How to Effectively Navigate Non-Exempt Employee Meal Break Compliance
Tavon Parris, Trackforce Valiant + TrackTik, CALSAGA Network Partner
It’s no secret that many states have strict laws related to employee meal breaks. In California, for example, employers must provide employees with an uninterrupted 30-minute meal break for every five hours worked.
But for employers looking to provide unpaid meal breaks to their non-exempt employees, compliance can be complicated. Subsequently, failure to comply can be costly. Why? Because merely scheduling an employee for a 30-minute meal break, without more, is simply not enough to ensure compliance.
It’s why employers must take proactive steps to ensure employees:
- Take their full meal breaks
- Are relieved of all duties
- Are not impeded or discouraged from taking their full, uninterrupted meal breaks
But taking these steps is just the start. Additionally, employers should also collect and keep data they can use to prove compliance in case of a legal claim. And with technology transforming compliance opportunities for employers, a variety of tools can now be used to avoid being swept away in the wave of litigation involving meal break violations.
Dive deeper by getting your copy of Trackforce Valiant + TrackTik’s latest white paper. You’ll learn more about:
- What employers can do to help ensure compliance
- Appointing a meal break for at least 30 minutes for non-exempt employees
- Adopting a down-to-the-minute timekeeping system
- Ensuring no duties are performed during the meal period
- And more!
- What’s next for the future of break management
- Remote workforce tracking
- Harnessing data
- Looking for data trends
- And more!
- How technology can be used to nail compliance in the years to come
- What that means for your business
- How to future-proof your business beyond meal break compliance
This content was written with the help of experts at Littler Mendelson, the largest labor and employment law firm in the United States.
Trackforce Valiant + TrackTik combines over 45 years of total experience with the brightest and most influential minds to provide its customers with the industry’s most comprehensive security workforce management solution. Our cloud-based solutions help corporations and security guard service providers handle every aspect of security workforce management.
Tavon Parris
706-960-8158
Deviating from SCOTUS, California Supreme Court Has the Last Word on PAGA
Jaimee K. Wellerstein, Esq., Gmelich + Wellerstein, CALSAGA Legal Advisor
On July 17, 2023, the California Supreme Court issued its long-awaited ruling in Adolph v. Uber Technologies, Inc. (Supreme Court Case No. S274671), holding that a Private Attorneys General Act (PAGA) plaintiff retains standing to litigate representative PAGA claims in court after the plaintiff’s individual PAGA claims have been ordered to arbitration. In so holding, the California Supreme Court ignored guidance from the U.S. Supreme Court in Viking River Cruises v. Moriana.
Background
Plaintiff Erik Adolph worked as a food delivery driver for defendant Uber Technologies, Inc. (Uber). As a condition of his employment, Adolph was bound by the arbitration provision in the company’s technology services agreement. The arbitration provision required Adolph to arbitrate almost all work-related claims.
The agreement also stated: “[t]o the extent permitted by law, you and Company agree not to bring a representative action on behalf of others under the [PAGA] in any court or in arbitration. This waiver shall be referred to as the `PAGA Waiver.'” The agreement also included a severability clause: “If the PAGA Waiver is found to be unenforceable or unlawful for any reason, (1) the unenforceable provision shall be severed from this Arbitration Provision; (2) severance of the unenforceable provision shall have no impact whatsoever on the Arbitration Provision or the Parties’ attempts to arbitrate any remaining claims on an individual basis pursuant to the Arbitration Provision; and (3) any representative actions brought under the PAGA must be litigated in a civil court of competent jurisdiction. . . .”
In 2019, Adolph sued Uber, alleging individual and class claims for relief, claiming that Uber had misclassified him and other employees as independent contractors rather than employees and, as a result, wrongfully failed to reimburse them for necessary business expenses. Adolph later amended his complaint to add a claim for civil penalties under PAGA based on the same theory of misclassification. The trial court granted a motion by Uber to compel arbitration of Adolph’s individual claims and dismissed Adolph’s class action claims.
Adolph filed a second amended complaint, eliminating his individual and class claims and retaining only his PAGA claim for civil penalties. Uber filed a second motion to compel arbitration of Adolph’s independent contractor status and the enforceability of the arbitration agreement. The trial court denied the motion, and Uber appealed.
Both the trial court and the Court of Appeal ruled not only that PAGA claims are not subject to arbitration but that “PAGA waivers” are unenforceable. Uber appealed to the California Supreme Court, but in the meantime, the U.S. Supreme Court issued a ruling that seemed to help employers in the uphill battle.
In June 2022, in Viking River Cruises, Inc. v. Moriana, the U.S. Supreme Court held that PAGA actions could be split into individual and non-individual representative claims through arbitration agreement, but the claims could not be simultaneously arbitrated and litigated in courts. The U.S. Supreme Court held that PAGA permits a plaintiff to maintain non-individual PAGA claims only if they also maintain an individual claim in the same action. In the U.S. Supreme Court’s view, PAGA’s statutory scheme provides no mechanism for a court to adjudicate representative PAGA claims when the individual claim is relegated to a separate proceeding. Consequently, the U.S. Supreme Court determined that while plaintiff’s individual PAGA claim could be arbitrated, the non-individual claims must be dismissed for lack of statutory standing.
