Washington Court of Appeals Holds Independent Contractors Are Protected from Retaliation by the Washington Law Against Discrimination

The Washington courts are strict in their interpretation of the classification of individuals as employees versus independent contractors, resulting in many an employer discovering that an “independent contractor” is instead an employee. But the Washington Court of Appeals’ recent ruling in Currier v. Northland Services, Inc., confirms that even those individuals who qualify as bona fide independent contractors will be deemed subject to the full protections of the Washington Law Against Discrimination (“WLAD”), including protection from retaliation. 

In Currier, the plaintiff, who worked as an independent contractor truck driver for NSI, overheard another independent contractor make a racist “joke” to a Latino driver. Currier reported the incident to NSI’s quality assurance manager, who informed the dispatchers of Currier’s complaint. Two days later, the dispatchers terminated Currier’s contract, citing “customer service issues” and informing Currier that they had spoken with the other truck drivers and “they had decided that the joke was funny.”

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California Supreme Court Makes It Easier For Workers in Misclassification Cases To Obtain Class Certification

Employment class action litigation is often won or lost with a class certification ruling.  If the employer is successful in opposing class certification, then these cases often go away with little or no fanfare and limited liability.  If, however, an employer is unsuccessful, it may be exposed to substantial liability.  After the California Supreme Court's ruling last month in Ayala v. Antelope Valley Newspapers, workers alleging employment misclassification claims will find it easier to obtain class certification thereby transforming their relatively small individual claims into potentially multi-million dollar class action disputes. 

The plaintiffs in Ayala were newspaper carriers employed by defendant newspaper publisher. In their action, the four plaintiffs claimed that defendant classified them as independent contractors when, in reality, they were employees entitled to various wage and hour protections.  They sought to certify a class consisting of other carriers employed by defendant. The trial court denied plaintiffs' motion for class certification, concluding that common issues did not predominate because determining the carriers' employee status would require a detailed review of how defendant controlled the work of each respective carrier.  Plaintiffs appealed the trial court's denial to the Court of Appeal which agreed with plaintiffs that the issue was a common one capable of answer on a class wide basis. The California Supreme Court granted review and affirmed the ruling by the Court of Appeal. 

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Washington State Supreme Court's Decision on Religious Accommodation: What It Means for Employers

Employers in Washington should take note of last week’s decision from the Washington State Supreme Court holding that state law allows a claim for failure to reasonably accommodate an employee’s religious practices. That result is hardly surprising, but how the Court reached that result, and its other conclusions along the way, will complicate how businesses in Washington operate. While the obligation to accommodate employees’ bona fide religious practice has existed under federal law since at least the early 1970s, smaller employers not subject to Title VII must now comply -- and all employers are now subject to suit for such claims in Washington state courts.

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Eugene, Oregon Poised to Be Next City To Put Itself On Paid Employee Sick Leave Map

Not to be outdone by its neighbors to the north--Portland and Seattle--Eugene, Oregon appears poised to become the next jurisdiction to pass an ordinance requiring employers to provide employees working within city limits with paid sick leave. A coalition of pro-sick leave advocacy groups, including Portland-based Family Forward, first brought the topic before the council in February. A majority of council members support the idea and recently asked staff to draft an ordinance that could be ready for public comment in May or June and on the books by January 2015. 

In drafting the ordinance, council staff will likely look to Portland’s sick leave ordinance, which took effect January 1, 2014.  While there's a lot more to it, in a nutshell the Portland ordinance requires employers with six or more employees to provide workers in Portland up to 40 hours of paid sick leave per year. (Employers with fewer employees may provide unpaid leave.)  Notably, for jurisdictional reasons the Portland ordinance does not apply to federal or state government employers.  Since any ordinance passed by the city of Eugene will probably face similar jurisdictional limits, one of Eugene’s largest employers, the University of Oregon (as well as other state and federal government employers in the city), would likely be unaffected by passage of an ordinance in Eugene.

The City Council is expected to meet again in late April to continue discussing the ordinance. We will continue to keep you apprised as new developments occur.

Utah Supreme Court "Repudiates" the Federal Multi-Employer Worksite Doctrine

In an unapologetic rejection of a decades-old legal fiction hatched by the federal Occupational Safety and Health Administration ("OSHA") and embraced by Utah Division of Occupational Safety and Health ("UOSH"), on January 31, 2014, the Utah Supreme Court repudiated the multi-employer worksite doctrine. Hughes General Contractors v. Utah Labor Commission, 2014 UT 3. The Court based its repudiation on the doctrine’s “incompatibility with the governing Utah statute.”

The so-called multi-employer worksite doctrine makes a general contractor responsible for the occupational safety of all workers on a worksite, including those who are not even the general contractor’s actual employees. In rejecting that doctrine, the Supreme Court reaffirmed that the responsibility for ensuring occupational safety in Utah is limited to an employer’s actual employees.

Hughes was a general contractor overseeing a construction project involving multiple subcontractors, including a masonry subcontractor. UOSH invoked the multi-employer worksite doctrine and cited Hughes for improper erection of scaffolding in connection with the masonry subcontractor’s work, concluding that Hughes was responsible as a “controlling employer” under Section 34A-6-201 of the Utah Occupational Safety and Health Act (UOSH Act) given Hughes’ “general supervisory authority over the worksite.” Hughes challenged the legal viability of the doctrine before the Administrative Law Judge, who upheld the citation; and then the Labor Commission’s Appeals Board affirmed the ALJ’s decision. The Board based its decision on the notion that Section 34A-6-201 “mirrors its federal counterpart, which was interpreted [by the 10th Circuit] to endorse” the doctrine. Id., ¶5.

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Washington Supreme Court Holds That the WLAD Exemption for Non-Profit Religious Organizations is Unconstitutional as Applied to Certain Employees

The Washington Supreme Court has significantly limited non-profit religious organizations’ immunity from employment discrimination claims brought under the Washington Law Against Discrimination (“WLAD”), RCW 49.60. In Ockletree v. Franciscan Health System, the majority held that the exemption of non-profit religious organizations from the definition of “employer” in the WLAD is unconstitutional as applied in circumstances outside the scope of the organizations’ religious purposes.

Larry Ockletree worked as a security guard for a non-profit religious organization, FHS. Following the termination of his employment, Ockletree raised claims of race and disability discrimination against his former employer. FHS moved to dismiss Ockletree’s WLAD claims, arguing that it is exempt from the WLAD’s definition of an “employer,” which expressly excludes “any religious or sectarian organization not organized for private profit.” RCW 49.60.040(11).

The United States District Court certified two questions to the Washington Supreme Court: (1) whether the WLAD’s exemption for non-profit religious organizations violates the privileges and immunities clause or the establishment clause of the Washington Constitution; and (2) if not, whether the exemption is unconstitutional as applied to an employee claiming that the religious non-profit organization discriminated against him for reasons unrelated to a religious purpose, practice or activity.

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California Court of Appeal Affirms That It Pays To Be the Squeaky Wheel

In a time when California courts are busier than ever, the California Court of Appeal recently did double duty by issuing an opinion that both decided an issue of first impression in California and implicitly approved Senate Bill ("SB") 292, a relatively new law (and one that we blogged about last year) clarifying that sexual harassment under California’s Fair Employment and Housing Act (“FEHA”) does not require proof of sexual desire towards plaintiff.

The Court's opinion in Max Taylor v. Nabors Drilling USA, LP can be found here. (Warning: this one is not family friendly!)  The case involved an employee working as a “floorhand” on an oil rig. For anyone who has never worked on an oil rig before (myself included), a floorhand is usually the lowest member of a drilling crew and is given the dirtiest and most physically demanding jobs. During the course of plaintiff’s employment, his male supervisor subjected him to serious and extreme harassment. For example (and this is where it gets bad, although we're only giving you the PG version), his supervisors called him multiple derogatory terms for gay men, made several offensive comments when he had an infection on his face, posted his photograph in the restroom with offensive graphics, urinated on him, spanked him, and aroused themselves in his presence and then asked him to sit on his lap.

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Happy New Year from the Oregon Legislature: New Employment Laws To Watch Out For in 2014

Today we continue with our recent New Years theme.  Not to be outdone by their neighbors to the south, the Oregon Legislature was also busy in 2013.  And now that 2014 is upon us so too are a slew of new Oregon employment laws. In areas ranging from social media to sick leave, Oregon employers should carefully review their policies and practices to ensure current compliance with these new laws.  Here is a round up of the major changes to employment laws enacted by the Oregon Legislature (and the City of Portland) that employers should be aware of in 2014:

  • Employers may not demand access to employees’ social media accounts. Beginning on January 1, 2014, employers may not demand access to employees’ or applicants’ personal social media accounts. House Bill 2654, which Governor Kitzhaber signed into law on May 22, 2013, prohibits employers from requiring an employee or applicant to disclose her username, password, or “other means of authentication that provides access to a personal social media account.” It further prohibits employers from requiring that an employee “friend” or otherwise connect with an employer via a social media account, and from compelling the employee to access the account in the employer’s presence such that the employer can view it. A number of other states have passed or are considering similar legislation.
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A Not-So Happy New Year for California Employers: 2014 Legislative Update

It has become an annual New Year’s tradition in California -- employers getting up to speed on a host of new employment laws that will affect them in the coming year. The California Legislature was busy in 2013 imposing new burdens on employers for 2014 and beyond. We previously blogged about an increase in the state minimum wage and a statutory clarification of the definition of sexual harassment, but those new laws are only the tip of the iceberg. Here’s our annual summary of the most important new laws affecting California employers.

  • Expanded Whistleblower Protection (SB 496): California law already prohibits employers from retaliating against employees who report the employer’s violation of state or federal law to a government or law enforcement agency. SB 496 expands whistleblower protection in several ways. First, it prohibits retaliation against internal whistleblowers, so an employee who reports suspected violations within the company is entitled to whistleblower protection to the same extent as an employee who reports violations to a government agency or law enforcement. Second, SB 496 provides whistleblower protection for reports of violations of local ordinances and regulations, as well as state and federal statutes. Third, SB 496 provides whistleblower protection to employees whose duties include the disclosure of legal compliance issues, which overturns case law excluding such employees from whistleblower protection.
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No Harassment, No Problem: Idaho Court Holds Harassing Comments May Still Support Liability for Negligent Infliction of Emotional Distress

A November 27, 2013 opinion from the Idaho Supreme Court reinstated a former Assistant Vice Principal’s claim seeking damages for negligent infliction of emotional distress. This decision highlights that allegedly harassing workplace comments may subject employers to liability even though e the complaining employee cannot make out a traditional sexual harassment claim. 

In Frogley v. Meridian Joint School Dist., 2013 opinion No. 124, the employee claimed that he had been the victim of sexual harassment based upon sexually-charged comments to and about him. Mr. Frogley claimed that the behavior continued despite making known that the behavior was offensive. The complaints came at approximately the same time his superiors began to question his work performance.

All of the claims, including sexual harassment under federal and state law, were dismissed before they were allowed to proceed to trial. The Supreme Court’s opinion does not detail the reason for the lower court’s decision in that regard and the employee chose not to appeal dismissal of the sexual harassment theories; pursuing instead his claims for retaliation and negligent infliction of emotional distress.

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Top 25 FAQs Employers May Have About Implementing the New Portland Paid Sick Leave Ordinance in 2014

In March 2013, the Portland City Council passed the new Portland Paid Sick Leave Ordinance requiring all but the smallest employers to provide paid sick leave (“PSL”) for employees who work within city limits. On November 1, the city released final regulations interpreting the Ordinance and fleshing out some of the requirements in more detail. Also, the original Ordinance was amended in early October while the regulations were being finalized. The law becomes effective January 1, 2014, so employers with employees in Portland need to review relevant policies to confirm they comply with the new ordinance.

Many of the Ordinance’s requirements will look familiar to employers used to dealing with other leave laws, particularly the Oregon Family Leave Act (“OFLA”). But this Ordinance has its own twists, many of which result from the fact that it’s not a state-wide law like OFLA but instead only applies to employees within Portland. This list of 25 frequently asked questions (“FAQ”) covers many of the the questions employers might have as they work through understanding the Ordinance and update their policies to ensure compliance. Yes, there are really 25 of them.

The Basics


1. What does the Ordinance require in 20 words or less?

Employers with six or more employees must allow employees in Portland at least 40 hours of PSL per year.  That’s 19 words!  But of course, there’s a lot more to it than that, so read on.


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New Seattle Job Assistance Ordinance Limits Employers' Reliance on Criminal Records

Seattle employers are about to become much more restricted in their ability to inquire into or act upon the criminal records of applicants and employees. On November 1st, the Seattle Job Assistance Ordinance, SMC 14.17, takes effect and will apply to positions that are based in Seattle at least half of the time. The Ordinance does not apply to governmental employers (with the exception of the City of Seattle) or to positions involving law enforcement, crime prevention, security, criminal justice, private investigation, or unsupervised access to children under the age of sixteen or to vulnerable or developmentally disabled adults.

The Ordinance imposes the following new restrictions on the hiring process:

  • Advertisements for positions cannot state that applicants with criminal records will not be considered or otherwise categorically exclude such applicants;
  • The employer cannot implement any policy or practice that automatically excludes all applicants with criminal histories;
  • The employer must complete an initial screening process to weed out any unqualified candidates before the employer can question applicants about their criminal histories or run criminal background checks on applicants;
  • The employer cannot refuse to hire an applicant solely because he or she has an arrest record (as opposed to a conviction record); and
  • The employer cannot refuse to hire an applicant solely because of his or her conviction record, conduct underlying his or her arrest record, or pending criminal charges unless the employer has a legitimate business reason to do so.
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Remember: New Increase to California Minimum Wage Affects Exempt Employees Too!

California Governor Jerry Brown recently signed into law an increase in the state’s minimum wage, from the current rate of $8.00 per hour up to $9.00 per hour beginning on July 1, 2014. The minimum wage will increase again to $10.00 per hour, effective January 1, 2016. 

In addition to ensuring that all non-exempt employees are paid the increased minimum wage, employers with operations in California should also evaluate how the increase to the minimum wage affects salaries of exempt employees. California law requires that exempt employees be paid a salary of at least twice the minimum wage for full time employment on a monthly basis.  Under the existing minimum wage of $8.00, exempt employees must be paid an annual salary of at least $33,280. With the increase to the minimum wage, the minimum salary for an exempt employee will increase to $37,440 per year by July 2014, and then to $41,600 by January 1, 2016. Employers who do not ensure that their exempt employees are receiving at least these amounts will be exposed to misclassification claims.

Companies with employees in California should review their compensation practices to ensure they are fully in compliance with applicable law before the increased minimum wage takes effect.

2013 Minnesota Labor and Employment Update

Minnesota employers, take note:  laws that impact you are changing this year. Not only did the Minnesota legislature recently expand the use of employee sick leave (as we blogged about here) and legalize same-sex marriage, but several other changes occurred this year that may directly impact your business.  Here's a quick round up of some of the most important new laws enacted by the legislature affecting Minnesota employers.

Criminal Background Checks

Perhaps the most notable change is, beginning January 1, 2014, most Minnesota employers must change their standard employment applications and hiring practices related to use of a job applicant's criminal history. The new "ban the box" law, which refers to the check box on most employment applications asking about an applicant's criminal history, will bar private employers from asking about or considering an applicant's criminal history until (1) the applicant is selected for an interview or (2) if there is no interview, the applicant receives a conditional offer of employment. Employers who have a statutory duty to conduct criminal history investigations or otherwise consider criminal history in the employment process, such as school districts and many health and human services providers, are exempt from the new law.

When the law goes into effect, Minnesota employers who previously required all applicants to disclose criminal history will need to defer the inquiry until further into the interview process.

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New California Law Provides that Sexual Desire Is Not a Required Element in a Sexual Harassment Lawsuit

In a same-sex sexual harassment case, does the plaintiff need to prove that the alleged harasser's conduct was motivated by sexual desire?  Under SB 292, a law signed by Governor Brown a few days ago, the answer in California is "no."   

A key question when dealing with a sexual harassment claim under California's Fair Employment and Housing Act ("FEHA") is whether the harassment was "because of sex."  Relying on the United States Supreme Court's ruling in Oncale v. Sundowner Offshore Services, Inc., a California appellate court held in Kelley v. The Conco Companies that proof of sexual desire was required in order to allege a same-sex sexual harassment claim.  In Kelley, the plaintiff, a male apprentice iron worker, suffered sexually-explicit and homophobic insults and threats from male coworkers.  The Kelley court found that the conduct, while abusive, was not "because of sex" under FEHA, because the coworkers were simply using sexually-explicit language but were otherwise not acting out of sexual attraction towards the plaintiff.  

Five years before Kelley, a different California appellate court in Singleton v. United States Gypsum Company had reached the opposite conclusion, holding that plaintiff only had to prove that he or she was treated differently because of gender and that proof of sexual motivation was unnecessary.  While the Court in Singleton also analyzed Oncale, it found that the case did not stand for the proposition that a plaintiff had to present proof that the harasser was motivated by sexual desire.

SB 292 resolves the split in the California appellate courts by explicitly overturning Kelley and clarifying that sexual harassment under FEHA does not require proof of sexual desire towards plaintiff. Employers with operations in California should take note, however, that while SB 292 is aimed at overturning the decision in Kelley, it goes beyond that decision as it encompasses all types of sexual harassment, same-sex as well as different-sex. This new law is a reminder that effective policies that comply with state and federal law, and training of supervisors as required by California law, is more important than ever.

Minnesota Legislature Expands Employee Right To Use Sick Leave To Care For Family Members

Minnesota employers who offer sick leave benefits take note:  employees can use benefits to care for sick family members. 

The Minnesota Sick or Injured Child Care Leave Act, Minn. Stat. § 181.9413, permits an employee to use personal sick leave benefits for absences due to the injury or illness of the employee's child.  Child is defined as "an individual under 18 years of age or an individual under age 20 who is still attending secondary school."  Minn. Stat. § 181.940.   A recent amendment to the statute, however, will allow an employee to use sick leave benefits to care for other family members as well. 

Effective August 1, 2013, employees may use personal sick leave benefits to provide care for a sick or injured minor or adult child (including a biological, adopted, foster, or stepchild), and also a spouse, sibling, parent, grandparent, or stepparent, on the same terms upon which the employee may use sick leave for him or herself.  An employer may limit the use of sick leave for an employee's adult child, spouse, sibling, parent, grandparent, or stepparent to no less than 160 hours in a 12-month period.  No limit may be placed on sick leave for a minor child.

Two notable limitations to the law exist.  First, the law does not require employers to provide sick leave benefits.  It merely states that employers offering sick leave benefits must extend the benefits to absences resulting from the illness or injury of an employee's family member.  And, second, the law applies only to employers with 21 or more employees. 

Employers who are subject to the amended statute are advised to update their employee handbooks and sick leave policies, and train managers and supervisors on the new law.


Oregon Court of Appeals Continues Debate About Status of Wrongful Discharge Claims In Oregon in Kemp v. Masterbrand Cabinets, Inc.

Last week the Oregon Court of Appeals issued its opinion in Kemp v. Masterbrand Cabinets, Inc., holding that the plaintiff’s common law wrongful discharge claim was not precluded by the statutory remedies then available under Oregon or federal anti-discrimination laws, and that claim could properly be decided by a jury.  The case is another wrinkle in the ever-evolving and complex body of case law trying to define the contours of claims for common law wrongful discharge in Oregon.

Oregon Wrongful Discharge 101: A Quick Primer On When Common Law Wrongful Discharge Claims Can Be Precluded By Statutory Remedies

A claim for wrongful discharge is a common law tort claim developed by Oregon courts.  Many states’ courts have recognized the tort; Oregon’s Supreme Court first did so in the 1970s in Nees v. Hocks.  The specifics about what makes a discharge from employment “wrongful” and therefore tortious hinges on whether the employee’s termination violates an important public policy, usually where an employee is fulfilling an important job-related right or public duty.  As we have blogged about previously, courts have had difficulty wrestling with defining “wrongfulness” in specific cases, and divergent results can make it difficult to clearly understand which public duties and job-related rights are covered by the tort.  For example, being discharged for complaining about the employer’s fire code and safety violations (Love v. Polk County Fire Distr.) has been found wrongful, but a car salesman being fired for complaining about the employer’s allegedly deceptive sales tactics (Lamson v. Crater Lake Motors) or private security guards being fired for restraining or arresting concert-goers suspected of drug use and violent behavior (Babick v. Oregon Arena Corporation) was not.  Further, some courts have held wrongful discharge usually covers only conduct-based discrimination (taking action against an employee because of what they do, commonly known as “retaliation”), not status-based discrimination (based on a protected personal characteristic such as race, gender, or age), although this distinction is often inconsistently applied.

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Legislature Adds Two-Week Bereavement Leave To Oregon Family Leave Act

Governor Kitzhaber last week signed House Bill 2950 ("HB 2950"), which expands the Oregon Family Leave Act ("OFLA") to include bereavement leave.  The change will become effective on January 1, 2014.

Under the new law, an OFLA-eligible employee (who works for OFLA-covered employer) may take up to two weeks of leave for three death-related purposes:  attending the funeral or alternative to a funeral of a family member; making arrangements necessitated by the death of the family member; or grieving the death of the family member.  The law incorporates the existing definition of “family member,” meaning that an employee make take the leave for the death of a spouse, same sex domestic partner, parent, parents-in-law (including the parents of same-sex domestic partners), grandparent, grandchild, child, stepchild, or child of the employee’s same sex domestic partner. 

The eligible employee must provide notice of the leave, but unlike other kinds of OFLA leave, the employer may not reduce the 2-week leave entitlement for failure to timely provide notice.  The leave must be completed within 60 days of the date on which the employee receives notice of the death. 

There are a couple of additional quirks in the new law.  An employer may not require the eligible employee to take multiple periods of leave concurrently if more than one family member dies during the one-year leave period.  In other words, if an employee has the misfortune to lose two family members in rapid succession, the employer cannot require that the employee take bereavement leave for multiple deaths concurrently.  In addition, the general prohibitions against family members who work for the same employer taking concurrent leave does not apply to bereavement leave; spouses or same sex domestic partners who work for the same employer may take concurrent bereavement leave.

Employers should start preparing now by reviewing and updating their handbooks and leave policies to be ready to comply with the new law when it becomes effective in January.

Oregon Legislature Passes HB 2654 Prohibiting Employers From Requiring Access To Employee Social Media Accounts

Coming as no big surprise since other states, like Utah and California, have been passing similar laws, the President of the Oregon Senate recently signed the final version of HB 2654, which will prohibit Oregon employers from compelling employees or applicants to provide access to personal social media accounts, like FaceBook or Twitter.  The law will also keep off limit to employers other sites that allow users to create, share or view user-generated content (like videos, still photos, blogs, videos, podcasts or instant messaging, email or website profiles), and also prohibits requiring that employees allow the boss to join or "friend" them on social media sites.  It also prohibits retaliation against any employee or applicant who refuses to provide access to accounts or to add the employer to his or her contacts list. The law becomes effective in January 2014.

Specifically, under the new law Oregon employers will not be allowed to:

  • Require or ask an employee or applicant to share a username or password allowing access to a personal social media account;
  • Require employees or applicants to add their employers to their contacts or friends lists;
  • Compel employees or applicants to access the accounts themselves to allow the employer to view the contents of a personal social media account;
  • Take or threaten to take any action to discharge, discipline or otherwise penalize an employee who refuses to share their account access information, allow their employer to view content, or add the employer to their contact or friends list (or fail or refuse to hire an applicant for the same things).
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Ninth Circuit's Standing Committee on Federal Public Defenders Finds DOMA and Oregon's Measure 36 to be Unconstitutional

A single Ninth Circuit judge, in his capacity as chair of the Circuit’s Standing Committee on Federal Public Defenders (“the Standing Committee”), recently ruled in the unpublished decision of In the Matter of Alison Clark that the federal Defense of Marriage Act (“DOMA”) and Oregon’s Measure 36 violate the United States and Oregon Constitutions by unlawfully discriminating against same-sex couples.

Alison Clark, a federal public defender in Oregon, married Anna Campbell in Canada in 2012. Clark’s marriage was not recognized in Oregon, due to Measure 36, a ballot initiative passed in 2004 that defined marriage as between only a man and a woman. In addition, the federal government did not recognize Clark’s marriage, as DOMA similarly defines marriage as a legal union between one man and one woman.

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Utah Passes Internet Employment Privacy Act

You have probably seen news accounts of employers requesting or requiring employees or applicants to disclose their usernames or passwords for their online accounts at services like Facebook and Twitter. Employers ostensibly request this information to learn more about job applicants and to monitor employee compliance with workplace requirements. Many employees and observers, however, see such requests as overly intrusive. The resulting controversy has led some states to pass laws restricting employers’ rights to make such requests. On March 7, 2013, the Utah State Legislature joined these states and passed the Internet Employment Privacy Act (the “Act”)

Under the Act, Utah employers may not request that an employee or job applicant disclose a username and password allowing access to a personal internet account. It also prohibits employers from taking an adverse employment action (like refusing to hire, demoting or firing) against an employee who fails or refuses to disclose a username or password for a personal internet account. A “personal internet account” is defined under the Act as an online account used by the employee or applicant for purely personal reasons unrelated to work.

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Portland City Council Approves Sick Leave Ordinance

We previously advised you that the Portland City Council was considering an ordinance that would require Portland employers to provide sick leave to employees. The Council voted unanimously to approve the ordinance on Wednesday, meaning that Portland will now join a handful of jurisdictions (including Connecticut, San Francisco, Seattle, and Washington, D.C.) that require employers to give employees time off for illness. Similar bills have also been introduced in the state legislature, although it is too soon to predict whether they will pass.

The Portland ordinance, which takes effect on January 1, 2014, generally requires private employers to provide 40 hours of sick leave per year to eligible employees. For employers with six or more employees, the time must be paid; for smaller businesses, leave may be unpaid. Employers that already provide sick leave equivalent to or in excess of what the ordinance requires do not need to make any changes.

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Oregon Supreme Court Takes Another Big Bite Out of the At-Will Employment Doctrine in Cocchiara v. Lithia Motors

Most people understand that employment in Oregon, as in most states, is at will, meaning that either the employer or the employee can end the relationship at any time for any reason or no reason at all, absent a contractual, statutory, or constitutional requirement to the contrary.  Of course, that last clause provides that there are limits on at-will employment.  An employer can’t end the relationship because the employee becomes disabled, needs to fulfill duty obligations in the armed forces reserves, files a complaint against the employer, or a myriad of other unlawful reasons.  Some plaintiff’s lawyers would argue that the at-will employment doctrine is so riddled with exceptions that it doesn’t really exist.  And good employer defense attorneys will advise their clients that, while the doctrine still exists, every termination should be supported by clear, legitimate business reasons – and ideally with good documentation.  But it is clear that no employee can have a reasonable expectation of continued employment, since he or she could be fired at any time.  But what about an applicant?

