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Advising California Employers and Employees

Be ready to deal with virtually any workplace issue your clients may face.

Be ready to deal with virtually any workplace issue your clients may face.

  • Hiring guidelines and employment contracts
  • Immigration law for employers
  • Wages and hours; family and medical leave
  • Employee handbooks
  • Protecting trade secrets; noncompetition covenants
  • Privacy issues in the workplace
  • Employer liability for employee acts; insurance coverage
  • Discrimination, harassment, and retaliation claims
  • Whistleblower issues and workplace investigations
  • Wrongful termination; reductions in force
  • Mediation and arbitration of employment disputes
  • Auditing your client’s workplace practices
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Be ready to deal with virtually any workplace issue your clients may face.

  • Hiring guidelines and employment contracts
  • Immigration law for employers
  • Wages and hours; family and medical leave
  • Employee handbooks
  • Protecting trade secrets; noncompetition covenants
  • Privacy issues in the workplace
  • Employer liability for employee acts; insurance coverage
  • Discrimination, harassment, and retaliation claims
  • Whistleblower issues and workplace investigations
  • Wrongful termination; reductions in force
  • Mediation and arbitration of employment disputes
  • Auditing your client’s workplace practices

1

Hiring Guidelines and Pitfalls

Lawrence J. Gartner

Stefanie M. Gushá

  • I.  OVERVIEW  1.1
  • II.  RECRUITING
    • A.  Avoiding Discrimination Claims
      • 1.  Using Employment Agencies and Hiring Halls  1.2
      • 2.  Recruiting at Schools and Colleges  1.3
      • 3.  Newspaper Advertisements  1.4
    • B.  Recruiting During a Labor Dispute  1.5
    • C.  Raiding Other Employers  1.6
    • D.  Foreign Labor Contractors  1.6A
  • III.  JOB QUALIFICATIONS
    • A.  Hiring Standards Must Pass Business-Necessity Test  1.7
    • B.  Age  1.8
    • C.  Citizenship, National Origin, and Ancestry  1.9
    • D.  Sex, Sexual Orientation, and Gender Expression  1.10
    • E.  Financial Circumstances  1.11
    • F.  Dress and Personal Appearance Standards  1.12
    • G.  Rehabilitated Drug and Alcohol Users  1.13
    • H.  Education Requirements  1.14
    • I.  English Fluency  1.15
    • J.  Physical Abilities and Mental Health  1.16
    • K.  Medical Condition  1.17
    • L.  Spouses and Family Members Working Together  1.18
    • M.  Veterans  1.19
    • N.  Caregivers  1.19A
  • IV.  APPLICATIONS AND PRE-EMPLOYMENT INTERVIEWS
    • A.  Applications
      • 1.  Application Form Is Source of Useful Information  1.20
      • 2.  Applicant’s Copy  1.21
    • B.  Interview Restrictions
      • 1.  Non-Job-Related Questions  1.22
      • 2.  Specific Topics
        • a.  Age  1.23
        • b.  Marital Status  1.24
        • c.  Pregnancy  1.25
        • d.  Disability or Medical Condition
          • (1)  Prohibited Inquiries  1.26
          • (2)  Permitted Inquiries Concerning Ability  1.27
        • e.  Religion  1.28
        • f.  Criminal History: California’s “Ban the Box” Law and Related Restrictions  1.29
        • g.  Questions About Discipline for Sexual Harassment Permitted  1.30
        • h.  Salary History  1.30A
      • 3.  Agency Form: Employment Inquiries: What Can Employers Ask Applicants and Employees? (DFEH-161)  1.31
  • V.  REFERENCES AND BACKGROUND CHECKS
    • A.  References From Former Employers  1.32
    • B.  Credit History and Other Background Checks
      • 1.  Governing Law  1.33
      • 2.  Federal Requirements for Employers  1.34
      • 3.  California Law
        • a.  Consumer Credit Reporting Agencies Act  1.35
        • b.  Lab C §1024.5  1.35A
        • c.  Investigative Consumer Reporting Agencies Act  1.36
      • 4.  Procedural Requirements  1.37
        • a.  Notice of Intention to Obtain Report  1.38
          • (1)  Under Fair Credit Reporting Act  1.39
          • (2)  Under Consumer Credit Reporting Agencies Act  1.40
          • (3)  Under California Investigative Consumer Reporting Agencies Act  1.41
        • b.  Applicant’s Authorization  1.42
        • c.  Employer Certification of Compliance  1.43
        • d.  Employer Obligation to Provide Applicant With Copy of Report  1.44
        • e.  Employer’s Obligations When Employment Is Denied on Basis of Consumer Report  1.45
      • 5.  Information That May Not Be Included in Consumer Report  1.46
      • 6.  Form: Notice and Disclosure  1.47
      • 7.  Form: Certification to Credit Reporting Agency  1.48
      • 8.  Form: Certificate of Compliance by Agency  1.49
      • 9.  Form: Notification of Request for Investigative Consumer Report  1.50
      • 10.  Form: Authorization to Obtain Investigation Reports  1.51
      • 11.  Form: Pre-Adverse Action Disclosure  1.52
      • 12.  Form: Summary of Rights Under Fair Credit Reporting Act  1.53
      • 13.  Form: Post-Adverse Action Disclosure  1.54
      • 14.  Form: Notification of Intent to Procure Investigative Consumer Report  1.55
    • C.  Employee Misrepresentations  1.56
  • VI.  PRE-EMPLOYMENT TESTING
    • A.  General Education or Intelligence Tests  1.57
    • B.  Psychological Tests  1.58
    • C.  Polygraph Tests
      • 1.  Federal Law  1.59
      • 2.  California Law  1.60
    • D.  Voice Stress Analysis  1.61
    • E.  Fingerprints and Photographs  1.62
    • F.  Medical and Physical Examinations Given Only After Job Offer  1.63
    • G.  AIDS Testing  1.64
    • H.  Drug Tests Permissible  1.65
  • VII.  RECOMMENDATIONS FOR REDUCING THE RISK OF LIABILITY
    • A.  Statements Made During Recruitment  1.66
      • 1.  Avoiding Claims of Misrepresentation  1.67
        • a.  Do Not Falsely Induce Employee Relocation  1.68
        • b.  Covenant of Good Faith and Fair Dealing Is Implied in Employment Offer  1.69
        • c.  Use Checklist of Terms of Employment  1.70
      • 2.  Avoiding Claims of Implied Contract
        • a.  Use Written At-Will Provisions  1.71
        • b.  Do Not Assure Term of Job  1.72
    • B.  Follow Step-by-Step ADA/FEHA Hiring Guidelines  1.73
    • C.  Use Care in Hiring  1.74
  • VIII.  CHECKLISTS
    • A.  Checklist: Paperwork for New Employees  1.75
    • B.  Checklist: Trade Secret Concerns in Interviewing Applicant  1.76
    • C.  Checklist: Issues to Consider Before Implementing Employee Testing  1.77
  • IX.  FORMS
    • A.  Form: Application for Employment  1.78
    • B.  Form: Applicant’s Statement  1.79
    • C.  Form: Notification of Rejection of Application  1.80
    • D.  Form: Employment Offer Letter  1.81
    • E.  Form: Mutual Agreement to Arbitrate Claims  1.82
    • F.  Form: Authorization for Job-Related Medical Examination and Drug-Testing and for Release of Information  1.83
    • G.  Form: Sample Job Description Questionnaire  1.84
    • H.  Form: Sample Job Description for Receptionist  1.85

