices and documenting all instances of problematic behavior and employee complaints. Good documentation will provide contemporary evidence of legitimate non-retaliation grounds for action if an employer is sued. And employers with questions about an employee’s complaint should consult their attorney to ensure a proper response.

On December 29, 2022, the Provision of Urgent Maternal Protection for Breastfeeding Mothers (“PUMP”) Act was signed into law. law. The PUMP further amends the Federal Fair Labor Standards Act (“FLSA”), extending protections to employees who need to express breast milk on the job. PUMP expands available remedies for violations and extends employee coverage requirements. The US Department of Wage and Hour Division (the “DOL”) recently issued guidance in the PUMP requirements.

Summary of changes in PUMP

In 2010, Section 7 of the FLSA was amended by the Patient Protection and Affordable Care Act to include time slots and lactation space requirements for employees who needed to express breast milk on the job. These lactation gap time and space requirements are discussed in detail below and remain substantially unchanged with the enactment of the PUMP. However, the PUMP further amends the FLSA to extend its reasonable break time and lactation space protections for pumping breast milk at work for up to 9 million employees, including FLSA exempt employees who were not previously covered by the Affordable amendment. Care Act.

In addition, the PUMP amends the FLSA to provide a private right of action for aggrieved employees and clarifies how time spent pumping counts as hours worked for minimum wage and overtime purposes if an employee is not fully relieved of duty during the interval.

Intervals and Compensation

Employers must provide employees who need to express breast milk “a reasonable interval” for up to one year after the birth of a child “each time such employee needs to express milk”. The DOL guidance on PUMP makes it clear that: (i) an employer may not deny a covered employee time off to pump; (ii) the “frequency, duration and timing of breaks” will vary depending on factors such as the nurse’s and child’s needs and the lactation space; (iii) the employer and the employee can agree on a fixed schedule, as long as the compliance with the schedule adapts to the needs of the employee; and (iv) employees working remotely can also take pump breaks as if they were working onsite.

Employers are not required to compensate employees for pump breakdowns “unless otherwise required by federal or state law or city ordinance.” Exempt employees such as executives, administrative and bona fide professionals must be compensated during pump breaks in accordance with the FLSA salary base requirements. Non-exempt employees are not entitled to compensation during pump breaks provided they are fully relieved of work obligations during pump breaks and paid break time is not required by applicable law. If a pump breakdown is interrupted by work, time spent on work is compensated. For example, if a non-exempt employee receives a work-related call during a break, that time will be counted as hours worked under the DOL.

lactation spaces

Employers must provide employees who need to pump with a location, other than the bathroom, that is protected from view and free from intrusion from co-workers and the public, and that is available whenever an employee needs to pump. DOL guidance on PUMP elaborates that the designated location must be a “functional pumping space” and must provide the following: (i) a place for the nurse worker to sit; (ii) a flat surface, other than the floor, to place the pump; and (iii) the ability to safely store milk on the job (eg a refrigerator). Ideally, employers will also provide employees with access to electricity so they can use an electric pump (which operates more efficiently than a battery-operated pump) and access to a sink so employees can wash their hands and wipe their pump accessories. There is no one-size-fits-all approach, and employers need to consider the number of nursing staff and their work schedules when determining whether more than one space should be designated or created.

exemptions

There are some exemptions to these gap time and lactation space requirements. An employer employing fewer than 50 employees (regardless of workplace location) is not subject to these requirements if the employer experiences “undue hardship” due to “significant difficulty or expense” of compliance “in relation to size, resources , nature or structure of the employer’s business”. The DOL advises that small employers “will only be exempt under limited circumstances.”

Crew members performing duties on an aircraft during flight time, such as pilots and flight attendants, are also exempt from the lactation gap and space requirements. Some employees of rail carriers and bus service operators are currently exempt, but will be eligible for PUMP protections from 29 December 2025.

Available resources

With the enactment of the PUMP, employees now have a private right of action and can pursue all legal and equitable remedies available under the FLSA, such as liquidated damages. According to the DOL, these remedies are available regardless of whether the employee has been retaliated against.

