Employer Followed The Meal Period Law And Still Lost!!

October 25, 2010

California law mandates meal periods be provided to non-exempt workers, as set forth in Labor Code section 512.  However, the Labor Code provides the Industrial Welfare Commission (“IWC”) the power to create certain “Wage Orders” to adopt or amend working condition laws, including the power to exempt certain employees from various Labor Code requirements.

Notwithstanding this authority given to the IWC, a California court recently ruled the IWC exceeded its authority by exempting certain unionized employees covered by Wage Order 16 from the meal period requirements set forth in Labor Code section 512.  In Lazarin v. Superior Court (Total Western, Inc.), three union-represented workers sued their former employer on behalf of themselves and a putative class of non-exempt hourly employees, alleging in part that the employer failed to provide meal periods in the manner required by Labor Code Section 512 and section 10(B) of Wage Order 16.  Citing language in the Wage Order, the employer argued that Wage Order 16 specifically exempted employees subject to a collective bargaining agreement from the meal break requirements.  The court disagreed, holding not that the employer misinterpreted the Wage Order but that the IWC had overstepped its regulatory authority by providing an exemption from Labor Code section 512’s mandate for the non-exempt hourly unionized workers.

Although the Lazarin case deals only with the issue of union employees covered by Wage Order 16, it is another example of an unhelpful meal period interpretation for California employers, who are already struggling with compliance with California’s rigid meal break laws in a climate plagued by endless litigation on the subject.  As many employers are aware, the courts cannot even agree on what it means to “provide” a meal period.  This important issue has fueled numerous class action lawsuits and is currently before the California Supreme Court.  That uncertainty, and now the further uncertainty exemplified by the Lazarin ruling, underscores the need for legislation to be passed clarifying California’s meal period requirements.  Given that efforts to pass such legislation have almost all failed thus far, California employers have to make sure that their managers and supervisors are enforcing the ten minute rest breaks and lunch periods.

Agreements Not To Solicit Employees From Other Employers

October 18, 2010

In addition to California’s public policy in favor of competition, California employers should be aware that agreements with other employers not to contact or hire each others respective employees might constitute a Federal Antitrust violation.  The United States’ Department of Justice Antitrust Division, in conjunction with an ongoing investigation of anticompetitive practices of high tech employers, recently filed a Complaint against and simultaneously announced a settlement with Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar along those lines.

According to the complaint, the companies engaged in a practice of agreeing not to “cold call” employees of the other company to entice them to leave current employment.  The complaint states that the agreements were formed and actively managed by senior executives of the companies and were not limited by geography, job function, product group or time period.  Thus, the companies’ actions allegedly reduced the ability of employees to compete for high tech positions and interfered with the proper functioning of the price-setting mechanism that otherwise would have prevailed in competition among the employers. In other words, a lack of competition hurt affected employees who were deprived of competitive employment information and access to better job opportunities.

The proposed settlement, which if accepted by the court, broadly prohibits the companies from entering, maintaining or enforcing any agreement that prevents any person from soliciting, cold calling, recruiting, or otherwise competing for employees.  The companies also have agreed to implement compliance measures tailored to these practices.

The proposed settlement, along with the department’s competitive impact statement, will be published in The Federal Register and, following a 60-day comment period, the court is expected to conclude that the settlement serves the public interest, approve the agreement and enter a final judgment disposing of the case.

Therefore, California employers should be cautious about entering into casual or formal agreements with competitors that would limit each business’ ability to solicit employees away from the competition as such agreements will likely bring scrutiny from the Justice Department’s Antitrust Division.

Possible Workplace Protection for Marijuana Users

October 10, 2010

Proposition 19 on California’s November ballot seeks to legalize marijuana cultivation, processing, transportation, distribution, and sale for personal use.  Proposition 19 supporters contend that a common sense approach to marijuana is needed, largely because anti marijuana enforcement efforts have failed, that it is arguably less harmful than alcohol, and that it should be regulated and taxed in the same way as alcohol.  As California’s annual marijuana sales have been estimated at roughly $14 billion, Proposition 19 is effectively being promoted as a means to significantly enhance California’s cash strapped budget, while allowing limited criminal investigation and prosecution efforts to focus more on violent crime.

However, Proposition 19 also contains several vexing problems for California employers, including establishing workplace protection for marijuana use (provided such use does not result in “actual impairment,” which is undefined), requiring employers to consider marijuana use as a “reasonable accommodation,” creating a seemingly direct conflict with Cal-OSHA’s requirement to maintain a safe workplace, and eliminating eligibility for federal contracts over $100,000 (as it conflicts with the federal Drug-Free Workplace Act).  The “actual impairment” standard is particularly troubling, as testing for such impairment is problematic.  Unlike alcohol, marijuana impairment is not detectable by urinanalysis until several hours after ingestion, making it difficult to confirm “actual impairment” at the time of the incident in question.  Moreover, also unlike alcohol, traces of marijuana use remain in the system long after its effects have subsided. Consequently, someone heavily intoxicated by marijuana may test negative, and someone completely sober may test positive.

To date, California employers have been permitted to treat medical marijuana use just as they would any other illegal drug use, including lawfully terminating employees who test positive for marijuana.  The California Supreme Court upheld the legality of such terminations in Ross v. Ragingwire.  If passed, Proposition 19 will change the legal landscape for employers. 

According to a recent Field Poll, support for marijuana legalization has tripled over the past 40 years, to the point where roughly half of California voters now favor legalization.  As a result, Proposition 19 currently appears to have a reasonable chance of being passed.  While it is premature to change any employment policies concerning employee marijuana use, California employers are well advised to consult with their drug testing facilities to seek recommendations concerning appropriate and effective marijuana screening procedures.  

Meal Period Legislation Among New Laws Signed by California’s Governor

October 3, 2010

Here you have it! I told you to keep your fingers crossed.

In the last two days, Governor Schwarzenegger signed and vetoed several more pieces of employment legislation, including signing legislation that exempts certain categories of unionized employees from California’s meal period laws.  AB 569, which will take effect January 1, 2011, exempts construction employees, security officers in the security services industry, commercial truck drivers, and employees of electrical and gas corporations and local publicly owned electric utilities from California’s meal period requirements if the employees are covered by a valid collective bargaining agreement containing meal period provisions.  This is an important new law that will greatly benefit employers in these industries, many of whom have been affected by the wave of meal period litigation in California in recent years and whose operations are impaired by efforts to strictly comply with California’s meal period laws on threat of additional litigation.
AB 569 contains more specific definitions of the occupations exempted from meal period requirements under this law.  Employers who may benefit from this new law should review it carefully before changing policies or practices and must also understand that in order for it to apply, there must be a valid collective bargaining agreement in place containing its own meal period provisions.  Although California’s meal period rules are in need of much broader revamping to the benefit of all employers and employees, this new legislation is at least a start in the right direction.

In addition to signing AB 569 into law, Governor Schwarzenegger also signed SB 1304, which requires private employers with 15 or more employees to provide up to 30 days of paid leave per year to an employee for purposes of donating an organ, and up to 5 days of paid leave per year to an employee for purposes of donating bone marrow.

Finally, Governor Schwarzenegger signed AB 2364, which slightly broadens eligibility for unemployment compensation by providing that employees who leave their employ to protect his or her family from domestic violence abuse are eligible for benefits.

The Governor did not sign all proposed legislation increasing employee benefits, however. Notably, Governor Schwarzenegger vetoed AB 2340, which would have required employers to provide bereavement leave to employees.

We won some and we lost some.