2

Employment Contracts and Executive Compensation

Margaret Hart Edwards

Kate West Rowan

Michael Pedhirney

  • I.  GENERAL CONSIDERATIONS IN USE OF EMPLOYMENT CONTRACTS
    • A.  Overview of Benefits to Employer  2.1
      • 1.  Anticipating Termination of Employment  2.2
      • 2.  Exercising Business Control Over an Employee  2.3
      • 3.  Attracting and Retaining Employees for a Period or Purpose  2.4
      • 4.  Protecting the Employer’s Intellectual Property  2.5
      • 5.  Agreeing on Alternative Forums for Dispute Resolution  2.6
    • B.  Drafting Considerations
      • 1.  Gathering Relevant Background Information  2.7
      • 2.  Other Legal Considerations
        • a.  Reporting Requirements  2.8
        • b.  Conflicts of Interest  2.9
  • II.  EMPLOYMENT CONTRACT PROVISIONS
    • A.  General Comment on Use of Forms  2.10
    • B.  Preliminary Matters
      • 1.  Form: Preamble to Employment Contract  2.11
      • 2.  Recitals
        • a.  Purpose  2.12
        • b.  Form: Recitals  2.13
    • C.  Term of Employment
      • 1.  Drafting Considerations  2.14
        • a.  At-Will Employment
          • (1)  Erosion of At-Will Nature of Employment  2.15
          • (2)  Including At-Will Clause in Employment Contract  2.16
        • b.  Indefinite Term  2.17
        • c.  Specified Term  2.18
      • 2.  Form: Term of Employment  2.19
    • D.  Form: Place of Employment  2.20
    • E.  Employee’s Duties and Authority
      • 1.  Describing Duties in Broad Terms  2.21
      • 2.  Form: Employee’s Duties and Authority  2.22
    • F.  Employee’s Outside Business Activities
      • 1.  Duty Not to Engage in Conflicting Activities  2.23
      • 2.  Drafting Considerations  2.24
      • 3.  Form: Outside Business Activities Precluded or Restricted  2.25
      • 4.  Form: Reasonable Time and Effort Required  2.26
      • 5.  Form: Covenant Not to Compete During Employment Term  2.27
      • 6.  Form: Morality Clause  2.28
      • 7.  Consulting Arrangement
        • a.  Drafting Considerations  2.29
        • b.  Form: Consulting Services  2.30
    • G.  Employee’s Compensation and Benefits
      • 1.  Planning Executive Compensation  2.31
        • a.  Salary  2.32
        • b.  Deferred Compensation  2.33
        • c.  Incentives  2.34
        • d.  Benefits  2.35
      • 2.  Form: Base Salary  2.36
      • 3.  Form: Adjustment to Base Salary  2.37
      • 4.  Form: Incentive Compensation  2.38
      • 5.  Form: Stock Bonus  2.39
      • 6.  Form: Stock Options  2.40
      • 7.  Form: Cash Bonus  2.41
      • 8.  Form: Commissions  2.42
      • 9.  Form: Royalties  2.43
      • 10.  Form: Deferred Compensation  2.44
      • 11.  Additional Benefits  2.45
        • a.  Form: Additional Benefits  2.46
        • b.  Form: Vacation  2.47
        • c.  Board Membership  2.48
        • d.  Form: Board Membership  2.49
        • e.  Expenses
          • (1)  Drafting Considerations  2.50
          • (2)  Form: Expense Reimbursement  2.51
        • f.  Form: Automobile Allowance  2.52
        • g.  Form: Life Insurance  2.53
      • 12.  Repayment of Compensation Held Excessive
        • a.  Tax Considerations in Drafting  2.54
        • b.  Form: Repayment of Compensation Held Excessive  2.55
    • H.  Ownership of Intangibles
      • 1.  Drafting Considerations  2.56
      • 2.  Form: Ownership of Intangibles  2.57
        • a.  Proprietary Information Obligations  2.58
          • (1)  Protecting Confidential Information  2.59