Before filing a civil action for failure to provide lactation space, the employee must first notify the employer of the need for a space and provide the employer with 10 days to comply, unless: (i) the employee has been fired for exercising your rights under the FLSA or objecting to employer conduct; or (ii) the employer expresses its refusal to comply. There are no notice requirements for filing a complaint with the Wage and Hour Division or filing a lawsuit to enforce a reasonable gap requirement (not a space requirement).

Notice/publication requirements

The Wage and Hour Division posted an update FLSA poster reflecting PUMP requirements, which may be used to satisfy FLSA notification and publication requirements.

State or Local Laws

The PUMP and DOL guidance expressly state that nothing in federal law supersedes any state law or city ordinance that provides greater protections for employees. The state of New York, for example, recently clarified employer obligations and employee protections under the Workplace Breastfeeding Mothers Act, which takes effect on June 7, 2023. The Breastfeeding Mothers Act New York State’s breastfeeding in the workplace is an addition to the New York City’s lactation accommodation law. For additional information about these laws, click here.

Apprenticeship

Employers should evaluate their current break practices and available lactation spaces to ensure compliance with the PUMP. Employers should be mindful of these requirements when communicating with employees about their anticipated break needs, including the time frame for providing a lactation space after a request (10 days) and how to handle multiple employee requests for a lactation space .

like us before reported, the Equal Employment Opportunity Commission (“EEOC”) had on its radar potential harms that can result from the use of artificial intelligence (“AI”) technology in the workplace. While some jurisdictions have already enacted requirements and restrictions on the use of AI decision-making tools in employee selection methods,(1) On May 18, 2023, the EEOC updated its guidance on the use of AI for work-related decisions, issuing a technical assistance document titled “Selected Issues: Assessing the Adverse Impact on Software, Algorithms, and Artificial Intelligence Used in Job Selection Procedures Under Title VII of the Civil Rights Act 1964” (“Updated Guidance”). The Updated Guidance comes nearly a year after the EEOC published guidance explaining how employers’ use of algorithmic decision-making tools may violate the Americans with Disabilities Act (“ADA”). Instead, the Updated Guidance focuses on how the use of AI may implicate Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment based on race, color, religion, sex and national origin. In particular, the EEOC focuses on the disparate impact that AI can have on “selection procedures” for hiring, firing, and promotion.

Background to Title VII

As a brief background, Title VII was enacted to help protect candidates and employees from discrimination based on race, color, religion, sex and national origin. Title VII is also the act that created the EEOC. In its nearly 60 years of life, Title VII has been interpreted to include protections against sexual harassment and discrimination based on pregnancy, sexual orientation, gender identity, disability, age and genetic information. It prohibits discriminatory actions by employers in making employment-related decisions, including, for example, with regard to recruiting, hiring, monitoring, promoting, transferring and terminating employees. There are two main categories of discrimination under Title VII: (1) disparate treatment, which refers to an employer’s intentional discriminatory decisions, and (2) disparate impact, which refers to unintentional discrimination that occurs as a result of an employer’s standards. employer and practices. As stated above, the updated EEOC Guidance focuses on the effects that AI can have on the latter.

Updated EEOC guidance on using AI decision-making tools

The Updated Guidance provides important information to help employers understand how the use of AI in “selection procedures” could expose them to liability under Title VII, as well as some practical tips for limiting liability.

First, as a starting point, it is important for employers to understand whether they are using AI decision-making tools in their “selection procedures” as defined in Title VII. The EEOC clarifies that a “selection procedure” is “any ‘measure, combination of measures or procedure’ that is used as the basis for an employment decision”. In other words, the EEOC considers a selection process to encompass any and all decisions made by the employer that affect the employee’s position in the company, from the employee’s candidacy to termination.