Suppose an applicant meets with a hiring manager and, after the interview, the manager shakes the applicant’s hand and says “You’re hired!  Come in tomorrow to sign the paperwork.”  The applicant has another offer and the hiring manager encourages him to turn it down.  The applicant does so and, the next day, shows up at his new employer’s offices.  There he is told that they have changed their minds and don’t need him after all.  The applicant is devastated because not only does he not have this job, but the other offer he turned down has already been filled.  The employer, on the other hand, reasons that it could have fired the applicant anyway on his first day on the job under the at-will doctrine, so where is the harm?  The employer argues that if the applicant has a claim, how long does an employer have to employ new hires?   

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Proposed Utah Bill To Prohibit Discrimination Based On Sexual Orientation or Gender Identity

Utah State Senator Steve Urquhart (R-St. George) is sponsoring a bill that would amend Utah’s employment and housing antidiscrimination statutes to address discrimination on the basis of sexual orientation and gender identity. Urquhart introduced Senate Bill 262 to the Utah Senate Rules Committee on March 1, 2013. Currently, several municipalities in Utah have ordinances prohibiting employment or housing discrimination against LGBT individuals, but there is no state-wide protection against such discrimination, nor is the state’s Labor Commission empowered to investigate or remedy any such discrimination.

S.B. 262 would amend the Utah Antidiscrimination Act to make it unlawful for an employer to discriminate against or harass an otherwise qualified person because of that person’s sexual orientation or gender identity. The bill defines “sexual orientation” as “an individual’s actual or perceived orientation as heterosexual, homosexual, or bisexual.” The bill defines “gender identity” as “an individual’s internal sense of gender, without regard to the individual’s designated sex at birth.” Utah’s Antidiscrimination Act applies to employers employing 15 or more employees but does not apply to religious organizations or associations. S.B. 262 would also exempt organizations “engaged in public or private expression if employing an individual would affect in a significant way the organization’s ability to advocate public or private viewpoints protected” by the First Amendment from the definition of “employer.” Thus, certain advocacy groups would not be required to employ LGBT individuals under S.B. 262 if doing so was inconsistent with their mission and would significantly affect their ability to advocate their viewpoints.

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Washington Court Affirms That Anti-Retaliation Laws Protect HR Employees

The Washington Court of Appeals recently determined that state anti-discrimination laws prohibit retaliation against human resources and legal professionals who oppose discrimination as part of their normal job duties. The court also declined to extend the same actor inference, a defense against discrimination claims, to retaliation claims.

Lodis worked at Corbis Holdings as a vice president of human resources. As part of his normal job duties, he warned Corbis’s CEO, Shenk, that Shenk’s age-related comments could give rise to liability for age discrimination. Around the same time, Shenk promoted Lodis but almost immediately gave him a negative performance review, placed him on probation, and then ultimately fired him. 

Lodis sued under the Washington Law Against Discrimination (WLAD), claiming that Corbis retaliated against him for opposing Shenk’s comments. The trial court concluded that Lodis was not engaged in protected activity “because he was simply performing his job duties by warning Shenk” about potential discrimination. The court of appeals disagreed.

Step Outside Rule

Corbis urged the court to adopt the “step outside” rule, which governs federal cases under the Fair Labor Standards Act (FLSA). The rule requires an employee to step outside her normal job duties before receiving the FLSA’s protection against retaliation.  

The court declined to adopt the rule for two reasons. First, the court believed that the language of the WLAD could not support a step outside rule. Second, the court concluded that policy considerations favored rejecting the rule. “[A]dopting the step outside rule,” the court said, “would strip human resources, management, and legal employees of WLAD protection.” The court noted the importance of protecting these employees because they are often the most able to oppose workplace discrimination. 

Same Actor Inference

Corbis also argued that the court should apply the same actor inference to dismiss Lodis's retaliation claim.  The same actor inference arises when an employee is both hired and fired by the same decision-makers in a short period of time.  Courts may then infer that the employee was not fired for any attribute that the decision-makers were aware of when they hired her.  Corbis contended that Shenk promoting Lodis despite the warning about potential discrimination proved that he did not retaliate when he later fired Lodis.

The court, however, refused to extend the same actor inference to retaliation claims.  The court was concerned that extending the defense would allow employers to simply promote employees before terminating them to avoid valid retaliation claims.

Thus, Lodis v. Corbis Holdings, Inc. limits the same actor defense to traditional discrimination cases. And perhaps more importantly, the case reaffirms that the WLAD protects all employees from retaliation.

New Pregnancy Disability Leave Regulations Take Effect in California

California law requires employers with five or more employees to provide pregnancy disability leave (PDL) to employees who are disabled by pregnancy, childbirth or related medical conditions. New revisions to the PDL regulations have taken effect and include some notable substantive changes, including the following:

  • Expansion of definition of “disabled by pregnancy.” The regulations now define the term “disabled by pregnancy” to include needing time off for prenatal or postnatal care, gestational diabetes, pregnancy-induced hypertension, preeclampsia, post-partum depression, and loss or end of pregnancy. The regulations indicate that the list of conditions is intended to be non-exclusive and illustrative only, so employers should take a broad view of the term “disabled by pregnancy.”
  • Prohibition of discrimination based on “perceived pregnancy.” It is now unlawful to discriminate or harass an employee based on “perceived pregnancy,” which the regulations define as being regarded or treated by an employer as being pregnant or having a related medical condition.
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Portland, OR May Soon Follow Seattle In Requiring Employers To Provide Paid Sick Leave

Last fall we told you about the new Paid Sick and Safe Time (PSST) ordinance passed by the city of Seattle that requires certain employers within that city to provide paid time off to employees.  The Portland City Council is now considering a similar ordinance for employers with employees in Portland.  The Council will consider the proposal on Thursday this week, and will likely vote on it in February.

The ordinance would require employers that have employees within the city with more than six employees to provide 40 hours, or five work days, of paid sick time per year to employees who work more than 240 hours per year.  Employers with five or fewer employees must also provide sick leave, but it can be unpaid.  Employees will be able to bank one hour of sick time for every 30 hours worked.  Employers that already have a paid time off policy that provides the same or better benefits will already comply with the new ordinance, and would not be required to provide additional paid time off. 

The law would prohibit covered employers from denying employees leave, or retaliating against them for requesting and taking it.  Aggrieved employees can file a charge with the Oregon Bureau of Labor and Industry (BOLI) or file a lawsuit "for damages and such other remedies as may be appropriate."

We'll continue to monitor this proposal and keep you updated, especially of course if it passes.  If that happens, it would become effective in January 2014.


Countdown to Washington's New Hazardous Drugs Rule

In 2014, Washington health care employers will be required to comply with the Department of Labor and Industries’ (“L&I’s”) new Hazardous Drugs Rule.   While today that may seem like the distant future, savvy employers will take time in 2013 to implement measures in compliance with the new rule before the deadline to do so creeps up.

What is the Hazardous Drugs Rule?

The Hazardous Drugs Rule is designed to protect employees of health care facilities in Washington from occupational exposure to hazardous drugs. For purposes of the Rule, the term “health care facilities” includes not only hospitals and clinics, but also pharmacies, nursing homes, home health care agencies, veterinary practices, and some research laboratories. The Rule’s protections extend beyond medical providers, pharmacists, and the like to encompass all employees who may be exposed to hazardous drugs. For example, a janitorial employee’s duties may include disposal of discarded medications or similar exposure to hazardous drugs.

Hazardous drugs include any drug identified by the National Institute for Occupational Safety (“NIOSH”) in its list of antineoplastic and other hazardous drugs in health care settings, which can be found at: http://www.cdc.gov/niosh/docs/2012-150/. In addition, hazardous drugs can include any other drug that can damage DNA or cause cancer, birth defects, fertility problems, or organ toxicity at low doses. Common examples of drugs considered to be hazardous under the Rule are chemotherapy drugs, birth control pills, and certain anti-depressants.

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Happy New Year: New Laws Affecting California Employers In 2013

The California Legislature was again busy in 2012 thinking of new ways to make it more difficult to do business in the Golden State. Here’s our annual overview of key changes to employment laws in California (see last year's summary here). Companies with operations in California should ring in the new year by ensuring their familiarity and compliance with these laws, which took effect on January 1, 2013.

  • Computing Regular Rate of Pay for Nonexempt Salaried Employees (AB 2103)AB 2103 amends the California Labor Code to provide that for the purpose of computing the overtime rate of compensation required to be paid to a salaried, nonexempt employee, the employee’s regular hourly rate shall be 1/40th of the employee’s weekly salary, regardless of any agreement between the employer and the employee to the contrary. The Legislature made clear in the bill that its intent is to overturn Arechiga v. Dolores Press (2011) 192 Cal.App.4th 567, in which a California Court of Appeal upheld a written wage agreement that predetermined a nonexempt employee’s overtime compensation and included it as part of the employee’s salary. AB 2103 means that the method of calculating overtime for salaried, nonexempt employees cannot be modified by any agreement between the employer and the employee.
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Court of Appeals Interprets Definition of "Independent Contractor" Under ORS 670.600

A new case from the Oregon Court of Appeals, Compressed Pattern LLC v. Employment Department, provides some clarity about the “maintain a separate business location” prong of Oregon’s unique independent contractor statute, ORS 670.600.

First, the facts.  In the summer of 2009, a design company retained a recently-laid-off architectural intern to provide drafting services on some of its projects. The design company’s owners agreed to pay him $35.00 an hour for his services, and paid him periodically based on statements of his work he prepared and submitted. The design company provided the architect-intern with general specifications and timelines for the drafting projects, but didn’t otherwise instruct him on how to complete them. It also didn’t provide him with scheduled hours, a workspace, supplies and equipment, an email address or business cards. In fact, the architect-intern performed his drafting work free of charge at the offices of the architectural firm that had laid him off. The architectural firm was not affiliated in any way with the design company. The architect-intern performed drafting services for clients other than the design company, and even hired a friend to help him with an especially big drafting project. Meanwhile, the architect-intern spent his spare time preparing for the exams necessary to become a licensed architect. The licensing authority charged the architect-intern hundreds of dollars to take each exam.

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Oregon Court of Appeals Upholds Wrongful Discharge Claim By Whistleblowing Prison Guard

Is the Oregon Court of Appeals back in the wrongful-discharge business? It’s a fair question to ask after the court’s decision last week in Lucas v. Lake County, --Or. App.-- (2012).  Reversing the trial court's motion to dismiss, the court held that a sheriff’s deputy who served as a correctional officer could sue for wrongful discharge in violation of public policy based on his allegation that he’d been fired for demanding that the sheriff implement a training program regarding sexual relations with inmates, and for concluding that another sheriff’s deputy had traded contraband for sex with an inmate.  

What Is An "Important" Public Duty?

Wrongful discharge has had an eventful history in the Oregon courts.  Broadly speaking, in a wrongful discharge claim an employee alleges that the employer terminated him for a reason that is inconsistent with an important public policy.  The key (and usually thorny) legal issue is identifying the public policy and weighing whether it is sufficiently important to protect an employee from being fired.  The Oregon courts have deemed an employee’s need to be absent from work to serve on a jury (Nees v. Hocks, 272 Or. 210 (1975)) and an employee’s internal protest that a fire department covered up evidence of a safety violation (Love v. Polk County Fire Dist., 209 Or. App. 474 (2006)) important enough to qualify.  On the other hand, a doctor’s disagreement with his medical group’s treatment recommendations (Eusterman v. Northwest Permanente P.C., 204 Or. App. 224 (2006)) and private security guards’ lawful arrest of drunken concertgoers (Babick v. Oregon Arena Corp., 333 Or. 401 (2002)) didn’t make the cut.


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Washington State Marijuana Legalization Law Need Not Affect Employer Drug Testing Policies

There are many sound reasons why employers have zero tolerance policies and engage in drug testing of applicants and/or employees, including customer requirements, government contracting requirements (e.g.,the federal Drug Free Workplace Act), federal or state laws (including DOT requirements for transportation workers), workplace safety, productivity, health and absenteeism, and liability. 

Some Washington state employers may be wondering whether any workplace implications have been created by the election day passage of voter Initiative 502, which made Washington the first state, with Colorado, to reject federal drug-control policy and legalize recreational marijuana use.  The simple answer is it does not change a Washington employer’s rights. 

We previously blogged a similar issue when discussing a 2011 Washington Supreme Court decision holding that Washington’s Medical Use of Marijuana Act does not protect medical marijuana users from adverse hiring or disciplinary decisions based on an employer’s drug test policy. Also previously covered in World of Employment, the Oregon Supreme Court ruled that because federal criminal law preempts Oregon’s medical marijuana law, employers in Oregon do not have to accommodate employees' use of medical marijuana.

Similar concepts apply to the new Washington State marijuana legalization law.  Marijuana still remains illegal for all purposes under the federal Controlled Substances Act.  Employers simply do not have to condone illegal drug use, possession or influence at their workplace.

In light of state marijuana legalization efforts, to best protect themselves, employers should review their policies to make sure that illegal drug use under both state and federal law is prohibited, and that their policies prohibit any detectable amount of illegal drugs as opposed to an “under the influence” standard. Employers should also ensure that all levels of their human resources personnel know how to handle medical marijuana issues as they arise.

This issue has been getting a lot of attention in the state and national media since the election.  For example, see this story in the Puget Sound Business Journal, and another article I wrote at the Law360 website (note that you need a subscription for Law 360).

California Legislature Prohibits Requesting Employee Social Media Passwords

As we blogged about earlier this week, there have been a lot of recent cases before the National Labor Relations Board ("NLRB") testing the validity under federal labor laws of employer policies seeking to restrict employee use of social media.

The NLRB isn't the only place action is happening recently in this developing clash between employment law and social media.  Responding to an emerging controversy about whether employers can require disclosure of social media passwords during the hiring process, the California Legislature has passed Assembly Bill 1844, which Governor Jerry Brown signed in late September.  It takes effect on January 1, 2013.

This legislation prohibits an employer from requiring or requesting that an employee or job applicant disclose a user name or password for the purpose of accessing personal social media. AB 1844 also prohibits requiring or requesting that an employee or applicant access personal social media in the presence of the employer, or divulge any personal social media.  Finally, it also prohibits retaliation against an employee or applicant for not complying with an employer's request for such information.

The law does contain a few limited exceptions.  An employer may request that an employee divulge personal social media that the employer reasonably believes to be relevant to an investigation of allegations of employee misconduct or employee violation of law, provided that the social media is used solely for purposes of that investigation.  Additionally, the law does not preclude an employer from requiring or requesting that an employee disclose a user name, password or other method for the purpose of accessing an employer-issued electronic device.

With the passage of this law, California becomes the third state (along with Maryland and Illinois) to legislatively limit employer access to social media accounts. Companies with employees in California should assess their hiring and employment practices to make sure they are in compliance with these new restrictions.

Oregon Court of Appeals Upholds Enforceability of Employer Arbitration Agreement

In the recent case Hatkoff v. Portland Adventist Medical Center, the Oregon Court of Appeals affirmed enforcement of a company arbitration provision in an employee handbook requiring that a former employee bring his employment discrimination claims in binding arbitration. The Court’s opinion offers a straight-forward application of the law regarding the enforceability of arbitration agreements, and the outcome is probably not surprising.  Nevertheless, it contains a helpful and well-reasoned survey of the current state of Oregon law in this area, and provides another helpful case for Oregon employers interested in resolving employment disputes using arbitration or similar alternative dispute resolution (“ADR”) procedures. 

Arbitration Agreements Are Upheld Where They Are Not “Unconscionable”

Arbitration is a form of private ADR in which the parties agree to waive the right to go to court and instead adjudicate disputes privately before an arbitrator. In the employment context, arbitration can be a cost-effective and quicker alternative to litigation.  While the details of arbitration agreements can vary greatly, they may frequently be confidential (lawsuits are public proceedings), provide more limited procedures (especially with respect to discovery), require trial before a neutral arbitrator (not a jury), and provide a limited right to appeal. In general, Oregon courts, like most courts, uphold such employment arbitration agreements as long as they are not “unconscionable,” either procedurally (with respect to how the agreement was formed) or substantively (with respect to its terms).

The Oregon Court of Appeals applied this analysis to find Portland Adventist’s “Grievance and Arbitration Procedure” in an employee handbook was not unconscionable. It found the agreement was not substantively unconscionable, because while it did waive the right to a jury trial (like all arbitration agreements), it did not unreasonably limit the employee's rights or remedies that would be available in court. Interestingly, the Court specifically held that the fact the agreement required that employees file a complaint within 90 days of the complained-of employment action was not substantively unconscionable, even though the applicable statute of limitations was one year. The Court also went on to find the agreement was not procedurally unconscionable: the employee, a sales and marketing professional, signed multiple acknowledgments that he received the employee handbook containing the arbitration agreement and was aware of what he had signed.

Law On Arbitration Continues To Develop

Despite the fact that many cases come out similarly to Hatkoff and the law on arbitration agreements is generally favorable for employers, the enforceability of such agreements is routinely litigated in employment cases. For that reason, and also because the unconscionability analysis is very fact-specific and the outcome can be very different in each case, arbitration continues to be a “hot” and fluid area of employment law both in Oregon and around the country. 

Sometimes that fluidity leads to conflicts in the law, such as between courts and legislatures.  For example, since 2008 Oregon has had a statute, ORS 36.620(5), that prohibits employee arbitration agreements under certain circumstances where the agreement does not contain “magic words” provided in the statute, and where the employee does not have at least 72 hours advance written notice before starting work (the legislature lowered the advance notice requirement to 72 hours in 2011; it originally required 14 days). However, that Oregon statute itself may be unenforceable, because it may be preempted by a federal statute, the Federal Arbitration Act (“FAA”), that strongly endorses the use of arbitration and contains no such limitation.  Several federal district courts in Oregon have found that ORS 36.620(5) is preempted by the FAA, and have enforced arbitration agreements that did not provide the advance notice required by that statute, although no Oregon state appellate court has yet considered the issue (the agreement in Hatkoff preceded the Oregon statute, so it was not a factor in the analysis in that case).

Other potential conflicts exist not between state and federal law, but between different parts of federal law.  As we have blogged about previously , just such a conflict has been brewing between the U.S. Supreme Court and the National Labor Relations Board (“NLRB”) over whether arbitration agreements can include waivers of class action claims—the Supreme Court says they can; the NLRB says they violate federal labor laws allowing employees to engage in “concerted activity” relating to working conditions. We are waiting to see how the federal appellate courts resolve that conflict.

Ultimately, Hatkoff will likely stand, not as a departure from existing law, but instead as the latest in a series of federal and state cases over the past few years that are broadly supportive of employer efforts to utilize arbitration and ADR to resolve employment disputes.  But, as we've said, this continues to be an evolving area of employment law, so employers will need to stay tuned to new developments.

In the meantime, here are a few things employers should keep in mind when crafting arbitration agreements to maximize the chance they will be enforceable:

  • Make sure your arbitration agreement, whether a stand-alone agreement or part of a handbook, is clear, understandable, and well publicized.  Include the "magic words" in ORS 36.620 to make it expressly clear to employees that arbitration involves waiving some legal rights, especially the right to a jury trial.  Employees should sign acknowledgments that they have received and understand the agreement.  
  • If you have employees who don't speak English as a first language, have a translated version of the agreement to ensure it is understood.
  • Give new employees the 72 hour advance written notice required by ORS 36.620 wherever possible.  While some courts have found that statute is preempted and unenforceable, there's no guarantee every court will.
  • Under ORS 36.620, current employees can only sign arbitration agreements at the time of "bona fide" promotion or advancement.  Again, courts may find this requirement is also preempted and unenforceable, but if you can comply with it, all the better.  
  • Arbitrators are paid by the parties, unlike judges.  While in theory the parties can split the cost, the agreement should not impose costs on employees unreasonably in excess of what they would pay to file a lawsuit in court.  Many employers agree to pay a large portion, or even all, of the arbitration fees.
  • Specify the rules and procedures that will apply.  The American Arbitration Association's ("AAA") specific rules for employment arbitration are one option; other state or local arbitration forums are other (and sometimes cheaper) options.

Above all, work with your employment counsel in the crafting and implementation of the agreement.  Many enforceability pitfalls can be easily avoided with careful planning, but the devil can be in the details.  That is especially true for any state-specific rules or "gotchas," as arbitration agreements may be perfectly enforceable in some states but not in others.

Washington Law Against Sexual Orientation Discrimination Not Retroactive

On September 13, the Washington Supreme Court held that a 2006 amendment to the Washington Law Against Discrimination, which makes it illegal for employers to discriminate on the basis of sexual orientation, does not apply retroactively. But the Court also held that evidence of pre-amendment harassment is admissible to show why post-amendment conduct is discriminatory.

Loeffelholz, a lesbian, sued the University of Washington in 2009, alleging that Lukehart, her supervisor, harassed her from 2003 to 2006 because of her sexual orientation.  She claimed that Lukehart’s conduct had created a hostile work environment.  She alleged only one incident, however, that occurred after the effective date of the 2006 amendment, and that incident was not explicitly related to her sexual orientation.  The trial court dismissed her claim, stating that Lukehart’s post-amendment conduct was insufficient to support a hostile work environment claim.  The court of appeals reversed, and the Supreme Court affirmed in part.

The Supreme Court first determined that the 2006 amendment applies only prospectively.  Thus, Loeffelholz was not entitled to recover for Lukehart’s actions before the amendment’s effective date.  The Supreme Court held, however, that evidence of Lukehart’s pre-amendment conduct was admissible as context to prove that his post-amendment behavior was discriminatory.  The only explicit comments Lukehart made regarding Loeffelholz’s sexual orientation, asking if she was gay and telling her not to “flaunt it,” occurred when she started working in 2003.  The Court further held that if Loeffelholz prevailed in her post-amendment hostile work environment claim, she would be entitled to damages from the effective date of the amendment, not just from the date of Lukehart’s post-amendment conduct.

Thus, while Loeffelholz v. University of Washington precludes recovery for sexual orientation discrimination occurring before the amendment, it does allow employees to bolster sexual orientation discrimination claims with evidence of pre-amendment conduct.

California: New Requirements For Commission Agreements To Take Effect

Companies with employees in California who are paid on commission should be aware of a new law requiring commission agreements to be in writing.  As we've blogged about previously, California AB 1396 was enacted last year with a deferred effective date of January 1, 2013.  That deadline is now coming up quickly, and affected employers should therefore begin to prepare for compliance.

The new law requires all contracts for employment involving commissions as a method of payment to be in writing and to set forth a method by which the commissions are required to be computed and paid. The employee must be given a signed copy of the agreement, and the employer must obtain a signed receipt from the employee. If the contract expires and the parties continue to work under the terms of the expired contract, the contract terms are presumed to remain in full force and effect until the contract is superseded or employment is terminated by either party.

California law defines commission wages as compensation paid for services rendered in the sale of the employer's property or services and based proportionately on the price of the service or product sold. The definition of “commissions” does not include short-term productivity bonuses such as those paid to retail clerks, and it does not include bonus and profit-sharing plans unless there has been an offer by the employer to pay a fixed percentage of sales or profits as compensation for work to be performed.

With the January 1, 2013 effective date of AB 1396 fast approaching, now is the time to ensure that agreements and procedures that comply with the new requirements are in place with respect to each of your commissioned employees in California.

City of Seattle's New Paid Sick and Safe Time Law To Take Effect in September 2012


As most Seattle employers know by now and as we blogged about earlier, beginning September 1, 2012, the City of Seattle will require that all but the smallest employers provide paid sick leave to their Seattle employees. Seattle Paid Sick and Safe Time (PSST) mandates that most employers provide paid leave, which increases depending on the size of a company’s workforce. Once employees have worked 180 days or more, they must be allowed to use PSST for their own or their family members’ illnesses, as well as for certain safety-related reasons.

We are getting many questions from employers about this new leave mandate. This update will provide answers to some common questions. 

Remember that you need to notify Seattle employees of their PSST rights by September 1.  We are here to assist you in administering this new leave.  Below are a few common questions that may come up.

Q:        What general notice do we have to provide our employees?

A:        Regularly Work in Seattle.  As of September 1, 2012 or soon thereafter, current Seattle employees (of employers of any size) should receive notice of their PSST rights, and new employees should receive such notice at the time of hire. This can be accomplished in several ways:

  1. A poster displayed conspicuously and accessibly in your usual posting place,
  2. A notice to employees provided in employee handbooks or similar employee guidance, and/or
  3.  A notice to employees handed out to each new employee upon hiring. 

The notice can be given either electronically or on paper. The City of Seattle’s model notice and poster (in a number of languages) are available online (scroll down to “Resources” box in right column). 

            Occasional Seattle Employees. If your only Seattle employees are those who work in Seattle occasionally and not on a regular schedule, you do not have to provide notice to all employees, provided that notice is given to occasional-basis employees reasonably in advance of their first period of work in Seattle.

Q:        What notice do we have to provide our employees regarding their PSST accruals?

A:        Each time wages are paid, employees who are accruing PSST (even those who have not worked 180 days yet) must be given information (either on paper or in electronic format) about the amount of PSST they have available. 

Q:       What categories of employees are covered by the law, and what leave must these employees be given? 

A:        Regularly Work in Seattle. These are employees (regular part-time or full-time, and temporary) who regularly work at least 240 hours per year in Seattle, either at your workplace, by teleworking from a Seattle location or by traveling from another location to regularly work in Seattle. These employees begin to accrue leave on September 1, 2012, and can take it as soon as they have worked 180 days or more (even if those 180 days occurred before September 1, 2012). Leave is only required to be provided during times the employee is working in Seattle.

            Occasionally Work in Seattle. These are employees (regular part-time or full-time, and temporary) who occasionally work in Seattle, not on a schedule. These employees begin to accrue leave for every hour they work in Seattle after the 240th hour in a calendar year, and can take leave on their 181st day of employment (even if some or all of those 180 days occurred before September 1, 2012). You can begin to count these employees’ Seattle hours as of September 1. You can delegate to employees the duty to track “Seattle hours” as long as you notify them of this and provide a reasonable way for them to track hours. Once an occasional employee is covered, he or she is covered for that calendar year and the following calendar year. Leave is only required to be provided during times the employee is working in Seattle.

            In order to determine accruals, you must determine your Tier Size. See our past post for further information on Tier Size and accrual amounts. 

Q:        How do we figure out what rate of pay employees earn during leave? 

A:        Generally.  Employees earn the rate of pay they would have earned during the time PSST is taken—but only for hours they were scheduled to work. Employees need not be paid for lost tips or commissions, but must receive at least Washington’s current minimum wage ($9.04 in 2012). 

Nonexempts. Employees who would have been paid overtime during their PSST hours need only be paid their regular hourly rate of pay. 

Exempts. Employees receive an hourly rate of pay by dividing the annual salary by the number of weeks worked per year, to get the weekly salary, and dividing the weekly salary by the number of hours of the employee’s normal work week.

Q:        How do we coordinate PSST with other leave, including paid leave such as Short-Term Disability and other Income Replacement Policies? 