          • (2)  Restraint of Unfair Competition After Employment Termination  2.60
      • 3.  Form: Proprietary Information Obligations  2.61
      • 4.  Form: Noninterference  2.62
      • 5.  Form: Noncompetition [Deleted]  2.63
      • 6.  Form: Use of Employee’s Name and Image  2.64
    • I.  Indemnification of Employee
      • 1.  Need for Indemnification Provisions  2.65
      • 2.  Form: Indemnification by Employer  2.66
      • 3.  Form: Employer-Provided Indemnity Insurance  2.67
      • 4.  Form: Qualification for Surety Bond  2.68
      • 5.  Form: Indemnification by Employee  2.69
    • J.  Termination of Agreement
      • 1.  Provisions Regarding Termination
        • a.  Termination of Employment  2.70
        • b.  Effect of Mergers, Transfers of Assets, or Dissolutions  2.71
      • 2.  Form: Termination of Employment; Termination Date  2.72
        • a.  Form: Involuntary Termination  2.73
          • (1)  Form: Termination Payment  2.74
          • (2)  Form: Termination of Employment by Employee  2.75
        • b.  Form: Termination for Cause  2.76
        • c.  Form: Termination on Resignation  2.77
        • d.  Form: Termination on Retirement  2.78
        • e.  Form: Termination Because of Disability  2.79
        • f.  Form: Termination on Death  2.80
      • 3.  Form: Employer Has Right to Terminate or Assign Agreement  2.81
      • 4.  Form: Agreement Survives Combination or Dissolution  2.82
      • 5.  Form: Rights and Obligations After Notice of Termination  2.83
      • 6.  Duty of Cooperation After Termination  2.84
      • 7.  Form: Other Benefits  2.84A
      • 8.  Form: IRC §409A  2.84B
    • K.  Resolving Disputes
      • 1.  Arbitration
        • a.  Drafting Considerations  2.85
        • b.  Form: Arbitration  2.86
      • 2.  Injunction
        • a.  Drafting Considerations  2.87
        • b.  Form: Injunction  2.88
      • 3.  Liquidated Damages
        • a.  Drafting Considerations  2.89
        • b.  Form: Liquidated Damages for Employer  2.90
        • c.  Form: Liquidated Damages for Employee  2.91
      • 4.  Form: Statute of Limitations  2.91A
    • L.  Miscellaneous Provisions
      • 1.  Form: Integration  2.92
      • 2.  Form: Choice of Law  2.93
      • 3.  Form: Notices  2.94
      • 4.  Form: Severability  2.95
      • 5.  Form: Employee’s Representations  2.96
      • 6.  Form: Counterparts  2.97
      • 7.  Form: Successors and Assigns  2.98
      • 8.  Form: Attorney Fees  2.99
      • 9.  Form: Amendments  2.100
      • 10.  Form: No Third Party Rights  2.101
    • M.  Form: Execution  2.102
  • III.  EXECUTIVE COMPENSATION
    • A.  Types of Compensation Generally  2.103
    • B.  Cash Compensation  2.104
      • 1.  Base Salary  2.105
      • 2.  Cash Commissions  2.106
      • 3.  Bonuses and Incentive Bonus Plans  2.107
    • C.  Equity or Equity-Related Compensation  2.108
      • 1.  Publicly Traded Company Considerations  2.109
      • 2.  General Tax Rules  2.110
      • 3.  Restricted Stock  2.111
      • 4.  Stock Options  2.112
        • a.  Incentive Stock Options  2.113
        • b.  Nonqualified Stock Options  2.114
      • 5.  Phantom Stock and Stock Appreciation Rights (SARs)  2.115
    • D.  Deferred Compensation  2.116
    • E.  Other Types of Compensation
      • 1.  Severance Benefits  2.117
      • 2.  Below-Market Loans  2.118
    • F.  Miscellaneous Issues
      • 1.  Parachute Payments  2.119
      • 2.  Excess Employee Remuneration  2.120