Though Viking River appeared to be a victory for employers, the issue of standing under PAGA remained unsettled. In fact, Justice Sotomayor noted in her concurrence that “if this Court’s understanding of state law” as to statutory standing “is wrong, California courts, in an appropriate case, will have the last word.” And now, they have.
The California Supreme Court’s Decision
The California Supreme Court’s ruling in Adolph departs from the U.S. Supreme Court’s ruling in Viking River. In Adolph, the Court stated unanimously and unequivocally that “where a plaintiff has filed a PAGA action comprised of individual and non-individual claims, an order compelling arbitration of individual claims does not strip the plaintiff of standing to litigate non-individual claims in court.”
In rejecting Uber’s arguments, the Court made clear that the outcome of a PAGA plaintiff’s individual arbitration will determine issues of standing for the non-individual claims. If a plaintiff prevails on their individual claims in arbitration (i.e., proves at least one individual Labor Code violation), the plaintiff retains standing to litigate the non-individual claims in court. If, however, the plaintiff does not prevail on their individual claims in arbitration (i.e., is unable to prove at least one individual Labor Code violation), then the plaintiff will lose the ability to pursue the non-individual PAGA claim in court as the individual would not be considered an “aggrieved employee” and would lose standing to proceed with the non-individual action.
Can Employers Still Hope to End PAGA?
Although not unexpected, this decision forces employers to look somewhere other than the judiciary for possible reprieve. The “California Fair Pay and Employer Accountability Act of 2024” is a proposed ballot measure which proposes to repeal PAGA and replace it with increased DLSE enforcement. It has qualified for the November 2024 general election.
Employer Takeaway
In light of this ruling, wage and hour compliance (e.g., overtime, timekeeping, pay, meal period and rest break policies, premium pay, etc.) is more important than ever. Employers should consider utilizing or revising arbitration agreements to specifically comply with the recent laws. Employers are advised to consult with counsel to review pending litigation to determine whether arbitration of individual claims to potentially deprive PAGA plaintiffs of standing to pursue non-individual PAGA claims is a viable option. If you have any questions about how this case may affect your business or need assistance preparing compliant policies or revising your practices, please contact your attorneys at Bradley, Gmelich + Wellerstein LLP. We are here to help.
Jaimee K. Wellerstein, Esq. is a Partner and the firm’s Employment Team Head. Representing employers in all aspects of employment law, Ms. Wellerstein collaborates with her clients to develop proactive business and legal strategies to try to avoid workplace conflict and employment disputes. She provides legal advice and counsel to numerous businesses, including conducting individualized training programs for both management and employees. Ms. Wellerstein performs internal audits of her clients’ employment practices to ensure compliance with the rapidly-changing world of employment laws, and guides investigations of employee allegations regarding harassment, discrimination, and employee misconduct. When litigation cannot be avoided, Jaimee K. Wellerstein aggressively defends her clients against employment law claims in the state and federal courts, as well as at administrative hearings, arbitrations, and mediations. Having defended numerous representative and individual lawsuits on behalf of her clients, Ms. Wellerstein is a skilled litigator and negotiator with a broad spectrum of experience upon which to draw. A frequent speaker on numerous topics, including employment law and contract law, Ms. Wellerstein regularly conducts training seminars and programs for managers and employees in all areas of employment practices and policies.
Confidentiality of Settlement Agreements Obliterated by the NLRB
For decades, employers have comfortably included confidentiality provisions in settlement and severance agreements. This allowed employers to keep the terms of the agreement and the sum paid to a former employee confidential. Employers were even allowed to require the employee to keep information regarding their employment with the Company confidential. Recently, however, this has begun to change.
Effective January 1, 2022, Senate Bill 331 placed significant restrictions on confidentiality and non-disparagement provisions in settlement agreements related to sexual harassment and assault cases. More recently, the National Labor Relations Board (“NLRB”) imposed further restrictions on confidentiality provisions in severance and settlement agreements. In short, the NLRB opined in McLaren Macomb (07-CA-263041; 372 NLRB No. 58) that if a confidentiality provision is too overboard, it restricts the employee from exercising their rights under Section 8(a)(1) of the National Labor Relations Act. Surprise: that’s most confidentiality provisions!
McLaren Macomb, a teaching hospital was forced to lay-off a portion of its staff during COVID-19. The staff were offered a severance agreement that included both a non-disparagement provision disallowing the staff to speak negatively about McLaren Macomb and a confidentiality provision that disallowed the staff from disclosing the terms of the severance agreement.
The staff challenged the provisions (even though these are ordinarily included in severance agreements). McLaren Macomb contended that the provisions were lawful because McLaren Macomb did not separately violate any other portion of the NLRA and were unrelated to any union or protected activity. The NLRB disagreed.
The NLRB decided that the non-disparagement and confidentiality provisions had a chilling effect on workers and interfered with their Section 7 rights under the NLRA to organize even though these workers were no longer going to be employed by McLaren Macomb.
Though this case dealt with union employees, the implications of this opinion are far reaching as even non-union employees have rights to organize under Section 7. As a result of this opinion, Employers should carefully review and revise any severance or settlement agreement that they offer to employees. Otherwise, depending on the language of the severance agreement the entire agreement or the confidentiality and/or non-disparagement agreement could be deemed invalid. The attorneys at Bradley, Gmelich & Wellerstein LLP are here to help!