Examples of AI-powered decision-making tools that employers can use in selection procedures include:

• resume scanners that prioritize applications using certain keywords;
• monitoring software that ranks employees based on their keystrokes or other factors;
• “virtual assistants” or “chatbots” that question job seekers about their qualifications and reject those who do not meet predefined requirements;
• video interview software that evaluates candidates based on their facial expressions and speech patterns; It is
• Testing software that provides “appropriateness for work” scores to candidates or employees regarding their personalities, aptitudes, cognitive abilities, or perceived “cultural fit” based on their performance on a game or a more traditional test.

Second, the EEOC explains how employers can and should evaluate their AI-driven selection procedures for adverse impacts. If an AI-based method causes members of a given group to be screened at a “substantially” lower “selection rate” when compared to individuals from another group, an employer’s use of that tool would violate Title VII. A “selection rate” is the proportion of applicants or applicants who are actually hired, promoted, fired, or otherwise selected. It is calculated by taking the total number of applicants or applicants from a given pool that were selected and dividing that number by the total number of applicants or applicants in that pool as a whole. As a general rule, a given group’s selection rate is “substantially” lower if it is less than 80% or four-fifths of the most favored group’s selection rate. The EEOC appropriately refers to this as the “four-fifths rule”. The EEOC warned, however, that compliance with the “four-fifths rule” does not guarantee a compatible selection method. “The courts have agreed that use of the four-fifths rule is not always appropriate, especially when it is not a reasonable substitute for a test of statistical significance.”(two)

Third, the EEOC reiterated that yes, just as an employer can be held liable for ADA violations by using AI decision-making tools designed or administered by a third party, the same is true for violations of Title VII. Reliance on a software vendor’s warranties will not absolve the employer of liability if the software results in a “substantially” lower selection rate for certain groups.

Finally, the Updated Guidance makes clear that employers should also evaluate the use of AI tools against the other stages of the Title VII disparate impact analysis, including “whether a tool is a valid measure of important job-related characteristics or characteristics ”.

Practical tips for employers

1. Require employees to seek approval before using algorithmic decision-making tools so you can do tool due diligence. Earlier, we explained why employee policies should be updated to address the use of AI tools in that article;
2. perform periodic audits to determine whether the tools you are using result in a different impact and, if they do, whether they are linked to relevant job-related skills and consistent with the business need;
3. Requiring their software vendors of these tools to disclose what steps were taken to assess whether using the tool could have a different impact, and specifically whether it was based on the four-fifths rule or whether it was based on a standard such as statistical significance can also be used by courts;(3)
4. ensure that your contracts with vendors have adequate provisions for indemnification and cooperation in the event your use of the tool is called into question;
5. ensure your employees receive adequate training on how to use these tools; It is
6. if you are outsourcing or relying on third parties to carry out selection procedures or act on your behalf to make employment-related decisions, require them to disclose their use of AI decision-making tools so that you can properly assess your exposure.

main conclusions

As AI continues to evolve at an alarming rate, employers need to adapt to ensure they are using the technology in a responsible, compliant and non-discriminatory manner. While AI can speed up the selection process and even reduce costs, relying on AI without due diligence can be problematic. Employers, not software developers and vendors, are ultimately responsible for ensuring a selection rate that is not “substantially” lower for a group of people. Employers need to remain critical of the methods they implement for selection, from the application stage through separation and transfers. Employers should continue to audit the use of these tools and ensure their employee policy and vendor contracts are updated to minimize their exposure to liability under Title VII and other labor laws. If adjustments or changes are necessary, employers must adapt and work with their suppliers to ensure they implement the least discriminatory methods or can justify their decisions as work-related and consistent with business need.

As always, Sheppard Mullin will continue to provide updates and insights on any developing legal trends related to the employment and use of AI technology.

FOOTNOTES

(1) For a review of the New York City Automated Employment Decision Tools Act, click here.

(two) quoting Isabel v. city ​​of memphis404 F.3d 404, 412 (6th Cir. 2005).

(3) To see Jones v. city ​​of bos., 752 F.3d 38, 50, 52 (1st Cir. 2014) (explaining that the four-fifths rule may be rejected when a test of statistical significance would indicate an adverse impact, such as when there is a small sample size or in cases where the “disparity is so small as to be almost imperceptible without detailed statistical analysis.”)