3

Independent Contractors, Leased Workers, and Outsourcing

Arthur Chinski

  • I.  SCOPE OF CHAPTER  3.1
  • II.  TERMINOLOGY  3.2
  • III.  ADVISING CLIENT ON ADVANTAGES AND DISADVANTAGES OF USING INDEPENDENT CONTRACTORS
    • A.  Preliminary Considerations  3.3
    • B.  Potential Advantages in Using Independent Contractors  3.4
    • C.  Disadvantages in Using Independent Contractors  3.5
  • IV.  CHART: TESTS THAT DETERMINE WHETHER WORKER IS INDEPENDENT CONTRACTOR OR EMPLOYEE  3.6
    • A.  California Law
      • 1.  State Income Tax Withholding  3.7
        • a.  Restatement Test  3.8
        • b.  Common-Law-Based Control Factors Determining Employment Status  3.9
      • 2.  Wage and Hour Laws: Dynamex Decision  3.9A
      • 3.  AB 5: Legislature Codifies Dynamex’s ABC Test for Independent Contractors  3.9B
      • 4.  California Unemployment and Disability Insurance
        • a.  Taxes and Contributions  3.10
        • b.  ABC Test Applied for Unemployment and Disability Insurance Purposes  3.11
      • 5.  California Workers’ Compensation  3.12
        • a.  Definitions of “Employer” and “Employee” in California Workers’ Compensation Law  3.13
        • b.  Presumption of Employment  3.14
        • c.  Licensed Contractor  3.15
        • d.  Definition of Independent Contractor in California Workers’ Compensation Law  3.16
        • e.  Test Under the Borello Decision  3.17
      • 6.  Areas Other Than Workers’ Compensation Where Borello Test May Apply  3.18
    • B.  Federal Law
      • 1.  Payroll Taxes
        • a.  Social Security and Medicare Contributions (FICA)  3.19
        • b.  Federal Unemployment Tax  3.20
        • c.  Tests Determining Worker Classification for Federal Payroll Tax Purposes
          • (1)  Classification by IRS Based on Common-Law Control Test  3.21
            • (a)  Revenue Ruling 87–41: Source of 20 “Control of Work” Factors  3.22
            • (b)  The “Safe Harbor” Provision  3.23
          • (2)  Classification of Corporate Officers as Statutory Employees  3.24
          • (3)  Other Statutory Employees  3.25
      • 2.  Title VII of the Civil Rights Act (EEOC)
        • a.  Prohibited Acts  3.26
        • b.  Definitions of Employer, Employee, and Independent Contractor Under Title VII
          • (1)  Employer  3.27
          • (2)  Employee  3.28
          • (3)  Independent Contractor  3.29
        • c.  Tests Determining Status Under Title VII
          • (1)  “Economic Realities” Test  3.30
          • (2)  EEOC Test  3.31
      • 3.  National Labor Relations Act  3.32
        • a.  Employees and Independent Contractors Under the NLRA  3.33
        • b.  Common Law Agency Test  3.34
      • 4.  Fair Labor Standards Act  3.35
        • a.  Employer, Employee, and Independent Contractor Under the FLSA  3.36
        • b.  Ninth Circuit “Economic Realities” Test  3.37
    • C.  The “Smell Test”  3.38
  • V.  EMPLOYING LEASED WORKERS
    • A.  Increasing Use of Leased Workers  3.39
    • B.  Risk of Joint-Employer Status  3.40
      • 1.  Applicability of Title VII to Joint Employers  3.41
      • 2.  Applicability of Fair Labor Standards Act to Joint Employers  3.42
      • 3.  Applicability of Family Medical Leave Act to Joint Employers  3.43
      • 4.  Applicability of National Labor Relations Act to Joint Employers  3.44
      • 5.  Special Employment and Workers’ Compensation Liability  3.45
      • 6.  California Unemployment and Disability Compensation  3.46
      • 7.  Tax Liability  3.47
  • VI.  POTENTIAL PENALTIES FOR MISCLASSIFICATION  3.48
    • A.  Chart: Penalties for Misclassifying Employee as Independent Contractor  3.49
    • B.  Failure to Withhold/Contribute Payroll Taxes
      • 1.  IRS Sanctions  3.50
      • 2.  EDD Sanctions  3.51
      • 3.  Severity of Combined State and Federal Penalties; IRS Authority to Compromise Assessments  3.52
      • 4.  Statutes of Limitations  3.53
    • C.  Potential Penalties Imposed by Workers’ Compensation Appeals Board  3.54
    • D.  Penalties Under National Labor Relations Act  3.55
    • E.  Liability for Minimum Wages and Overtime
      • 1.  Potential Penalties  3.56
      • 2.  Statutes of Limitations  3.57
    • F.  Employee Benefits  3.58
  • VII.  AUDIT CONSIDERATIONS
    • A.  IRS and EDD Usually Audit  3.59
    • B.  EDD Audit Procedures
      • 1.  Investigation  3.60
      • 2.  Assessment  3.61
      • 3.  Appeal  3.62
    • C.  IRS Audit Procedures
      • 1.  Investigation  3.63
      • 2.  Appeal of Determination  3.64
      • 3.  Correcting Retirement Plan Errors  3.64A
  • VIII.  DATA SUMMARIZING LEGAL STATUS OF EMPLOYMENT RELATIONSHIPS
    • A.  Chart: Industry-Specific Rulings and Guidelines  3.65
    • B.  Chart: California and Federal Statutory Exceptions to General Rules Governing Employees  3.66
  • IX.  FORMS
    • A.  Form: Sample Independent Contractor Data Sheet  3.67
    • B.  Form: Sample Agreement Between Principal and Independent Contractor  3.68