Gentle Reminders
- Pursuant to Labor Code section 201.3, security companies must pay security officers weekly. Paying these employee bi-weekly or monthly will lead to individual and PAGA penalties.
- Naranjo v. Spectrum Security Services, Inc. threw a curve ball at employers when the Court decided that premium pay for missed meal periods and rest breaks should be paid at an employee’s regular rate of pay rather than the employee’s regular rate of compensation which for decades was interpreted to be the employee’s hourly rate. If employers do not already, they should pay premium pay based on the employee’s regular rate of pay.
Saba Zafar is Special Counsel in Bradley, Gmelich & Wellerstein LLP’s Employment Law Department. Ms. Zafar has over a decade of experience as an attorney, primarily in employment law. Ms. Zafar focuses her practice of providing strategic advice and counsel in all aspects of employment law and workplace matters, including drafting and implementation of HR policies and procedures, Employment Handbooks, providing advice to clients on personnel issues as well as general business matters.
About Bradley, Gmelich & Wellerstein LLP
Founded in 2000, Bradley, Gmelich & Wellerstein, LLP is dedicated to providing sound advice and exceptional results for our clients. Our twenty-five plus skilled, dedicated and diverse attorneys represent individuals and businesses of all sizes in a wide variety of business, employment law and litigation matters. www.bgwlawyers.com.
NEW CALIFORNIA LAWS FOR 2023 STRESS SAFETY, MORE REGULATIONS, AND ADDRESS WORKPLACE DISPARITY
Barry A. Bradley, Esq., Managing Partner, Bradley, Gmelich + Wellerstein, CALSAGA Legal Advisor
California’s Governor Newsom signed 997 bills last year (and vetoed 169). While there was a flurry of laws that protect women’s reproductive rights as a result of the overturning of Roe v. Wade by the U.S. Supreme Court, January 1st marks the enforcement of many other laws about which you should be aware.
Some will impact how you maneuver on the streets and sidewalks, some will impact employers as well as their employees and even job applicants, while another will protect the hides of some of our non-human animals. Many that are noteworthy, or just plain interesting, are summed-up below.
2023 Is The Year Of The Jaywalker
It’s true! You no longer have to cross streets only within crosswalks, only on green signals, only when the “Walk” sign is green, and only at corners. Thanks to Assembly Bill (AB) 2147, peace officers can no longer stop a pedestrian for jaywalking violations UNLESS “a reasonably careful person would realize there is an immediate danger of a collision with a moving vehicle or other device moving exclusively by human power.”
While cars must always yield to pedestrians, you should always look out for your own safety and use reasonable care when crossing.
Bikers Rule!
In an effort to encourage more cycling and also to protect cyclists on the road, the legislature passed the OmniBike Bill, AB 1909 that will make life a little safer and protected for our two-wheeler friends and family members.
Autos Must Change Lanes to Pass a Bike. It is no longer okay to pass bicyclists with just 3-feet of space between the biker and your car. Where possible, motorists must treat bikers as if they are any other car, including signaling, going around them into another lane to pass, and provide adequate room. This will hopefully reduce the hundreds of “near misses” that occur every day, not to mention serious accidents.
E-Bikes Allowed on All Bikeways
Move over, Tesla! The electric bike is here to stay. This bill outlaws municipalities from limiting access on bike lanes and bike paths. This will allow e-bike riders to make use of the designated bike lanes and trails as an added measure of safety. (For those concerned about our environmental impact, the e-bikes are still not allowed on equestrian and hiking trails.)
Bikes Can Cross on WALK signals
Pedestrians, look out! Bikes can make use of the crosswalks and enjoy the safety that pedestrians have.
No More Bicycle Licensing Ordinances
And lastly, cities can no longer charge a fee or require registration of bicycles. (However, bicyclists can still voluntarily register their bikes so they can be located in the case of theft.)
Pay Data Reporting and Pay Scale Disclosures
As of January 1st, companies with 15 or more employees in California are now required to list salary ranges for all job postings. Senate Bill (SB) 1162 requires an employer to provide pay scale to an applicant or to an employee upon request.
This new law complements previous legislation, SB 973, signed into law in 2020, which requires employers with more than 100 employees to submit wage data to the state’s Department of Fair Employment and Housing.
Failure to disclose the pay scale can result in stiff penalties for violators, and could also lead to a complaint with the Labor Commissioner or a civil action for an injunction against the company.
FAMILY LEAVE FOR MOURNING AND FOR CARING FOR NON-FAMILY MEMBERS
The California Family Rights Act (“CFRA”) has been amended to include bereavement leave. Under AB 1949 all employers with 5 or more employees must now provide any employee who has worked for them for at least 30 days the right to take 5-days of unpaid bereavement leave for the death of a family member.
Who Says You Can’t Pick Your Family?
Your close friend who’s “just like a brother to you” may now qualify as a “Designated Person” for whom you can take an unpaid leave of absence to care for. Under AB 1041, the CFRA is expanded to allow employees to add to the list one extended family member or a person they consider to be family for whom the employee needs to provide care.