As we previously wrote here, in October 2022, the Sixth District of the California Court of Appeals in Camp v. Home Depot USA, Inc., 84 Cal.App.5th 638 (2022), ignored a decade of precedent and made Home Depot’s total rounding time for its non-exempt employees unlawful. In so ruling, the court held, “if an employer, as in this case, can capture and has captured the exact amount of time an employee worked during a shift, the employer must pay the employee for ‘all the time’ worked. ” The court rejected at least half a dozen previous appellate opinions and instead focused on carefully selected passages from the California Supreme Court decision in Troester x Starbucks5 Cal.5th 829 (2018) and Donohue v. AMN, 11 Cal.5º 58 (2021). In Troester, the Supreme Court upheld the federal decision de minimis the doctrine did not apply in California, and employees must be paid for all the time they worked, even during activities that occur regularly but only take a few minutes a day before clocking in (for example, going through baggage check). In Donohuethe Supreme Court rejected rounding of time for 30-minute meal periods, although it did not address whether rounding clock points for entry and exit times when shifts begin and end was improper.

O Camping the court concluded that rounding off employees’ total time is inadmissible when the employer records actual time and has the ability to pay by the minute. In reaching its decision, the court relied primarily on a plaintiff who lost time due to rounding. Surprisingly, the court ignored the fact that the other plaintiff was admittedly overpaid due to rounding. Underpayment by one author and overpayment by another suggests equal rounding over time as a whole. However, the Camping The court did not find this highly significant fact and ignored the established principle that rounding systems should not be assessed or found illegal solely on the basis of their isolated impact on a single employee.

After Home Depot appealed, the California Supreme Court granted the review opinion in February 2023. The parties’ briefing is ongoing, and on June 1, 2023, Home Depot filed its initial summary. In the absence of any extensions, Camp’s response summary will be due on July 3, 2023. Home Depot will then have the opportunity to submit a response summary.

The California Employment Law Council (“CELC”) and the Employers Group, not-for-profit firms that advocate on behalf of employers, hired Richard J. Simmons and Tyler J. Johnson of Sheppard Mullin to write the employer amicus brief in Camping. In doing so, CELC and Employers Group confirmed Sheppard Mullin’s position as the preeminent employment law firm and subject matter expert on wage and time issues. The amicus brief will serve as the voice of employers across California and provide further support to Home Depot in showing the California Supreme Court the validity of time rounding. Time rounding has long been used by employers in California and the California Court of Appeals has consistently upheld its validity when practices are properly designed. O Camping decision called into question whether employers can continue to round off time. An adverse Supreme Court decision could lead to possible class action lawsuits and PAGA claims, as well as unpaid wages and fines for employers. Sheppard Mullin’s amicus brief will play a critical role in arguing to the Supreme Court that this should not happen.

Sheppard Mullin will continue to update readers as the briefing process unfolds.

As of 2017, the New York State Nursing Mothers Act requires New York State employers to provide paid or unpaid daily express breaks for up to three years after a child is born and provide a room for expressing milk, in privacy, close to the employee’s workplace. On December 9, 2022, Governor Kathy Hochul signed legislation, effective June 7, 2023, to clarify these obligations. New York City employers will be familiar with many of these clarifications, as they generally accompany the requirements set forth in the New York City Lactation Accommodations Act of 2018 previously reported here. But New York state law is different in several important ways.

Similar to New York City law, the state amendment provides detailed requirements for the designated lactation room. Specifically, at the request of an employee, employers must designate a room or location for an employee to express breast milk that is (i) close to their work area; (ii) well lit; (iii) protected from view; and (iv) free from intrusion into the workplace by others or the public. In addition, the room must contain, at a minimum, a chair, a work surface, close access to clean running water and, if the workplace has electricity, an electrical outlet. The room cannot be a bathroom or toilet. If the function of the room is not exclusively dedicated to lactation, it must be made available to the nursing mother when necessary and cannot be used for any other purpose while being used by a worker to express milk. Employers must notify all employees when the room is designated for lactation. An employer must also provide access to refrigeration to store milk, if the workplace has access to refrigeration. Finally, the amendment clarifies that the nursing mother has the right to interrupt lactation “whenever such employee has a reasonable need to express breast milk”.