4

Immigration Law Requirements for Employers

Mitchell L. Wexler

  • I.  SCOPE OF CHAPTER  4.1
  • II.  TO WHOM DOES IRCA APPLY?  4.2
  • III.  REQUIREMENTS FOR EMPLOYERS
    • A.  Summary  4.3
    • B.  Hiring Obligations  4.4
      • 1.  Acceptable Documents  4.5
        • a.  To Establish Both Identity and Employment Authorization  4.6
        • b.  To Establish Identity Only  4.7
        • c.  To Establish Employment Authorization Only  4.8
        • d.  Receipts in Place of Required Documents  4.9
      • 2.  Employer Document Examining Procedures  4.10
      • 3.  Form I-9 is Evidence of Compliance  4.11
      • 4.  Form: Employment Eligibility Verification (Form I-9)  4.12
    • C.  Document Retention Requirements; DHS Inspection  4.13
    • D.  I-9 Electronic Signatures and Storage  4.14
    • E.  Social Security Administration “Mismatch Letters”  4.14A
    • F.  E-Verify; IMAGE Program  4.14B
  • IV.  EMPLOYEE STATUS
    • A.  Who Is an “Unauthorized Alien”?  4.15
    • B.  Aliens Eligible for Employment  4.16
    • C.  Restricted Categories  4.17
    • D.  Independent Contractors  4.18
    • E.  Employees Hired From State Employment Agency  4.19
  • V.  RECRUITERS AND REFERRERS  4.20
  • VI.  INVESTIGATIONS  4.21
  • VII.  PENALTIES  4.22
    • A.  Hiring Violations  4.23
    • B.  Paperwork Violations  4.24
    • C.  Criminal Violations
      • 1.  “Pattern or Practice” Violations  4.25
      • 2.  Penalties: Fines, Imprisonment, Civil Sanctions  4.26
    • D.  Indemnification Against Employer Liability Prohibited  4.27
  • VIII.  ANTIDISCRIMINATION PROVISIONS
    • A.  Prohibited Conduct  4.28
    • B.  Exceptions  4.29
    • C.  Penalties  4.30
  • IX.  CALIFORNIA UNFAIR IMMIGRATION PRACTICES  4.30A
  • X.  CALIFORNIA IMMIGRANT WORKER PROTECTION ACT  4.30B
  • XI.  CHECKLIST: ESTABLISHING EMPLOYMENT PRACTICES THAT COMPLY WITH IMMIGRATION LAWS  4.31
  • XII.  CHECKLIST: IDENTITY AND EMPLOYMENT AUTHORIZATION DOCUMENTS  4.32
  • XIII.  HIRING FOREIGN NATIONALS  4.33
    • A.  Client Representation  4.34
    • B.  Temporary Categories: Nonimmigrant Visa Categories  4.35
    • C.  Nonimmigrant Status Categories That Require Petition to USCIS
      • 1.  H-1B Specialty Occupations  4.36
        • a.  Dual Intent Permitted  4.37
        • b.  Prevailing Wage Requirement  4.38
        • c.  Labor Condition Application  4.39
        • d.  Filing Petition With USCIS  4.40
        • e.  Authorized Work Period  4.41
        • f.  Where to Obtain H-1B Visas  4.42
        • g.  Change of Status  4.43
        • h.  Presumption of Fraud  4.44
        • i.  Extension of H-1B Status  4.45
      • 2.  L-1 Intracompany Transferee  4.46
        • a.  Qualification for L-1 Status  4.47
        • b.  Procedure for Applying for L-1 Status  4.48
      • 3.  O-1 Extraordinary Ability or Achievement  4.49
    • D.  Nonimmigrant Status Categories That Do Not Require Petition to USCIS
      • 1.  Generally  4.50
      • 2.  E-1 and E-2: Treaty Traders and Treaty Investors  4.51
      • 3.  E-3: Australian Specialty Occupation Workers  4.51A
        • a.  Methods for Obtaining Visa  4.52
          • (1)  Treaty Trader (E-1) Status  4.53
          • (2)  Treaty Investor (E-2) Status  4.54
        • b.  Specific Procedures for E Status  4.55
      • 4.  J-1 Exchange Visitors  4.56
        • a.  Procedure  4.57
        • b.  Requirement to Return to Home Country  4.58
        • c.  Application to Waive J-1 Home Return Requirement  4.59
      • 5.  F-1 Students  4.60
      • 6.  B-1 Business Visitors  4.61
      • 7.  TN Canadian and Mexican Professionals  4.62
      • 8.  Other Nonimmigrant Visa Categories  4.63
  • XIV.  PERMANENT RESIDENCE; IMMIGRATION THROUGH EMPLOYMENT  4.64
    • A.  Immigrant Visa Categories
      • 1.  First Preference: Priority Workers  4.65
        • a.  Persons With Extraordinary Ability  4.66
        • b.  Outstanding Professors and Researchers  4.67
        • c.  Multinational Executives and Managers  4.68
      • 2.  Second Preference: Workers With Advanced Degrees or Exceptional Ability  4.69
        • a.  Advanced Degree Professionals  4.70
        • b.  Persons of Exceptional Ability  4.71
      • 3.  Third Preference: Skilled or Unskilled Workers Without Advanced Degrees  4.72
        • a.  Skilled Workers  4.73
        • b.  Professional Workers Without Advanced Degree  4.74
        • c.  Unskilled Workers  4.75
    • B.  Labor Certification  4.76
      • 1.  Schedule A  4.77
      • 2.  Filing PERM Labor Certification Applications  4.78
      • 3.  Ban on Sale, Barter, or Purchase of Labor Certifications, and on Certain Payments  4.79
      • 4.  PERM Prefiling Recruitment  4.80
      • 5.  DOL Audits  4.81
    • C.  Immigrant Petition  4.82
    • D.  Immigrant Visa Application  4.83
      • 1.  Consular Processing  4.84
      • 2.  Adjustment of Status  4.85