With the close cross-over between CFRA and the Family Medical Leave Act (“FMLA”), a qualified employee under FMLA may now possibly be able to take up to 24-weeks of unpaid leave over a 12-month period, and still have their job protected! (Work is overrated anyway!)
PRACTICE POINTER: Update your employee handbooks and policies to reflect the new law.
STATE HOLIDAYS: JUNETEENTH And the LUNAR NEW YEAR
California now recognizes two new holidays as State Holidays.
Juneteenth commemorates the end of slavery in the United States. Juneteenth (short for “June Nineteenth”) marks the arrival of federal troops in Galveston, Texas in 1865 to ensure that all enslaved people be freed. This holiday is now codified in AB 1655.
This year also marks the Lunar New Year as an official state holiday. AB 2596 describes the calculation date. This is a moving target each year as it falls on “the second new moon following the winter solstice, or the third new moon following the winter solstice should an intercalary month intervene.” (Got that?)
While Juneteenth is a judicial holiday, the Lunar New Year is not yet federally recognized and will result in our state and federal courts remaining open. Other non-judicial State Holidays include Genocide Remembrance Day and Native American Day.
PRACTICE POINTER: Update your Employee Handbooks to include these new holidays!
New Laws Impacting “Proprietary” (In-House) Security Forces
While most of us know that licensed private security guard companies provide guards to patrol businesses, buildings and residences, there is another side to security that has been largely unregulated.
“Proprietary Security” is that which is provided by a business or school where the uniformed guards are directly employed by the business or school and not by a licensed security company. (Think shopping malls, theme parks, certain department stores, many jewelry stores, bar bouncers, and most community college campus security forces. These are “Proprietary Security.”)
AB 2515 has made some massive changes to the security industry, many of which directly impact this previous minimally regulated side of the security.
Registration Required
Proprietary Security Officers must be registered with the California Bureau of Security & Investigative Services (BSIS), and produce their registration upon demand to any law enforcement officer. All officers must undergo a criminal background check and receive some training on the laws of the state.
Self-Reporting All Uses of Force
Riding the wave of reigning-in the use of force by police agencies, existing law was imposed on the licensed private security companies to ensure each guard received training, background checks and had to report all uses of force during an altercation. (See, AB 229.)
Under the new law, AB 2515, Proprietary Security Guards and their employers must report any physical altercation with a member of the public while on duty to (BSIS) within 7-business days. This now imposes the same reporting requirements that the licensed security companies have complied with for years. The goal is to enhance the safety of the public.
The bill also requires actual training in the de-escalation of a situation and use of force training. (Although not nearly as robust as the training required of the licensed private security guard companies and their security officers, it is a good start.)
No More Weapons of Any Kind
Under AB 2515, Proprietary (In-House) Security officers are no longer allowed to carry any type of weapons. This includes batons, pepper spray, Tasers, & of course, firearms.
The law took effect on January 1st, and violators could face stiff fines and even misdemeanor charges. (The use of force training won’t go into effect until July 1st.)
Another Year, Another Rose to Minimum Wage
Beginning January 1, 2023, the statewide minimum was supposed to increase to only $15.00 for employees with less than 26 employees and to $15.50 for employees with 26 or more employees.
However, due to inflation, the statewide minimum wage has increased to $15.50 for ALL employees. (Remember that some local jurisdictions impose a higher minimum wage.) This also means that exempt employees in California must be paid a minimum annual salary of $64,480.
Furless California
Finally, Animals throughout the state are ringing in the New Year with glee. Following California’s concern and compassion for our four-legged friends, California is the first state to ban and outlaw the sale and production of animal fur products. The landmark law, AB 44, went into effect on January 1st, 2023, making it illegal to sell new items made from the fur of undomesticated animals, including mink, rabbit and coyote. The law passed in 2019 and went into effect on January 1st, 2023.
The law, sponsored by the Humane Society of the United States, reflects the evolving attitudes of compassionate Californians who reject fashion made from animals, and paves the way for other states to follow suit. It carries hefty fines for violators. (The bill excludes the use of fur for religious and cultural purposes.)
Barry A. Bradley is the managing partner of Bradley, Gmelich & Wellerstein LLP where he oversees the firm’s Business and Employment Department and heads up the firm’s Private Security Litigation Team. A former Deputy District Attorney, Barry’s practice concentrates on licensing, employment and business related issues, defending cases involving negligent security, as well as assisting clients in avoiding liability through proactive, preventative measures.
The firm acts as general counsel for many security companies in California. Barry is a Legal Advisor to The California Association of Licensed Security Agencies, Guards & Associates (CALSAGA) and other non-profits.
He has been conferred an AV-Preeminent Peer Rating by Martindale Hubbell, the highest rating attainable, and has been named a Southern California Super Lawyer for the past 16 consecutive years in the area of Business Litigation. Barry is also the recipient of CALSAGA’s Security Professional Lifetime Achievement Award. bbradley@bgwlawyers.com 818-243-5200.
About Bradley, Gmelich & Wellerstein LLP
Founded in 2000, Bradley, Gmelich & Wellerstein, LLP is dedicated to providing sound advice and exceptional results for our clients. Our twenty-five plus skilled, dedicated and diverse attorneys represent individuals and businesses of all sizes in a wide variety of business, employment law and litigation matters. www.bgwlawyers.com.