A:        PSST may run concurrently with other leave (such as FMLA) where both apply, and can be provided as a part of paid leave policies (such as vacation, sick and PTO) if those policies meet the eligibility, use, accrual and carryover requirements of PSST. Determining how you will do this and how to amend your policies must be done on a case-by-case basis. The language of your short-term disability leave arrangement, whether provided via insurance, policy or a plan, also requires a case-by-case review. 

Please contact Keelin Curran or your Stoel Rives attorney with your questions regarding coordination of PSST with other leave benefits.


Washington Appeals Court Holds No Religious Accommodation Required Under WLAD

In Short v. Battle Ground School District, Division II of the Washington Court of Appeals held last week that Washington’s Law Against Discrimination, which makes it unlawful for employers to discharge employees because of creed, does not require employers to accommodate employees’ religious beliefs.

Julie Short, a devout Christian, was employed as an assistant to the superintendent of the Battle Ground School District. Ms. Short alleged that the superintendent demanded that she to lie to a colleague about the existence of a meeting, even after she informed the superintendent that lying was contrary to her religious beliefs. After quitting her job, Ms. Short filed a lawsuit. One of the claims she brought was for failure to accommodate her religious beliefs. The trial court dismissed Ms. Short’s claim on summary judgment.

The Court of Appeals affirmed. It acknowledged that such a claim exists under federal law, as Title VII expressly imposes an affirmative duty on employers to accommodate their employees’ religious beliefs and practices. Washington’s Law Against Discrimination, however, pre-dates Title VII and does not contain similar language. The Court of Appeals declined to read a duty to accommodate religious beliefs into the statute without any indication from the legislature or the Washington Human Rights Commission that such a duty was intended.

While the Short case is a victory for employers, the question of whether Washington’s Law Against Discrimination requires employers to accommodate their employees’ religious beliefs will not be resolved definitively unless and until the Washington Supreme Court takes up the issue. It declined to do so in Hiatt v. Walker Chevrolet Co., a case decided almost 20 years ago, and has not readdressed the issue since. In Hiatt, the Court recognized that Washington’s Law Against Discrimination did not expressly provide for a failure-to-accommodate claim but noted that it might implicitly require such accommodation. The Court declined to address the issue without more briefing, stating that it was an “important and complex question” that could have “constitutional implications.”

It is also well-settled that Title VII requires employers with 15 or more employees to reasonably accommodate their employees’ religious beliefs and practices, unless to do so would create an undue hardship upon the employer.


California Supreme Court Clarifies Meal and Rest Break Requirements Under State Law

In its long-anticipated decision in Brinker v. Superior Court, a unanimous California Supreme Court has clarified the scope of an employer’s obligation to provide meal and rest breaks to non-exempt employees in California.  The Court's full opinion is available here.

Meal Breaks

California law requires employers to provide employees with a meal period of not less than 30 minutes for workdays lasting more than five hours, and to provide two meal periods for workdays in excess of ten hours, subject to waiver in certain circumstances.  At issue in Brinker was whether an employer must ensure that an employee’s work stops for the required 30 minutes, or whether an employer is only obligated to make meal periods available, with no responsibility for whether they are taken.  The Court concluded that an employer’s obligation is to relieve its employee of all duty, with the employee thereafter at liberty to use the meal period for whatever purpose he or she desires.  The employer must relinquish control over its employee’s activities and give the employee a reasonable opportunity to take an uninterrupted 30 minute break, and the employer may not impede or discourage the employee from doing so.  However, the employer is not obligated to police meal breaks and ensure no work is performed. 

Timing of Meal Breaks

The Court held that an employer must provide a first meal period no later than the end of an employee’s fifth hour of work, and a second meal period no later than the end of an employee’s tenth hour of work.  The Court found that there are no additional timing requirements, such as rolling five hour meal periods. 

Rest Periods

Under California law, employers must authorize and permit employees to take rest periods based on the total hours worked daily, at the rate of ten minutes net rest time per four hours worked or major fraction thereof.  A rest period need not be authorized for employees whose total daily work time is less than three and one-half hours.  The Court summarized the rest period obligation as follows: employees are entitled to ten minutes’ rest for shifts from three and one-half hours to six hours in length, 20 minutes for shifts of more than six hours up to ten hours, 30 minutes for shifts of more than ten hours up to 14 hours, and so on.  The 10-minute breaks must fall within the middle of a four hour period of work, to the extent practicable.

Timing of Rest Periods

The Court held that employers do not have a duty to permit their employees a rest period before any meal period.

What Brinker Means For Employers

Brinker is generally regarded as a favorable ruling for employers, and the decision provides a roadmap for employers to reduce the risk of claims arising from alleged meal and rest period violations.  Post-Brinker, it is essential that California employers carefully review and, if necessary, revise policies to state that meal periods are duty-free, 30 minutes in length and are to be taken before the end of the fifth hour of work.  Rest period policies should now detail that rest periods are authorized and permitted in accordance with the specific standards set forth above.

Employers should continue to require employees to clock out and in for meal breaks, and to carefully monitor and manage whether employees are working through their meal periods.  Employers are liable for straight time or overtime pay if they know or should have known employees have worked through meal breaks. If an employee is not clocking out for meals, an employer would likely be found to be on notice that the employee continued to work and thus should be paid for that time.  Additionally, if there is a pattern of employees not taking meal periods, or taking meal periods of less than 30 minutes in length or after the end of the fifth hour of work, management should look into whether the employees are really being given the opportunity to take timely 30-minute off-duty meal periods.

Finally, supervisors and managers should be trained on the importance of allowing employees to take meal and rest periods as prescribed in Brinker.  While the outcome in Brinker is good news for employers, managers who discourage or prevent employees from taking meal or rest breaks will expose the company to substantial liability.

When Does Alcohol or a Controlled Substance Preclude Workers' Compensation Benefits?

Like most states, Utah’s Worker’s Compensation statute prohibits an employee from recovering disability compensation when “the major contributing cause of the employee’s injury” is the employee’s unauthorized use of alcohol or a controlled substance. See Utah Code Ann. § 34A-2-302(3)(b). If any amount of a controlled substance or its metabolites is found in an injured employee’s system at the time of the injury, the Worker’s Compensation statute presumes that drug use was the major contributing cause of the injury. 

An employee can rebut this presumption by:

  • challenging the accuracy of the drug test;
  • demonstrating that he or she did not actually use a controlled substance;
  • providing expert medical opinion suggesting that the level of controlled substance in the employee’s system does not support a finding that drug use was the major contributing cause of the injury; or
  • otherwise demonstrating that drug use was not the major contributing cause of the injury.


A Utah appellate court recently weighed in on this issue when it reversed the Utah Labor Commission’s denial of disability compensation to James Barron in Barron v. Labor Commission.

Mr. Barron was severely injured while at work when he stepped backward off the edge of temporary metal decking at a construction site and fell fourteen feet to a concrete floor below. A urine sample taken at the hospital on the day of the accident tested positive for cocaine metabolites. Mr. Barron admitted to sharing a quarter of a gram of cocaine with a friend two days before the accident but presented evidence tending to demonstrate he was not impaired at the time of the accident, including testimony from co-workers and medical personnel who observed Mr. Baron’s conduct on the day of the accident.

Applying the statutory presumption, the Commission ignored Mr. Barron’s evidence of non-impairment and found that drug use was the major contributing cause of his injury. Specifically, the Commission determined that Mr. Baron must demonstrate that “some other force” apart from his own actions caused his injury to overcome the presumption. Following case law from a number of other states with similar statutory schemes, the Utah Court of Appeals reversed the decision of the Commission and, for the first time, clarified that employees are not required to show that their injury was the result of an outside force to overcome the statutory presumption. Rather, evidence of non-impairment at the time of the accident may be used to rebut the presumption and to demonstrate that drug use was not the major contributing cause of injury. 

So, when does the use of alcohol or a controlled substance preclude workers' compensation benefits?  The answer: almost always, but not when employees can demonstrate that they are not impaired, despite the presence of controlled substances within their systems.

Guidance on Terminations in Alaska


Two recent opinions from the Alaska Supreme Court offer helpful guidance to employers regarding termination processes.


In Barickman v. State, an employer suspected an employee of theft.  When confronted, the employee signed a letter of termination and then wrote a letter stating that he was resigning to avoid a “black mark on his record.”  The employee later sued, alleging wrongful termination based on breach of good faith and fair dealing.


To win a claim of wrongful discharge in Alaska, the employee must show that (1) he was discharged by his employer and (2) that the employer breached a contract or committed a tort in connection with the termination.  Here, the employee argued that his employer terminated him in bad faith, treated him differently than similarly situated employees, and failed to conduct a reasonable investigation before deciding to fire him.


Alaska law provides that when an employer makes a good faith determination that misconduct has occurred, there is no breach of the implied covenant of good faith and fair dealing, even if the employee can subsequently prove that the factual finding of misconduct was a mistake.  Here, the Supreme Court found that the employee did not raise any facts alleging that the employer’s determination was made in bad faith, particularly since the employer provided a spreadsheet showing instances where other employees accused of similar charges were dismissed or asked to resign.  The Court ultimately held that the employer did not breach its duty of good faith and fair dealing.  The Court likewise found that the employee failed to present enough evidence on the issues of whether the employer had treated him differently than other similarly situated employees or whether the employer’s investigation was unreasonable.


Boyko v. Anchorage School District  involved a teacher who sued the Anchorage School District, one of Alaska’s largest employers.  The parties had entered into a verbal resignation agreement wherein the employer promised not to release any negative information about the teacher to prospective employers.  The teacher claimed that the District had provided information that was not positive to another school district, and that these actions breached the termination agreement, violated the covenant of good faith and fair dealing, and interfered with her prospective contractual relations.  She also claimed disability discrimination, because the termination stemmed from incidents associated with the teacher’s drinking problem.  The employer won on summary judgment all counts in the lower court, where the court found that the employer was immune under an Alaska statute (see AS 09.65.160) immunizing employers who disclose job performance information in good faith.


The Supreme Court largely disagreed, finding that evidence the teacher produced in the trial court raised sufficient factual issues as to whether the District had breached the resignation agreement, and therefore whether the District had violated the covenant of good faith and fair dealing and interfered with the teacher’s  prospective contractual relations.  The Court also noted that statutorily-created rights can be waived where there is “direct, unequivocal conduct indicating a purpose to abandon or waive the legal right.”  Ultimately, the Court found that whether such a waiver occurred through the District’s verbal negotiation of a resignation agreement was in itself a material issue of fact, and remanded the claim to the lower court.


It was not all bad for the employer.  On the disability claim the court found that District had provided a legitimate, nondiscriminatory reason for the dismissal and that the teacher had not raised sufficient doubts as to whether the reason was a pretext.  Therefore, the Court affirmed the lower court’s entry of summary judgment on the claim.


Four Practical Tips For Terminations:

  1. Always act in good faith and deal fairly with employees.
  2. Consider whether termination of employment is consistent with applicable policies and past practices.
  3. Good documentation demonstrates process (and calm reflection).
  4. Be careful what you say at termination – it can become an oral contract.

Melanie Osborne contributed to this post.

Seasons' Greetings From The California Legislature--New Laws That Apply To Employers In January 2012

The California legislature has done plenty this year to leave in employers' stockings for the holidays--new employment laws that will become effective January 1, 2012.  In addition to the new California Transparency in Supply Chains Act we blogged about earlier, after some eggnog and holiday cheer, employers will need to be aware of new legal obligations that will kick in as we kick off 2012.  Here are the highlights.

 “Anti-Wage Theft” Law (AB 469). The Wage Theft Prevention Act of 2011 requires employers to provide non-exempt employees, at the time of hiring, a notice specifying the employee’s rate or rates of pay and the basis on which the employee’s wages are to be calculated (such as hourly, daily, piece, salary, commission, etc.). The notice must also include applicable overtime rates, allowances (if any) claimed as part of the minimum wage, the employer’s designated regular payday, the name of the employer (including any “doing business as” names), the employer’s physical and mailing addresses, and contact information for the employer’s workers’ compensation carrier. The Act also requires the employer to notify employees in writing of any changes made to any of this information within seven days of the implementation of such changes, unless the changes are reflected on a timely wage statement or other writing required by law. The Act adds an element of criminal liability by providing that any employer who willfully fails to pay wage-related Labor Commissioner orders or court judgments is guilty of a misdemeanor. 

Independent Contractors (SB 459). This new law cracks down on employers who misclassify their employees as independent contractors by imposing a fine of between $5,000 and $25,000 for “willfully” misclassifying a worker as an independent contractor. “Willful misclassification” means avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor. The law also imposes joint and several liability for a non-attorney consultant to advise an employer to willfully misclassify someone as an independent contractor.

Background Checks (AB 22). This law prohibits most employers from obtaining or relying on consumer credit reports regarding employees or job applicants, except in certain specified limited circumstances. The law does not apply to financial institutions or entities required by law to perform credit checks. Under the new law, employers may still obtain and rely upon credit reports for managerial employees covered by the executive exemption.

Pregnancy Disability Leave (AB 592 and SB 299). This law expressly prohibits “interference” with the exercise of any right provided under the California Family Rights Act, or due to disability by pregnancy, childbirth or related medical conditions. In a provision that may prove to be preempted by ERISA, the law also requires employers to maintain and pay for health coverage under a group health plan for any eligible female employee who takes up to four months of leave due to pregnancy, childbirth or a related medical condition in a twelve month period. 

Gender Identity and Expression (AB 887). Existing law prohibits discrimination and harassment based on gender. This law expands the definition of “gender” to include both gender identity (how the person sees him or herself) and gender expression (how other people view the person). Under the new law, an employee must be permitted to dress consistent with the employee’s gender identity and expression.

Genetic Information Discrimination (SB 559). Discrimination in hiring or employment based on genetic information is now unlawful under the Fair Employment and Housing Act. Genetic information is defined to include the individual employee’s genetic tests, the genetic tests of the employee’s family members, and the manifestation of a disease or disorder in the employee’s family members. 

Commission Agreements (AB 1396). This law requires all contracts for employment involving commissions as a method of payment to be in writing and to set forth a method by which the commissions are required to be computed and paid. The employee must be given a signed copy, and the employer must obtain a signed receipt from each employee. This law does not take effect until January 1, 2013, so employers have a year to prepare for compliance.

Agricultural Labor Relations (SB 126). This law authorizes the California Agricultural Labor Relations Board to certify union elections when employer misconduct affects the outcomes.

 Happy Holidays!

It's Time to Ensure Compliance with the California Transparency in Supply Chains Act

Under the California Transparency in Supply Chains Act, beginning January 1, 2012, large retailers and manufacturers that do business in California must disclose information on their websites about what they do to eradicate slavery and human trafficking from their supply chains. The new law applies to companies with worldwide gross receipts of over $100 million.

The law provides that if a covered company has a website, it must disclose certain information via a “conspicuous and easily understood link” on the homepage. The company must disclose to what extent, if any, it does each of the following:

  1. Engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery, specifying if the verification was not conducted by a third party.
  2. Conducts audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains.
  3. Requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking.
  4. Maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.
  5. Provides company employees and management, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chain of products.

Notably, the law does not require companies to do anything to combat slavery and human trafficking. The law simply requires disclosure of the above information.   

Although the law’s exclusive remedy for noncompliance is an action for injunctive relief brought by the Attorney General, the law does not limit remedies available for a violation of any other state or federal law. On an annual basis, the California Franchise Tax Board will submit to the Attorney General a list of companies required to make the disclosure.


Mandatory Paid Sick Leave Law Passed in Seattle

Beginning September 1, 2012, the City of Seattle will require that all but the smallest employers provide paid sick leave to their Seattle employees. Sick leave mandates under the new law increase depending on the size of a company’s workforce, and employees must be allowed to use the leave for their own or their family members’ illnesses (“Paid Sick Leave”), as well as for certain safety-related reasons (“Paid Safe Leave”).

Seattle employers should use the coming months to plan how to best structure their paid leave programs to comply with the new law. The law has posting requirements and allows complaints to the Seattle Office for Civil Rights, including recovery of damages where violations are found (but not private lawsuits). Employers have an opportunity to provide comment to the City regarding the law before rules under the law are issued (see below).

Key aspects of the comprehensive new Paid Sick Leave and Paid Safe Leave ordinance include:

  • Coverage. Employers of five or more full-time equivalent (“FTE”) employees (employees working outside Seattle must be counted) are covered. Employees, including temporary and part-time employees, who work in Seattle at least 240 hours in a calendar year, must be allowed to accrue leave.
  • Waiting Period. Leave accrues from date of hire, but employees cannot begin to take leave until 180 calendar days after date of hire.
  • Mandated Leave and Minimum Caps. The amount of required leave increases with the number of FTE employees. Employers in the different tiers are required to allow their employees to accrue leave at the following minimum levels:
    • Tier One Employers of 5-49 FTE employees must provide at least one hour of accrued paid leave time for each 40 hours worked, up to a minimum ceiling of 40 hours per year.
    • Tier Two Employers of 50-249 FTE employees must provide at least one hour of accrued paid leave time for each 40 hours worked, up to a minimum ceiling of 56 hours per year.
    • Tier Three Employers of 250 or more employees must provide at least one hour of accrued paid leave time for each 30 hours worked, up to a minimum ceiling of 72 hours per year.
  • Basis of Accrual. Non-exempt employees accrue leave time based on hours actually worked. Exempt employees’ leave accrual is based on their regular weekly schedule, up to 40 hours maximum.
  • Carryover Required; No Payout on Termination. Mandated carryover is required for up to the same amount of leave time employers are required to allow an employee to accrue in any given year. (For instance, for employers of 49 or fewer, up to 40 hours may be carried over.) Payout on termination is not required.
  • Special PTO Requirement for Largest Employers. Tier Three Employers that use a “universal” paid leave program (usually referred to as “paid time off” or “PTO”), rather than dedicated sick leave, must provide more paid leave under the law than those employers with dedicated sick leave. Tier Three Employers must allow accrual of at least 108 hours of paid leave per year and allow carryover up to the same amount.
  • Leave Use. Leave can be used for the following purposes:
    • Sick Leave. Absence resulting from an employee’s or a qualifying family member’s illness or injury, including diagnosis, treatment and preventative care. (Qualifying family members are the same as under Washington’s Family Care Act: spouse, registered domestic partner, child, parent, parent-in-law or grandparent.)
    • Safe Leave. Absence (1) related to domestic violence, stalking or sexual assault of an employee or qualifying family member (amount of leave allowed and qualifying family members are the same as under Washington’s domestic violence leave law), or (2) due to a public health-related closure of the employee’s place of business or a child’s school.
  • Notice and Certification. An employee must provide at least 10 days’ notice of foreseeable leave, and must generally follow employer notice policies. Certification of leave use is limited to leaves of three or more days. Where the employer does not provide health insurance, the employer must pay at least half of medical costs associated with obtaining the certification.
  • Considerations and “To-Dos.”
    • Opportunity for Comment to the City. Employers have the opportunity to provide comments to and receive updates from the City of Seattle related to the implementation of the law. An FAQ is expected by the end of the year on their website, and draft rules in the spring of 2012. Write to Elliott Bronstein at the Seattle Office for Civil Rights, at elliott.bronstein@seattle.gov, to be included in the notification list, and with any questions or comments you have about the law.
    • Collective Bargaining Agreements. The ordinance allows unions to expressly waive their members’ rights under the law. To avoid application of the law, employers should take steps to negotiate with their unions for a “clear and unambiguous” waiver and put it in writing.
    • Review Sick and Related Leave Policies, Including Short-Term Disability Policies. Employers must review policies and consider whether changes are needed to meet requirements under the new law.
    • Special PTO Requirements. Tier One and Tier Two Employers should make sure their PTO policies meet the requirements of the law to avoid having to provide additional paid sick and safe leave. Tier Three Employers that use a PTO program need to allow accrual and carryover of additional paid leave as described above.

Stoel Rives is here to help employers plan for the implementation of this law on September 1, 2012, and will be providing comments to the City about the law in the near future. Please contact us for assistance.


Why Should Employers be Fair?

Martha walks into your office and says she wants to fire her assistant, Roy, because he keeps sending emails with typos and it is embarrassing. Martha says, “We are at-will and I want him gone by the end of the day.”  Like most others, Alaska is an “employment-at-will” state, which means that the employee and employer are free to end the employment relationship at any time and for almost any reason. But is there more to consider in terminating Roy?

Every employment relationship in Alaska contains an implied covenant of good faith and fair dealing. An employer can violate the covenant by acting with an improper motive, like firing an employee two weeks before he is tenured. The covenant also requires employers to treat employees in a way that a reasonable person would consider fair.

Violation of the covenant of good faith requires a very fact intensive inquiry, which often requires going through a trial with witnesses rather than resolving issues through a motion for summary judgment. Trial is incredibly expensive for employers, not only in court costs but also in terms of stress on staff and distraction from business. However, two Alaska Supreme Court cases issued in early July of this year, that you can see here and here, show that summary judgment is alive and well if an employer can adequately demonstrate it acted fairly and without improper motives in its termination process. The application of the implied covenant of good faith and fair dealing to the employment context varies from state to state, and clearly does not apply in some states, like Washington. Nonetheless these recent cases are a good reminder that fair and equitable treatment in discharging employees can help employers avoid costly and disruptive claims.

So what do we do about Roy? Here are five suggestions to help ensure compliance with the implied covenant of good faith and fair dealing:

  • Follow a process. Require supervisors to provide good faith, fair reasons for discipline. Provide the employee an opportunity to respond to any allegations. Hear facts from Roy now, rather than for the first time in an EEOC proceeding or in court.
  • Be fair.  Enforce personnel policies in a way that a reasonable person would regard as fair. Follow personnel policies when disciplining employees. What policy is Roy violating? Is termination an appropriate response to Roy’s violations?
  • Be consistent. Treat like employee alike, and justify any reasons for inconsistency in treatment. What type of conduct has resulted in other terminations? Have other employees received progressive discipline under similar circumstances, instead of termination? Treat Roy like other employees in similar situations.
  • Act in good faith. Do not manufacture reasons to justify a termination. Is Martha frustrated with Roy for some other reason? Better to learn about it now.
  • Document your process, fairness, consistency, and good faith.

Meghan M. Kelly also contributed to this post.

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

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.

Victory For Employers in Washington Medical Marijuana Case

In a victory for employers, the Washington Supreme Court has ruled that Washington’s Medical Use of Marijuana Act (“MUMA”) does not protect medical marijuana users from adverse hiring or disciplinary decisions based on an employer’s drug test policy. Click here to download a copy of the decision in Roe v. Teletech Customer Care Management. The lawsuit and all appeals were handled for the employer by Stoel Rives attorneys Jim Shore and Molly Daily.

Jane Roe (who did not use her real name because medical marijuana use is illegal under federal law) sued Teletech for terminating her employment after she failed a drug test required by Teletech’s substance abuse policy. She alleged that she had been wrongfully terminated in violation of public policy and MUMA since her marijuana use was “protected” by MUMA. The trial court granted summary judgment in favor of Teletech, and Roe appealed. As discussed in a previous blog, the Washington Court of Appeals, Division II affirmed the trial court’s dismissal of Roe’s case. Roe then appealed to the Washington Supreme Court.

The Supreme Court ruled 8-1 in favor of in Teletech, holding that MUMA provides an affirmative defense to state criminal prosecutions of qualified medical marijuana users, but “does not provide a private cause of action for discharge of an employee who uses medical marijuana, either expressly or impliedly, nor does MUMA create a clear public policy that would support a claim for wrongful discharge in violation of such a policy.” The Court’s holding applies regardless of whether the employee’s marijuana use was while working or while off-site during non-work time. Adding to a significant victory for employers, the Court’s decision extends to the current version of MUMA as amended by the Legislature in 2007, and not just the original version passed by the voters in 1998 in effect when the facts of the case arose.

The plaintiff in the Teletech case did not raise a disability discrimination or reasonable accommodation claim under Washington’s Law Against Discrimination, and the Supreme Court therefore did not expressly reach that particular issue. But the Court did point out that marijuana remains illegal under federal law regardless of what the State of Washington does, and that it would be incongruous “to allow an employee to engage in illegal activity” in the process of finding a public policy exception to the at-will-employment doctrine. Moreover, the Court noted that the Washington State Human Rights Commission itself acknowledges that “it would not be a reasonable accommodation of a disability for an employer to violate federal law, or allow an employee to violate federal law, by employing a person who uses medical marijuana.”

The workplace implications of medical marijuana continue to be a developing area in many states. California’s Supreme Court has ruled in a manner consistent with Washington. Also previously covered in World of Employment, in Emerald Steel Fabricators, Inc. v. Bureau of Labor & Industries, the Oregon Supreme Court ruled that because federal criminal law preempts Oregon’s medical marijuana law, employers in Oregon do not have to accommodate employees' use of medical marijuana. But some states are more protective of an employee’s medical marijuana use. Given the continued efforts by marijuana advocates and civil rights groups to “push the envelope” of medical marijuana laws into the workplace, it is important for employers to continue to closely monitor legislative and legal developments. A recent effort to include workplace protections for medical marijuana users via amendments to Washington’s medical marijuana laws was defeated, but we anticipate similar efforts may be made in other states in the coming years.

There are many sound reasons why employers have zero tolerance policies and engage in drug testing of applicants and/or employees, including customer requirements, government contracting requirements (e.g.,the federal Drug Free Workplace Act), federal or state laws (including DOT requirements for transportation workers), workplace safety, productivity, health and absenteeism, and liability. To best protect themselves, employers should review their policies to make sure that illegal drug use under both state and federal law is prohibited, and that their policies prohibit any detectable amount of illegal drugs as opposed to an “under the influence” standard. Employers should also ensure that all levels of their human resources personnel know how to handle medical marijuana issues as they arise.

Ninth Circuit Holds Shareholder Hire Preference Not Facially Discriminatory

Meghan M. Kelly also contributed to this post.

In an unpublished opinion in Conitz v. Teck Alaska Inc. the Ninth Circuit held that an Alaska Native corporation’s shareholder employment preference was not facially discriminatory because it was based on shareholder status, not racial status.


Teck employee Gregg Conitz works at the Red Dog Mine, which Teck operates and NANA Regional Corporation, an Alaska Native corporation, owns. Conitz alleged that he was passed over for promotions as a result of Teck’s policy favoring NANA shareholders in hiring – a preference Conitz argued was racially discriminatory because the majority of NANA shareholders are Alaska Native. The district court found that Teck’s employment preference for NANA shareholders was not a racial distinction and therefore did not violate either the Civil Rights Act or any other provisions of federal or state law. Given this, the district court declined to address Teck’s argument that as a joint venture between NANA and Teck, the Red Dog Mine is exempt from Title VII under a provision of the Alaska Native Claims Settlement Act. The district court also found that Conitz failed to show he was qualified for the promotion, and therefore failed to make out a case of discrimination under Title VII.


The Ninth Circuit affirmed, holding that a shareholder preference is not facially discriminatory because it favors candidates based on shareholder status, not race. The court also found that Conitz failed to show the elements of a prima facie case of discrimination under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Conitz did not demonstrate he was qualified for the supervisory position and was, in fact, not promoted because he was not qualified. The court declined to decide whether the shareholder preference policy constitutes racial discrimination since the policy did not affect Conitz.