5

Wage and Hour Laws

Richard S. Rosenberg

Matthew T. Wakefield

Jeffrey P. Fuchsman

  • I.  OVERVIEW OF APPLICABLE LAW  5.1
    • A.  Basic Federal Statutes  5.2
    • B.  California Regulatory Scheme: Wage Orders  5.3
  • II.  APPLICATION OF THE FLSA
    • A.  Requires Employer-Employee Relationship  5.4
    • B.  Joint Employer Relationship  5.4A
    • C.  “In Commerce” Requirement  5.5
      • 1.  Employee Test  5.6
        • a.  “Engaged in Commerce”  5.7
        • b.  “Engaged in the Production of Goods for Commerce”  5.8
        • c.  Employees of Not-for-Profit Organizations  5.9
      • 2.  Enterprise Test  5.10
        • a.  Family Business Exception  5.11
        • b.  Public Entities  5.12
        • c.  Indian Tribes  5.12A
  • III.  COVERAGE UNDER CALIFORNIA LAW  5.13
  • IV.  WAGE REQUIREMENTS
    • A.  Employers May Not Rely on Applicant’s Salary History in Hiring  5.13A
    • B.  Information to Be Provided to Employees on Hire  5.13B
    • C.  Employment Agreement Requirements  5.13C
    • D.  Pay Periods  5.14
    • E.  Method of Payment  5.14A
    • F.  Itemized Wage Statements  5.14B
    • G.  Sick Pay Statements   5.14C
    • H.  Pay for Reporting to Work  5.15
    • I.  Split-Shift Premiums  5.15A
    • J.  Payment of Wages on Termination of Employment  5.16
    • K.  Payment of Commissions on Termination of Employment  5.16A
    • L.  Payment of Bonuses and Other Incentives on Termination of Employment  5.16B
    • M.  Minimum Wage
      • 1.  Basic Rate
        • a.  Adult Employees  5.17
        • b.  Minors and Learners  5.18
      • 2.  Crediting of Tips Toward Minimum Wage
        • a.  Under the FLSA  5.19
        • b.  Under California Law  5.20
      • 3.  Meal and Lodging Credits  5.21
    • N.  Overtime Compensation
      • 1.  General Rules
        • a.  Under California Law  5.22
        • b.  Under the FLSA  5.23
      • 2.  The Workweek
        • a.  Under the FLSA and California Law  5.24
        • b.  Alternative Workweek Arrangements in California  5.25
        • c.  Make-Up Time Exception in California  5.26
      • 3.  The Regular Rate
        • a.  Hourly Employees  5.27
        • b.  Salaried Employees  5.28
        • c.  Fluctuating Workweek
          • (1)  Under the FLSA  5.29
          • (2)  Not Permitted Under California Law  5.30
          • (3)  Example Illustrating Differences Between Federal and State Approach  5.31
        • d.  Piece-Rate Employees  5.32
        • e.  Different Rates of Pay for Different Types of Work
          • (1)  Under California Law  5.33
          • (2)  Under the FLSA  5.34
        • f.  Noncash Wages and Commissions  5.35
      • 4.  Exclusions From the Regular Rate
        • a.  Gifts and Special Occasion Bonuses  5.36
        • b.  Payment for Hours Not Worked, for Forgoing Paid or Time Off, and for Reimbursement of Expenses  5.37
        • c.  Discretionary Bonuses and Payments to Certain Benefit Plans  5.38
        • d.  Other Benefit Plan Contributions  5.39
        • e.  Stock Options and Other Equity Devices  5.40
        • f.  Premium Pay for Overtime  5.41
      • 5.  Different Overtime Rules for Different Industries  5.42
    • O.  Equal Pay for Substantially Similar Work, Regardless of Gender, Race, or Ethnicity  5.42A
    • P.  Compensatory Time Off  5.43
    • Q.  Tips  5.44
  • V.  DETERMINING HOURS WORKED
    • A.  Generally
      • 1.  Under California Law  5.45
      • 2.  Under the FLSA  5.46
    • B.  Preparatory and Concluding Activities  5.47
    • C.  Rest, Lactation, Recovery, and Meal Periods
      • 1.  Under California Law  5.48
      • 2.  Under the FLSA  5.49
    • D.  Waiting Time/On-Call Time  5.50
    • E.  Sleeping Time  5.51
    • F.  Travel Time
      • 1.  California Law  5.52
      • 2.  Federal Law  5.53
    • G.  Training Time  5.54
    • H.  Trainees and Interns  5.54A
    • I.  Volunteers  5.54B
    • J.  Rounding of Time Entries  5.54C
    • K.  Off-the-Clock Work  5.54D
    • L.  Other Limitations on Time Worked  5.55
  • VI.  EXEMPTIONS FROM MINIMUM WAGE AND OVERTIME REQUIREMENTS
    • A.  California Exemptions  5.56
      • 1.  Executive Exemption  5.57
      • 2.  Administrative Exemption  5.58
      • 3.  Professional Exemption  5.59
      • 4.  Exempt Treatment of Other Particular Occupations
        • a.  Computer-Related Professionals  5.60
        • b.  Outside Salespersons  5.61
        • c.  Commissioned Salespersons  5.61A
        • d.  Other Exemptions  5.61B
    • B.  Under Federal Law  5.62
      • 1.  Executive Exemption  5.63
        • a.  Salary Basis  5.64