“SIT DOWN AND BE COUNTED!” – Court Reiterates Duty To Provide Suitable Seating
Barry A. Bradley, Esq., Managing Partner, Bradley, Gmelich + Wellerstein, CALSAGA Legal Advisor
In California, an employee is entitled to use a seat while working if the nature of the work reasonably permits the use of a seat. An employer is required, in that circumstance, to provide the employee with a suitable seat.
In the recently decided case of Meda vs. AutoZone, Inc., et. al. (7/19/2022), the California Court of Appeal reversed summary judgment in favor of the employer and sent the case back to the trial court level for trial on the issue of whether the employer “provided” suitable seating. Although this case takes place in a retail store setting, the same rules apply to the security industry.
Facts:
Plaintiff and appellant Monica Meda (plaintiff) worked as a sales associate for about six months at an AutoZone auto parts store (store) operated by defendant and respondent AutoZoners, a Limited Liability Company (AutoZoners). After she resigned from her position, plaintiff filed a lawsuit alleging one claim under the California Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2699 et seq.) (PAGA). She asserted that AutoZoners failed to provide suitable seating to employees at the cashier and parts counter workstations, and that some or all of the required work could be performed while sitting.
About 40% of plaintiff’s duties were performed at the cashier’s station, another 40% at the parts counter, and the remainder around the floor. Plaintiff asserted that her time at the cashier’s station could have been performed while seated on a stool, and about half of her work at the parts counter could, likewise, have been performed while seated.
California Wage Orders:
As a refresher, the court stated that “’wage and hour claims are today governed by two complementary and occasionally overlapping sources of authority: the provisions of the Labor Code, enacted by the Legislature, and a series of 18 wage orders, adopted by the [Industrial Welfare Commission (IWC)].” [Citation.] The IWC, a state agency, was empowered to issue wage orders, which are legislative regulations specifying minimum requirements with respect to wages, hours, and working conditions.’ ” [citations omitted.]
Although this case addresses wage order No. 7, the identical requirement is listed in Wage Order No. 4, applicable to security guards. Specifically, it states:
“14. SEATS
(A) All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.
(B) When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.”
AutoZoners claimed that it satisfied the Wage Order requirement by providing two stools by the manager’s office, located around the corner (and out of sight) from the parts counter and the cashier stations. Unfortunately, it did not provide any seating at these workstations nor did it advise any of the employees that they had a right to carry the stools to their workstations. The court pointed out that even if the employees used the two stools, there were five to nine employees working at any given time, so there would have been a shortage if more than two wanted to use them at once.
Totality of the Job Duties:
Although the court did not focus on the issue as to whether an employer has an obligation to place a seat at every location (such as in an office setting where desks are located), it did provide some guidance. Citing to a Supreme Court decision, the court restated:
“[W]hen evaluating whether the ‘nature of the work reasonably permits the use of seats,’ courts must examine subsets of an employee’s total tasks and duties by location, such as those performed at a cash register or a teller window, and consider whether it is feasible for an employee to perform each set of location-specific tasks while seated. Courts should look to the actual tasks performed, or reasonably expected to be performed, not to abstract characterizations, job titles, or descriptions that may or may not reflect the actual work performed. Tasks performed with more frequency or for a longer duration would be more germane to the seating inquiry than tasks performed briefly or infrequently.” (Kilby, supra, 63 Cal.4th at p. 18, 201 Cal.Rptr.3d 1, 368 P.3d 554.)
Result:
In reversing the summary judgment (which would have ended the case in favor of AutoZoners without the need for a trial), the court held:
“We conclude that where an employer has not expressly advised its employees that they may use a seat during their work and has not provided a seat at a workstation, the inquiry as to whether an employer has “provided” suitable seating may be fact-intensive and may involve a multitude of job-and workplace-specific factors.”
Lessons Learned For Security Employers:
In order to try to avoid PAGA or class action lawsuits based on suitable seating claims, employers should remember that each security post and assignment will be different and should be evaluated separately. Your employee handbook should make it clear that seats are available where the nature of the work would allow for their use. Employers should make the seats available where appropriate and notify employees of the same. This would satisfy the “providing suitable seating” requirement of the Wage Order according to this court. You can accomplish this analysis by incorporating suitable seating as part of your Post Site Survey performed at each of your accounts.
Barry A. Bradley is the Managing Partner of Bradley, Gmelich & Wellerstein LLP located in Glendale, California, where he oversees the Employment and Business Teams at the firm. A former Deputy District Attorney, Barry’s practice concentrates on representing business owners in employment, business and licensing issues, as well as defending litigated cases involving negligent security, employment and business related issues. The firm acts as general counsel for many security companies in California. Barry is a volunteer Legal Advisor to the California Association of Licensed Agencies, Guards, & Associates (CALSAGA), and multiple other non-profits.
He has been conferred an AV-Preeminent Peer Rating by Martindale Hubbell, the highest rating attainable, and has been named a Southern California Super Lawyer for the past 16 consecutive years in the area of Business Litigation. Barry can be reached at bbradley@bgwlawyers.com / 818-243-5200.