WISHA Amendment Impacts Washington Employers' Obligations to Correct Serious Safety Violations During Appeals

Washington employers appealing citations for serious safety violations are about to face a new element to the appeal process.  An amendment to the Washington Industrial Safety and Health Act (“WISHA”), signed into law on April 15, 2011, will make it more difficult for employers to avoid immediate abatement of the underlying workplace hazard during the pendency of an appeal. 

Under the current version of the statute, the requirement to correct a safety violation is stayed when the employer files a notice of appeal of the citation with the Department of Labor and Industries (“L&I”).  Pursuant to the new amendment, an appeal of a citation involving a violation classified as “serious, willful, repeated serious violation, or failure to abate a serious violation” will no longer automatically stay the requirement to correct the underlying hazard.  Instead, an employer who desires a stay under such circumstances must file a specific request for a stay of abatement requirements in connection with its notice of appeal.

In cases where L&I issues a redetermination decision regarding the substance of the appeal, it will simultaneously issue a decision regarding any request for a stay.  L&I may grant the request unless it determines that the preliminary evidence shows a substantial probability of death or serious physical harm to workers if a stay is permitted.

Denial by L&I of an employer’s request for a stay can be appealed to the Board of Industrial Insurance Appeals (“BIIA”), which will employ an expedited review process regarding the request. Affected employees and their representatives will have the right to participate in that process.  As with L&I’s redetermination decision, the BIIA will be statutorily required to deny the request if the preliminary evidence shows that it is more likely than not that a stay would result in death or serious physical harm to employees. 

Employers appealing less serious safety citations will still be entitled to an automatic stay of abatement requirements during the appeal process, although many employers choose to voluntarily correct cited safety issues prior to resolution of an appeal.  The amendment is scheduled to go into effect 90 days after the close of the legislative session.

Idaho Enacts Law Providing Tax Credits for Private Employers

On the final day of the sixty-first Legislature, Idaho lawmakers passed a bill which provides varying levels of tax credits for private employers who hire at least one employee after April 15, 2011. Governor Otter signed the legislation amending Idaho Code section 63-3029F on April 13.

In order to qualify for the credit, a newly hired employee must receive qualifying employer-provided health care benefits as determined by the Idaho State Tax Commission and be employed in a county within in the state of Idaho with an unemployment rate at or greater than the benchmarked annual employment rate as determined by the Department of Labor on the date the new employee was hired.  That benchmark is either ten percent (10%) or more at average annual earnings of twelve dollars ($12.00) or more per hour, or less than ten percent (10%) at average annual earnings of fifteen dollars ($15.00) or more per hour.   The available credit is not earned, however, until the new employee has worked for a minimum of nine consecutive months with any part of the qualifying period ending during the taxable year for which the credit is claimed. Additionally, the credit is not available when an employer acquires a trade or business or who operates in a place of business the same or substantially identical trade or business as operated by another qualifying business within the prior twelve months. Employees transferred from a related business shall also not be included in the computation of the credit.

The amount of the credit varies between 2-6% depending on how the employer is rated for unemployment tax purposes.   Employers with a positive rating earn the highest amount of the credit while deficit rated business earn the lower amount. The credit is calculated based on the gross salary paid to the eligible new employee during the initial twelve months of employment and claimed during the qualifying taxable year.

The Tax Commission is charged with promulgating rules implementing the legislation.  To claim the credit, rated employers must attach to the employer's income tax return the taxable wage rate notice issued by the department of labor for the income tax year for which the credit is claimed.   An estimate of the financial impact from the Department of Labor and Division of Financial Management indicates that the legislation could draw $7.9 million per year from the general fund while generating $25.3 million in state tax revenue.

This legislation is very complex and may be difficult for employers to determine whether they may quality for the credit.  If you have questions, please contact your attorney.

Utah: 2011 Legislative Session Winners and Losers

The 59th legislative session of the Utah State Legislature ended last week. Below is a list of the winners and losers from legislative session preview post on February 18, 2011(and a couple of notable additions).


Immigration – Three highly controversial immigration bills affecting employment passed Utah’s House and Senate and were signed by Governor Gary Herbert on March 15, 2011. 

  • H.B. 497 grants immigration authority to state and local police to enforce general federal immigration laws when a person has been lawfully stopped, detained, or arrested for class a misdemeanors and felonies. 
  • H.B. 116 establishes a guest worker program for undocumented workers that would require background checks, proof of insurance and a Utah driving privilege card.
  • H.B. 466 creates a state program coordinated with the federal guest worker program to begin a partnership between Utah and Mexico to allow Mexican temporary workers to work in Utah.

For more information and various perspectives on these bills see our prior post on the immigration issue and other local news sources.

Community Service for Medicaid CoverageUtah lawmakers approved H.B. 211 creating a pilot program requiring a small number of Medicaid recipients to do community service in exchange for medical coverage.

More Tax Breaks for New Full-Time Positions – The legislature also passed H.B. 17 which modifies provisions related to tax credits which may be claimed for new full-time employee positions to allow certain credits to be taken in consecutive years.

Construction Employees v. Owners – Both the House and Senate approved S.B. 35 targeting construction firms that classify employees as owners in order to avoid paying workers' compensation insurance premiums, contributing to unemployment insurance, or withholding taxes. The bill would require construction owners to file an annual ownership status report and includes penalties for violations for misclassifying employees and depriving employees of workers' compensation coverage, among other things. If signed by Governor Herbert, the bill will take effect July 1.

Worker Misclassification Task Force– S.B. 11 has been approved by the legislature and signed by Governor Herbert. This bill sets up a new task force for various state agencies to discuss and coordinate their efforts to enforce rules against the classification of workers as owners or as independent contractors.


Immigration H.B. 253 would have required employer registration with E-Verify, but was defeated in the Senate.

Employee NoncompetitionH.B. 417, defeated in the House, would have enacted the Noncompetition Contract Act, which would have prohibited the enforcement of a noncompetition agreement against an employee who is discharged because of a reduction in force.

Gender IdentityS.B. 148 adding “gender identity” and “sexual orientation” to the list of protected classes under Utah discrimination in employment and housing statutes was defeated in the Senate.

Employment Practices & Protection from ViolenceS.B. 40 giving victims of violence the right to sue an employer that denies extra time off work was defeated in the Senate. 

Utah Immigration Legislation Remains Up In the Air (UPDATED)

Immigration was one of the top issues in the 2011 Utah Legislative session, which concluded last week. Contrary to early predictions, Utah did not adopt a carbon-copy of Arizona’s controversial immigration law. In fact, even the “enforcement” legislation, which got so much attention before the session, passed only after it was amended to remove language that some feared would lead to racial profiling. In addition, the Utah legislature also passed bills providing for a guest worker program (which will require federal approval) and a worker exchange program with Nueva Leon, Mexico. At the end of the day, Utah’s “omnibus” approach was seen by many as a kinder, gentler version of state immigration policy. (We hope our constitutional-expert readers will forgive that term). Some, however, take a more cynical view of Utah’s efforts in this arena, and Latino groups have called for a boycott of Utah businesses through March 28.

And the political drama over Utah’s immigration legislation is not over, either. None of these immigration bills have yet been signed by Utah Governor Gary Herbert. Governor Herbert has until March 30 to sign or veto the bills. Alternatively, he can allow the bills to take effect without his signature. Governor Herbert signaled his support and approval for the “omnibus” immigration package, noting that it comports with views he had previously articulated, and with the Utah Compact, which contains guidelines on immigration policy proposed by a diverse group of Utah community, business and religious leaders and groups. Nevertheless, Governor Herbert is being pressured by groups who seek stronger immigration enforcement to veto the guest worker legislation, which they fear will attract undocumented workers to Utah.

Most predict that the Utah immigration bills will take effect. That will probably not be the end of the story, however. The scene may simply change to Washington or the courts.  

UPDATE: Governor Herbert today (3/15) signed all four immigration passed by the Utah legislature. According to news reports, Utah officials are already in discussions with the White House and members of Congress regarding federal waivers that would allow Utah’s guest worker program to operate constitutionally.  

Medical Marijuana and Zero Tolerance Drug Testing Policies Remain An Issue For Employers

Employers and the courts continue to wrestle with issues involving “zero tolerance” drug testing policies and whether employers must accommodate medical marijuana use by their employees. Marijuana use is illegal under the federal Controlled Substances Act, and therefore does not need to be accommodated under the federal Americans with Disabilities Act (“ADA”). However, 15 states currently have legalized some form or another of medical marijuana use: Alaska, Arizona, California, Colorado, Hawaii, Maine, Michigan, Montana, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington as well as the District of Columbia. The language of each state’s law can differ, and the courts therefore interpret these state law issues on a case-by-case basis.


Most recently, in Casias v. Wal-Mart Stores, Inc., a Michigan federal district court ruled that an employee who was terminated by Wal-Mart after testing positive for validly obtained medical marijuana stated no legal claims for wrongful discharge. The court accepted Wal-Mart’s argument that Michigan’s medical marijuana law does not regulate private employment; rather, it merely provides a potential affirmative defense to criminal prosecution or other adverse action by the state. The court rejected the plaintiff’s argument that the law created a new protected employee class, which “would mark a radical departure from the general rule of at-will employment in Michigan.” The Casias decision is currently being appealed.

A similar ruling is under review by the Washington State Supreme Court. I argued the case for the employer on January 18, 2011. As I previously blogged, the Washington Court of Appeals in Roe v. Teletech Customer Care Management affirmed a trial court’s ruling and held that Washington’s Medical Use of Marijuana Act (“MUMA”) does not protect medical marijuana users from adverse hiring or disciplinary decisions based on an employer’s drug test policy. In so doing, the Court of Appeals stated, “MUMA neither grants employment rights for qualifying users nor creates civil remedies for alleged violations of the Act.” Rather, the Court held that MUMA merely protects qualified patients and their physicians from state criminal prosecution related to the authorized use of medical marijuana. The Court further held that when Washington’s voters passed MUMA through the initiative process, they did not intend to impose a duty on employers to accommodate employee use of medical marijuana. A decision from the Washington Supreme Court is anticipated later this year.

Three other state Supreme Courts have already issued rulings on workplace medical marijuana issues, and all have found in the employer’s favor. In Ross v. RagingWire, the California Supreme Court ruled that it is not discrimination to fire an employee for using medical marijuana. The court held that employers in California do not need to accommodate the use of medical marijuana, even when users only ingest or smoke marijuana away from the workplace.

In Johnson v. Columbia Falls Aluminum Company, the Montana Supreme Court ruled, in an unpublished decision, that an employer is not required to accommodate an employee's use of medical marijuana under the federal ADA or the Montana Human Rights Act.

Also previously covered on World of Employment, in Emerald Steel Fabricators, Inc. v. Bureau of Labor & Industries, the Oregon Supreme Court ruled that because federal criminal law takes precedence over Oregon’s medical marijuana law, employers in Oregon do not have to accommodate employees' use of medical marijuana. Stoel Rives filed a “friend of the court” brief on behalf of the employer in that case.

There are many sound reasons why employers have zero tolerance policies and engage in drug testing of applicants and/or employees, including, without limitation, customer requirements, government contracting requirements (including the federal Drug Free Workplace Act), federal or state laws (including DOT requirements for transportation workers), workplace safety, productivity, health and absenteeism, and liability. To best protect themselves, employers should review their policies to make sure that illegal drug use under both state and federal law are prohibited, and that their policies prohibit any detectable amount of illegal drugs in an applicant’s or employee’s system as opposed to using an “under the influence” standard. Employers should also ensure that all levels of their human resources personnel know how to handle medical marijuana issues as they arise. Finally, given the continued efforts by marijuana advocates and civil rights groups to “push the envelope” of medical marijuana laws into the workplace, it is important for employers to continue to closely monitor legislative and legal developments. A recent effort to include workplace protections for medical marijuana users via amendments to Washington’s medical marijuana laws was defeated, but we anticipate similar efforts will be made in Washington and other states in the coming years.

Oregon: 2011 Legislative Session Preview

Oregon’s 76th Legislative Assembly convened on February 1, 2011. The Legislature has wasted no time introducing a multitude of new labor and employment bills, some with potentially far reaching effects. Below is a (non-exhaustive) list of some of the more interesting bills up for debate:

Civil Rights:

  • HB 2035 -- Standardizes statute of limitations period for filing discrimination lawsuits. A person who has filed a BOLI complaint must file a lawsuit within one year of the occurrence of the unlawful practice or within 90 days of the mailing of BOLI’s 90-day notice, whichever is later.
  • HB 2036 -- This bill was introduced at the request of the Commissioner of BOLI, and attempts to accomplish several significant changes. First, it proposes to lower the standard as to what’s considered a “substantial limitation in a major life activity,” and clarifies certain aspects of state statutes related to discrimination against individuals with disabilities. Second, it grants BOLI the authority to enforce provisions for employees to take crime victim leave to attend criminal proceedings. Third, it will allow employers to make decisions based on credit history of applicants for public safety officer employment.
  • HB 2243 -- Allows Attorney General or BOLI to file suit related to discrimination against person for uniformed military service; includes $50,000 penalty for first violation, and $100,000 penalty for each subsequent violation.
  • HB 2446 and HB 2771 seek to respectively amend and repeal ORS 659.70 and 659.785 related to workplace communication on employer opinions on religion and politics. While HB 2771 would seek to repeal those provisions entirely, HB 2446 seeks to amend the definitions and exceptions to those provisions and amend the damages as well.
  • HB 2828 -- Would make it unlawful (including a civil penalty of $750) to cease to provide health, disability, life or other insurance during period employee serves on a jury.
  • HB 2862 -- This bill would extend various anti-discrimination laws to persons working for educational purposes or as volunteers.


  • HB 2095 -- Requires granting family leave under OFLA for academic activities of the employee’s child, including teacher conferences or meetings, and requires granting up to 18 hours of family leave for academic activities in a one-year period, but not more than six hour per calendar month.
  • SB 506 -- Allows eligible employee to take family leave related to the death of a family member.
  • HB 2850 -- Adds siblings as covered family members under OFLA.

Wage and Hour:

  • HB 2038 -- Modifies expression of breast milk provisions. Requires employers to provide a reasonable rest period each time an employee has a need to express milk and eliminates the undue hardship exception for employees with 50 or more employees
  • HB 2040 -- Requires unpaid wages requested by employee post-termination or discharge to be mailed by certified mail, return receipt request.  
  • HB 2230 -- Requires employers to offer first payment to a new employee within 14 days of employment, unless declined by employee. Carries a maximum fine of $720 for violations.
  • HB 2861 -- Expands Oregon’s wage discrimination law to bar wage discrimination based on a more expansive list of protected classifications, not just sex.


  •  Immigration: HB 2802 and HB 2973 include a variety of immigration-related provisions, some of which would affect employers. One such provision includes a prohibition against knowingly employing unauthorized aliens, which includes a maximum six-month prison sentence and/or up to $2,500 fine. Another would require employers to verify immigration status of employees hired after January 1, 2012, and authorizes the Attorney General to investigate violations and suspend or revoke business licenses of violators. 
  •  Health Care Employees: SB 199 -- Requires health care facilities/employers of 25 or more employees to provide mandatory annual vaccinations against influenza, varicella zoster, pertussis, Hepatitis B, measles, mumps and rubella at no cost to employees.

World of Employment will keep you updated regarding the status of these (and other) bills up for debate this legislative session, and will provide an end-of-session wrap-up of the winners and losers.

Utah: 2011 Legislative Session Preview

The 59th legislative session of the Utah State Legislature convened in January, and several labor and employment-related bills were introduced. We’ve highlighted some of the more interesting bills below.


  •  Immigration – Immigration is an issue that has been a subject of intense debate in Utah and nationally and multiple bills have been proposed on the issue this session.
    • H.B. 116 would establish a guest worker program for undocumented workers that would require background checks, proof of insurance and a Utah driving privilege card.
    • H.B. 253 would require businesses with five or more employees to register with E-Verify, the federal government’s program that tracks the legal status of workers. It would repeal the Private Employer Verification Act.
  • Employee NoncompetitionH.B. 417 would enact the Noncompetition Contract Act. The bill prohibits the enforcement of a noncompetition agreement against an employee who is discharged because of a reduction in force, but does not affect the enforcement of non-solicitation agreements or covenants not to disclose confidential information.
  • Gender IdentityS.B. 148 defines “gender identity” and “sexual orientation” and adds them to the list of prohibited bases for discrimination in employment and housing. It includes sexual orientation and gender identity as a consideration in appointments to the Antidiscrimination and Labor Advisory Council.
  •  Community Service for Medicaid CoverageUtah lawmakers have tentatively approved a proposal for a pilot program to require a small number of Medicaid recipients to do community service in exchange for medical coverage (H.B. 211).
  • More Tax Breaks for New Full-Time PositionsH.B. 17 would modify provisions related to tax credits which may be claimed for new full-time employee positions to allow certain credits to be taken in consecutive years. 
  • Construction Employees v. Owners– On February 10, 2011, the Utah House approved S.B. 35 targeting construction firms that classify employees as owners in order to avoid paying workers' compensation insurance premiums, contributing to unemployment insurance, or withholding taxes. The bill would require construction owners to file an annual ownership status report and includes penalties for violations for misclassifying employees and depriving employees of workers' compensation coverage, among other things. If signed by Gov. Gary Herbert (R), the bill will take effect July 1.
  •  Employment Practices & Protection from ViolenceS.B. 40 would allow employees who are victims of violence to sue an employer for damages who denies extra time off work for victims to seek a protective order, a stalking injunction, medical care or counseling.

We will report back later in the year on the winners and losers from this year’s session. 

More Employers Resorting to No-Nicotine Hiring Policies

Check out this Washington Healthcare News article authored by Stoel Rives Labor and Employment attorneys Keelin Curran and Karin Jones, in which they discuss the developing trend of strict no-smoking policies in the workplace, including no-nicotine hiring practices. Research indicates that smokers impose significant additional health and disability costs on employers, and experience twice as many illness-related absences from work.

In the article, they note that many states have enacted legislation specifically prohibiting employers from discriminating against employees on the basis of lawful off-duty activities such as tobacco use. However, for those states without such protections, employers have thus far successfully defended their right to exclude tobacco users from their hiring pools.

Read Curran's and Jones' analysis of the issue, including court cases and the potential pitfalls under the Health Insurance Portability and Accountability Act (HIPAA) and the Employment Retirement Income Security Act (ERISA) when such policies are applied to current employees.

"Snuffing Out Employee Tobacco Use: The Trend Towards No-Nicotine Hiring Policies" was published by Washington Healthcare News, February 2011.

The Do's and Don'ts of Employee Handbooks

Employee handbooks can operate as a useful management tool to ensure fairness and consistency in employment practices which in turn may limit an employer’s exposure to unwanted and costly litigation. But if not carefully drafted an employee handbook may unwittingly supply a disgruntled employee with greater ammunition on the legal battlefield. A couple of Utah employers recently saw this play out with different results.

In Hoko v. Huish Detergents, Inc., a 2010 Utah District Court decision, an employee sued his employer alleging disparate treatment and wrongful termination after he was discharged for abuse of the internet policy set forth in his employee handbook. The handbook, however, disclaimed any intent to create an employment contract and the employee signed an acknowledgement of receipt of the handbook indicating he understood his at-will status. Further, there was no evidence his employer had enforced the internet policy differently with other employees holding similar positions. The Court ultimately dismissed both of the employee’s claims.

In Cabaness v. Thomas, a 2010 Supreme Court of Utah case, things went down much differently. In that case, the employee brought suit against his employer alleging breach of an implied contract created by promises made in the employment manual. As in Hoko, the employer argued that a disclaimer precluded a finding of intent to contract. But unlike in Hoko, the disclaimer only indicated that the handbook did not create a contract “with respect to” certain aspects of the employment relationship. The Court ruled that the limited disclaimer in conjunction with the promise like provisions set forth in the employment manual evinced the employer’s intent to undertake additional duties and accordingly held for the employee.

The Hoko and Cabaness cases provide examples of two opposite ends of the spectrum. Both provide useful insights into the do’s and don’ts of drafting employee handbooks. What follows is a short list of points an employer might glean from these cases as well as some additional thoughts to consider when drafting or reviewing employee handbooks.

1.         Make sure your employee handbook contains a broad “clear and conspicuous” disclaimer indicating that neither the handbook, any provisions therein, nor other similar materials are intended to create a contract or alter the at-will employment status of an employee.

2.         Use language that is easy to understand and not susceptible to various reasonable interpretations. This avoids confusion on the part of your employee and potential legal battles over whose interpretation is correct.

3.         Avoid using language that could be read as a definitive promise. This includes avoiding word such as “must,” “shall,” “will,” “required,” or other words and phrases that imply an employer has made a definitive promise.

4.         If your employee handbook includes specific grounds for disciplinary action or termination, make sure it also indicates the list is demonstrative and not exhaustive.

5.         Once your policies and procedures are established, stick to them and apply them uniformly to avoid claims of disparate treatment.

6.         Include and ask each employee to sign an acknowledgment provision that indicates the employee’s receipt of the employee handbook and documents their understanding that it does not create a contract.      

7.         Review and update employee handbooks regularly. Workplace conditions change rapidly. For example, the internet and social media continually demand greater attention within the work place. If you do not have any policies regarding internet usage in your handbook, it’s probably time to think about some revisions.

8.         Consider having your employee manual reviewed by your legal team. State and federal laws are continually evolving and you want to make sure that your employee handbook is up to date with the latest changes in employment law.

Alaska: 2011 Legislative Session Preview


The 27th Session of the Alaska Legislature convened in January, and several labor and employment-related bills were introduced. We’ve highlighted some of the more interesting bills below.


Hot Topics:

  • “Alaska’s Oil, Alaska’s Jobs” -- HB 82 and SB 71 propose to authorize a rebate of the production tax on oil and gas, based on the employment of Alaska workers, expanding upon the current Alaska Employment Preference Act, AS 36.10, applicable to public construction projects.
  • “Right to Work” -- HB 134 would provide employees a choice whether or not to join or pay the union at companies that are unionized. Such State laws are allowed under 29 U.S.C. § 164(b) and 22 other states have enacted them. (See also last week’s post regarding Idaho’s right to work statute.)
  • The “Conscience Clause” -- SB 14 provides protection and “reasonable accommodation” of a health care provider’s expression of conscience regarding the provision of health care services. This expands Alaska’s current clause (AS 18.16.010) preventing healthcare providers from being forced to perform abortions, but SB 14 would broaden the “conscience” protection.
  • Safety First! -- Three bills (HB22, HB 35, and HB 65) propose to prohibit the use of cell phones when driving a motor vehicle. These bills would have a significant impact on employers dependent on drivers, because drivers will no longer be reachable en route.  However, if these bills are passed, all employers should review and update their personnel policies.

Bills Addressing Specific Employee Groups:

  • HB 51 proposes to establish child care services for state officers and employees, either in state offices or other convenient places for state officers and employees.
  • Reintroduced, SB 69 and HB 36 propose to repeal the prohibition against classified state employees participating in the management of political parties above the precinct level.
  • HB 84 and SB 38 propose a one-time death benefit for peace officers and firefighters.
  • To address the increasing shortage of healthcare professionals, HB 78 proposes a loan repayment and employment incentive program for certain healthcare professionals in Alaska.
  • HB 28 proposes temporary 180-day courtesy licenses for certain nonresident professionals regulated by Title 8, with the exception of attorneys.

Two Proposed Oversight Groups:

  • A “Workers’ Compensation Advisory Council” is reintroduced in HB 12, which also would abolish the more informal Medical Services Review Committee.
  • SB 53 proposes the “Alaska Commission on the Status of Women,” with duties including research and recommendations on opportunities for women in employment, among other areas.

Health Care Issues:

  • Proposed Alaska Constitutional Amendment HJR 5 would prohibit passage of laws that, among other things, compel a person to participate in a health care system.
  • SB 70 proposes to establish the Alaska Health Benefit Exchange, aimed to facilitate individual purchase of qualified health plans, to establish small business health options and to generally reduce the number of uninsured Alaskans.
  • Also likely directed at the new national health care law are two bills providing that Alaska will not follow unconstitutional laws. HB 8 provides that any federal act adopted in violation of the Constitution or federal statute has no effect on Alaska law. HB 88 prohibits any court or other authority from applying a law that violates an individual’s constitutional rights.

As Alaska’s short session progresses, we’ll keep you posted on these bills and others impacting the Alaska workforce.

Editor’s Note: This is just the first in a number of legislative preview posts for each of the states in which we have a presence. Stay tuned for legislative updates in Oregon, Washington, California, Utah and Idaho, as well as a federal update, in the upcoming weeks.



Companion Anti-Union Bills Slated to Pass Idaho Legislature

Never shy about taking on unions, especially in a state where organized labor enjoys little support outside the government sector, the Idaho Legislature recently introduced a pair of bills for addition to the state’s existing Right to Work statute. 

Senate Bill 1007, named the “Fairness in Contracting Act,” is intended to “promote fairness in bidding and contracting.”  This bill provides, among other things, that a “contractor or subcontractor may not  directly or indirectly receive a wage subsidy, bid supplement or rebate on behalf of its employees, or provide the same to its employees, the source of which is wages, dues or assessments collected by or on behalf of any labor organization(s), whether or not labeled as dues or assessments.”  The proposed measure would also prohibit labor organizations from “directly or indirectly” paying “a wage subsidy or wage rebate to its members in order to directly or indirectly subsidize a contractor or subcontractor, the source of which is wages, dues or assessments collected by or on behalf of its members, whether or not labeled as dues or assessments.”  Use of any fund financed by wages collected by or on behalf of any labor organization, whether or not labeled as dues or assessments, to subsidize a contractor or subcontractor doing business in the state of Idaho would be deemed unlawful. 

Contractors, including subcontractors, or labor organizations that violate the provisions of this proposed law will be guilty of a misdemeanor and could be fined an amount not to exceed ten thousand dollars ($10,000) for a first offense, twenty-five thousand dollars ($25,000) for a second offense, and one hundred thousand dollars ($100,000) for each and every additional offense. 

The legislation would also confer standing on any “interested party,” including a bidder, offeror, contractor, subcontractor or taxpayer, to challenge any bid award, specification, project agreement, controlling document, grant or cooperative agreement in violation of the provisions of the law.  If an interested party prevails in a lawsuit challenging the bill, it will be awarded costs and attorney's fees.

A companion bill, Senate Bill 1006 (“The Open Access to Work Act”), introduced at the same time, bars bidders on public works projects from paying a predetermined amount of wages or wage rate; or type, amount or rate of employee benefits.  The law does not apply when federal law requires the payment of prevailing or minimum wages to persons working on projects funded in whole or in part by federal funds.  A separate provision makes clear that the contractor party cannot be required to enter into an agreement with a labor organization as part of the contract.

Both of these bills were printed and sent to the State Affairs Committee for further action last week.  Yesterday, the full Senate considered and voted on SB 1006, approving it by a 27-7 vote. It has now been referred to the Idaho House. SB 1007 on Monday passed the Committee by a 7-2 party line vote, and will soon be taken up by the full Senate. 

