California: "Suitable Seating" Class Actions on the Rise
California employers need to be mindful of a new kind of wage-hour class action – class claims arising from the “suitable seating” requirements of the California Industrial Welfare Commission’s wage orders.
The wage orders set forth what employers must do with respect to employees’ wages, hours and working conditions. There are 17 wage orders, applying to every industry and occupation. Most of the wage orders provide that “all working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of such seats.” Unfortunately, the wage orders do not define “suitable seats” or “reasonably permits.”
In Bright v. 99 Cents Only Stores, a cashier at a discount retail chain filed a class action against her employer alleging that the company did not provide cashiers with “suitable seating.” Unlike the typical wage-hour class action, this case does not involve a claim that employees were underpaid. Instead, the plaintiff seeks to use the alleged wage order violation to trigger the penalty provisions of the California Private Attorney General Act (PAGA), which amount to $100 for each aggrieved employee for the first violation and $200 per pay period for each aggrieved employee for subsequent violations. The Court of Appeal recently ruled that the plaintiff can proceed with her case and, if she proves the employer did not provide suitable seating, recover PAGA penalties.
The retail industry is the first industry in the cross-hairs of the plaintiffs’ bar for seating violation class actions, but employers in the hospitality and manufacturing industries should expect to be targeted soon. The decision of the Bright court permitting PAGA penalties for seating violations may lead to class actions for violations of other obscure provisions of the wage orders, such as requirements relating to changing rooms, resting facilities and workplace temperatures. California employers should take immediate measures to ensure they are in compliance with the seating requirements and other provisions of the California wage orders.
2011 Update: Compliance and regulatory considerations in implementing your value based interventions
Please join Stoel Rives Partners Ed Reeves and Bob Thompson as they present "2011 Update: Compliance and regulatory considerations in implementing your value based interventions" an Oregon Coalition of Health Care Purchasers educational seminar and national webcast.
This seminar focuses on understanding the federal law traps and pitfalls associated with the use of incentives and penalties when implementing value-based employee benefit plan design as well as, the use of a 'HIPAA-based' safe harbor wellness program.
August 4, 2011
9:00 – 10:30 a.m. (Pacific)
Stoel Rives, Portland Office
Webcast available
For more details or to register please contact Linda Dixon (staff@ochcp.org) by Friday, July 29, 2011.
Idaho Supreme Court Rejects Lawsuit over Intra-Office Romance
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On June 29, 2011, the Idaho Supreme Court unanimously upheld a district court ruling that a state worker could not maintain an action against her employer for wrongful discharge based on allegations that her supervisor’s intra-office romance and consequent favoritism toward his paramour created a hostile work environment. See Patterson v. State of Idaho Dep’t of Health & Welfare. In the first Idaho case of its kind, the Court found that paramour favoritism did not violate Title VII and therefore opposition to such activity is not “protected activity” under the Idaho Human Rights Act (“IHRA”).
The longtime Idaho Health & Welfare employee who initiated the action, Lynette Patterson, asserted that her boss’s affair with another worker resulted in favoritism toward the other worker and created a hostile work environment for her and others in her unit. Following Patterson’s initial complaints of her supervisor’s misconduct, the department launched an investigation into her allegations and found that although Patterson’s supervisor did in fact have an inappropriate relationship with another employee in violation of the department’s internal policy, there was no evidence to support preferential treatment. Thereafter, Patterson claims she was the victim of retaliation. Upon receiving a performance evaluation stating that she had failed to achieve performance standards, she quit her job, alleging that she was constructively discharged.
Patterson’s complaint against the department asserted constructive discharge under the IHRA and violation of the Idaho Protection of Public Employees Act. Following an unfavorable summary judgment ruling, she appealed both issues to the Supreme Court.
In its analysis of Patterson’s retaliation claim under the IHRA, the Court used the Ninth Circuit’s three-prong test for a retaliation claim, which requires a plaintiff to demonstrate: 1) that she engaged in protected activity; 2) that she suffered an adverse employment action; and 3) there was a causal link between her activity and the adverse employment action. See EEOC v. Luce, Forward, Hamilton & Scripps. Courts have found the first prong satisfied when an employee demonstrates he or she subjectively and reasonably believed that he or she was opposing activity that violates Title VII. See Little v. United Technologies, Carrier Transicold Division.
The Court found that Patterson subjectively believed she engaged in protected activity when she opposed the paramour relationship allegedly resulting in favoritism, but it concluded that such a belief was not objectively reasonable. The Court noted that a critical element of the inquiry regarding objective reasonableness of an employee’s belief that he or she is engaging in protected activity is the existing case law at the time of the incident. The case law at the time of Patterson’s resignation did not support her position. Moreover, the Court found that the favoritism, even if true, affected all concerned on a gender-neutral basis.
