Author: Megan Shaked

Workplace Romance: Beyond the Headlines

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By Megan Shaked and Letitia Silas

With the internet ablaze over the recent apparent outing of a workplace romance among executives during a Coldplay concert, employers may be reviewing the legal implications of workplace relationships and considering options for managing such relationships. For those who prefer their content in podcast form, check out February’s episode of Conn Maciel Carey’s Terms & Conditions™ podcast (Looking for Love in the Wrong Place – What Employers Need to Know About Managing Workplace Dating and Romance).

While there are no laws that strictly prohibit consensual romantic relationships between adults in the workplace, there are numerous reasons employers may choose to regulate romantic relationships and dating at work. And at all stages, employers may need to consider the impact on company culture and morale, power dynamics within the organization, and the legal risk involved.

Workplace Relationships Raise Many Questions for Employers to Consider

Initially, employers may ask whether and how they even want to regulate workplace romances: Continue reading →

California Legislature and Civil Rights Agency Focus on Potential Employment Law Pitfalls in Artificial Intelligence

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By Megan Shaked

Agency Efforts

The California Civil Rights Division has finalized regulations addressing employer use of artificial intelligence and automated decision systems. The proposed regulations, which are pending approval with the Office of Administrative Law, are explicit in confirming that “[i]t is unlawful for an employer or other covered entity to use an automated-decision system or selection criteria (including a qualification standard, employment test, or proxy) that discriminates against an applicant or employee or a class of applicants or employees on a basis protected” by the California Fair Employment and Housing Act (FEHA). The regulation further specifies that “[r]elevant to any such claim or available defense is evidence, or the lack of evidence, of anti-bias testing or similar proactive efforts to avoid unlawful discrimination, including the quality, efficacy, recency, and scope of such effort, the results of such testing or other effort, and the response to the results.” Continue reading →

PAGA Reform Bills Approved in California Legislature and Awaiting Governor’s Signature

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By Megan S. Shaked

Last week, California Governor Gavin Newsom announced an agreement had been reached on reforms to the Private Attorneys General Act (PAGA). The Governor, legislative leaders, business groups, and labor collaborated in reaching the deal.

Today, Assembly Bill 2288 and Senate Bill 92 passed in the legislature and await approval by the Governor. The law will take effect immediately upon his signature.

The new legislation significantly alters the landscape for PAGA cases.

Continue reading →

Employers Take Note: New Employment Laws for 2024

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By Megan Shaked, Andrea Chavez, and Samuel Rose

This year, Governor Newsom signed into law employment bills on disparate subjects such as paid sick leave, reproductive loss leave, non-competes, and more.  These new laws take effect on January 1, 2024, unless otherwise noted.

SB 525 (Minimum Wage Increase for Healthcare Workers)

SB 525 increases the minimum wage for healthcare industry workers over the next few years, working toward a minimum wage of $25 per hour. The precise schedule for the increases depends on the type of facility. The bill broadly covers employees working for a healthcare facility who provide patient care, health care services, or services supporting the provision of health care (for example, groundskeepers, guards, ancillary services workers, and more).

SB 525 also requires exempt employees be paid no less than 150% of the healthcare minimum wage or 200% of the applicable minimum wage, whichever is greater.

SB 497 (Retaliation Presumption) Continue reading →

California Supreme Court Concludes Third Party Agents May Be Directly Liable for Discrimination under FEHA

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By Megan Shaked

This week the California Supreme Court in Raines v. U.S. Healthworks Medical Group decided that an employer’s business entity agents can be held directly liable under the California Fair Employment and Housing Act (FEHA) for employment discrimination in “appropriate circumstances when the business-entity agent has at least five employees and carries out FEHA-regulated activities on behalf of an employer.”

The Underlying Class Action For Unlawful Medical Inquiries

The FEHA prohibits employers from making any medical or psychological inquiry of an applicant, except under certain circumstances. The plaintiffs in the underlying class action alleged Continue reading →

NLRB Issues Ruling Prohibiting Non-Disparagement and Confidentiality Provisions in Severance Agreements

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By Megan S. Shaked

Over the last few years, we have seen states enact various restrictions on confidentiality and nondisparagement clauses in employment agreements. These changes were made in the wake of the #MeToo movement and in an effort to reduce perceived barriers to workers’ ability to raise claims for unlawful conduct in the workplace.

Last week, the National Labor Relations Board (NLRB) ruled that a severance agreement containing nondisparagement and confidentiality provisions is unlawful under the National Labor Relations Act (NLRA).

The main issue was whether the employer violated the NLRA by offering a severance agreement to 11 bargaining unit employees it permanently furloughed. The agreement broadly prohibited the employees from making statements that could disparage the employer. The agreement also prohibited the employees from disclosing the terms of the agreement.

In examining the language of the severance agreement at issue, the Board ultimately concluded that the nondisparagement and confidentiality provisions “interfere with, restrain, or coerce employees’ exercise of Section 7 rights.” The Board reasoned that because the agreement conditioned the receipt of severance benefits on the employee’s acceptance of the unlawful provisions, the respondent’s proffer of the agreement violated the NLRA.