        • b.  Primary Duty  5.65
        • c.  Supervisory Position  5.66
        • d.  Authority to Hire or Fire  5.67
      • 2.  Administrative Exemption  5.68
        • a.  Salary Basis  5.69
        • b.  Primary Duty  5.70
        • c.  Exercise of Discretion and Independent Judgment  5.71
      • 3.  Professional Exemption
        • a.  Learned Professional  5.72
          • (1)  Salary Basis  5.73
          • (2)  Primary Duty  5.74
        • b.  Creative Professional  5.75
      • 4.  Exempt Treatment of Other Particular Occupations
        • a.  Computer-Related Professionals  5.76
        • b.  Outside Salespersons  5.77
        • c.  Commissioned Employees  5.77A
        • d.  Certain Agricultural Workers  5.78
      • 5.  Miscellaneous Exemptions
        • a.  From Both Minimum Wage and Overtime Requirements  5.79
        • b.  From Overtime Requirements Only  5.80
  • VII.  CHILD LABOR
    • A.  California Law
      • 1.  Limitations on Employment  5.81
      • 2.  Wages and Hours  5.82
    • B.  Federal Law
      • 1.  Application of the FLSA  5.83
      • 2.  Prohibition Against “Oppressive Child Labor”  5.84
        • a.  Hazardous Occupations  5.85
        • b.  Limited Occupations for Minors 14 and 15 Years Old  5.86
        • c.  Waivers  5.87
    • C.  Chart: Child Labor Laws  5.88
  • VIII.  RESPONSIBILITY FOR UNIFORMS, EQUIPMENT, PROPERTY LOSS, AND SALES ADJUSTMENTS
    • A.  Employee/Employer Responsibility
      • 1.  Uniforms  5.89
      • 2.  Tools and Equipment  5.89A
      • 3.  Shortages, Breakage, or Losses  5.89B
      • 4.  Adjustments, Charge Backs, or Deductions  5.89C
      • 5.  Indemnification  5.89D
      • 6.  Employer-Provided Training Costs  5.89E
  • IX.  MANDATORY WORKING CONDITIONS
    • A.  Changing Rooms and Resting Facilities  5.89F
    • B.  Seating  5.89G
    • C.  Temperature  5.89H
    • D.  Other Requirements  5.89I
  • X.  ENFORCEMENT
    • A.  California Wage and Hour Laws
      • 1.  Investigation and Hearings  5.90
      • 2.  Enforcement of Judgments by Labor Commissioner  5.90A
      • 3.  Complaints of Discrimination or Retaliation  5.90B
      • 4.  Subpoenas  5.91
      • 5.  Civil Actions; Remedies Available  5.92
      • 6.  Unfair Competition Claims  5.92A
      • 7.  Class Actions  5.93
      • 8.  Class Actions and Arbitration  5.93A
      • 9.  Class Action Settlements  5.93B
      • 10.  Statute of Limitations  5.94
      • 11.  Criminal Actions  5.95
      • 12.  Civil Penalties  5.96
      • 13.  Labor Code Private Attorneys General Act  5.97
        • a.  More Serious Violations  5.98
        • b.  Other Labor Code Violations  5.99
        • c.  Health and Safety Violations  5.100
        • d.  Construction Industry Exception  5.100A
      • 14.  Punitive Damages  5.100B
      • 15.  Settlements and Releases of Claims Under California Law  5.100C
      • 16.  Successor Liability Under California Law  5.100D
      • 17.  Joint Employer Liability With Labor Contractor  5.100E
      • 18.  Joint Employer Liability of Construction Contractors  5.100F
      • 19.  Owner, Director, Officer, or Managing Agent Liability  5.100G
    • B.  Federal Enforcement of Wage and Hour Laws
      • 1.  Investigations and Inspections  5.101
      • 2.  Civil Actions
        • a.  Remedies Available in Suits by the Department of Labor  5.102
        • b.  Remedies Available in Private Suits  5.103
        • c.  Successor Liability Under Federal Law  5.103A
        • d.  Union Employees May Bypass Grievance and Arbitration Procedure  5.104
        • e.  Statute of Limitations  5.105
      • 3.  Criminal Actions  5.106
      • 4.  Settlements and Releases of Claims Under Federal Law  5.106A
  • XI.  WAGE AND HOUR REQUIREMENTS FOR GOVERNMENT CONTRACTORS
    • A.  Walsh-Healey Public Contracts Act  5.107
    • B.  Davis-Bacon Act  5.108
    • C.  Copeland Act  5.109
    • D.  Contract Work Hours Standards Act  5.110
    • E.  McNamara-O’Hara Service Contract Act  5.111
  • XII.  WAGE GARNISHMENTS
    • A.  Earnings Withholding Orders  5.112
    • B.  Employees and Earnings Subject to Order  5.113
    • C.  Service of Withholding Orders  5.114
    • D.  Employer’s Procedure After Service
      • 1.  Notice to Employee  5.115
      • 2.  Determining Withholding Periods, Amounts; Priority
        • a.  Withholding Period  5.116
        • b.  Amount to Be Withheld  5.117
        • c.  Priorities of Conflicting Levies and Assignments  5.118
      • 3.  Employer’s Return  5.119
      • 4.  Remitting Withheld Earnings  5.120
    • E.  Notice of Termination or Modification  5.121

