Battle Over "Employment Non-Discrimination Act" Heating Up In Congress

In April 2007, the "Employment Non-Discrimination Act" ("ENDA") was introduced in the House of Representatives. The ENDA will, among other things:
  • extend federal employment discrimination protections currently provided based on race, religion, sex, national origin, age, and disability to sexual orientation and gender identity. (These terms are defined in the bill to include gay men, lesbians, bi-sexuals, and transgender persons);
  • prohibit public and private employers, employment agencies and labor unions from using an individual's sexual orientation or gender identity as the basis for employment decisions (i.e., hiring, firing, promotion, or compensation); and
  • would apply to Congress and the federal government, as well as to employees of state and local governments.
Although the ENDA does apply to businesses with 15 or fewer employees, it does not apply retroactively. In addition, it does not apply to uniformed members of the armed forces nor does it allow for quotas based on sexual orientation or gender identity.

Click here to read more on the ENDA from the proponents point of view, and here for the position of various groups opposing the bill.

Apparently, Congressional Democrats are "strongly considering" dropping anti-discrimination protections for transgendered persons from the bill due to stronger than expected opposition to that provision. Congressional observers claim that even if ENDA passes the House, it likely faces a filibuster in the Senate and it is unclear whether supporters have the required 60-votes to pass the bill.

While this bill is making a lot of news on the national level, it does not appear that California employers will be greatly effected if the bill is passed, as sexual orientation is already a protected category under California law.  See California Government Code § 12940 (defining sexual orientation as “heterosexuality, homosexuality, and bisexuality”). 

Business Week's Cover - Wage Wars

Daniel Schwartz over at the Connecticut Employment Law Blog, notes that Business Week's cover story on "Wage Wars" is not exactly breaking news (or at least should not be) for HR professionals and companies. 

He offers a few suggestions for readers in response to the article:
  • Audit your exempt employees.  Go over job descriptions and compare that with actual duties.  Sometimes "managers" are just glorified sales workers.
  • Take seriously any complaints by employees about their overtime.  If there is a problem, odds are the complaining employee isn't the only one with the problem.  And that means the potential for a class action case. 
California has been "leading" the wage and hour class action trend mentioned  in the Business Week article.  These cases have arguably been the leading types of lawsuits filed in California for over the last five years.  This is primarily due to California's unique wage and hour laws.  Employers not familiar with California law mistakenly believe that because their policies comply with the FLSA, they are in compliance with California law.  This is a costly mistake, as California's labor code is very unique, and out-of-state employers should always seek a California employment attorney's advice regarding whether the complies with California law.  For example, the following are issues that illustrate how unique California law is compared to the rest of the country:

Meal and Rest Period Penalties

This is the current favorite claim of plaintiff’s class action attorneys in California. A 2001 statute imposes substantial penalties on employers who do not comply with very technical regulations concerning the timing and duration of employee lunch and rest breaks. In general, employees must receive a 30-minute meal break (during which they must be relieved of all duty and be free to leave the premises) before they complete 5 hours of work if their shift will be longer than 6 hours for the day. Employees are entitled to a second meal break whenever their shift will be longer than twelve hours. And employees are also entitled to take paid rest periods of at least 10-minutes for every four hours of work, taken as close to the middle of each work period as possible. The aggregate liability that can result over time was apply demonstrated by a 2005 jury verdict in a meal and rest break class action against Wal-Mart that awarded over $192 million in penalties and punitive damages.

California Overtime Exemptions Are Based on “Counting Hours” Test

Like the FLSA, California law provides that various job categories are exempt from overtime, including outside salespeople, commissioned salespeople and “white collar” employees.  Employers have often defined positions on a nation-wide basis as salaried or hourly based on the definitions of exempt duties provided by the FLSA and its implementing regulations.  California law, however, frequently rejects these federal rules in favor of its own, narrower definition of exempt duties.  For example, under federal law, a position may be exempt from overtime where its “primary,” or most important job functions are exempt. In California, by contrast, the duties test is strictly quantitative — i.e., “does the employee spend more than 50% of his or her time performing exempt duties?”  If not, the position may be misclassified and substantial back overtime may be due.

Daily Overtime and Double-Time

Virtually all employers know that the FLSA requires payment of “time-and-one-half” premium pay for all hours worked beyond 40 hours in one workweek. But a surprisingly large number of employers who set up shop in California are ignorant of the fact that California also requires “time-and-a-half” overtime for all hours worked beyond eight in a single workday and for the first eight hours worked on the seventh consecutive day worked in a workweek. Unlike, the FLSA, California also requires overtime at a double-time rate for all hours worked beyond 12 hours in a single workday and for hours worked beyond eight on the seventh consecutive day worked in a single week.

Mandatory Sexual Harassment Training for Supervisors

California law requires employers with 50 or more employees to provide two hours of sexual harassment training to all supervisors once every two years. Regulations are currently being proposed to clarify the extent to which this obligation applies to supervisors who are located outside California, but supervise California employees and other issues raised by the requirement.

No “Use-It-Or-Lose-It” Vacation Policy

California treats earned, but unused vacation time, as a form of vested compensation, which cannot be forfeited and must be paid out in full at the termination of employment. So-called “use-it-or-lose-it” vacation plans, which are permissible in most other states, are therefore illegal in California.