About Bradley, Gmelich & Wellerstein LLP
Founded in 2000, Bradley, Gmelich & Wellerstein, LLP is dedicated to providing sound advice and exceptional results for our clients. Our twenty-five plus skilled, dedicated and diverse attorneys represent individuals and businesses of all sizes in a wide variety of business, employment law and litigation matters. www.bgwlawyers.com.
SCOTUS TO DECIDE THE FATE OF PAGA WAIVERS IN ARBITRATION AGREEMENTS IN CALIFORNIA
In what could be a seminal ruling for California employers in the fight over out-of-control wage and hour litigation, the Supreme Court of the United States (“SCOTUS”) has recently granted certiorari in Viking River Cruise, Inc., v. Moriana to decide whether federal law permits employers and employees to agree to arbitrate claims individually and waive not just class and representative claims, but California Private Attorneys General Act (“PAGA”) claims, too.
PAGA Refresher
As a brief refresher, PAGA authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations. Employees act as “private attorneys general.” Employees can pursue civil penalties as if they were a state agency. Each initial Labor Code violation carries a civil penalty of $100 per employee, per pay period. Subsequent violations are $200 per employee, per pay period. 75% of the penalties go to the State, and 25% of the penalties go to the aggrieved employees. These penalties add up very quickly and employers can face hundreds of thousands or even millions in penalties for technical errors or other unintentional violations!
Background of PAGA Waivers
In 2014, in Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (2014), the California Supreme Court held that waivers of employees’ right to pursue PAGA actions are unenforceable as they violate California public policy. The California Supreme Court also stated that the FAA does not preempt California state law prohibiting PAGA waivers because a PAGA dispute is between the State and the employee, rather than between the employer and the employee.
Viking River Cruise, Inc. v. Moriana
In Viking River Cruise, Inc., v. Moriana, the plaintiff worked for Viking River as a sales representative. She sued under PAGA, alleging the employer violated several wage and hour laws under the California Labor Code. Viking River moved to compel arbitration in California state court. The trial court denied the company’s motion to compel and the Court of Appeal affirmed. The California Supreme Court denied Viking River’s petition for review.
Viking River petitioned for certiorari to the United States Supreme Court, arguing that the Supreme Court’s decisions in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), and Epic Systems Corp. v. Lewis, 138 S.Ct. 612 (2018) support the conclusion that the FAA preempts California law, and requires enforcement of arbitration agreements in PAGA actions. In those cases, the Supreme Court held that bilateral arbitration agreements must be enforced, including terms that prohibit class or collective arbitrations.
Employer Takeaway:
It is unclear why SCOTUS granted review at this time, but a favorable ruling would be monumental. In short, if SCOTUS rules in favor of Viking River, employers could expand waivers in employment arbitration agreements to include waiver of class and PAGA claims. A decision is expected from SCOTUS in the summer of 2022. Employers are therefore advised to consult with their employment counsel and consider updating their arbitration agreements, as necessary.
If you have questions about the impact this case will have on your business, or have any employment-related questions, please contact the attorneys at Bradley, Gmelich & Wellerstein LLP. We’re here to help.
Martin P. Vigodnier, Esq. is a Senior Associate in Bradley, Gmelich & Wellerstein LLP’s Employment Law Department. Martin focuses his practice on labor and employment litigation, class actions, and Private Attorney General Act (PAGA) actions, including wage and hour claims, discrimination, leaves of absence, reasonable accommodation, defamation, trade secrets, retaliation, harassment, wrongful termination, breach of contract, and fraud. Martin also drafts, in both English and Spanish, contracts, regulatory compliance materials, agreements, and policies such as anti-harassment, discrimination, and retaliation policies, OSHA safety policies, employee reimbursement policies, employee stock purchase plans, independent contractor agreements, arbitration agreements, settlement agreements, cross-purchase buy sell agreements, and employee handbooks.
Prior to joining the firm, Martin was President and Founder of his solo law practice handling various employment matters. Prior to practicing law, he was an extern for the Equal Employment Opportunity Commission (EEOC) and awarded the prestigious Peggy Browning Fellowship to work for the Federal Labor Relations Authority (FLRA), assisting the Office of General Counsel analyze unfair labor practice charges against government agencies.
Martin is a native Spanish speaker and writer, and a former amateur boxer.
mvigodnier@bgwlawyers.com
Jaimee K. Wellerstein, Esq. is a Partner at Bradley, Gmelich & Wellerstein LLP, and the Head of the firm’s Employment Department. Jaimee concentrates her practice in representing employers in all aspects of employment law, including defense of wage and hour class actions, PAGA claims, discrimination, retaliation, harassment, wrongful discharge, misclassification, and other employment related lawsuits. She also provides employment counseling and training in all of these areas.
Jaimee routinely represents employers in federal and state courts and in arbitration proceedings throughout the state, as well as at administrative proceedings before the Equal Employment Opportunity Commission, the California Department of Labor Standards Enforcement, the United States Department of Labor, and other federal and state agencies.
Jaimee assists as a Legal Advisor to CALSAGA, and is a member of ASIS International. She is rated AV-Preeminent by Martindale-Hubbell, the highest peer rating available. jwellerstein@bgwlawyers.com
About Bradley, Gmelich & Wellerstein LLP
Founded in 2000, Bradley, Gmelich & Wellerstein, LLP is dedicated to providing sound advice and exceptional results for our clients. Our twenty-five plus skilled, dedicated and diverse attorneys represent individuals and businesses of all sizes in a wide variety of business, employment law and litigation matters.