Employers are not required to comply to the extent that these requirements are impracticable because they would impose an “undue hardship” on the employer, causing significant difficulty or expense when considered in relation to the size, financial resources, nature or structure of the employer’s business. However, employers must still make reasonable efforts to provide an alternate location (other than a bathroom or shower stall) where an employee can express breast milk in privacy. Please note that if providing a nursing room would cause undue hardship, New York City law only requires a “cooperative dialogue” with the employee to identify suitable accommodation that meets your needs.

Unlike New York City law, which only applies to New York City employers with four or more employees, state law applies to employers of any size in the state of New York. In addition, the state amendment requires employers to provide employees with the Department of Labor’s (forthcoming) written policy on the rights of breastfeeding mothers to express breast milk in the workplace, both upon hiring and annually thereafter. , and employees returning to work after the birth of a child. New York City law only requires that employees create and provide their own policy consistent with city law.

New York State employers must ensure that their statewide workplaces comply with these new lactation accommodation obligations by June 6, 2023 and must establish internal protocols to comply with the policy’s reporting requirements. The new state amendment also serves as a reminder to New York City employers of existing obligations under city law in addition to new state requirements.

California General Law of Private Attorneys of 2004 (“PAY”) allows employees to act as “agents” of the State of California and recover civil penalties for violations of the Labor Code through a civil action brought on behalf of themselves and other current or former employees. In Viking River Cruises, Inc. vs. MorianaThe Supreme Court of the United States held that the Federal Arbitration Law partially preempted a California rule that prohibits employers from requiring their employees to enter into pre-dispute arbitration agreements that contractually waive the right to make “representative” claims under PAGA. viking river held that while California could validly prohibit pre-dispute arbitration agreements that effect “wholesale waivers” of PAGA claims, the Federal Arbitration Act supersedes any rule against requiring employees to arbitrate their “individual” PAGA claims. PAY.

viking river also held that an employee subject to a valid agreement to arbitrate his individual PAGA claims could not maintain “non-individual” PAGA claims based on alleged violations of the Labor Code against other employees. In concurring opinions, however, several justices indicated that the permanent question presented a state law issue on which the California courts would have the last word.

On March 24, 2023, the California Court of Appeals for the Second Appellate District concurred with the concurring opinions in viking river and gave his own answer to PAGA’s standing question on Gregg v. Uber Technologies, Inc.

The decision in Gregg v. Uber Technologies, Inc.

Greek involved an Uber driver who alleged that Uber misclassified drivers as independent contractors, leading to a violation of several provisions of the Labor Code against him and other drivers. The “Technology Services Agreement” Plaintiff signed as a condition of using the Uber smartphone app to be an Uber driver included an arbitration agreement. With respect to PAGA, the arbitration agreement:

• prohibited non-individual PAGA claims against Uber in any court of arbitration;
• required drivers to resolve their PAID claims against Uber “on an individual basis” through binding arbitration; It is
• stated that the outcome of an individual PAGA arbitration could not be used to “resolve whether other individuals have been harmed or subjected to any violations of law.”

Uber asked the Court of Appeals to (a) compel arbitration of plaintiff’s individual PAGA claims under the contract and (b) dismiss non-individual PAGA claims that plaintiff sought to bring on behalf of other drivers. Based on viking riverUber argued that the agreement to arbitrate “individual” PAGA claims deprived the plaintiff of the standing to bring PAGA claims on behalf of other drivers.

The Court of Appeal agreed that the plaintiff had signed an arbitration agreement, which pursuant to viking riverThe Federal Arbitration Act’s review of the Federal Arbitration Act required him to arbitrate his individual PAGA claims. However, the Court of Appeal concluded that the PAGA standing requirements presented a state law issue as to which viking river it was not binding.