Although these bills remain at a relatively early stage, questions have been raised about their legality and potential conflict with federal labor law.   Stay tuned for more.

California: Employee's E-Mails With Lawyer Are Not Privileged When Sent Via Company Computer

A clear and comprehensive computer policy is an essential component of any employee handbook. Last week, a California appellate court ruled that when such a policy is in place, an employee who uses the company computer to e-mail her attorney about perceived harassment and discrimination in the workplace waives the attorney-client privilege.

In Holmes v. Petrovich Development Company, the plaintiff alleged that she was the victim of sexual harassment and retaliation arising from her employer’s response to her pregnancy. Before quitting her job, the plaintiff used her work computer to send e-mails to her attorney regarding possible legal action. As might be expected, the employer subsequently located these e-mails on its computer system, and used the e-mails as part of its defense of the employee’s lawsuit.

Ordinarily, communications between a client and her attorney are confidential and privileged. In this case, however, the employer’s policies provided that: (1) company computers were to be used only for company business, (2) the company would monitor its computers for compliance with this policy and thus might “inspect all files and messages … at any time,” and (3) employees using company computers to create or maintain personal information or messages “have no right of privacy with respect to that information or message.”

The court ruled that when the plaintiff used a company computer to e-mail her attorney about an employment action against her boss, with knowledge of her employer’s computer monitoring policy, the employee knowingly disclosed the information to the company, and her communications with her attorney lost their privileged character. Summing it up neatly, the court said that sending the e-mails via company computer “was akin to consulting her lawyer in her employer’s conference room, in a loud voice, with the door open, so that any reasonable person would expect that their discussion of her complaints about her employer would be overheard by him.”  The defendants prevailed on all of plaintiff's claims.

This case reinforces that there are many benefits to an employer’s implementation of a well-written computer policy.

Oregon Supreme Court Allows Greater Punitive Damage Award in Some Employment Cases

The Oregon Supreme Court has recognized an exception to limits on punitive damage awards in certain employment cases where the compensatory damages are low.  In Hamlin v. Hampton Lumber Mills, Inc., the Oregon Supreme Court considered the case of a plaintiff who was injured on the job and whose employer failed to reinstate him as required by ORS 659A.043.  That statute requires employers to reinstate injured workers on request within three years of the injury, unless other exceptions apply.  A jury found the employer had violated ORS 659A.043 and awarded the plaintiff $6,000 in lost wages and $175,000 in punitive damages.

As the Court noted, the Due Process Clause in the Fourteenth Amendment of the United States Constitution imposes limitations on punitive damages awards.  The exact limitations are based on factors including the ratio of compensatory to punitive damages and the reprehensibility of the act, among other things.  Courts have held that in the ordinary case, the ratio of punitive damages to compensatory damages should be limited  to single digits (for example, 4:1).  In this case, the ratio was 22:1.  The Oregon Court of Appeals held that the punitive damages award was unconstitutional and ordered it reduced to $24,000 – or a 4:1 ratio.

The Oregon Supreme Court reversed, upholding the 22:1 ratio because it determined that the compensatory damages were “relatively small” and that a violation of ORS 659A.043  was particularly reprehensible.  The Court noted that “the harm that offending employers inflict may be more than monetary and . . . a plaintiff who is not reinstated and who is, therefore, unemployed, is in a more vulnerable position than is a person who is employed when he or she suffers monetary loss.  A person who suffers a loss of employment is without the present ability to earn money to recover economic loss and to avoid further consequential loss.” 

The ruling leaves a number of perplexing loose ends.  First, as the dissenting justices noted, the opinion creates the possibility that a plaintiff who receives a larger compensatory damage award could actually be limited to a smaller punitive damages award.   For example, a plaintiff who received $25,000 in lost wages could be limited to a ratio of 4:1, allowing only $100,000 in punitive damages – less than those awarded in this case.  Second, the ruling leaves unclear whether ORS 659A.043 is the only statute that the Court will consider it particularly reprehensible to violate, or whether the Court’s holding applies to any unlawful employment practice that leaves the plaintiff employee without a job.  The matter may end with the United States Supreme Court.  In an unusual move, the dissenting justices specifically requested further clarification from that Court. 


Oregon Minimum Wage to Rise to $8.50/Hour in 2011

The Oregon Bureau of Labor and Industries recently announced that Oregon's minimum wage will increase by ten cents to $8.50 an hour effective January 1, 2011.  Oregon's minimum wage has been $8.40 an hour since January 1, 2009.  Click here to read Labor Commissioner Brad Avakian's press release on the minimum wage increase

As a result of Ballot Measure 25, passed by voters in 2002, the minimum wage is adjusted annually based on changes in inflation as measured by the Consumer Price Index (CPI). The Labor Commissioner is charged with adjusting the minimum wage for inflation every September, rounded to the nearest five cents.

And for your viewing pleasure, here's a fascinating video of an employee who we hope earns much more than minimum wage.  At least we know we wouldn't do this job for under $1,000 an hour:

Court Dismisses Lawsuit Against Oregon Mandatory Meeting Law

Last week a federal judge dismissed a lawsuit aimed at blocking SB 519, the Oregon law the prohibits employers from requiring employees to attend meeting about, among other things, labor unions.  Click here to read the District of Oregon's opinion in Associated Oregon Industries v. Avakian

SB 519, passed by the Oregon legislature in 2009, prohibits employers from disciplining or threatening to discipline employees who refuse to attend mandatory or "captive audience" meetings on religious or political matters, including the employer's views on labor unions.  SB 519 also requires employers to post a notice informing employees of their rights under the law, which you can download here

Associated Oregon Industries brought a federal lawsuit on behalf of Oregon employers, arguing that the law is preempted by the National Labor Relations Act and violates employers' First Amendment free speech rights.  The court did not reach the merits of that challenge; instead, the court held that the case was not ripe for review, and indicated it could not be challenged "until an employer holds a mandatory meeting, and then creates an employee's cause of action by disciplining an employee who refuses to attend." 

In our humble opinion (not to be taken as legal advice!), the portion of SB 519 that applies to union meeting will someday be successfully challenged on the basis that it is preempted by federal labor law.  This latest ruling, however, seems to indicate a court will be reluctant to rule on the bill until it is presented with a case involving employee discipline, and that may take an employer with enough interest in such meetings to be willing to run the risk and costs of litigation. 

Oregon Supreme Court: Employers Are Not Required to Accommodate Medical Marijuana

Yesterday the Oregon Supreme Court conclusively ruled that employers are not required to accommodate the use of medical marijuana in the workplace, ending years of doubt and confusion on this critical issue. Click here to read the Court’s opinion in Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries.

In Emerald Steel, a drill press operator was terminated after his employer learned he was using medical marijuana to treat a medical condition that qualified as a disability under Oregon law. The employee filed a claim with the Oregon Bureau of Labor and Industries, alleging that the employer’s refusal to accommodate his use of medical marijuana violated Oregon law requiring employers to reasonably accommodate an employee’s disability. A judge ruled that the employer did not properly engage in the interactive process to determine whether other reasonable accommodations were possible.

The employer appealed that decision, arguing that neither federal nor state disability law requires employers to engage in the interactive process with users of medical marijuana, given that their use of marijuana is prohibited by federal law. The Oregon Court of Appeals ruled in favor of the employee on the basis that the employer failed to preserve that argument in the case below. Further, a prior Oregon Court of Appeals case—Washburn v. Columbia Forest Products—had held that employers do have a duty to accommodate the use of medical marijuana by a disabled employee.

On appeal, the Oregon Supreme Court reversed the decisions of the trial judge and the Court of Appeals, and reversed the Oregon Court of Appeals’ decision in Washburn. The Supreme Court held that employers do not have to accommodate employees’ use of illegal drugs. Because marijuana—medical or otherwise—is illegal under federal law, employers are not required to accommodate its use under any circumstance.

Since the original Washburn decision, many Oregon employers have assumed they were obligated to accommodate the use of medical marijuana by disabled employees. The Emerald Steel decision should give all Oregon employers comfort in knowing that, until or unless federal law changes, they are definitely not required to accommodate medical marijuana use. A similar ruling from the Washington Court of Appeals is being reviewed by that state’s supreme court.  Stoel Rives represents the employer in that case. Click here to read the World of Employment's coverage of that case.

Oregon Legislature Passes Five Employment-Related Bills in Special Session

The Oregon Legislature recently completed its 2010 Supplemental Session.  Among the bills passed by the legislature include five employment-related bills.  Click on the bill number to download a copy of the actual bill:

  • SB 996:  Expands protections for public employees who report law violations or safety dangers to include discussions on those topics with elected officials and auditors (effective March 4, 2010)
  • SB 1045:  Prohibits employers from using credit histories for pre-employment screenings or promotions (effective July 1, 2010) (click here to read the Stoel Rives World of Employment's coverage of the bill)
  • HB 3651: Applies prevailing wage law to construction and installation of solar energy systems on public property (effective January 1, 2011)
  • HB 3652: Allows electrical apprentices to work without direct supervision after completion of 5,000 hours of training for a license requiring 6,000 hours of training (effective January 1, 2011)
  • HB 3686:  Allows the  wearing of religious dress while engaged in the performance of duties as a public school teacher, and amends undue hardship test under  the 2009 Workplace Religious Freedom Act as it applies to a classroom environment (effective July 1, 2011)

Ninth Circuit Issues Split Decisions on Compensation for Travel Time and "Off-the-Clock" Work


Employees who drive company vehicles between home and work will find little to cheer about in a recent Ninth Circuit decision . . . unless they live in California.  In Rutti v. Lojack Corporation, a three-judge panel refused to relax the rule that commuting time is non-compensable under the Fair Labor Standards Act (FLSA).  

The employee, who installed vehicle recovery systems, contended that his travel time between home and worksites was compensable under the FLSA and California law because his employer required him to drive company vehicles and significantly restricted his activities while doing so.  For example, the employer prohibited the employee from transporting passengers and engaging in personal pursuits, and required him to drive directly to and from the worksite with his cell phone turned on.  

All three judges rejected that argument under the FLSA, holding that use of an employer's vehicle to commute is non-compensable even if it is a condition of employment and that the restrictions placed on the employee's activities were incidental to his principal job activities.  The unanimous panel also rejected the employee's argument that his commuting time was compensable under the "continuous workday doctrine," under which an employee's workday generally lasts until he has completed all of his principal activities during the day. 

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Oregon Legislature Bans Workplace Credit Checks

This week the Oregon House voted to prohibit employers from using credit histories for any employment purposes including hiring, discharge, promotion and compensation.  The Oregon Senate passed the bill last week, and Governor Ted Kulongoski is expected to sign the bill into law effective July 1, 2010.  Click here to download a copy of the bill, SB 1045

A violation of the new law will be an unlawful employment practice, and an aggrieved employee could either file a complaint with the Bureau of Labor and Industries (BOLI) or file a civil lawsuit for injunctive relief, reinstatement or back pay, and attorney's fees.  

The new law will have some narrow exceptions:  banks and credit unions, public safety and law enforcement officers, employers who are required by state and federal law to use credit histories for employment purposes, and other employment if credit history is "substantially job-related" and the use of the credit check is disclosed in writing.  The bill does not give any guidance on what it means for a credit check to be "substantially job-related," but we're assuming that courts will construe that requirement very narrowly.

Oregon employers who are currently using credit checks as part of their employment processes should make sure they fit into one of the exceptions and, if not, find alternatives by July 1.  The law only prohibits the use of credit history, so other background checks - such as criminal background checks - are not affected.

9th Circuit: No Compensatory or Punitive Damages in ADA Retaliation Cases

The Ninth Circuit Court of Appeals recently limited the remedies available to employees who sue for retaliation under the Americans with Disabilities Act (ADA), ruling that the statute does not provide for punitive damages, compensatory damages or a jury trial in ADA retaliation cases.  Click here to read the decision in Alvarado v. Cajun Operating Co. 

Mr. Alvarado worked as a cook in defendant’s restaurant. He complained after his supervisor made allegedly discriminatory remarks related to his age and disability, and shortly afterward he received several disciplinary write-ups for poor performance.  After Mr. Alvarado was ultimately terminated, he sued his former employer for, among other things, retaliation under the ADA.  Prior to trial, the federal district court granted defendant’s motion in limine, barring plaintiff from seeking punitive and compensatory damages, and a jury trial, on his ADA retaliation claim on the grounds that the statute provided only equitable relief for such claims.

The Ninth Circuit affirmed the district court’s ruling by holding that the plain, unambiguous language of the ADA remedy provisions specifically enumerate only those sections of the act for which compensatory and punitive damages (and a jury trial) are available, and that the ADA anti-retaliation provision is not included in that list.  Somewhat surprisingly considering the laws at issue have been on the books since 1991, the Ninth Circuit appears to be only the third Circuit Court of Appeals to have been presented with the issue, after the Seventh and Fourth Circuits (which reached similar conclusions).  The court also noted that several district courts in other circuits had reached the opposite conclusion (perhaps most surprising of all), by ignoring the text of the remedy provision and instead emphasizing the overall structure of the ADA and the “expansive” intent of the 1991 amendments. 

For now, the law in the Ninth Circuit on this question is clear:  while still entitled to compensatory or punitive damages in disability discrimination or failure to accommodate claims under the ADA, employees may not receive those damages for ADA retaliation claims.

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Our Festivus Present to Oregon Employers: Ten Things You Should Know for 2010

Wow, it's Festivus already, which means that in just a few short days it will be a brand new year!  We have a Festivus present for Oregon employers to help you get ready:  Ten things you need to know for 2010!  (click on each blue hotlink for more information)

  1. All Oregon employers are required to post the SB 519 (Mandatory Meeting Ban) Notice to Employees.
  2. The H1N1 (or "swine:) flu is slowing down, but it's not gone. If you have concerns for you or your employees, Oregon has a great Flu Hotline.
  3. As if we needed another reason to investigate complaints of unlawful harassment, the Oregon Court of Appeals recognized a claim for negligent failure to investigate
  4. Leave for Military Spouses:  Employers with 25 or more employees in Oregon must provide leave to spouses of service members prior to deployment and during leave from active duty. 
  5. In 2010, you might have a greater duty to accommodate employees' religious dress and practices
  6. Domestic Violence Leave and Accommodations:  Employers may not discriminate against victims of actual or threatened stalking, sexual assault or domestic violence, and must  make reasonable accommodations for such employees.
  7. In 2010, you (and your employees!) may no longer talk on the phone while driving (unless it's with a hands-free device).
  8. Oregon's minimum wage will remain $8.40/hour.
  9. Oregon kept its disability discrimination law in tune with the federal Americans with Disabilities Act
  10. Oregon has new rest and meal break regulations.

And on that note, we're off to put up our festivus pole (aluminum, high strength-to-weight ratio), air our grievances, and commit feats of strength.  Happy festivus, and see you in 2010!

Oregon Employers: Download SB 519 (Mandatory Meeting Ban) Notice Here!

Back in June, we reported on Oregon SB 519 - the law taking effect January 1, 2010 that will prohibit Oregon employers from disciplining any employee who refuses to participate in communications concerning the employer’s opinions on religious or political matters - including labor unions. 

SB 519 also requires ALL Oregon employers to post a notice informing employees of their rights under the new law.  We usually rely on the Oregon Bureau of Labor and Industries (BOLI) to supply us with all mandatory postings, but BOLI has chosen not to publish an SB 519 posting. 

We at the Stoel Rives World of Employment and Stoel Rives couldn't just leave you in the lurch - we have created our own SB 519 Poster - just click the link to download, free of charge.  It's a .pdf document, and we've included two per page, just in case you want multiple copies.  We would recommend that you post the notice wherever you typically put up your employment law posters.  If you have an extra copies, we think they make excellent stocking stuffers (at least for the HR professional in your family).

DISCLAIMER!  (You knew this was coming, right?)  No government official or agency has approved this poster as fulfilling the SB 519 requirements.  This poster represents our best efforts to create a poster that complies with those requirements, but we make no representations, promises or warranties as to whether it fulfills the legal requirements of SB 519.  As always, the materials available at this web site/blog are for informational purposes only and not for the purpose of providing legal advice or soliciting legal business. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site/blog or any of the materials or e-mail links contained within the site do not create an attorney-client relationship between Stoel Rives and the user or browser.

Supreme Court to Review Text Message Case; Primarily of Interest to Public Employers

Yesterday the United States Supreme Court agreed to consider whether a police officer has a reasonable expectation of privacy in text messages sent using his department-issued pager.  The Ninth Circuit Court of Appeals ruled earlier this year that the officer had such a privacy right.  Click here to read the opinion below in City of Ontario, California v. Quon

In Quon, the employer, the City of Ontario, distributed to its police officers pagers with texting capability.  The City then audited the use of text messages by the officers to determine whether overage charges may have been caused by personal use of the service.  During the audit, it discovered that Quon had sent several personal, sexually explicit text messages.  Quon sued the City, asserting violations of his right to privacy under the Fourth Amendment of the United States Constitution as well as under Article I, Section I of the California Constitution.  The District Court dismissed Quon's suit after a jury found that the City conducted the audit to investigate usage, not misconduct.  The Ninth Circuit reversed, holding that the City violated Quon's constitutional privacy rights by reading his private texts, and the City's articulated policies did not give Quon sufficient notice that his texts could by read by others to overcome his privacy rights. 

What does this mean for employers?  For most private employers, this case will have little or no impact.  Federal privacy rights, such as those that come from the Fourth Amendment, apply only to public employers and not to private ones.  Private California employers should watch out:  California courts have sometimes applied state constitutional rights to private employers, and could rule that their employees have privacy rights in work-provided email and text systems.  Still, it is a good practice for all employers, public and private and in all states, to adopt and distribute policies clearly stating that employees have no expectation of privacy in communications they make using employer-provided equipment and systems, such as email, text messages, cell phones, etc. 

Washington Domestic Partnership Law Impacts Employee Benefits and Family Leave

Washington voters recently approved Referendum 71, giving registered domestic partners all of the rights and responsibilities of married couples under Washington state law.   Prior domestic partnership laws gave registered domestic partners limited rights and responsibilities such as hospital visitation, health care decision making, inheritance and community property rights.  The new law includes all of the rights and responsibilities granted to married couples under state law. 

Notably, the Washington State Insurance Commissioner has given notice that all insurance policies that include spouses will also be required to cover registered domestic partners.  Washington employers and insurance providers should review the new law and existing policies and procedures to ensure compliance when the law takes effect on December 3, 2009.  More information, including verification of registered domestic partnerships, is available at the Secretary of State’s website.  Additional information on how R 71 may affect employee benefits and family leave laws is available as part of a recent Stoel Rives LLP Client Alert.

Oregon Expands Flu Hotline

Beginning today, November 12, the Oregon Department of Human Services (DHS) is offering expanded service on the Oregon Public Health Flu Hotline.  Oregonians can call 1-800-978-3040 between 8:00 a.m. and 6:00 p.m. Monday-Friday, or 8:00 a.m. and 5:00 p.m. on weekends and holidays for information on the flu, including the H1N1 (or "swine flu") virus.  Three services are available on the hotline:

  1. Information and referral:  listen to recorded messages about the flu, or be routed to an information and referral specialist who can answer questions about the flu and vaccines;
  2. Telephone triage:  speak to a licensed healthcare provider about flu symptoms or exposure, and receive care advice, referral to a healthcare provider, or referral to the emergency room; and
  3. Clinician support:  doctors, lab techs, pharmacists, nurses and other healthcare professionals can receive information about H1N1 treatment options and vaccines.

Oregon employers should consider providing flu hotline information to their employees.  Click here to download DHS's announcement of the flu hotline, which employers can print and distribute or email to their employees.  For more information on H1N1 and the workplace, check out the DHS's flu resource website, flu.oregon.gov.  Outside of Oregon, check out the Center for Disease Control's H1N1 resource site

New Salt Lake City Ordinances Prohibit Housing and Employment Discrimination Based on Sexual Orientation

Yesterday the Salt Lake City Council unanimously passed ordinances prohibiting discrimination on the basis of sexual orientation and gender identity.  Click here to download a copy of the City Council's Staff Report on the ordinances, along with full text of the new laws.  Highlights of the employment discrimination ordinance include:

  • Forbids employment discrimination based on a person's sexual orientation or gender identity in Salt Lake City. 
    • "Sexual orientation" is defined as "a person’s actual or perceived
      orientation as heterosexual, homosexual, or bisexual."
    • "Gender identity" is defined as "a person’s actual or perceived gender identity, appearance, mannerisms, or other characteristics of an individual with or without regard to the person’s sex at birth."
  • Creates a complaint and investigation process. The complaint could be resolved through mediation or a fine of up to $1,000.
  • Does not create a "private right of action" to sue over alleged discrimination.
  • Exempts religious organizations, the State of Utah, and businesses with fewer than 15 employees.
  • "Does not create any special rights or privileges," because "every person has a sexual orientation and a gender identity."
  • Requires annual reports by the city's Human Rights Commission on the effectiveness of the ordinances.
  • Takes effect on April 2, 2010.

In case you were wondering, the ordinances passed with the full support of the LDS Church.  "The church supports these ordinances," LDS spokesman Michael Otterson told the City Council, "because they are fair and reasonable and do not do violence to the institution of marriage."  For more coverage of the SLC ordinances, read this article from the Salt Lake Tribune, or this article from the Deseret News.

SLC employers should review the new laws and review existing policies and procedures to ensure compliance.  Many states, counties and cities across the country have adopted similar ordinances.  To check the state of the law in your location, check out this handy list of state and local sexual orientation and gender identity laws from the Human Rights Campaign

Oregon BOLI Files Multiple Proposed Rule Changes

The Oregon Bureau of Labor and Industries has filed several proposed rules pertaining to labor and employment law, and is inviting public comment.  Click on the title of each to read the proposed rule:

  • Religious worship, child support obligors, physical accommodations for eligible disabilities.  The proposed rules would implement statutes:
    • requiring employers to reasonably accommodate wearing of religious clothing and leave for religious practices (SB 786)
    • making discrimination by employers against child support obligors an unlawful employment practice (ORS 25.424(3))
    • requiring places of public accommodation to provide access to employee toilets for customers with eligible medical conditions (SB 277)
    • requiring transient lodging of 175 or more units to provide lifts for individuals with disabilities (HB 3256). 
  • Compliance with the ADAAA, preferences for veterans, and discrimination on the basis of uniformed service.  The proposed rules and amendments would implement:
    • amendments to statutes providing for employment preference for veterans.
      (HB 2510)
    • amendments to disability discrimination statutes to conform them to the
      federal Americans with Disabilities Act Amendments Act of 2008 (ADAAA) (SB 874)
    • statutes prohibiting discrimination in employment on the basis of uniformed
      service (HB 3256).
  • Home Health Agencies, Wage Security Fund.  The proposed rule amendment would:
    • implement HB 2595, enacted in 2009, which prohibits home health agencies and hospice programs from paying nurses providing home health or hospice services on a per-visit basis
    • clarify conditions to be met in qualifying for payments from the Wage Security Fund and delete obsolete references in the agency’s insurance cancellation notification rules.
  • Employment of Minors.  The proposed rule amendment would:
    • implement House Bill (HB) 2826 enacted in 2009, which removes the requirement that employers obtain a special permit before employing a minor under 16 years of age until 7 p.m. (9 p.m. between June 1 and Labor Day).
    • conform current language in the rules to the provisions of HB 2826, which shifts authority for the issuance of agricultural overtime permits from the Wage and Hour Commission to the Commissioner of the Bureau of Labor and Industries
    • clarify that minors may not be employed to operate or assist in the operation of power-driven farm machinery unless the employer has obtained an employment certificate as required and the minor has received required training in the operation of such machinery.
  • Rest and meal periods.  The proposed rule amendment would address the provision of rest and meal periods to employees, including factors to be considered in determining when an employee is prevented from receiving regularly scheduled meal and rest periods.
  • Prevailing Wage.  The proposed rule amendments would make permanent the temporary rules currently in place regarding prevaling wage rates. 

Click here for more information on BOLI's proposed rule changes, including information on how to make public comment and the deadlines for doing so. 

New TSA Regulations Potential "Gotcha" For Employers Interviewing Out-of-Town Candidates

As the economy rebounds (we hope) and hiring begins again, employers flying out-of-town job candidates in for interviews will need to be wary of new Transportation Security Administration ("TSA") regulations that require anyone booking air travel to provide the passenger’s date of birth and gender.  Employers who are not careful about how they implement this rule may increase their exposure to possible discrimination claims from rejected and disgruntled candidates.

49 C.F.R. § 1540.107(b), part of TSA's Secure Flight program, requires an individual to provide name (as it appears on the ID to be used at the airport), date of birth (DOB), and gender when “the individual, or a person on the individual’s behalf, makes a reservation for a covered flight.”  The purpose of the rule is to reduce the number of 4-year old girls and other "false matches" who accidentally end up on TSA “no fly” lists.  While the regulation was enacted in December 2008, airlines have been slow to implement the necessary upgrades to their reservation systems.  Some airlines may not be asking for the name, DOB and gender information now, but TSA expects all airlines to be in compliance by early 2010.

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Washington Court of Appeals Upholds Termination Where Medical Marijuana Use Caused Drug Test Failure

Note:  On April 1, 2010, the Washington Supreme Court granted review of the Court of Appeals decision discussed in this entry.  A final ruling on the case will be issued by the Washington Supreme Court at a later date.


A Washington Court of Appeals has ruled that Washington’s Medical Use of Marijuana Act (“MUMA”) does not protect medical marijuana users from adverse hiring or disciplinary decisions based on an employer’s drug test policy. Click here to download a copy of the Court of Appeals Decision in Roe v. Teletech Customer Care Management


Jane Roe (who did not use her real name because medical marijuana use remains illegal under federal law) sued Teletech for rescinding its employment offer after she failed a drug test required by Teletech’s substance abuse policy. She sought reinstatement and damages, alleging that she had been wrongfully terminated in violation of public policy since her marijuana use was legal under MUMA. The trial court granted summary judgment in favor of Teletech, and Roe appealed.


The Washington Court of Appeals, Division II affirmed the trial court’s dismissal of Roe’s case, stating, “MUMA neither grants employment rights for qualifying users nor creates civil remedies for alleged violations of the Act."  Rather, the Court held that MUMA merely protects qualified patients and their physicians from state (not federal) criminal prosecution related to the prescribed use of medical marijuana.  The Court further held that when Washington’s voters passed MUMA through the initiative process, they did not intend to impose a duty on employers to accommodate employee use of medical marijuana. The lawsuit and appeal, handled for the employer by Stoel Rives attorneys Jim Shore and Molly Daily, is likely to be further appealed by Roe to the Washington Supreme Court. 