This decision aligns Idaho with other jurisdictions that have confronted the specific issue of paramour favoritism and ruled that paramour favoritism does not constitute gender discrimination because it affects both men and women equally. The Court’s ruling is useful to Idaho employers to the extent that it requires employees to demonstrate the reasonableness of their belief that they are engaging in protected activity under the IHRA. Notwithstanding these holdings, employers must continue to be careful about the prospect of retaliation claims, which constituted 25% of all complaints filed with the Idaho Human Rights Commission in 2010.
California Overtime Rules Apply To Work Performed In California By Out-Of-State Employees
The California Supreme Court has ruled that California’s daily overtime requirements apply to work performed in California by non-residents. In Sullivan v. Oracle Corp., three employees of Oracle who were not residents of California worked as “instructors” and trained Oracle’s customers in the use of the company’s products. Required by Oracle to travel, the plaintiffs worked primarily in their home states but also in California and several other states. California is one of the few states that requires payment of daily overtime for hours worked in excess of eight in a day. At issue in the case was whether these non-residents of California were entitled to daily overtime for days they worked in California.
In a unanimous decision, California Supreme Court held that the California Labor Code does apply to overtime work performed in California for a California-based employer by out-of-state employees, such that overtime pay is required for work in excess of eight hours in a day. In reaching this conclusion, the Court noted California’s strong interest in applying its overtime law to all non-exempt workers, and all work performed, within the state’s borders. The Court stated that to permit non-residents to work in California without the protection of the state’s overtime law would completely sacrifice, as to those employees, California’s important public policy goals of protecting health and safety and preventing the evils associated with overwork. Additionally, not applying California law would encourage employers to substitute lower paid temporary employees from other states for California employees, thus threatening California’s legitimate interest in expanding the job market.
While not great news for employers, this decision provides guidance to multi-state employers about how to pay non-exempt employees who work occasionally in California. However, the Court left some important questions unanswered. First, the decision does not directly apply to employers that are based outside of California. The Court specifically limited its holding to out-of-state employees working for California-based employers. The question remains whether an employer based outside of California must comply with California’s overtime rules for those days its non-California employees work in California. Even though the ruling does not specifically address this scenario, the reasoning the Court employed in reaching its decision leaves the door open for an argument that its holding applies to employers based outside of California. Also, the Court was not asked to address, and did not address, whether other provisions of California’s wage law -- such as the contents of pay stubs, meal period requirements, the compensability of travel time, the accrual and forfeiture of vacation time, and the timing of payment to employees who quit or are discharged -- apply to work performed in California by non-resident employees.
California-based employers with non-exempt employees in other states who occasionally work in California should immediately confirm that all such employees are paid overtime in conformity with California law when working in California.
Lawmakers Aim to Take the "Spice" out of Synthetic Drug Use.
Meghan M. Kelly also contributed to this post.
Alaska has joined the growing list of states that have outlawed the sale or possession of “synthetic cannabinoids.” These so-called designer drugs are sold under trade names like “Spice” and “K2”, and are essentially chemicals sprayed on dried weeds then rolled and smoked like marijuana.
Alaska’s new law, that you can see here, criminalizes certain chemical combinations used to create synthetic cannabinoids, in effect banning the substance. Possession of these chemicals is punishable as a Class C felony down to a misdemeanor, depending on quantity. The ban became effective July 1, 2011.
At least thirty states have banned synthetic cannabinoids and several others are currently considering such legislation. In March, the federal government issued an “emergency listing” under the Controlled Substances Act of five compounds used to produce synthetic cannabinoids.
What does this mean for employers?
Synthetic cannabiniods may look like marijuana, but their affect on users more closely resembles methamphetamine or PCP. It is reported that the drug can cause paranoia and severe anxiety, hallucinations, nausea, suicidal thoughts, and combative behavior, among other symptoms. Poison centers across the country had nearly 5400 calls related to synthetic cannabinoid use between January 2010 and May 2011. Employers need to understand these symptoms and their impact on productivity and workplace safety.
Drug Free Workplace policies that ban use of illegal substances or “controlled substances” as defined by the Controlled Substance Act now have the backing of Alaska’s law and the federal government’s listing. Designer drugs are a rapidly evolving market, and employer drug testing programs must continue to evolve as well. While drug testing companies can test for synthetic cannabiniods, few employers in Alaska have taken this step. Presently, testing for synthetic drugs requires a separate test from the ordinary panel and it is expensive.
Certain workforces may be more prone to use of synthetic cannabinoids, and it is important for employers to determine the needs of their company and workforce. The Air Force began using urinalysis to screen for Spice in February 2011 and other branches of the armed services, some of the largest employers in the country, have started moving in the same direction.