Analyzing the standing issue of PAGA for itself, the Court of Appeal disagreed viking riveranalysis of and considered that the Greek the plaintiff retained standing to pursue non-individual PAGA claims in court despite his agreement to arbitrate his individual PAGA claims. The Court concluded that the arbitration agreement only required him to “litigate” the non-individual “part” of his PAGA claim in an “alternative forum”.

As a result, the Court of Appeals concluded that portions of the arbitration agreement intended to require Greek plaintiff’s “waiver” of his right to invoke the position of “representative” to recover penalties based on violations against other employees committed were invalid under California law. The Court severed these provisions from the arbitration agreement.

Apprenticeship

Greek marks the second decision by the California Court of Appeals to disagree viking riverinterpretation of ongoing PAGA requirements. As we shared in a previous post, the recent decision by the Fifth Appellate District of California in Galarsa v. Dolgen California, LLC also held that an agreement to arbitrate an employee’s individual PAGA claims does not deprive the employee of standing to pursue further representative PAGA claims.

Both Greek It is if remain are published decisions that are binding in the lower courts of California. As a result, when a PAGA plaintiff has an arbitration agreement that requires arbitration of its individual PAGA claim, California trial courts will likely not reject any representative PAGA claim that is also alleged, such as viking river interpreted California law to require. Instead, lower courts are likely to uphold representative claims pending individual arbitration.

However, Greek It is if remain it will not be the final word on whether an employee who has been required to arbitrate his individual claims under PAGA retains statutory standing to pursue representative PAGA claims based on alleged violations of the Labor Code against other employees. The California Supreme Court granted review in Adolf v. Uber Technologies to answer the same question. adolph is fully informed, but the oral argument has not yet taken place.

Pending adolphemployers should be careful to draft arbitration agreements that comply with the latest rulings on the interaction between PAGA and the Federal Arbitration Act, while allowing for the possibility of adolph can agree with viking riveranalysis of this issue. Due to the complex and ever-evolving case law surrounding the arbitration of PAGA claims – and the enforcement of arbitration agreements in general – employers are strongly encouraged to regularly review their arbitration agreements with counsel.

On April 6, 2023, the New York City Department of Consumer and Workforce Protection (“DCWP”) enacted its final regulation (the “Final Rules”) in connection with the New York City Automated Employment Decision Tools Act (“AEDTL”). In connection with the Final Regulations, the DCWP also notified employers that it would further delay the application of the AEDTL from April 15, 2023 to July 5, 2023. The Final Regulations, among other things, expand the definition of “machine learning , statistical modeling , data analysis or artificial intelligence” as used in the AEDTL and clarify details about bias audits required by the AEDTL.

As we previously reported, the AEDTL regulations have been in a state of flux for months. The Final Regulations are the DCWP’s third attempt to formulate regulations for the AEDTL and have received an unusually high volume of public comment, requiring several highly attended public hearings. As a result, the application of the AEDTL was postponed twice; first from January 1, 2023 to April 15, 2023, and now through July 5, 2023. However, because Final Regulations have been issued up to this point, it is unlikely that the effective date of the AEDTL will change any further.

Overview of the AEDTL

Once executed, the AEDTL will restrict employers’ ability to use “automated employment decision tools” in hiring and promotion decisions in New York City. The AEDTL defines “automated employment decision tool” as “any computational process, derived from machine learning, statistical modeling, data analysis, or artificial intelligence, that emits simplified output, including a score, rating, or recommendation, used to substantially assist or replace discretionary decision-making with employment decisions that affect individuals”. The phrase “substantially assist or replace discretionary decision-making” means: (i) relying only on simplified output (score, tag, rating, rating, etc.), with no other factors considered; (ii) use a simplified output as one of a set of criteria where the simplified output is more heavily weighted than any other criterion in the set; or (iii) use a simplified output to overrule conclusions derived from other factors, including human decision making.