The workplace implications of medical marijuana continues to be a developing area. If your company has employees in any state allowing the use of medical marijuana under certain circumstances (including Washington, Oregon and California), you should review your substance abuse policies and make certain that all local human resources personnel and drug test administrators know whether the company will consider an exception for medical marijuana usage. Currently, Washington employers do not need to accommodate medical marijuana usage by making an exception to an otherwise valid substance abuse policy. However, because of court rulings in other states interpreting their states’ disability laws and advocacy groups’ continued attempts to expand medical marijuana rights, employers should continue to exercise caution when dealing with requests for disability accommodation involving medical marijuana. If such an issue arises, consider consulting with legal counsel.

President Obama Orders Federal Employees Not to Text While Driving

Last week, President Obama signed an executive order prohibiting all federal employees from text messaging while driving on official business or while using government equipment.  Click here to read President Obama's executive order on texting while driving.  While President Obama's order does not effect private employers, it does directs federal agencies to encourage contractors and their employees to also to ban texting while driving on government business. 

Private employers may also want to consider adopting policies prohibiting employees from texting or using cell phones while driving.  Several studies, including this one from Car and Driver Magazine, show that texting while driving is more dangerous than driving while intoxicated.  There have been numerous cases in recent years where employers have been sued by the victims of accidents alleged to have been caused while the employees were texting or using cell phones and driving. 

Several states have banned cell phone use while driving (including Washington and, effective Jan. 1, 2010, Oregon) and several more are banning texting while driving.  Need to know the law in your state?  Check out this great overview of cell phone/texting while driving laws by state from the Governors' Highway Safety Association

Washington Minimum Wage to Remain $8.55/Hour in 2010

Washington's minimum wage will remain $8.55 per hour in 2010, the Washington State Department of Labor and Industries (L&I) announced this week.  Click here to view L&I's press release on the 2010 Washington minimum wage.    

L&I recalculates the state’s minimum wage each year as required by Initiative 688, which requires that the minimum wage be increased for inflation annually according to any increases in the federal Consumer Price Index.  This year, the CPI actually decreased by 1.9 percent.  However, Initiative 688 does not allow L&I to decrease the minimum wage, so it will remain the same in 2010.  Washington employers can continue to use the current minimum wage poster for at least one more year.  Click here for more information on Washington's minimum wage from L&I. 

As we reported last week, Oregon's minimum wage will also remain unchanged in 2010, at the rate of $8.40 per hour.  A total of ten states have minimum wage rates tied to various cost of living measures:  Washington, Oregon, Vermont, Ohio, Nevada, Montana, Missouri, Florida, Colorado, and Arizona. 

Oregon's BOLI Proposes New Employee Leave Regulations

Last week the Oregon Bureau of Labor and Industries (BOLI) filed with the Secretary of State a Notice of Proposed Rulemaking on new regulations pertaining to certain employee leave laws.  The proposed regulations are intended to reflect some recent amendments to federal Family and Medical Leave Act (FMLA) regulations and to clarify, edit and make housekeeping changes.  The proposed rules would impact three Oregon leave statutes: 

  1. The Oregon Family Leave Act (OFLA)
  2. The Oregon Military Family Leave Act  (OMFLA)
  3. The Oregon Victims of Certain Crimes Leave Act (OVCCLA)

Click here to download the full text of the rules, or click here to download the Statement of Need and Fiscal Impact (both in Word format). 

The public (that's you!) is invited to comment on the proposed rules no later than November 13, 2009.  Send comments via email to plebaneks@state.or.us.  Comments via regular mail should be directed to:  Stef Plebanek c/o BOLI CRD, 800 NE Oregon St. #1045, Portland OR 97232. 

Once the regulations are finalized, the Stoel Rives World of Employment will provide coverage of any significant rule changes. 

2009 Oregon Legislative Update

The Oregon Legislature was in session in 2009, and many labor and employment-related bills came up for consideration.  A complete list of the bills that passed and the bills that failed follows below (you may have to click "continue reading." 

Several passed and will become law effective January 1, 2010.  Several others didn't get the support they needed to become law, but employers may want to take note as they may gain more traction in the next legislative session. 

Notable winners:  leave for military spouses, a ban on "captive audience" union meetings, and protections for stalking victims.  Notable losers:  several attempts to clarify an employer's obligation to accommodate medical marijuana use. 

Up next:  a federal labor and employment legislation update.  Stay tuned!

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Oregon's Minimum Wage Will Remain $8.40 in 2010

Oregon's minimum wage will remain $8.40 per hour in 2010, Labor Commissioner Brad Avakian announced last week.  Oregon's minimum wage is tied to the Consumer Price Index, and is recalculated by the Labor Commissioner every September.  This year, however, the CPI declined 1.5 percent, so Oregon's minimum wage workers will not receive a raise next year.  Click here to read Commissioner Avakian's press release on the 2010 minimum wage

So, if prices are falling, why is there no decrease in the minimum wage?  Oregon's minimum wage law, passed by the voters in 2002, does not provide for cutting the minimum wage when prices fall.

Don't care because you don't live in Oregon?  Click here for a state-by-state list of minimum wage rates

Oregon Court Of Appeals Holds Non-Disabled Employees Are Protected When Requesting Accommodations

On Thursday, in Herbert v. Altimeter, the Oregon Court of Appeals held that an employee does not need to actually be disabled in order to be protected from retaliation for requesting an accommodation under Oregon’s disability anti-discrimination law.  The case serves as a useful reminder that anti-retaliation protections, like those in the Oregon disability law, can be very broadly applied and protect many types of employee requests or complaints. Employers should be careful when disciplining or terminating any employee who has recently made some kind of arguably protected request or complaint.

Sherrie Herbert was terminated from her truck-driving job with Altimeter shortly after she became ill, allegedly from exhaust fumes in the cab of her truck, and she reported those problems to her boss. She sued under various retaliation theories, including that she was terminated in retaliation for her having requested an accommodation for a disability (i.e., requesting to be reassigned to a different truck). The trial court granted a directed verdict for Altimeter at the close of Herbert’s case at trial and dismissed all claims.

The Court of Appeals reversed.  Altimeter argued that it couldn’t have retaliated against plaintiff for requesting an accommodation as a matter of law, because she was not disabled and therefore not protected under the Oregon disability law's anti-retaliation provisions.  The court rejected that argument, noting that while the law requires Oregon employers to provide a reasonable accommodation to a “person with a disability,” the anti-retaliation provision, ORS 659A.109, protects any “worker” who requests an accommodation.  So, the court reasoned, by its plain terms the statute protects a broader class of employees (all of them) who make protected requests for accommodations, even though those employees may not be entitled to an actual accommodation. 

The opinion also contained an illustrative reminder about the importance of well-drafted written responses filed with the Equal Employment Opportunity Commission (“EEOC”), the Oregon Bureau of Labor and Industries (“BOLI”), and similar agencies. Those written position statements are admissible later; if they’re not carefully drafted they could come back to bite the complainant. In Herbert, Altimeter’s BOLI position statement included several damaging admissions, the worst of which essentially stated that she was terminated because she insisted she be reassigned to another truck, i.e., requested an accommodation.  Despite a general lack of other evidence of retaliation presented by Herbert at trial, the Court held that Altimeter's admission in the BOLI statement alone was enough to allow that claim to go to a jury. 

Oops!  While there are no easy, hard-and-fast rules about how to draft effective BOLI or EEOC position statements, generally you want to say as little as possible while still making your case, and above all, you don't want to provide the only evidence a plaintiff will need to take his or her case all the way to a jury!!  Those kinds of careless statements early on can make litigating employment discrimination lawsuits very expensive for employers, because they become much harder to get dismissed before trial.

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California DLSE Reverses Itself Regarding Schedule and Salary Reductions for Exempt Employees

The California Department of Labor Standards Enforcement (DLSE) has issued an opinion letter in which it concludes that California law does not prohibit an employer from temporarily reducing the work schedule of an exempt employee from five days a week to four days a week, and correspondingly reducing the employee's salary by 20 percent.  The employer in question was experiencing significant economic difficulty and wanted to temporarily reduce the schedules and salaries of exempt employees to avoid or limit the need for layoffs.  The DLSE concluded that this practice does not violate the salary basis test and the affected employees would not lose their exempt status.

Although this conclusion is consistent with well-settled principles of federal law, it represents a reversal of the DLSE's opinion.  The DLSE reached the opposite conclusion -- that an employer cannot reduce the salary of an exempt employee during a period in which the company operates a shortened workweek due to economic conditions -- in a 2002 opinion letter.  The 2002 opinion letter relied on a federal court decision that the DLSE now characterizes as "not well-reasoned and misguided."

Although DLSE opinion letters are not binding authority, California courts usually give them a great deal of weight.  Additionally, DLSE opinion letters provide insight into how the DLSE will interpret the law in cases it pursues as California's wage and hour enforcement agency.

Washington Supreme Court Upholds Employer's Right to Fire Workers who Protest Bad Boss

Sometimes the Washington Supreme Court pleasantly surprises employers. Today is one of those days. The Court issued its decision today in Briggs v. Nova Services. The plaintiffs in this case were eight employees of Nova Services, a non-profit social services organization in Washington. The employees apparently had major problems with the executive director who was appointed by the board, Linda Brennan. They sent a letter to the board expressing their disapproval with Ms. Brennan’s job performance. They explained that she “left managers to do work in isolation, failed to delegate authority well, did not hire needed staff, failed to foster open communication, and was poor at managing finances.”  The board hired a lawyer who confirmed that regardless of whether Ms. Brennan was a decent manager, she had done nothing illegal. He suggested that the board either fire Ms. Brennan or the two employees who were the ringleaders of the disgruntled group, Ken Briggs and Judy Robertson, because their animosity clearly ran too deep to foster a positive working environment. The board decided to let Ms. Brennan stay.   After an unsuccessful attempt to mediate their dispute, Ms. Brennan ultimately fired Briggs and Robertson. The other six employees responded by writing another letter to the board protesting the firing of Briggs and Robertson and threatening, in essence, unless Brennan is fired and Briggs and Robertson are reinstated, we quit.  The employees gave the board one day to respond and stated that the deal was “non-negotiable.” The board did not respond and the employees did not report to work.


The at-will employees sued for wrongful discharge in violation of public policy. This cause of action is a narrow exception to the at-will employment doctrine. It only applies where an employee is fired for something like refusing to engage in an illegal act, performing a public obligation like jury duty, exercising a legal right like voting, or in retaliation for reporting employer misconduct (whistle blowing). Relying on RCW 49.32.020, the employees argued that Washington law, like the federal labor laws, protects employees’ rights to engage in concerted activities. In essence, this law protects non-union employees who work together to complain/negotiate/bargain with their employers over terms and conditions of employment. The Court determined that RCW 49.32.020 was not meant to apply to this context of a protest walk out over the firing of two employees and the retention of a disliked boss. The Court focused on the idea that “working conditions includes things like better wages, improved medical coverage, better treatment from supervisors, lunch and rest breaks, layoffs and recalls, production quotas, work rules, on the job harassment, and even food prices at in-plant dining rooms.” The Court determined that management decisions which “lie at the heart of entrepreneurial control” are not terms and conditions of employment. Thus Nova’s decision to replace the employees who walked out in protest was not a wrongful termination in violation of public policy. There was a dissent which focused more on federal labor laws as persuasive. Under federal law, this case might have come out differently. There were also two concurring opinions. Justice Madsen’s opinion focused on the fact that the plaintiffs never raised the RCW 49.32.020 issue until the appeal, which is arguably way too late to bring it up. Justice Johnson’s opinion was a bit more complicated but essentially argued that the Court mixed up two completely separate issues, the wrongful discharge tort and the protected concerted activity statute. He agreed that complaining about a bad boss is not protected.


The bottom line for employers is that in Washington, it is not necessarily “protected concerted activity” (and that is a legal term of art to be discussed with your labor lawyer when necessary) for employees to protest everything in the workplace. There are still going to be some workplace issues that are clearly terms and conditions of employment.   Employees can band together to complain about these issues.  Other workplace concerns may not be safe for at-will employees to protest. One such concern is clearly who’s the boss. With support from today’s decision, there will be others. Before taking any action in response to employees who act collectively, however, it would be very prudent to consult an experienced labor lawyer.      

Oregon Supreme Court Denies Employee's Wrongful Discharge Claim for Reporting Unlawful Trade Practices

The Oregon Supreme Court has denied a car salesman's wrongful discharge claim. In Lamson v. Crater Lake Motors, Inc., the salesman, Kevin Lamson, claimed he was terminated for complaining to his employer that an outside entity managing sales on his employer's car lot was engaging in unlawful trade practices.  Lamson refused to participate in special promotional events run by the outside company,  because he believed company was engaging in sales tactics that were unethical and unlawful.

As the Stoel Rives World of Employment has discussed earlier, wrongful discharge is a common law remedy.  One way a plaintiff may assert the claim is by arguing that the employer terminated him for fulfilling an "important societal obligation."  Oregon courts determine what obligations qualify by reviewing state statutes and the state constitution. 

In this case, the Oregon Supreme Court ruled that plaintiff would have had a wrongful discharge claim if he had been terminated for refusing to engage in illegal practices prohibited by Oregon's Uniform Trade Practices Act..  However, the court determined that plaintiff's evidence did not meet that burden.  Plaintiff had not complained that he was being forced to act illegally; he had complained only that the outside company was acting illegally and urged his employer not to do business with that company.  The court also held that plaintiff would have had a viable claim if he had been terminated for reporting the outside company's illegal practices to a government agency that could have taken legal action about the outside company.  Reporting the allegedly illegal practices to his employer, the court ruled, was insufficient to trigger the common-law remedy.

Lamson does not signal an entirely new direction in the law of wrongful discharge; employers have known for some time that they may be held liable for terminating employees for performing public duties such as jury service or even arresting lawbreakers.  However, Lamson is a valuable precedent for employers because it shows that Oregon courts are not willing to extend a wrongful discharge remedy for every act that a discharged employee can relate (however tangentially) to an Oregon statute.  Plaintiffs asserting wrongful discharge must show how their complaint directly relates to the furtherance of a public policy


Oregon Court of Appeals Rejects Wrongful Discharge Claims for Health and Safety Retaliation

This morning the Oregon Court of Appeals rejected a plaintiff's common-law wrongful discharge claim that she was terminated for reporting a health and safety violation.  The Court ruled that the state and federal statutory remedies were adequate, and that she should have filed a statutory claim instead. 

Plaintiff Andrea Deatherage was an employee of Super 8 Inn when she filed a health and safety complaint against her employer with Oregon OSHA.  Deatherage was terminated the next day.  She sued for the common-law tort of wrongful discharge, claiming she was terminated in retaliation for filing the complaint. 

In Oregon, wrongful discharge is a "gap filling" remedy that is available only when there is no adequate remedy by statute.  In Walsh v. Consolidated Freightways, 278 Or 347, 563 P2d 1205 (1977), the Oregon Supreme Court ruled that the state and federal statutory remedies for health and safety complaint retaliation were sufficient to preclude a common-law remedy.  Citing Walsh, the trial court dismissed plaintiff's claim.

So why the fuss at the Court of Appeals?  Plaintiff claimed that a federal case issued since Walsh had cast doubt on whether the statutory remedies were actually adequate.  The Court of Appeals rejected the invitation to ignore an Oregon Supreme Court case, and adhered to Walsh, agreeing with the trial court.  (Oddly, the court declined to fill a gap in Oregon law by explaining exactly what remedies are available for an Oregon statutory health and safety reporting claim under ORS 654.062.)

So why is this case important?  At this point, it creates a difference in how these kinds of wrongful discharge cases will be treated in state courts as opposed to federal courts. The Stoel Rives World of Employment will be watching future developments, as the Oregon Supreme Court may have an opportunity to weigh in on this issue.

California Supreme Court: No Privacy Violation for Employer's Placement of Video Camera in Employees' Office

The California Supreme Court has issued its decision in Hernandez v. Hillsides, Inc., finding that an employer's placement of a hidden camera in an office used by two employees did not violate the employees' right to privacy.  This case has been closely watched (OK, pun intended) as it worked its way through the appellate courts.  Like all workplace privacy cases in California, the case is highly fact-specific and should not be interpreted as encouraging employers to conduct clandestine surveillance of employees.

Hillsides operated a residential facility for neglected and abused children.  Plaintiffs Hernandez and Lopez were employees of Hillsides who shared an enclosed office and performed clerical work during daytime business hours.  Hillsides learned that late at night, after the plaintiffs had left the premises, an unknown person repeatedly used a computer in the plaintiffs' office to access and view pornographic web sites.  Concerned that the culprit might be a staff member who worked with the children who resided there, Hillsides set up the hidden camera, which could be operated from a remote location at any time.  Neither of the plaintiffs was suspected of being the culprit, and the employer only activated the camera after hours when the plaintiffs were gone.  The plaintiffs' activities were never viewed or recorded by means of the surveillance system.

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Recovery of Attorney Fees for the Employer in Oregon Wage and Hour Cases

A recent Oregon Court of Appeals case, Rogers v. RGIS, LLP, presents an opportunity for employers.  In Rogers, the court awarded an employer a whopping $180,854.09 in attorney fees.  The plaintiff brought one lawsuit but several wage and hour claims (overtime, minimum wage, late payment of final wages, unpaid wages for rest and meal breaks).

The court found the plaintiff prevailed on a few claims, but the employer prevailed on most.  As a result the employer was awarded six figures and the plaintiff was awarded only $880 to cover fees.

This case is saying that a prevailing party may recover fees, which relate to each separate wage claim.  For example, if the plaintiff brings five separate wage claims and the employer prevails on four, the employer will (in the court’s discretion) get to recover its fees to defend against the four claims upon which it prevailed.

If you’re sued under Oregon wage and hour laws, you should seek fees under ORS 20.077 and 653.055(4).  You can also use the potential for recovering fees as leverage before a lawsuit is filed.  Will this logic be extended to other employment claims, such as discrimination and retaliation claims?

Washington Wal-Mart Workers Get Their Wish - $35 Million

The Washington state class action by Wal-Mart employees for missed meal and rest breaks and for being forced to work off the clock finally ended this week with a payment to the workers of $35,000,000 and $10,000,000 to their attorneys.  Wal-Mart (are you surprised?) denies any wrongdoing.  For more on the lawsuit and subsequent settlement, click to read the Huffington Post's analysis or this coverage by Forbes. The settlement, which is just one of many for Wal-Mart, is another important reminder that liability for wage and hour violations can really add up.  And it adds up really fast when the class size is over 80,000 workers.

Washington employers should check with the Washington State Department of Labor and Industries for information on meal and rest break rules

Now, Washington Wal-Mart workers, go spend those "stimulus" dollars!  You have until August 19 to fill out your claim form.

Oregon Religious Accommodation Bill Becomes Law

Last week Oregon Governor Ted Kulongoski signed Senate Bill 786, which will require employers to more extensively accommodate employees' religious practices and observation.  The bill passed both the Oregon House and Senate by wide margins earlier this Spring.  The new law will take effect January 1, 2010.

Oregon law already prohibits discrimination based on an employee's religion.  Senate Bill 786 also requires employers to reasonably accommodate employees' religious practices.  The law specifies types of accommodations that may be required, such as shift changes, approving vacation time for religious holidays, and allowing employees to wear jewelry or religious clothing.  The bill makes exceptions if the requested accommodations create an undue hardship on the employer.  The law contains only one occupation-specific exception:  public school teachers will be prohibited from wearing religious dress while at work.

The new Oregon law is modeled after federal regulations interpreting the Civil Rights Act of 1964, and guidance on those regulations will help Oregon employers comply with the new law.  For an excellent guide on accommodating religious practices, check out this article on religious accommodation from HR Hero.  And, expect more tattooed and pierced employees to request accommodations due to their membership in the Church of Body Modification

Use Workshare Program to Cut Costs and Keep Workers

Are you looking for ways to hang on to staff, yet reduce costs?  Those goals are not necessarily mutually exclusive if you choose to participate in your state's workshare program.  A workshare program allows your employees to collect some unemployment benefits but continue working part time.  Here's an article from the Center for Law and Social Policy that gives additional detail.

Seventeen states have such programs:  Arizona, Arkansas, California, Connecticut, Florida, Iowa, Kansas, Maryland, Massachusetts, Minnesota, Missouri, New York, Oregon, Rhode Island, Texas, Vermont and Washington.  For a sample of a workshare law, see Section 1279.5 of California's unemployment insurance code.

Each state’s program is a little different, but they have common attributes.  We’ll use Oregon’s program as an example. 

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Oregon Court of Appeals Upholds Employer's Right to Ask Potentially Disabled Employees to Take Medical Exams

Today in Heipel v. Henderson et al.,  the Oregon Court of Appeals affirmed summary judgment on an Oregon disability discrimination claim in favor of an employer who asked an employee to take an independent medical exam (IME) as part of an investigation into the employee's disturbing work-related behavior.  The court confirmed that such exams must be "job related and consistent with business necessity," and that the exam in this case met those criteria.

Plaintiff Barbara Heipel worked for the Oregon Employment Department.  Her supervisors received an escalating string of complaints about her job performance and erratic behavior.  Her actions included:

  • standing in the bathroom in a "trance" pulling out paper towels into an overflowing trash can;
  • leaning against a bathroom stall in a "despondent state";
  • total loss of emotional control with supervisors and coworkers;
  • accusing her coworkers of stealing shredded documents from a trash can and pasting them together for personal use; and
  • false and contradictory complaints to customers about her employer and coworkers.

Heipel's employer asked her to take an IME to determine whether she posed a threat to herself and others and whether she could perform the essential functions of her position.  Plaintiff refused, and the Employment Department terminated her for refusing.  Plaintiff filed a lawsuit claiming, among other things, that her employer had unlawfully discriminated against her under Oregon employment statutes for having a disability.

ORS 659A.136(1) provides that such examinations are appropriate only where they are "job related and consistent with business necessity."  The Oregon Court of Appeals, relying on federal cases in the Sixth and Eighth Circuits, ruled that, under these circumstances, the requested exam met both requirements.

This decision should not be seen as a blanket endorsement of all IMEs in the workplace.  Although this exam was ruled appropriate, the Court of Appeals' inquiry was fact-specific -- and the facts here were unusual.  Employers should understand the risk of requesting such exams and should carefully evaluate the individual circumstances before forging ahead.

Proposed "LAW" Would Index Federal Minimum Wage to Poverty Level

The recently proposed Living American Wage Act (LAW) would tie the federal minimum wage to the federal poverty threshold for a family of two with one child. Introduced last week by Rep. Al Green (D-Texas), LAW would index the minimum wage to 15 percent above the poverty line for a full-time worker, or about $8.20 per hour in wages, and it would increase the minimum wage every four years to maintain a wage at least 15 percent above the poverty line. For more information, click to read Rep. Green’s press release on LAW

Such an indexed minimum wage would not be unique. Oregon adjusts its minimum wage each year based on the U.S. City Average Consumer Price Index for All Urban Consumers for All Items.  Currently, Oregon's minimum wage is $8.40 per hour.  For a list of the minimum wages in other states, click here for the Department of Labor's handy list of minimum wages by state, effective January 1, 2009

We’ll keep watching to see if LAW becomes law.  Until then, please note that the federal minimum wage will increase to $7.25 per hour effective July 24, 2009.

Washington Supreme Court Decides Morgan v. Kingen - Bankruptcy is No Defense

The Washington Supreme Court issued a decision today in Morgan v. Kingen, holding that bankruptcy is not a valid defense to a willful withholding of wages under RCW 49.52.070.  The plaintiffs in this case worked at Funsters Grand Casino in SeaTac, Washington.  The casino was not a success and the owners voluntarily filed for Chapter 11 bankruptcy after only one year in business.  After it became clear that the owners were not going to inject badly needed capital, the bankruptcy court converted the proceedings to a complete liquidation under Chapter 7.  After the conversion, the owners couldn't have paid their employees even if they had wanted to (at least from the seized Funster assets).

The plaintiffs brought a class action lawsuit on behalf of over 180 employees to recover unpaid wages.  The owners of the bankrupt casino argued that while the wages were admittedly owed, the withholding was not willful because the assets were seized in bankruptcy.  This distinction is crucially important because willful withholding of wages allows a plaintiff to recover double damages, attorneys' fees and exposes the withholder to personal liability.  The owners of the bankrupt casino were thus personally liable for twice the amount of all the unpaid wages plus attorneys' fees unless they could assert a bankruptcy defense.  They tried.  They failed at the trial level, the appellate level, and as of today, at the Washington Supreme Court as well.  Justice Sanders dissented, noting that the owners could not have paid as their assets were seized and unavailable.  He was joined by Justice Johnson and Justice Sweeney, pro tem.

The bottom line for businesses in Washington remains unchanged by this decision.  A financial inability to pay wages does not constitute a defense to a willful withholding of wages.  Today's decision establishes that even a complete liquidation in bankruptcy is no defense.  The lesson?  If your business is failing and it looks like there may not be enough assets to satisfy all the looming creditors, you might want to seriously consider paying wages before anything else.      

Oregon Musicians No Longer Presumed Employees for Unemployment Purposes

Sine die!  The Oregon Legislature's biennial session has come to a close, providing a perfect opportunity for the Stoel Rives World of Employment to take a look at what passed, what failed, and what flew under the radar.

One helpful new statute fixes a problem for employers who operate music venues.  In late 2007, Mississippi Studios, a hip North Portland nightspot and recording studio, got nailed in an Oregon Employment Department audit for not paying unemployment taxes on musicians who played at the venue.  Mississippi assumed that the musicians were not employees, but were  independent contractors according to the Department's test.  Not so fast.  Mississippi was unaware of ORS 657.506, an obscure provision in Oregon statute that presumed musicians are employees unless otherwise stated in an employment agreement.

The new statute, which went into effect immediately on passage, repeals the old rule and treats Oregon musicians just like everybody else.  The bill is simply drafted and repairs some bad lawmaking.  Way to go, legislature!  This time you were up there with the best.

9th Circuit Orders Damages, but Not Reinstatement for Unauthorized Alien Workers

What's an employer to do when it is ordered to reinstate former employees, but those employees are not legally authorized to work in the United States?  Pay liquidated damages instead, according to the Ninth Circuit's recent decision in NLRB v. C&C Roofing Supply Inc

In C&C, the National Labor Relations Board (NLRB) alleged that the employer unlawfully fired 20 workers for engaging in union activity.  The parties reached a formal settlement that called for reinstatement of the illegally fired workers and payment of specific amounts of liquidated damages to each.  However, the employer then refused to reinstate the employees because many of them were unauthorized aliens and rehiring them would violate the Immigration Reform and Control Act (IRCA) and the Legal Arizona Workers Act, which both prohibit hiring unauthorized aliens. 

