Shocker!? Scary New California Employment Laws – Coming to You January 1!

Caroline Powell Donelan and Taylor C. Morosco

California Governor Gavin Newsom went on a bill-signing frenzy earlier this month, enacting 17 new bills into law. Below, we highlight the “Big Five” which will have a certain and critical impact on any business with workers in the Golden State.

AB 51 Prohibiting Mandatory Arbitration. California’s battle against arbitration wages on! For agreements “entered into, modified, or extended” on or after January 1, 2020, AB 51  prohibits employers from requiring current employees or applicants to “waive any right, forum, or procedure for a violation” of the Fair Employment and Housing Act or the California Labor Code. This necessarily means that an employer will not be permitted to require applicants or employees to consent to mandatory arbitration as a condition of employment. Notably, employees may still voluntarily consent to arbitration, and AB 51 does not apply to “postdispute” settlement agreements or “negotiated” severance agreements, terms that beg for clarification. AB 51 prohibits retaliation against individuals who refuse to consent to such agreements and even authorizes injunctive relief and attorneys’ fees to any plaintiff who proves a violation. There is no doubt that this bill will be challenged under the Federal Arbitration Act (“FAA”), which preempts any state law that “stands as an obstacle” to enforcing arbitration agreements. While the bill contemplates and tries to avoid preemption by expressly stating it is not “intended to invalidate a written arbitration agreement that is otherwise enforceable under the [FAA],” similar attempts by the state have been rejected. Continue reading “Shocker!? Scary New California Employment Laws – Coming to You January 1!”

California Passes AB 5: The Lawful Use of Independent Contractors in California is Drastically Limited

Caroline Powell Donelan and Caitlin I. Sanders

Just last year, the California Supreme Court in Dynamex Operations West v. Superior Court (2018) 4 Cal. 5th 903 (“Dynamex”) abruptly replaced the longstanding test in California for determining whether a worker is an independent contractor (versus an employee) with a more stringent “ABC” test for purposes of the California Industrial Welfare Commission (“IWC”) Wage Orders.

Under the “ABC” test, a worker is presumed to be an employee unless the hiring entity can prove that the worker is (A) free from control; (B) providing services unrelated to the hiring entity’s business; and (C) holding him or herself out as an independent business. More on the landmark decision in Dynamex can be found here.

Last week, California Governor Newsom signed into law Assembly Bill (“AB”) 5, which codifies and expands the “ABC” test set forth in Dynamex, making it even more difficult for employers to properly classify workers as independent contractors in California.

What are the basic provisions of AB 5? Continue reading “California Passes AB 5: The Lawful Use of Independent Contractors in California is Drastically Limited”

New York Closes in on Comprehensive Employee Wage Lien Law

Mara B. Levin, Anthony A. Mingione, and Stephen E. Tisman

New York is on the precipice of passing a law that would allow employees to easily file liens against an employer’s property in connection with pending wage disputes. The bill also would permit employee access to certain sensitive employer records and expand the scope of personal liability for owners in disputes over wages. Employers should monitor these developments and work with counsel to prepare an action plan should this bill become law.

The New York State Legislature has recently passed a bill that could substantially alter the legal landscape of wage disputes if signed into law by Governor Cuomo. The proposed Employee Wage Lien bill would allow employees to obtain liens against an employer’s real property and personal property based on allegations involving nonpayment of wages. If signed into law, the bill will become effective within 30 days. Similar laws have been enacted on other states.

The law will allow employees to file a notice of a lien up to three years following the end of the employment giving rise to the wage claim. Employees will be able to place liens up to the total amount allegedly owed based on claims relating to overtime compensation, minimum wage, spread of hours pay, call-in pay, uniform maintenance, unlawful wage deductions, improper meal or tip credits or withheld gratuities, unpaid compensation due under an employment contract, or a claim that the employer violated an existing wage order. In addition, the State Attorney General and Department of Labor will be able to obtain a lien on behalf of an individual employee—or a class of employees—against an employer that is the subject of an investigation, court proceeding, or agency action.

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Quick Flashback—NLRB Overruled Obama Board’s “Independent Contractor” Test

Rosemary McKenna

Earlier this year, the National Labor Relations Board (“NLRB” or “the Board”)—with its 3-to-1 Republican-appointed majority—returned to its long-standing common-law test for determining whether workers are independent contractors (“ICs”) or employees, expressly overruling an Obama-era decision, which it said impermissibly altered the test by severely limiting the significance of “entrepreneurial opportunity” to the analysis. The importance of “independent contractor” status lies in the fact that ICs are not covered by the National Labor Relations Act (“NLRA”).

In SuperShuttle DFW, Inc. and Amalgamated Transit Union Local 1338 (Case No. 16-RC-010963), the Trump Board addressed the issue of whether franchisees who operated shared-ride vans were ICs and thus excluded from coverage under the NLRA. Relying on common-law agency analysis, the Board upheld a regional director’s decision finding the franchisees to be ICs. That traditional common-law analysis involves application and consideration of the following factors: Continue reading “Quick Flashback—NLRB Overruled Obama Board’s “Independent Contractor” Test”

LGBT Protection under Title VII? “No,” Says Fifth Circuit Judge

Alix L. Udelson

Some 40 years ago, in Blum v. Gulf Oil Corp. (1979), the Fifth Circuit pronounced that Title VII of the Civil Rights Act of 1964 does not prohibit sexual orientation discrimination. Despite the immense shift in the cultural and legal zeitgeists since then, including decisions from several federal appellate courts holding the exact opposite, the Fifth Circuit seized the opportunity in its recent decision in Wittmer v. Phillips 66 Company to reiterate—albeit in dicta—that the Blum decision remains the law of that Circuit, which covers Louisiana, Mississippi, and Texas.

Nicole Wittmer, a transgender female, received a conditional offer of employment from Phillips 66. But Phillips 66 rescinded the offer when Wittmer’s background check revealed that she had been less than candid about her employment history during her job interview.

Wittmer then filed suit against Phillips 66 alleging transgender discrimination under Title VII. Continue reading “LGBT Protection under Title VII? “No,” Says Fifth Circuit Judge”

More Money, More Problems? New Jersey Significantly Expanding Family Leave Benefits

Thomas J. Szymanski

The bill (NJ A3975), revamping the New Jersey Family Leave Act (“NJFLA”) and Family Leave Insurance (“FLI”), was passed in both houses of the New Jersey Legislature on January 31, 2019. Governor Murphy is expected to sign the bill today, with some changes effective immediately.

As a reminder, NJFLA provides job-protected leave for workers at large employers to care for family members. On the other hand, FLI provides wage-replacement benefits to workers during a leave used to care for a family member. FLI applies regardless of the size of the employer and is funded by employee payroll deductions.

Summary of the most significant changes: Continue reading “More Money, More Problems? New Jersey Significantly Expanding Family Leave Benefits”

#TakeTheLead: California Employment Laws Boldly Go Where No Legislation Has Gone Before

Emily K. Borman

Unless you’ve been living under the Starship Enterprise, you’ve seen the laundry list of new laws recently passed by the California legislature, which went into effect this year. If you do business in the Golden State, you need a clear and concise understanding of what these new laws mean to your business. To assist, we’re rolling out a series of blog posts to spotlight some of the most far-reaching and significant California legislation to date.

Today, our focus is on #MeToo-inspired legislation, as we examine California’s newest sexual harassment laws and how they affect your business.

Now that we’ve got your attention…Warp Speed Ahead! Continue reading “#TakeTheLead: California Employment Laws Boldly Go Where No Legislation Has Gone Before”