Employers may not use automated employment decision tools unless: (i) the tool has been subject to a bias audit carried out in the previous year in accordance with AEDTL requirements; and (ii) the employer has posted a summary of the results of the tool’s most recent bias audit, as well as the distribution date of the tool to which such audit applies, on its publicly available website. The audit for bias must be performed by an “independent auditor”, who cannot have been involved in the use, development or distribution of the tool, cannot be employed by an employer seeking to use the tool, or a vendor who developed or distributed it. , and must not have a material direct or indirect financial interest in the employer seeking to use the tool or the vendor that distributed it. Employers must use historical data (i.e., data collected during the use of the tool by the employer) to conduct the audit. However, if insufficient historical data is available to conduct a statistically significant audit, employers may use non-historical test data, provided the employer explains why historical data was not used and how the test data was used. were generated and obtained.

Under the AEDTL, employers who use automated job decision tools must also disclose the following information to applicants at least ten business days before the tool is used: (i) the fact that an automated job decision tool will be used in connection with the evaluation or evaluation of any applicant residing in New York City; (ii) the qualifications and job characteristics that the automated employment decision tool will use to evaluate the candidate; and (iii) instructions on how an individual can apply for an alternative selection process or reasonable accommodation, if available. The AEDTL does not require employers to provide an alternate selection process, although employers are required to provide reasonable accommodation if required by the Americans with Disabilities Act and analogous state and local laws.

Finally, the AEDTL requires employers to undertake the following additional disclosure steps: (i) provide information in the employment section of their website in a clear and visible manner about their automated employment decision tool data retention policy, the type of data collected for the tool, and the source of the data; (ii) post instructions in the employment section of its website in a clear and conspicuous manner on how to make a written request for such information and, if a written request is received, provide such information within 30 days; and (iii) if such a request is denied, explain why disclosing such information would violate applicable law or interfere with a police investigation.

Employers who violate the AEDTL may be subject to civil fines ranging from $500 to $1,500 per day that the employer fails to comply with the law. The AEDTL does not expressly permit or prohibit a private right of action, but states that it should not be construed as “limiting any right of any applicant or employee for an employment decision to bring a civil action in any court of competent jurisdiction”.

Impact of the Final Regulation

The Final Regulation imposed several discrete changes to the requirements of the AEDTL and clarified the obligations of employers. More specifically, the Final Regulation:

• Expand the definition of “machine learning, statistical modeling, data analysis, or artificial intelligence” to mean “a group of computer-based mathematical techniques: (i) that generate a prediction, i.e., an expected result for an observation, such as an assessment of a candidate’s suitability or likelihood of success, or that generate a rating, ie, an assignment of an observation to a group, such as categorizations based on skill sets or aptitudes; and (ii) for which a computer identifies, at least in part, the inputs, the relative importance assigned to those inputs and, if applicable, other parameters for the models in order to improve prediction or classification accuracy”;
• Requiring bias audits to indicate the number of individuals the tool assessed that are not included in the calculations because they fall into an unknown category, and requiring that number to be included in the summary of results;
• Allow auditors to exclude categories comprising less than 2% of the data used for a bias audit from impact rate calculations;
• Clarify examples of a biased audit;
• Clarify when an employer can rely on a bias audit conducted using the historical data of other employers;
• Provide examples of when an employer may rely on a biased audit conducted with historical data, test data or historical data from other employers; It is
• Clarify that the number of applicants in a category and the category score, if applicable, must be included in the summary of results.

Next steps

The AEDTL and the Final Regulation are complex and this blog only provides an overview. Fortunately, employers who use or are considering using automated job decision tools now have an additional three months to comply. During this period, employers must: (i) identify the automated employment decision tools they currently use that may be subject to the AEDTL; (ii) begin collecting historical data or, if sufficient historical data is not available, identify appropriate test data; (iii) identify an appropriate independent auditor and obtain a biased audit; and (iv) plan for compliance with the AEDTL reporting requirements. Given the many nuances of the AEDTL and Final Regulations and the potentially significant penalties at stake, employers are strongly encouraged to coordinate with attorneys in their compliance efforts.

We will continue to monitor any new developments and provide updates as they become available.