The Ninth Circuit solved the dilemma by ordering the employer to pay the agreed-upon liquidated damages, but did not require the employer to reinstate the unauthorized employees.  But how does this case square with Hoffman Plastic Compounds Inc. v. NLRB?  There, the U.S. Supreme Court held 5-4 that the board may not order back pay for unauthorized aliens, despite their firing in violation of federal labor law, because doing so would violate immigration policy expressed in IRCA.  In C&C, the Ninth Circuit dodged that issue by ruling that agreed-upon liquidated damages as part of a settlement do not raise the same issues as back pay ordered by the court, as the employees need not be "available to work" in order to receive liquidated damages.  Don't be surprised if this one gets appealed up to the Supreme Court for a determination if it really does square with Hoffman

Oregon Legislature Bans Mandatory Meetings

A new Oregon bill will prohibit employers from requiring employees to attend mandatory or "captive audience" meetings on, among other topics, labor unions.  Governor Ted Kulongoski is expected to sign the bill, which would them become law effective January 1, 2010.  Click here to read SB 519

SB 519 prohibits an employer from taking action against an employee who refuses to participate in communications concerning the employer’s opinions on religious or political matters. Religious or political matters is defined broadly and includes communications to employees about unionization.  An employee who suffers economic loss (through termination or suspension) as a result of the bill can sue his or her employer and recover treble damages.  The bill also allows employees to obtain an injunction prohibiting additional "captive audience" meetings. 

This law might not be long-lived:  the U.S. Supreme Court found a similar California law to be preempted by federal labor law.  Click here to read that opinion in Chamber of Commerce v. Brown.  Even if a court finds Oregon's statute to be similarly preempted (and we believe a court will), the law could still apply to employers that are not covered by federal labor law - namely, Oregon public and agricultural employers.  Also, the word from Salem is that the legislature will still revise the law to provide additional protections for religious employers (such as churches and some hospitals) who hold religious meetings, so keep an eye out for those changes in the next week or so. 

Extension of Federal Benefits to Same-Sex Partners Falls Short of Goals

The memorandum issued by President Obama yesterday extends some benefits to the same-sex partners of federal employees, including access to a government insurance program that pays for long-term conditions such as Alzheimer's disease, and to sick leave to care for a sick same-sex partner or a non-biological child.  However, the extension did not provide eligibility for health care to same-sex partners, drawing protest from gay activists

Why did President Obama stop short?  The Defense of Marriage Act (DOMA), the 1996 federal law that, among other things, defines marriage as a legal union exclusively between one man and one woman.  According to President Obama's press statement, the White House determined that DOMA prevented an extension of all benefits to same-sex partners, including health care.  In the statement, President Obama called on Congress to repeal DOMA and signaled an intend to extend all benefits to same-sex partners if and when that happens. 

President Obama's actions will clearly impact Federal agencies and their employees, but what effect does it have on private employers?  For now, none  - the memorandum only applies to the federal government.  However, it does signal a growing trend in mandating the extension of employee benefits to same-sex partners. States that recognize same-sex marriage generally require private employers to extend benefits to same-sex spouses; other states that do not recognize same-sex marriages but do recognize same-sex partnerships (such as Oregon, Washington and California) may require private employers to extend benefits to same-sex partners under certain circumstances.  Private employers should consult legal counsel about their possible obligation to provide such benefits. 

Proposed Law Would Guarantee Working Mothers Right to Breast-Feed in Workplace

Oregon Democratic Senator Jeff Merkley has announced he will today introduce the Breastfeeding Promotion Act (BPA) in the U.S. Senate.  The BPA would  guarantee working mothers the right to breast-feed their children at their workplaces.  Click here to read about Merkley's proposal on Oregonlive.com. 

The bill is identical to one introduced yesterday in the House by Rep. Carolyn Maloney, D-N.Y. and Rep. Lois Capps, D-CA.  The law would amend Title VII of the Civil Rights Act of 1964, by  to protect breast-feeding in the workplace; provide tax incentives for employers that establish private lactation methods in the workplace; establish minimum safety standards for breast pumps; make breast feeding equipment tax deductible; and create time and privacy for working mothers to express milk.

Oregon implemented a breastfeeding law in 2007, which gives women the right to privately express breast milk in the workplace.  Employers with questions about that law may consult this helpful breastfeeding rest period fact sheet from the Oregon Bureau of Labor and Industries.  Meanwhile, the Stoel Rives World of Employment will continue to follow the progress of the BPA as it makes its way (or not) through the 111th Congress. 

Former Employee Wins $4.1 Billion, Dr. Evil Award

An arbitrator recently awarded $4.1 billion in favor of the former chief marketing officer of iFreedom  Communications Inc., finding that iFreedom breached his employment contract by firing him without cause.  You read that right:  $4.1 billion, with a "b."  U.S. Dollars, not Zimbabwean.  Don't believe us?  You can read the opinion yourself:  Chester v. iFreedom Communications Inc.

$4.1 billion dollars.  That's a ton of money.  Boatloads of money.  In fact, that's so much money, we are awarding Mr. Chester our First Annual Dr. Evil Award!  Congratulations!

So, how did Chester rack up $4.1 billion in damages?  The employment agreement guaranteed him a salary of $12,000 a month plus commissions of 5 percent of gross sales; if he was fired without cause, he would continue to receive commissions.  iFreedom also was supposed to provide Chester with 1.1 million shares of common stock upon hiring and another 600,000 shares if he met certain sales targets .  Apparently, iFreedom did really, really well.  Sales, stock and interest added up, and in a big way.

How can employers avoid owing an ex-employee billions?  First, be careful drafting employment agreements!  A carefully drafted agreement could have avoided this massive liability.  Second, if the agreement requires "cause" for termination, make sure such cause actually exists before pulling the trigger on someone.  Finally, if you get sued and the other side is seeking billions of dollars, hire a decent lawyer and don't try to represent yourself.  It turns out the founder of iFreedom (a non-lawyer) represented the company by himself.  Oops. 

Starbucks Obtains Reversal of $105 Million "Tip Sharing" Case

Just over a year ago, we reported about a $105 million California verdict in favor of Starbucks baristas who were required to pool their tips with supervisors.  As you might expect, Starbucks appealed that decision.  Yesterday, a California Court reversed the decision.  Click here to read the decision in Chau v. Starbucks.

The 4th District Court of Appeal in San Diego ruled Tuesday that supervisors "essentially perform the same job as baristas," so they should get their fair share of the collective tips.  (We wonder what that says about the supervisors' exempt status?)  Attorneys for the baristas have indicated they will appeal to the California Supreme Court, and the Stoel Rives World of Employment will be watching, its $3.50 latte in hand. 

Stoel Rives to Host Employee Free Choice Act Seminar in Portland June 11

If passed in its proposed form, the Employee Free Choice Act ("EFCA") will revolutionize federal labor laws by allowing unions to organize without a secret-ballot election. Other onerous provisions include shortening the time to negotiate a first contract and, if the parties do not agree, allowing an arbitrator (a judge) to decide the terms of the first contract. While Congress is debating several compromises over EFCA, just about any version of the law will tilt the playing field sharply in favor of labor unions. Union and non-union employers must be prepared to face new organizing tactics in light of EFCA and the unions’ sophisticated use of the Internet.

Please join Labor & Employment attorneys Victor Kisch and Dennis Westlind for a seminar about EFCA and the do’s and don’ts for remaining union-free in the new environment. We will also discuss other likely changes to labor laws. The seminar will cover:

  • How will EFCA make it easier for unions to organize? What can a non-union employer do under EFCA?
  • How do unions organize in the age of Facebook, MySpace, Twitter, chat rooms, websites, text messages, email and so on?
  • Effective no solicitation policies;
  • What key issues make a work force vulnerable to union organizing? How can an employer address employee concerns?
  • Salts -- If union organizers seek employment at your company, what can you do?


Thursday, June 11, 2009
11:30 - 11:45 a.m. - Registration and Lunch
11:45 a.m. - 1:30 p.m. - Presentation


Complimentary (lunch included)


Stoel Rives LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204


We will validate parking for most nearby parking garages.


Space is limited! Click here to register online by June 9.

Oregon Moves to Keep Its Disability Law in Tune With the ADA

The Oregon Legislature is taking steps to keep Oregon's disability discrimination laws consistent with the federal Americans with Disabilities Amendments Act (ADA).  Last week, Senate Bill 874 passed out of the Senate Judiciary Committee on a 4-1 vote.  SB 874 will amend existing Oregon disability law to adopt the changes made to the ADA in 2008 through the ADA Amendments Act (ADAAA).

SB 874 contains four key changes to make Oregon law consistent with federal law:

  1. prohibiting discrimination against individuals “regarded as” disabled whether or not their perceived impairment is perceived to limit a major life activity;
  2. construing the term "disability" in favor of broad coverage;
  3. considering an impairment that is episodic or in remission to be a disability if it would substantially limit a major life activity when active; and  
  4. determining whether an impairment substantially limits a major life activity without regard to the effects of mitigating measures except ordinary eyeglasses.

Oregon has, with a few exceptions, consistently kept its disability discrimination laws consistent with the ADA.  Because of that, we expect SB 874 (or something very similar) to become law.  The Stoel Rives World of Employment will continue to keep you updated.

Ninth Circuit Declines to Reconsider Ruling on SF Health Care Ordinance

Back in October 2008, the Ninth Circuit Court of Appeals upheld a San Francisco city ordinance that requires many employers to either contribute a specified amount toward their employees' health care costs on a regular basis or pay into a city health care fund for San Francisco residents.  Earlier this week, the Ninth Circuit denied a petition for rehearing en banc, meaning that the law will continue to be in effect--until or unless the Supreme Court decides to hear an appeal. 

The San Francisco Health Care Security Ordinance went into effect on January 9, 2008.  It is a "pay or play" health care plan, as it requires employers either to "pay" for health care or "play" by the rules of the city health care fund.  The ordinance applies to for-profit employers with at least 20 employees and non-profit employers with at least 50 employees.  For more information on the ordinance, including compliance information, click here

In the underlying lawsuit, Golden Gate Restaurant Association v. San Francisco, a group of employers brought a lawsuit seeking the federal court to declare that the San Francisco ordinance is preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA).  The Ninth Circuit disagreed, and the ordinance will continue to be in effect.  This decision may pave the way for other state and local governments to pass similar "pay or play" health care laws, knowing that they will likely withstand a legal challenge. 

Supreme Court Upholds Idaho Law on Union Speech 6-3

The U.S. Supreme Court ruled earlier this week that an Idaho law banning local government employers from allowing payroll deductions for political activities does not violate unions' First Amendment free speech rights.  You can download the opinion here:  Ysursa v. Pocatello Ed. Ass'n, U.S., No. 07-869, 2/24/09).

The Idaho Voluntary Contributions Act, enacted in 2003, prohibited public employees' unions from using payroll deductions to fund political activities, defined as “electoral activities, independent expenditures, or expenditures made to any candidate, political party, political action committee, or political issues committee or in support of or against any ballot measure.”  A group of unions representing state and local employees in the state sued to challenge the VCA on the basis that it unlawfully restricted unions' First Amendment Right. 

A 6-3 majority of the Supreme Court held that the VCA does not violate unions' rights:  “Idaho's law does not restrict political speech, but rather declines to promote that speech by allowing public employee checkoffs for political activities,” Chief Justice Roberts wrote for the majority. Applying rational-basis review, he found that the restriction “is reasonable in light of the State's interest in avoiding the appearance that carrying out the public's business is tainted by partisan political activity.”

With that endorsement, don't be surprised if more states (particularly right-to-work states) pass similar legislation. 

Carpenters Union to Pay Oregon Employer $450,000 to Settle Picketing Dispute

The Pacific Northwest Regional Council of the Carpenters and Joiners of America recently agreed to pay Hoffman Construction Co. $450,000 and to settle a lawsuit over alleged unlawful picketing during a 2007 strike in Oregon.  The Carpenters have also agreed to pay an additional $200,000 into an escrow account until the union has trained its members on diversity, race and sex discrimination, intimidation, and picket line behavior.  Click here to read the consent decree

A union paying an employer?  You read that correctly.  Hoffman alleged that Carpenters members engaged in unlawful picketing with mass picketing and improper signage, intimidated workers, disrupted traffic, struck vehicles, picketed reserved gates, made excessive noise, and caused physical damage.  Hoffman also alleged that picketers used derogatory racial and sexist epithets, obscenities and threatening language aimed at replacement workers and union members crossing picket lines. 

This is an important decision for employers.  While lawsuits against unions for picket line misconduct are fairly common, a decisive outcome like this is very rare.  This sets a precedent that such picket line behavior is not acceptable, and may encourage unions to better control picketers.

BOLI Seeking Comments on Changes to Family Leave Regulations

The Oregon Bureau of Labor and Industries (BOLI) will hold three public forums on possible regulatory changes to the Oregon Family Leave Act (OFLA) to better align it with the recently revised federal Family and Medical Leave Act (FMLA).  BOLI is also seeking public comments through its regular comment process.  After receiving and reviewing the comments, BOLI will determine if any changes should be made to make Oregon leave law rules more similar to federal regulations.  Click here to read BOLI's press release on the forums, and click here for BOLI's notice of public comment

Interested in attending one of the forums?  Here is a list of places and times:

Thursday, February 26, 4:00-6:00pm
City of Eugene,City Council Chambers
777 Pearl Street
Eugene, Or 97401

Tuesday, February 24, 4:00-6:00pm
Portland State Office Building
800 NE Oregon St., Room 1-B
Portland, OR 97232

Thursday, February 26, 4:00-6:00pm
Portland State Office Building
800 NE Oregon St., Room 1-B
Portland, OR 97232

Would you rather comment in writing?  Written comments may be sent to Amy.K.Klare@state.or.us or to Amy Klare, BOLI Civil Rights Administrator, 800 NE Oregon St. #1045, Portland, OR 97232. Written comment must be received by 5pm on March 6, 2009.

Want to know the differences between current OFLA and the new FMLA regulations?  BOLI has prepared this handy OFLA/FMLA comparison chart.  You can also download BOLI's brief on Implementing OFLA Under FMLA rules

Oregon BOLI: No Changes to OFLA Regulations (yet...)

As previously reported here at the Stoel Rives World of Employment, new federal Family and Medical Leave Act (FMLA) regulations went into effect on January 16, 2009.  Oregon has its own analog to FMLA, the Oregon Family Leave Act (OFLA), with its own regulations.  FMLA applies to employers with 50 or more employees, while OFLA applies to employers with with 25 or more employees; Oregon employers with 50 or more employees are required to follow both laws.

Historically, OFLA and its regulations have tracked federal law (with a few notable exceptions that are more generous to employees).  However, following implementation of the new FMLA regulations, there is now a disconnect between the two laws.   The Oregon Bureau of Labor and Industries (BOLI) announced recently that even though there are new discrepencies between the two laws, it will not immediately update the OFLA regulations to match the new FMLA rules. (Click here to read BOLI's press release on its decision.)  Instead, BOLI will conduct informational hearings in February 2009 to determine whether updates to the OFLA regulations are warranted.  In the meantime, BOLI issued this brief on implementing OFLA under the new FMLA rules, which provides an overview of the new differences between OFLA and FMLA and how employers can safely navigate the two laws. 

Where does that leave Oregon employers that are covered by both OFLA and FMLA?  The rule of thumb is to apply both sets of laws, and then follow the one most generous to employees.  The Stoel Rives World of Employment will follow the hearings on the OFLA regulations and provide updates to let you know when and if there are any changes. 

Oregon Issues New Rest Break Regulations

The Oregon Bureau of Labor and Industries (BOLI) issued a revised regulation earlier this week on employees’ meal breaks which will be of interest to many smaller employers. 

The revised regulation, which is effective as of January 12, 2009, retains the basic requirement that employees normally be provided with a 30-minute, unpaid meal period in which they are relieved of all duties (for shifts longer than 6 hours).  However, it adds additional options for employers who do not provide the full 30-minute meal period and/or relieve an employee completely from duty (such as when the employee remains on-call).

Under the new regulation, an employer is not required to provide an employee with a 30-minute meal period in which the employee is relieved of all duties if the employer can demonstrate that:

  1.  failure to provide a meal period was caused by unforeseeable equipment failures, acts of nature or other exceptional and unanticipated circumstances that only rarely and temporarily preclude the provision of a meal period;
  2. industry practice or custom has established a paid meal period of less than 30 minutes (but no less than 20 minutes) during which employees are relieved of all duties; or
  3. providing a 30-minute, unpaid meal period where the employee is relieved of all duties would impose an “undue hardship” on the operation of the employer’s business (the regulations also provide guidance on what is an “undue hardship”). 

An employer that does not provide meal periods under the “undue hardship” exception must comply with two additional requirements: (a) the employer must also provide the employee adequate periods in which to rest, consume a meal, and use the restroom without deduction from the employee’s pay; and (b) the employer must first provide to each employee a notice provided by BOLI regarding rest and meal periods in the language used by the employer to communicate with the employee.  BOLI will make such notices available by March 16, 2009.


Want more information?  Click here to download BOLI's  press release explaining the new regulations. Or click here to download the full text of the new regulation, including the definition of undue hardship.  Or, click here if you want BOLI's full run-down of the law on rest and meal breaks in general. 

Starbucks Wins Round in Class Action over Applications' Marijuana Questions

Earlier this month, Starbucks scored an important procedural victory from the California Court of Appeals, which ruled that a class of employees lacked standing to sue over questions the coffee chain asked on its employment applications about prior marijuana convictions.  Click here to read the opinion in Starbucks v. Superior Court

Despite the apparent victory, this case teaches an important lesson for California employers:  make sure your employment applications do not inquire about minor marijuana possession convictions that are more than two years old.  Such questions violate California Labor Code Sections 432.7 and 432.8.  In the Starbucks case, even though the court held that the applications violated the statute, there was no evidence that any of the class members had been harmed; the outcome would have been different had the class consisted of employees who were denied employment based on their answers to the question, or employees who disclosed that information in response to the unlawful question. 

Minnesota Wal-Mart Employees Get $54 Million Christmas Present

Wal-Mart Stores Inc. announced yesterday that it will pay $54.25 million to settle a class-action lawsuit over allegations that Wal-Mart made its employees work during break time and off the clock after regular working hours.  The class consists of approximately 100,000 current and former hourly employees who worked at Minnesota Wal-Marts and Sam's Clubs between September 11, 1998 and November 14, 2008.  Click here to read MSNBC's coverage of the settlement

This isn't Wal-Mart's first major settlement, and it might not be the last:  according to Wal-Mart's 10-K filings with the SEC, it has to date settled 76 similar class-action lawsuits across the country.  The lesson for employers?  Carefully follow the wage and hour laws of each state in which you do business.  If you have employees in Minnesota, the state's Department of Labor and Industries has a great website with lots of valuable compliance tips and information. 

Washington's Minimum Wage To Rise to $8.55 January 1, 2009

Washington employers get ready to give your minimum-wage employees a raise:  effective January 1, 2009, Washington's minimum wage will increase to $8.55 per hour, allowing Washington to maintain the highest minimum wage in the country.  For more information, click here to read the Department of Labor and Industries' Press Release.  Washington's current minimum wage is $8.07 per hour.

As previously reported in the Stoel Rives World of Employment, Oregon's minimum wage will increase to $8.40 also effective January 1, 2009.  Following voter initiatives, both Oregon and Washington now tie their minimum wages increases to the Consumer Price Index

The federal minimum wage is now $6.55 per hour, but will go up to $7.25 per hour effective July 24, 2009.  For information on minimum wages in other states, check out this interactive map of the United States showing minimum wage rates, available from the U.S. Department of Labor

Oregon's New Smokefree Workplace Law Takes Effect January 1, 2009

Since 2002, the Oregon Smokefree Workplace Law has made most workplaces smokefree. Effective January 1, 2009, a new law will expand the number of indoor workplaces that are required to be smokefree, and prohibit smoking within 10 feet of entrances, exits, windows that open, and ventilation intakes of workplaces and public places. 

Workplaces and public places that must now be smokefree include but are not limited to:

  • Bars and taverns, including bar areas of restaurants
  • Bowling centers
  • Bingo halls
  • Private and fraternal organizations
  • Employee break rooms
  • Restaurants
  • Private offices and commercial office buildings
  • Retail and wholesale establishments
  • Manufacturing plants and mills
  • Truck stops
  • Child and adult day-care
  • Assisted living facilities
  • Movies theaters and indoor entertainment venues
  • Hotels and motels (Exception: up to 25% of guest rooms may be designated as smoking rooms by the owner or entity in charge)
  • Work vehicles that are not operated exclusively by one employee

That's right - no more smoking in the day care center!  There are some exceptions to the new law, but they are few:

  • Certified smoke shops
  • Cigar bars
  • Hotel/motel rooms designated for smokers
  • American Indian ceremonies

Employees and the public will be able to report violations of the new law once it takes effect by calling a toll-free number or completing an online complaint form.  If your business is caught violating the laws, it can be fined $500/day or $2000 per 30-day period.  For more information, including compliance tips, check out the State of Oregon's Smokefree Workplace website

Utah: Employee Commuting May Be Within "Course and Scope" of Employment

Last week the Utah Supreme Court ruled that an employee's commute may in some cases be within the course and scope of his or her employment, such that an employer may be held liable for the employee's negligence during the commute. 

In Newman v. White Water Whirlpool, the defendant employed Bradley Sundquist as an installer of marble countertops and tile.  In his job, Sundquist would drive White Water's materials and equipment to jobsites in his own truck and trailer.  One morning, on his way to White Water's offices, Sundquist's truck collided with a car driven by plaintiff Newman, injuring him severely.  Newman sued both Sundquist and White Water, alleging that Sundquist was acting in the course and scope of his employment at the time of the accident, thus making White Water jointly liable for his injuries.  The trial court dismissed the lawsuit on the basis that Sundquist was merely commuting, and therefore not acting in the course and scope of his employment.

The Utah Supreme Court disagreed, holding that a jury could find that Sundquist was acting in the course and scope of his employment at the time of the accident.  Why?  Because Sundquist's job required him to drive his truck carrying the employer's equipment and materials, and then returning unused materials to White Water, reasonable minds could conclude that he was not merely commuting but was in fact returning materials to his employer.  If so, that would mean Sundquist was working at the time of the accident and White Water is liable for his negligence. 

Utah employers should pay close attention to this ruling.  Employees who merely commute to and from work without performing any duties during the commute are not acting in the course and scope of their employment and employers will not be liable for any accidents that they might cause.  Employers may, however, be liable for the negligent acts of employees who are driving as part of their job duties.  If you have an employee whose "commute" includes occasional job duties (such as ferrying equipment and supplies, talking on a cell phone, reviewing documents, etc.), you should realize that their negligence might be imputed on your company and take any appropriate steps to ensure that they are driving as safely as possible.

"Blonde Jokes" Support Workplace Emotional Distress Claim

Usually when I get an employment lawsuit alleging "negligent infliction of emotional distress," I chuckle to myself and immediately begin drafting a motion to dismiss.  However, a recent case out of the Washington Court of Appeals may indicate that NIED claims are not totally frivolous!

In Strong v. Wright, the plaintiff sued her former supervisor because he told "blonde jokes" (apparently plaintiff was blonde), made fun of her house, ridiculed her husband's job, and referred to her as a "bum mother" because she put her son in therapy.  The plaintiff alleged that this treatment "caused her to vomit and to have anxiety attacks, depression, and heart palpitations."  Really.  Blonde jokes=heart palpitations.

The trial court granted the defendant's motion for summary judgment, reasoning that the claims were nothing more than a run-of-the-mill workplace dispute.  The Washington Court of Appeals  reversed, holding that  the events went beyond a mere workplace dispute.  One of the facts that helped the court reach this decision:  the defendant stood so close to plaintiff while telling the blonde jokes that his spit would fly and hit her face, constituting an "assault" under Washington law. 

What's the lesson here for employers?  Even though none of the supervisor's conduct violated federal or Washington discrimination or harassment law (although the blonde jokes could be construed as race or national origin discrimination under Title VII), employers still need to watch out for boorish and demeaning workplace behavior.  Courts appear willing to find a way--or even create a way--to continue policing the workforce.  Lastly, whatever you do, DO NOT let your employees visit this website full of blonde jokes

California Overtime Laws Cover Nonresidents Who Work in California

Do California wage and hour laws - including their daily and weekly overtime provisions - apply to non-residents who occasionally perform work in California?  Yes, according to a decision from the Ninth Circuit Court of Appeals earlier this month.  Click here to read the court's decision in Sullivan v. Oracle Corp.

In Sullivan, Oracle sent employees who regularly lived and worked in Arizona and Colorado to California on temporary assignments to train Oracle's customers on the use of its software products.  The plaintiffs sued under California law for daily and weekly overtime when they worked in California.  Oracle argued that Arizona and Colorado law should apply because the employees regularly work and live in those states.  (Of course, the plaintiffs would not have been entitled to any overtime pay under Arizona or Colorado law).  A district court sided with Oracle and granted its motion for summary judgment.  However, the Ninth Circuit overturned that decision and held that “California's employment laws govern all work performed in the state, regardless of the residence or domicile of the worker.”

What does this mean for employers?  If you have non-California employees working in California, even on temporary assignment, make sure that you comply with California's unique wage and hour and overtime laws.  For more information on California law, including its daily and weekly overtime provisions, check out this helpful FAQ from the California Labor Board

California Supreme Court to Review Rest and Meal Break Case

Back in August, we reported a California Court of Appeals decision that employers must provide rest and meal breaks, but are not required to control that the breaks were taken.  Last week, the California Supreme Court granted review of that case - it might uphold the decision, but it might also overturn it. 

The grant of review means the lower court case has no effect until the Supreme Court rules.  California employers should return to policing meal and rest breaks to make sure employees take them, at least until a new decision comes from the California Supreme Court, probably early next year.  Watch the Stoel Rives World of Employment for updates!

Fourteen Million Reasons Not to Misclassify Employees as Independent Contractors

A class of current and former FedEx Ground drivers misclassified as "independent contractors" will receive an additional $9 million in reimbursements for employment-related expenses, an appointed referee ruled October 20.  This award will be combined with a previous award of $5.3 million the drivers received in 2006.  The award will reimburse the drivers for such expenses as truck maintenance and registration, uniforms, fuel, and liability insurance.  For more information on the drivers' lawsuit, click here

As this case shows, employers run a substantial risk by misclassifying its employees as "independent contractors."  Not only can the misclassified employees bring lawsuits (for any number of reasons, such as unpaid overtime, minimum wage violations, family and medical leave issues, and more), but state and federal tax agencies can bring collection actions seeking unpaid payroll taxes, unemployment taxes and penalties.

Concerned that your independent contractor might be a misclassified employee?  The IRS has this handy information on how to determine whether the employee is correctly classified.  There is even an IRS form (Form SS-8) that you can file to seek the Service's help in determining if your employee is correctly classified.  Of course, if you believe that you have misclassified employees working as contractors, it might be a good time to contact your labor and employment attorney. 

Ninth Circuit Upholds San Francisco Health Care Ordinance

The Ninth Circuit Court of Appeals recently upheld a San Francisco city ordinance that requires many employers to either contribute a specified amount toward their employees' health care costs on a regular basis or pay into a city health care fund for San Francisco residents. 