Our firm is very pleased to announce the promotion of Jaimee K. Wellerstein as a named equity partner and our name change to Bradley, Gmelich & Wellerstein, LLP. Jaimee will continue to serve as Employment Law Team Head and work with us to shape the future of the firm. Please note our updated email addresses and website URL in your records!
WORKERS’ COMPENSATION CLAIMS: HOW TO CHOOSE AN OCCUPATIONAL CLINIC
Shaun Kelly, Tolman & Wiker, Preferred Broker
Hello to all and we hope everyone is doing well!
We have been assisting employers in managing Workers’ Compensation claims for many years. This includes First Aid claims, moderate injuries involving transitioning to light duty to get the employee back to work as soon as possible and assisting with very serious injuries. One part of the process in managing Workers’ Compensation claims that all employers should engage in, is choosing an occupational clinic that works best for you, the employee and the insurance carrier. A designated Occupational Clinic should be selected prior to any injuries. Including all team members handling Workers’ Compensation claims in this process is important. This should also include your insurance broker in order to assist you throughout the claim.
The clinic you choose is an important decision as it sets the tone for the rest of the claim. A well written discharge report will limit options while a poorly written report can leave the door open for further allegations and treatment. The clinic you choose should also help convey how your company cares about its employees.
Things to look for in a clinic:
- Look for a clinic who can see your employees during your work hours
- Look for a clinic who will keep copies of your job descriptions on file
- Look for a clinic who will use MRIs sparingly
- Look for a clinic who is responsive to employee needs and has a pleasant bedside manner
Before choosing a clinic you should schedule a time to visit. This will allow you to tour the clinic which will give you an idea of the average wait time, as well as meet some of the doctors. You may also ask the clinic to do an on-site visit of your facility. This will give the clinic a better idea as to what it is you do and what type of job duties your employees have as well as the physical demands of the job.
Things to ask during your visit to the clinic:
- What are their hours of operation? Are they open at night and on weekends?
- How many locations do they have?
- How do they handle return-to-work? Do they try to get injured employees back to modified duties as soon as possible? Do they send work status reports via email to employers as soon as possible? How descriptive do they get in writing work restrictions?
- How do they communicate with employers?
- Do they do pre-placement medical exams and physical abilities tests?
- Do they do drug screening?
- How do they handle red-flag cases?
- Do they have in-house specialists? Do they have in-house physical therapy, chiropractic services, or a pharmacy?
- How do they make sure the injured employee understands what is being told to them during the exam?
- Are their doctors bilingual? Do they have interpreters?
Please feel free to give us a call if you have any questions .
Shaun Kelly joined Tolman & Wiker Insurance Services in 2005. He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.
CALIFORNIA SUPREME COURT RULES CALCULATION OF PREMIUM PAY MUST INCLUDE NON-DISCRETIONARY PAY
Saba Zafar, Esq. and Jaimee K. Wellerstein, Esq. Bradley & Gmelich, CALSAGA Legal Advisor
On July 15, 2021, the California Supreme Court held that if an employer fails to provide a legally compliant meal period or rest break to an employee, the wage premium owed to the employee must be paid at the employee’s “regular rate of compensation,” which includes not just hourly wages but all nondiscretionary payments for work performed by the employee. The Court also held that its decision will be retroactive.
The Case
Jessica Ferra worked as an hourly bartender for Loews Hollywood Hotel. She received hourly wages plus quarterly nondiscretionary incentive payments. If an hourly employee was not provided a compliant meal or rest break, Loews paid the employee an hour of pay at the employee’s base hourly rate. Loews argued this was the “regular rate of compensation” mandated by Labor Code section 226.7(c).
In 2015, Ferra filed a class action lawsuit, arguing that nondiscretionary incentive payments should be factored into the regular rate of compensation for purposes of meal and rest break premiums. The trial court and Court of Appeal agreed with Loews that the “regular rate of compensation” was not synonymous with the “regular rate of pay” used in Labor Code section 510(a) governing overtime. Ferra appealed to the Supreme Court, and the instant ruling followed.
The Supreme Court discussed the history and evolution of the wage orders as well as Labor Code section 226.7 extensively as the basis for its holding. The Court noted that neither the Labor Code nor Wage Order No. 5-2001 define the terms and the words could reasonably be construed to mean hourly wages or wages plus nondiscretionary payments as is the case under Labor Code section 510(a) for calculation over the regular rate of pay for purposes of overtime.
The Supreme Court also relied on the courts’ and DLSE’s understanding of two different terms, that “regular rate” under the Federal Labor Standards Act (“FLSA”) and “regular rate of pay” in Labor Code section 510 have the same meaning. “Regular rate” under the FLSA for purposes of overtime includes “all remuneration for employment paid to, or on behalf of the employee” including nondiscretionary payments. Thus using the word “compensation” in Labor Code section 226.7 as opposed to “pay” in Labor Code section 510 does not necessarily mean the terms have different meanings.