Continue reading →

California Rings in 2023 with New Employment Laws

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By Andrew J. Sommer, Fred Walter, Megan S. Shaked, and Samuel S. Rose

This year, Governor Newsom has signed into law employment bills on disparate subjects such as pay equity, cannabis use, and leaves of absence.  These new laws also concern industry-specific mandates for wage and hour compliance and human trafficking avoidance. These new laws take effect on January 1, 2023, unless otherwise noted.

New Pay Equity Law Requiring Disclosure of Employee Pay Scales

Senate Bill (SB) 1162 amends the existing requirement for private employers with 100 or more employees to submit pay data reports to the California Civil Rights Department. The employer pay data reports are now due by the second Wednesday of May 2023, and the second Wednesday of May for each year thereafter. SB 1162 also requires private employers with 100 or more employees hired through labor contractors to submit, by the second Wednesday of May, a separate pay data report to the Civil Rights Department for those employees.

These pay data reports must now include the median and mean hourly rate for each combination of race, ethnicity, and sex within each enumerated job category (for example, executive/senior level officials/managers, professionals, administrative support workers, service workers, etc.). Employers with multiple establishments need not submit a consolidated report, as previously required. Importantly, employers can no longer submit an EEO-1 in lieu of a pay data report.

This law also adds a requirement that Continue reading →

California Courts Issue Reminder of Strict Requirement to Pay Arbitration Fees on Time

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By Megan Shaked

At the beginning of 2022, two sections were added to the California Arbitration Act specifying that a failure to timely pay arbitration fees constitutes a material breach of the arbitration agreement. In the event of a material breach, a party subject to arbitration can withdraw the claims from arbitration to proceed in court and seek other sanctions. Concept,For,Corruption,,Bankruptcy,Court,,Bail,,Crime,,Bribing,,Fraud,,AuctionLast month, the California Court of Appeal in De Leon v. Juanita’s Foods confirmed that the new law is a bright-line rule and that courts do not have discretion to deviate from a finding of material breach.

California Civil Procedure Code Sections 1281.97 and 1281.98 require employers seeking to compel an employee’s dispute into arbitration to timely pay the fees or costs to initiate and to continue arbitration proceedings. If the employer does not pay the fees/costs required within 30 days after the due date, the employer is in material breach of the arbitration agreement, is in default of the arbitration agreement, and waives its right to compel the employee to proceed with that arbitration.

At that point, the party being compelled into arbitration has a few options. Continue reading →

Alternatives For Employers Considering Workforce Reduction

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By Andrew J. Sommer and Megan S. Shaked

This article addresses alternatives to reductions in force, or RIFs.[1] An RIF is an involuntary termination of employment, usually due to budgetary constraints, changes in business priorities or organizational reorganization, where positions are eliminated with no intention of replacing them.

Because RIFs can be costly to implement, increase the potential for employment lawsuits and lower morale of the remaining employees, employers may consider alternatives such as furloughs, voluntary separation programs, or VSPs, and early retirement incentive plans, or ERIPs.

Such alternatives can help reduce employers’ labor costs or workforce while avoiding or minimizing adverse consequences associated with a RIF.

This article discusses each of these alternatives to RIFs in detail to help you and your employer client decide which alternative is best under the circumstances:

Furloughs

One alternative to a RIF is a furlough.

Furloughs are temporary layoffs or some other modification of normal working hours without pay for a specified duration. The structure of furloughs can vary. For instance, in some furloughs employees have consecutive days of nonduty — for example, taking the first two weeks of each month off — or take off a designated day each week.

In another example, the employee may take a certain number of days off each month, but which days those are may vary from month to month. Some employers may allow employees to choose which days to take off on their furlough. A furlough may also be a temporary layoff, where the employee remains employed with a predeterminated return date, which may be extended depending on the circumstances.

Furloughs can eliminate the need for a RIF in some cases by reducing the employer’s payroll costs. However, even on unpaid days, furloughed employees do cost the employer something, because employees on a furlough usually receive employment benefits. In a unionized workforce, employers must negotiate the furlough terms and schedule with the union.

Key Pros and Cons of Furloughs Versus RIFs

There are several pros and cons to consider when determining whether a furlough is a good alternative to a RIF. The advantages of furloughs over RIFs include:

Employers avoid employment terminations and the attendant potential legal liability.

Employees don’t lose their jobs.

Continue reading →

US Supreme Court Splits the Baby on Arbitrability of PAGA Claims

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By Megan S. Shaked and Samuel S. Rose

In the latest chapter in the enforceability of employment arbitration agreements in California, the United States Supreme Court in Viking River Cruises, Inc. v. Moriana (Viking River) weighed in on whether the Federal Arbitration Act (FAA) preempts California Supreme Court precedent set in Iskanian v. CLS Transportation (2014) preventing the enforceability of California Private Attorneys General Act (PAGA) waivers.

In Iskanian, the California Supreme Court held, in part, that the FAA does not preempt state law prohibiting waiver of PAGA representative actions in employment agreements.  Specifically, the California Supreme Court determined that “an arbitration agreement requiring an employee as a condition of employment to give up the right to bring representative PAGA actions in any forum is contrary to public policy.”

Now with the Viking decision, rather than treating a PAGA waiver as simply unenforceable in its entirety, the US Supreme Court, relying on a severability clause in the arbitration agreement at issue, decided that Continue reading →