The San Francisco Health Care Security Ordinance went into effect on January 9, 2008.  It is a "pay or play" health care plan, as it requires employers either to "pay" for health care or "play" by the rules of the city health care fund.  The ordinance applies to for-profit employers with at least 20 employees and non-profit employers with at least 50 employees.  For more information on the ordinance, including compliance information, click here

In Golden Gate Restaurant Association v. San Francisco, a group of employers brought a lawsuit seeking the federal court to declare that the San Francisco ordinance is preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA).  The Ninth Circuit disagreed, and the ordinance will continue to be in effect.  This decision may pave the way for other state and local governments to pass similar "pay or play" health care laws, knowing that they will likely withstand a legal challenge. 

Free Lunch Seminar on California Law for Oregon Employers October 30

Do you have an office or a facility in California? Do you have any employees who work in California? If you've had to confront the challenges of complying with California's unique employment laws and regulations, you'll want to join us.

We will have a lively discussion led by Tony DeCristoforo, a labor and employment law specialist based in our Sacramento office, and Victor Kisch, a Portland based attorney who practiced in California for about a decade. They will summarize the important differences between Oregon and California employment laws.

  • Where?  Stoel Rives' Portland Office
  • When?  11:30 a.m., October 30, 2008
  • Cost?  Free!  As Tom Peterson would say, "Free is a very good price!"

For registration information, click here

Washington: Public Policy Against Domestic Violence Supports Claim of Wrongful Discharge

Is a Washington employer prohibited from terminating an at-will employee because she took leave from work to protect herself from domestic violence?  Yes, according to last week's opinion from the Washington Supreme Court in Danny v. Laidlaw Services

In Danny, the plaintiff sued her former employer in federal court, alleging she was terminated for taking leave from work in order to respond to domestic violence.  The federal court certified to the Supreme Court the question of whether Washington has a clear public policy that would support Danny's claim of wrongful discharge.  The Washington Supreme Court responded in the affirmative, stating that Washington "has...established a clear mandate of public policy of protecting domestic violence survivors and their families and holding their abusers accountable." 

Washington employers take note:  if you have an employee who is taking time off from work - perhaps in violation of your attendance policy - to respond to an incident of domestic violence or to testify against an abuser, terminating that employee will be extraordinarily risky.  A safer course may be to work with that employee to find a way to allow her or him to get the time off that she or he needs, and then return to work.  Need more help on how to work with an employee who is dealing with domestic violence?  Check out these resources from the Family Violence Prevention Fund

U.S. Supreme Court to Hear Six L&E Cases This Term

The U.S. Supreme Court opened its 2008-2009 term on October 6 with six labor and employment law cases on its docket.  (For docket information and questions presented, click on the name of the case). 

  • Locke v. Karass:  may a public employee union may charge nonmembers for representational costs for litigation expenses incurred by the international union on behalf of other bargaining units?
  • Kennedy v. Plan Administrator for DuPont Savings & Investment Plan:  is a qualified domestic relations order (QDRO) is the only valid way under ERISA for a divorcing spouse to waive his or her right to the other spouse's pension benefits?
  • Crawford v. Metro. Gov't of Nashville & Davidson County:  Is an employee who cooperates with an employer-initiated investigation into alleged unlawful discrimination protected by Title VII's anti-retaliation provisions? 
  • Ysursa v. Pocatello Education Ass'n:  does an Idaho law that prohibits local government employers from allowing employee payroll deductions for political activities violate the First Amendment free speech rights of unions and their members?
  • 14 Penn Plaza LLC v. Pyett:  do employees covered by a collective bargaining agreement which providies that statutory employment discrimination claims must be pursued through the contractual grievance and arbitration procedures have a right for a court to decide their discrimination claims?
  • AT&T Corp. v. Hulteen:  must an employer give full service credit for purposes of calculating retirement benefits for pregnancy leaves taken before the Pregnancy Discrimination Act of 1978 if the plan gave full credit for other types of temporary disability leaves? 

Some of these cases (such as the Penn Plaza and Crawford cases) have the potential to make significant changes in existing law.  Stay tuned to the Stoel Rives World of Employment for developments as they occur!

Oregon: Arbitration Agreements Need Not Contain Express Waiver of Jury Trial

Late last month, the Oregon Court of Appeals held that an arbitration agreement between an employer and an employee need not contain an express waiver of the employee's right to a jury trial to be enforceable.  The opinion can be read here:  Hays Group, Inc. v. Biege

In Hays Group, a trial court denied an employer's motion to compel arbitration of an employee's wage and age discrimination claims on the basis that the arbitration agreement did not contain an express waiver of the right to a jury trial, just a statement that claims would be “settled by final and binding arbitration.”  The Court of Appeals reasoned that the employee did knowingly waive his right to a jury trial, given that “[c]laims cannot be settled by ‘final’ and ‘binding’ arbitration except by a waiver of the right to a jury trial.”

This decision gives Oregon employers some added leeway in drafting arbitration agreements.  The best practice remains to include an express waiver of the right to a jury trial  - there is no harm in including one, and it helps cut off any employee's arguments that he or she did not understand the scope of the agreement. 

Oregon employers should also be aware that, pursuant to a new statute effective January 1, 2008, all employee arbitration agreements  must be presented in a "written employment offer" that must be "received" by the employee at least two weeks before the first day of the employee's employment.  Arbitration agreements may be presented to current employees, but will not be enforced unless entered into at the time of a "bona fide advancement" (such as a promotion).

Governor Schwarzenegger Signs Two New Employment Laws, Vetoes Many Others

California employers take note:  late last month, the Governator signed a few new employment laws, but vetoed many others. 

Two bills are now law in California:

  • A.B. 10, which immediately exempts from state hourly overtime pay requirements computer professionals earning more than $75,000 a year .
  • A.B. 2001, which gives local governments authority to establish whistleblower hotlines, and requires cities and counties to protect the confidentiality of whistleblowers.

The bills that Governor Schwarzenegger vetoed include:

  • A.B. 2279, which would have prohibited employers from discriminating in hiring, termination, or employment conditions based on the use of medical marijuana.
  • A.B. 437, which would have reversed (for state law purposes only) the "paycheck rule" on equal pay claims as set forth in the U.S. Supreme Court's 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co.
  • A.B. 2386, which would have changed the rules for farmworkers' union elections, providing for either secret mail-in ballots or a traditional ballot box election.
  • A.B. 3063, which would have prohibited employers from asking job applicants about arrests or detentions that did not result in convictions, or about participation in pre-trial or post-trial diversion programs.
  • S.B. 1717, which would have doubled the amount of weeks a worker could receive disability pay.


Governor Schwarzenegger Vetoes SB 1583

As previously reported in the Stoel Rives World of Employment, the California Assembly passed Senate Bill 1583, which would have made paid consultants who advise employers to treat workers as independent contractors to avoid employee status jointly and severally liable with the employer if it is determined the workers are not independent contractors.  The Governator vetoed (terminated?) the bill on September 28.  It does not appear likely that there is enough support in the Assembly to override the veto. 

California Bans Texting While Driving

Add "texting" to the list of things you may not do in California while driving.  As previously reported in the Stoel Rives World of Employment, on July 1 this year, California banned talking on a cell phone while driving (although talking on a hands-free device is still okay).  However, the California legislature forgot to add texting to that ban. 

Senate Bill 28, signed by the Governator on September 24, 2008, fixed the loophole.  It reads: “A person shall not drive a motor vehicle while using an electronic wireless communications device to write, send, or read a text-based communication.”  The bill took effect immediately. 

Employers in all states should consider amending their employee handbooks to discourage texting, cell phone use, computer use, or other distracting habits while employees drive on company business.  In the event of an accident during work time, an employer risks significant liability if it is found the accident was caused by a distracted employee.  If you don't believe the Stoel Rives World of Employment, perhaps you will believe Katie Couric:

Ninth Circuit Asks Washington Supreme Court to Define "Disability" under WLAD

The Ninth Circuit Court of Appeals earlier this week certified a question to the Washington Supreme Court, seeking that court's help in defining "disability" under the Washington Law Against Discrimination (WLAD). 

Two years ago, in McClarty v. Totem Electric, 137 P.3d 844 (2006), the Washington Supreme Court significantly narrowed the definition of "disability" under the WLAD.  In 2007, the Washington Legislature passed a law codifying the broader, pre-McClarty definition of disability, and explicitly stated that definition would apply retroactively.   

This week, in Moore v. King County, the Ninth Circuit certified to the Washington Supreme Court the question of whether the retroactive application of the 2007 law is lawful under the separation of powers doctrine in the Washington Constitution, where the cause of action arose prior to the McClarty decision. 

This case is of interest to Washington employers with pending disability claims under the WLAD.  It will be a significant win for Washington employers if the Washington Supreme Court answers that the retroactive application is unlawful, as any WLAD disability cases arising before July 6, 2007 (the effective date of the new definition of "disability"), will be decided under the narrower McClarty definition of disability. 

Oregon Announces New Minimum Wage of $8.40 Effective January 1, 2009

The Oregon Bureau of Labor and Industries recently announced that Oregon's minimum wage will increase from the current $7.95 an hour to $8.40 an hour effective January 1, 2009.  For Oregon Labor Commissioner Brad Avakian's press release, click here

As a result of Ballot Measure 25, passed by voters in 2002, the minimum wage is adjusted annually based on changes in inflation as measured by the Consumer Price Index (CPI). The Commissioner is charged with adjusting the minimum wage for inflation every September, rounded to the nearest five cents.

Ninth Circuit Upholds Legal Arizona Workers' Act

This week the Ninth Circuit Court of Appeals ruled that the Legal Arizona Workers Act (LAWA) is not preempted by the federal (IRCA).  Rather, the court held, LAWA falls within the scope of the “savings clause” of IRCA’s express preemption provision as a “licensing law” and is therefore enforceable.  A coalition of human rights and employers' groups challenged the law on several grounds, all of which were rejected by the Ninth Circuit.  To read the court's opinion, click here:  Chicanos Por La Causa v. Napolitano

LAWA allows Arizona state courts to suspend or revoke business licenses of employers who intentionally employ "unauthorized aliens," and also required Arizona employers to use the E-Verify System to check applicants' eligibility for employment.  Arizona employers should review this Notice to Employers from the Arizona State Legislature for more information.

Now that the Arizona law has been upheld (and assuming the U.S. Supreme Court does not hear further challenges), the Stoel Rives World of Employment expects anti-immigration groups to push for similar laws in other states. 

What Labor and Employment Law Question Would You Ask the Presidential Candidates?

The Presidential election is less than two months away, and the candidates' campaigns are in full swing.  Oddly enough, the candidates have been strangely silent on labor and employment law issues, focusing their attention on other pressing national security concerns, such as putting lipstick on pigs.  Glad to see they're taking the high road. 

In any event, Daniel Schwartz at the Connecticut Employment Law Blog has this great post about what labor and employment law issues the presidential and vice-presidential candidates should address in their upcoming debates, withs suggestions like the Employee Free Choice Act and a bill to provide employee with paid sick leave.  And if that's not your cup of tea, Dan's got this great post about the use of the phrase "lipstick on a pig" in labor and employment law. 

City of Vancouver Settles Race Discrimination Suit for 1.65 Million

The City of Vancouver, Washington announced yesterday that it will pay a former police officer $1.65 million to settle a federal retaliation and racial discrimination lawsuit he filed two years ago over his termination.  To read the Oregonian's coverage on the case, click here

This isn't plaintiff Navin Sharma's first settlement with the city:  he settled another race discrimination claim against the city in 2001 for $287,000.  In the most recent lawsuit, Sharma claimed that his 2006 firing was in retaliation for his 2001 settlement.  Vancouver admits no wrongdoing, but claims that the cost of a trial and keeping police officers in the courtroom for two or three weeks instead of performing their regular police duties promted the settlement decision. 

 Sharma's attorneys are calling the settlement the Northwest's largest-ever individual settlement for employment discrimination.  We'll never know for sure:  most discrimination cases are settled privately and the terms are confidential.  This settlement is public only because the 'Couve is a public entity.  In any event, it appears that the bar has been raised. 

California Assembly Passes Four Employment-Related Laws

California employers take note:  The California State Assembly recently passed four significant employment-related bills that you should pay close attention to:

  • Medical MarijuanaA.B. 2279 would prohibit discrimination against an employee based on marijuana use, as long as the use was for medical reasons and did not occur at the workplace or during the hours of employment.
  • Equal PayA.B. 437 would reject the "paycheck rule" established in the U.S. Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber Co., 127 S. Ct. 2162 (2007).   Under the new bill, the statute of limitations for pay claims under the state Fair Employment and Housing Act would toll with each discriminatory paycheck an employee receives. 
  • Independent ContractorsS.B. 1583 would make paid consultants who advise employers to treat workers as independent contractors to avoid employee status jointly and severally liable with the employer if it is determined the workers are not independent contractors.
  • Arrest RecordsA.B. 3063 would prohibit employers from asking applicants about arrests  that did not result in convictions, or about participation in pre-trial or post-trial diversion programs.

Will the Governator sign the bills?  Right now, he and the state assembly are deadlocked over the state budget, and Schwarzenegger has said he will not sign any new bills unless and until a new budget is agreed on.  However, if he does not sign the bills within 30 days of their passage, they automatically become law.  Stay tuned to the Stoel Rives World of Employment for more updates!

California Drywall Contractor Settles Meal Break Case for $1.4 Million

California employers beware:  the state Attorney General is enforcing meal breaks and overtime laws.  This week, an Orange County drywall contractor agreed to pay $1.4 million in damages to employees who did not receive their legally required meal breaks or who did not recieve overtime.  To read the settlement in the case, California v. Interwall Dev. Sys. Inc., click here.  To read the Attorney General's press release, click here

The defendant also agreed to pay the state up to $131,000 in payroll taxes it should have paid if it had adequately compensated its employees, civil fines totaling $200,000, $70,000 in attorneys' fees and costs, and $26,000 to cover the cost of a "restitution administrator."  Ouch. 

So remember:  under California law, employees are entitled to a ten-minute break every four hours and to overtime pay for working more than eight hours per day or forty hours per week.   If you don't follow the law, you might get a visit from the Governator

Stoel Rives Offers Seminar on Oregon's New Noncompete Law

Legislation that significantly altered an employer’s ability to utilize noncompete agreements in the state of Oregon took effect on January 1, 2008.  How has the new law impacted corporate policies around restrictive covenants? What are the new best practices you need to implement to stay in compliance? 

For answers to these questions and more, join Stoel Rives for a breakfast seminar on September 25 titled "Noncompetes, Nonsolicitation and Confidentiality: Lessons Learned After a Year Under Oregon's New Noncompete Law," presented by Amy Joseph Pedersen, Ed Reeves and Carolyn Walker of the firm's Labor and Employment Group.

Interested?  For more information and directions on how to sign up, click here

California Court Upholds One Year Statute of Limitation to Arbitrate FEHA Claim

If you've followed the development of California law on the enforceability of arbitration agreements in the last few years, you know it's complex.  And last week, it just got a little more so, although in a way that might be good for employers.  In Pearson Dental v. Superior Court, the California Court of Appeal (Second District) enforced an arbitration agreement requiring the employee to bring any claims within one year, despite the "hybrid" two year statute of limitations in California's Fair Employment and Housing Act (FEHA).   

The employee sued the employer for violation of FEHA alleging age discrimination and other claims.  The employer successfully moved to compel arbitration, and the arbitrator granted the employer's motion for summary judgment on the grounds that arbitration was not requested within one year as required by the arbitration agreement. The trial court vacated the arbitration award, but the Court of Appeal reversed, holding that the one-year statute of limitations did not "unreasonably restrict plaintiff's ability to vindicate his rights under the FEHA."  The court noted that the FEHA does not have a "true" two-year statute of limitations, but rather a "hybrid" period, in which the employee must file an administrative complaint within the first year.  Thus, the arbitration agreement's one-year limitations period was comparable to the FEHA's one-year administrative complaint deadline. 

Does this mean that California courts will be more likely to enforce arbitration agreements?  Don't count on it.  The court did not spend significant time analyzing the agreement for evidence of either substantive and procedural unconscionability - which are the bases on which many California courts have invalidated arbitration agreements.  Nevertheless, the case does give employers some comfort in knowing that a shorter limitations period sometimes may be enforceable.  If you want to read up on the complex history of employment arbitration agreements in California, here's what the Attorney General has to say on the topic

California Employers Required To Offer, But Not Police, Meal and Rest Breaks

California employers scored a major victory regarding meal and rest periods as the result of a new California Court of Appeals decision, Brinker Restaurant Corp. v. Superior Court.  Under the ruling, employers must provide meal periods by making them available, but need not ensure that they are taken.  To read Stoel Rives' detailed synopsis of the case, click here

California Paid Sick Leave Bill Dies in Committee

A California bill to provide universal paid sick leave died in committee last week, following intensive lobbying efforts from small businesses and their lobbyists.  The bill would have granted employees of small companies in California up to five days of paid sick leave each year, while workers at larger companies could take up to nine days a year.  To read more, check out this article from the L.A. Times

The bill was scuttled primarily due to the cost of implementation and enforcement in a year in which the state faces a $15 billion deficit.  Even if it had passed, the bill faced a likely veto from Governor Arnold Schwarzenegger.  The bill's sponsor, Fiona Ma (D-San Francisco), vowed to reintroduce a similar measure next year. 

If passed, the law would have made California the first state to have a mandatory paid sick leave program.  However, the program is not entirely unprecedented:  employees is San Francisco already have a paid sick leave program.  Further, since January 1, 2004, California has offered wage replacement benefits for employees who take time off from their jobs in order to care for a family member or child with a serious health condition.  Want to learn more about the legislative process?  Watch this.

California Supreme Court Confirms Noncompetes Are Invalid

In a 7-0 decision yesterday, the California Supreme Court held that a noncompetition agreement signed by a former Arthur Andersen CPA was invalid under California law.   In Edwards v. Arthur Andersen LLP, the court reminded us that noncompetition agreements are invalid under California's Business and Professions Code section 16600, even if they are written narrowly enough not to deprive persons of their right to pursue their profession.  The court specifically rejected the "narrow restraint" exception to section 16600 that had previously been adopted by the Ninth Circuit, under which employers could enforce noncompetes that did not "entirely preclude" an employee from practicing his or her trade. 

Oregon Supreme Court: Corporate Directors Not Employees

The Oregon Supreme Court recently ruled that a corporation's board of directors are not employees, and therefore not subject to Oregon's unemployment tax.  In Necanicum Investment Co. v. Oregon Employment Department, the Supreme Court reversed a 2007 Oregon Court of Appeals decision that had held unemployment tax should be assessed on the fees paid to the directors.  The Supreme Court instead reasoned that because the directors were not acting in the capacity of employees, no employer-employee relationship was formed and therefore there was no basis for the Employment Department to apply the tax.

This decision is good news for corporations who pay fees to their directors; however, many corporate directors act both as directors and also as employees.  In those cases, the corporation will still be liable for unemployment taxes on any wages paid to the directors in their roles as employees.   

Oregon Court of Appeals Rules Obesity Surgery Covered by Workers' Compensation

In SAIF Corp. v. Sprague, the Oregon Court of Appeals ruled earlier this week that an obese employee's gastric bypass surgery was coverd by workers' compensation.  For the full opinion, click here

The employee in Sprague suffered an on-the-job knee injury in in 1976.  He weighed 225 pounds at the time of the injury.  The employee began gaining weight after his 1976 injury, and by 2001, he weighed 350 pounds.  He then had gastric bypass surgery to reduce his weight, and filed a workers' compensation claim for the surgery, claiming it was necessary to allow his knee to heal.  

SAIF, the workers' compensation carrier, took the position that the surgery was not compensable because the employee's obesity was not caused by the 1976 knee injury.  The Court of Appeals disagreed, holding that because the record showed the gastric bypass surgery was performed to control the employee's obesity in order to allow the on-the-job knee injury to heal, it was compensable through workers' compensation.

This decision does not likely mean that all or even most gastric bypass surgeries or other elective procedures will be covered by workers' compensation.  It does mean, however, that some medical treatment that is indirectly related to a compensable injury may be covered, if the treatment is necessary to treat the compensable injury.  Claims like this one will likely be decided on a case-by-case basis.


Jail Time For Washington Employer

As part of a plea agreement reached earlier this month, Jerry and James Schram, co-owners of a Vancouver, Washington construction company, will serve 30 days of jail time and perform community service.  Their crime?  Hiding information in an attempt to reduce their workers' compensation premiums. In addition, the Schrams also pleaded guilty to misdemeanors for the unpaid wages and will pay 13 employees their back overtime, totaling over $350,000. 

The plea agreement was announced by the Washington Department of Labor and Industries, which brought the claims. 

Oregon: Leave for Olympic Athletes?

Local athletes did remarkably well at the 2008 Track and Field Olympic Trials in Eugene, Oregon, which raises an interesting leave issue.  It's an obscure law, but Oregon requires employers to give Olympic athletes leave to compete.  Under ORS 659.865, it is an unlawful employment practice for an employer to infringe on an employee's right to participate in any athletic event sanctioned by the national government body for that sport as recognized by the U.S. Olympic Committee.  It's similarly unlawful to discriminate against employees who compete in Olympic sports.  Unfortunately for this author, the law does not extend to beer pong

Ninth Circuit Affirms "Emotional Distress Damages" Caused by Denial of FMLA Leave

Plaintiffs suing their employers under the Family and Medical Leave Act ("FMLA") may recover lost wages, but they may not recover emotional distress damages.  What if an employee misses work because of emotional distress that is caused by a wrongful denial of FMLA leave?  The Ninth Circuit Court of Appeals recently ruled that such damages are a form of lost wages and therefore may be recovered under FMLA.  Continue Reading...

Hang Up and Drive! Washington and California Ban Cell Phone Use While Driving

Last night I was riding home and was almost run off the street by a woman reading a novel while driving, when I remembered:  Effective July 1, 2008, new laws in California and Washington prohibit the use of hand-held cell phones while driving.  Drivers may, however, use a cell phone if the communication is made using hands-free device such as a bluetooth headset or wired headset.  Earlier this year, another Washington law went into effect banning text messaging while driving. 

In Washington, both the cell phone and the text messaging laws are "secondary enforcement " laws, meaning that offenders will only receive a ticket if pulled over for another traffic violation such as speeding or running a stop sign.  California law enforcement, however, is authorized to ticket drivers only for cell phone use.  As far as I know, Oregon does not yet prohibit reading while driving (but it should!)

Want more information?  The California DMV has a great Q&A site on its new law.  Don't live in Washington or California but want to know what the law is in your state?  Check out this handy chart of state cell phone laws from the Governor's Highway Safety Association. 

Employers should alert their employees who may drive in California or Washington as part of their job duties.  And employers in all states might consider implementing a cell phone policy that restricts the use of cell phones while driving.  Recent years have seen a large upswing in lawsuits against employers who supply their employees with cell phones, if the employee is then in an accident while using the phone. 

Idaho Supreme Court Clarifies Covered Employment for Unemployment Insurance Tax Purposes

In Excell Construction Inc. v. Idaho Department of Commerce and Labor, the state's high court provided a detailed analysis of each the factors to be considered in determining whether a worker is covered for tax purposes.  The court adopted a list of fifteen factors an employer should consider in making that determination (and that the courts will consider to see if the employer got it wrong).  The case is of critical importance for employers who rely heavily on independent contractors to assure that they are not classified as employees for unemployment insurance tax purposes. 

New Idaho Statute Expands Noncompetition Agreements

A new Idaho statute (Idaho Code 44-2701 et seq.) set to go into effect July 1, 2008 defines presumptively reasonable limitations applicable to covenants against competition and solicitation by  employees and independent contractors. 

Under the statute, a noncompetition period of up to 18 months are presumptively reasonable, as is a geographic scope that includes anywhere the employee provided services or "had a significant presence or influence."  The law also encourages courts that find such provisions unreasonable to determine the intent of the parties and modify the covenant to make it enforceable. 

This should be good news for Idaho employers, who have historically received with a chilly reception in Idaho courts when trying to enforce noncompetition agreements. 

Big Day at the Supreme Court: Four New L&E Decisions

Today the U.S. Supreme Court issued four labor and employment-related decisions; none, however, were big surprises or substantial changes in the law.

 First, in Meacham v. Knolls Atomic Power Laboratory, the Court held 8-0 that an employer defending an Age Discrimination in Employment Act case bears the burden of proving a "reasonable factors other than age" or "RFOA" affirmative defense.  Truth be told, most defense lawyers have assumed that it was the employer's burden to prove the affirmative defense; this decision simply confirms that assumption.  Continue Reading...

Oregon Court of Appeals: Keep Accommodating Medical Marijuana (For Now....)

In Emerald v. Bureau of Labor, The Oregon Court of Appeals affirmed a Bureau of Labor and Industries determination that an employer must reasonably accommodate an employee's off-duty medical marijuana use.  However, the case was affirmed on a technicality - again leaving Oregon employers wondering if they really have to accommodate an employee's medical marijuana use. 

Continue Reading...

Oregon Court of Appeals Upholds Employment Discrimination Statute

Oregon's anti-discrimination statute allows an employee alleging employment discrimination to file either a lawsuit (which results in a jury trial) or an administrative complaint with the Oregon Bureau of Labor and Industries (which results in an administrative hearing with no jury). In Emerald v. Bureau of Labor, the employer argued that allowing an employee to arbitrarily choose whether or not there will be a jury trial violates the employer's right to a jury trial under the Oregon Constitution.  Not so, ruled the Oregon Court of Appeals earlier this week. 

Continue Reading...

Oregon Employees Have No Wage Claim for Missed Rest and Meal Breaks

The Oregon Supreme Court ruled that employees could not sue their employer for back pay over missed rest and meal breaks. Want to know more?  You can either read the court’s opinion, or read a more concise yet equally informative summary of Garfur v. Legacy written by yours truly.  Note to employers:  don't start making your employees skip their breaks just yet.  BOLI can fine you up to $1,000 per violation or, if you're really eggregious, throw you in jail!
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Washington Passes New Domestic Violence and Military Family Leave Laws

On April 1, 2008, Governor Christine Gregoire signed new laws requiring Washington employers of any size to provide two kinds of leave to Washington employees: domestic violence leave for victims and family members, and military family leave. To learn more, check out Stoel Rives’ update

Make Mine a "Venti": Starbucks Ordered to Pay Baristas $105 Million

A California Superior Court ordered Starbucks Corp. to pay $105 million in restitution to baristas who were required to pool their tips with supervisors. Chou v. Starbucks Corp., Cal. Super. Ct. No. GIC836925 (Mar. 19, 2008). The class action case was brought on behalf of all baristas who worked at any California Starbucks going back to October 8, 2000: an estimated 100,000 workers. That’s a little over $1,000 per barista—or approximately 420 tall lattes each.

No Individual Liability for Retaliation Under California FEHA

In a ruling that could simplify the defense of retaliation claims in California, the California Supreme Court recently held that there exists no individual liability for retaliation under California's Fair Employment and Housing Act (FEHA). Jones v. The Lodge at Torrey Pines P’ship, (Cal. Mar. 3, 2008). Although the FEHA prohibits discrimination by "an employer," in contrast, it prohibits retaliation by "any employer, labor organization, employment agency, or person." Based on the legislative history, the court determined that the legislature did not intend to provide for personal liability when it added the word "person."