Maintaining A Motivated And Happy Workforce

I recently discovered the blog "Building a Better Restaurant" by Jeffrey Summers.  If you are in the restaurant business, it is definitely a blog you should subscribe to

Jeffrey's recent post about 16 ways to grow your staff's loyalty is a good reminder to all employers about how to keep your employees motivated and working for you.  He writes:
Employees matter. No, really, think about it: Your competitors have access to the exact same resources as you—which means infinite choices exist for your customers, and for your employees as well.
Jeffrey lists the following as the ways to keep your employees happy:
1. Don’t misrepresent your culture.
2. Learn the rules of engagement.
3. Cross-pollinate your culture.
4. Be a good corporate citizen.
5. Give praise where praise is due.
6. Get creative with benefits.
7. Be aware of the changing needs of your employees.
8. Great employees thrive under great leaders.
9. Conduct “stay” interviews regularly.
10. Create a “best” work environment.
11. Help employees achieve work/life balance.
12. Insist that your employees take vacations.
13. Create an environment of trust.
14. Get rid of weeds.
15. Use internship and mentoring programs to grow and nurture new talent.
16. Take a seasonal approach.
To read Jeffrey's entire post, click here

With all of the recent press about legislation to prohibit "bullies" in the workplace, Jeffrey's post is a good reminder about what employers need to do keep employees happy and that market forces will penalize a "bad" employer in terms of high employee turnover and low customer service.  Also, as a practical matter, employees will eventually leave your company, but if they feel that they have been treated fairly, they are less likely to pursue legal action against a former employer out of spite.

Brinker - Court to Determine Employers' Obligation To "Provide" Meal Breaks

UPDATE: On July 22, 2008, the Appellate Court issued a published decision, which can be read about at our post "Meal and Rest Break Requirements Clarified By Court in Brinker v. Hohnbaum"

Appellate arguments were made recently in the case Brinker v. Superior Court (Hohnbaum). One issue that is being closely watched by all wage and hour attorneys raised in the appeal is whether the term “provide” in Labor Code § 512 requires employers to force employees to take meal breaks or whether employers only need to offer meal breaks to employees (similar to the "authorize and permit" requirement for rest breaks).

California Labor Code § 512(a) states:
An employer may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes, except that if the total work period per day of the employee is no more than six hours, the meal period may be waived by mutual consent of both the employer and employee. An employer may not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived.
This distinction argued in Brinker is critical in meal and rest break class actions. If the appellate court holds that Labor Code § 512 imputes a requirement on employers to force employees to take their meal and rest breaks, plaintiffs will have an easier argument that meal and rest break cases are subject to class certification. On the other hand, if the court holds that employers only need to make meal breaks available for employees, then class certification would be much harder to achieve because the court would have to make an individual inquiry into whether each employee could have taken a meal break and voluntarily waived it, or if the employee was forced to forego the break.

Courts that have reviewed this issue have reached differing conclusions about the meaning of the term “provide” in § 512. One court, in Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, held that “employers have ‘an affirmative obligation to ensure that workers are actually relieved of all duty.’” Id. at 962 - 963 (citing Dept. of Industrial Relations, DLSE, Opinion Letter 2002.01.28, p. 1.). However, another California federal district court held employers are only required to offer meal breaks. White v. Starbucks, Corp., (N. D. Cal. July 2, 2007) 497 F.Supp.2d 1080, 2007 WL 1952975. The court refused to follow the DLSE opinion letter relied upon in Cicairos, and stated:
In the absence of controlling California Supreme Court precedent, the court is Erie-bound to apply the law as it believes that court would do under the circumstances. See Wyler Summit Partnership v. Turner Broadcasting System, Inc., 135 F.3d 658, 663 (9th Cir.1998). The interpretation that White advances-making employers ensurers of meal breaks-would be impossible to implement for significant sectors of the mercantile industry (and other industries) in which large employers may have hundreds or thousands of employees working multiple shifts. Accordingly, the court concludes that the California Supreme Court, if faced with this issue, would require only that an employer offer meal breaks, without forcing employers actively to ensure that workers are taking these breaks. In short, the employee must show that he was forced to forego his meal breaks as opposed to merely showing that he did not take them regardless of the reason.
The California Labor & Employment Defense Blog will post about the appellate court’s ruling in Brinker v. Superior Court once it is issued.

Bill Making "Familial Status" Protected Category Passed by CA Legislature and Given to Governor

SB 836, introduced by Senator Kuehl, would add “familial status” to the list of protected categories in the employment context. It has passed the California legislature, and now awaits the Governor’s signature or veto. 

The bill states:

In connection with unlawful employment practices, the meaning of "familial status" includes being an individual who is or who will be caring for or supporting a family member.
   For purposes of this section:
(A) "Caring for or supporting" means any of the following:
   (i) Providing supervision or transportation.
   (ii) Providing psychological or emotional comfort and support.
   (iii) Addressing medical, educational, nutritional, hygienic, or safety needs.
   (iv) Attending to an illness, injury, or mental or physical disability.
(B) "Family member" means any of the following:
   (i) A child as defined in Section 3302 of the Unemployment Insurance Code.
   (ii) A parent as defined in Section 3302 of the Unemployment Insurance Code.
   (iii) A spouse, which means the partner to a lawful marriage.
   (iv) A domestic partner as defined in Section 297 of the Family Code.
   (v) A parent-in-law which means the parent of a spouse or domestic partner.
   (vi) A sibling as defined in paragraph (c) of Section 362.1 of the Welfare and Institutions Code.
   (vii) A grandparent.
   (viii) A grandchild.

Surprisingly, there has not been much attention paid to this bill, which is the first of its type in the country. We have previously posted about AB 836 here and here.  I am sure the Governor would be interested in employers' perspectives about this bill.  He can be reached via email through his website here.