The Supreme Court also rejected several federal district court opinions holding that the regular rate of compensation only means an employee’s hourly rate. The Supreme Court observed that such an interpretation would put an employee who received only a piece rate or both a piece rate and an hourly rate of pay as compensation at a disadvantage as the nondiscretionary payments would not be counted towards calculating their premium pay.
Based on its analysis and legislative history, the Supreme Court held the phrase “regular rate of compensation” in section 226.7(c) has the same meaning as “regular rate of pay” in section 510(a) and encompasses not only hourly wages but all nondiscretionary payments for work performed by the employee.”
As the final blow to employers, the Supreme Court rejected Loew’s request to apply the decision prospectively. Thus, the decision will be applied retrospectively.
Employer Takeaway:
Employers should closely examine their policies and practices with regard to meal and rest periods. Employers must demonstrate constant vigilance in complying with California’s rigid wage and hour laws, including proper calculation and payment of the one-hour premium when violations do occur.
As the decision is retroactive, employers who have paid premium pay should analyze their calculations to ensure that it includes nondiscretionary pay.
If you have any questions about how this decision may impact your obligations, or need assistance with regards to calculating premium pay, please feel free to contact Bradley & Gmelich LLP. We are here to help.
Prior to joining the firm, Saba was a Senior Counsel providing advice and counsel to mid-sized to large businesses on employment law compliance and day-to-day employment issues, including implementing policies and procedures, employee classifications, employment separations, managing and disciplining employees, and COVID-19 rules and regulations. Saba also handled a wide variety of employment matters in state and federal court, including cases involving wrongful termination, discrimination, and wage related cases.
In her spare time, Saba has volunteered as a Mediator for the Department of Consumer Affairs and the Orange County Human Resources Department. She was also a Volunteer Tutor for Schools on Wheels, tutoring elementary school students on skid row in Los Angeles. Prior to practicing law, Saba was a Judicial Extern for California Court of Appeal, Second Appellate District.
In her free time, Saba enjoys embarking on culinary adventures and catching up on new television shows. szafar@bglawyers.com
Jaimee K. Wellerstein, Esq. is a Partner at Bradley & Gmelich LLP, and the Head of the firm’s Employment Department. Jaimee concentrates her practice in representing employers in all aspects of employment law, including defense of wage and hour class actions, PAGA claims, discrimination, retaliation, harassment, wrongful discharge, misclassification, and other employment related lawsuits. She also provides employment counseling and training in all of these areas.
Jaimee routinely represents employers in federal and state courts and in arbitration proceedings throughout the state, as well as at administrative proceedings before the Equal Employment Opportunity Commission, the California Department of Labor Standards Enforcement, the United States Department of Labor, and other federal and state agencies.
Jaimee assists as a Legal Advisor to CALSAGA, and is a member of ASIS International. She is rated AV-Preeminent by Martindale-Hubbell, the highest peer rating available. jwellerstein@bglawyers.com.
WORKERS’ COMPENSATION EXECUTIVE ORDER UPDATE
Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker
As you may recall, Governor Newsom signed an executive order on May 6, 2020 creating a temporary, rebuttable presumption that COVID-19 is work-related (industrial) for employees who meet the specific conditions below:
- This Executive Order provides that COVID-19 cases for some employees will be presumed to be work-related (industrial) if certain conditions are met. This makes it easier for qualified employees to obtain workers’ compensation benefits because it shifts the burden onto the employer to prove that injury was not Fundamentally, if an employee worked on/after March 19, 2020 at the work location and direction of the employer and tested positive or was diagnosed by a medical doctor, the presumption will apply.
- If the claim form (DWC-1) was filed on/after May 6, 2020, the employer has 30 days to investigate in order to try to challenge the presumption and deny the claim. Otherwise, the claim is presumed compensable. With that said, this presumption is temporary as well as rebuttable. It only applies as long as the State of Emergency due to COVID-19 exists. Right now, it is set to end 60 days from May 6, 2020 (about July 4, 2020).
- Claims (DWC-1) filed after May 6, 2020 which show date(s) of employee’s COVID-19 diagnosis between March 19, 2020 and July 4, 2020 have a REDUCED investigation period of just 30 days, instead of the usual 90 days. The 30 days starts with the employee’s filing of the claim form (DWC-1). If a claim form for COVID-19 was filed before May 6, 2020, those claims are likely subject to the 90-day investigation period.
It is important to know that this presumption will cover claims of a COVID-19 diagnosis for employees working through July 4, 2020. Thereafter, the State Legislature and/or the Governor would have to pass a bill and/or extend the Executive Order to continue this rebuttable presumption after that date.
It is past the July 5, 2020, what now?
Although the presumption expired on July 5, 2020, California Legislature is currently addressing three bills that could potentially extend the order. SB1159 aims to backdate the bill to cover claims filed after July 5 for an employee. We will continue to monitor legislative updates. In the interim, new COVID-19 claims will again be addressed under previous workers’ compensation rules.
- There is no automatic presumption for COVID-19 claims
- We go back to a 90-day investigation period
- Workers’ Compensation benefits will be provided according the Pre – Executive Order rules and regulations
Please note that all COVID-19 related claims are still exempt from the experience modification. We will keep you posted on any updates.
Shaun Kelly joined Tolman & Wiker Insurance Services in 2005. He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.