6

Vacations, Family and Medical Leave, and Other Time Off

Deborah Crandall Saxe

  • I.  VACATIONS
    • A.  Right to Paid Vacation Benefits
      • 1.  Employer Agreement Requirement  6.1
      • 2.  Waiting Period  6.2
      • 3.  “Use It or Lose It” Policy  6.3
      • 4.  Limit on Accrual of Vacation  6.4
      • 5.  Accelerating Accrual  6.5
      • 6.  Payment on Termination of Employment  6.6
      • 7.  Recovery of Vacation Pay Advances  6.7
    • B.  Employee Actions for Unpaid Vacation Benefits  6.8
    • C.  Funded Vacation Plans and ERISA  6.9
    • D.  Checklist: Guidelines for Drafting Vacation Policy  6.10
  • II.  SICK LEAVE
    • A.  All California Employers Must Provide Paid Sick Leave  6.11
      • 1.  Covered Employees  6.11A
      • 2.  Permissible Uses of Sick Leave  6.11B
        • a.  Use for Family Member  6.11C
        • b.  Minimum Amount and Limit  6.11D
        • c.  Notice to Employer  6.11E
      • 3.  Accrual  6.11F
      • 4.  Carryover of Unused Sick Leave  6.11G
      • 5.  Reinstatement of Accrued and Unused Sick Leave  6.11H
      • 6.  No Discrimination or Retaliation for Use of Sick Leave  6.11I
    • B.  Posting and Recordkeeping Requirements  6.12
    • C.  Enforcement and Penalties  6.13
    • D.  No Preemption of Greater Requirements  6.13A
    • E.  Exemption for Certain Existing Sick Leave Policies  6.14
    • F.  Kin Care Leave  6.14A
  • III.  PAID TIME OFF  6.15
  • IV.  HOLIDAYS
    • A.  Table: Legal Holidays  6.16
    • B.  Floating Holidays  6.16A
    • C.  Checklist: Guidelines for Drafting Holiday Pay Policy  6.17
    • D.  Day of Rest  6.18
  • V.  PREGNANCY DISABILITY LEAVE
    • A.  Covered Employers  6.19
    • B.  Eligible Employees  6.20
    • C.  Length of Pregnancy Disability Leave  6.21
    • D.  Intermittent or Reduced Work Schedule Leave  6.22
    • E.  Employee and Employer Notices
      • 1.  Employee Notice of Leave  6.23
      • 2.  Required Employer Notices  6.24
    • F.  Medical Certification
      • 1.  When Required  6.25
      • 2.  Medical Certification and HIPAA  6.26
    • G.  Pay During Pregnancy Disability Leave  6.27
    • H.  Benefits Available During Pregnancy Leave  6.28
    • I.  Reinstatement to Same or Comparable Position  6.29
    • J.  Relationship to Family and Medical Leave  6.30
  • VI.  FAMILY LEAVE LAWS UNDER CFRA
    • A.  Employers Subject to Coverage  6.30A
    • B.  Employer Obligations   6.30B
    • C.  Pilot Mediation Program   6.30C
  • VII.  FAMILY AND MEDICAL LEAVE UNDER THE FAMILY AND MEDICAL LEAVE ACT (FMLA) AND CALIFORNIA FAMILY RIGHTS ACT (CFRA)  6.31
    • A.  Basic Requirements  6.32
    • B.  Reasons for Leave
      • 1.  FMLA Leave  6.33
      • 2.  California Variation: Pregnancy Exception  6.34
      • 3.  California Variation: Domestic Partners  6.35
    • C.  Employers Covered by FMLA and CFRA
      • 1.  Private Employers  6.36
      • 2.  Public Agencies  6.37
    • D.  Eligibility Requirements for Employees
      • 1.  In General  6.38
      • 2.  Medical Need Requirement for Leave to Care for Relative  6.39
    • E.  Definitions
      • 1.  “Spouse”  6.40
      • 2.  “Child” or “Son or Daughter”  6.41
      • 3.  “Parent”  6.42
      • 4.  “Serious Health Condition”  6.43
      • 5.  “Needed to Care for” a Family Member  6.44
      • 6.  “Health Care Provider”  6.45
      • 7.  “Continuing Treatment”  6.46
      • 8.  “Incapacity”  6.47
    • F.  Length of Family and Medical Leave  6.48
      • 1.  Calculating 12 Weeks of Leave  6.49
      • 2.  12-Month “Leave Year”  6.50
      • 3.  Limits on Leave for Birth or Child Care  6.51
      • 4.  Combined Leave for Spouses Under the FMLA  6.52
      • 5.  California Variation: Combined Leave for Parents of Child  6.53
    • G.  Intermittent and Reduced-Time Leave
      • 1.  When Appropriate  6.54
      • 2.  California Variation: Intermittent Leave for Child Care  6.55
    • H.  Employer Designation as FMLA/CFRA Leave  6.56
      • 1.  Basis for Employer’s Designation  6.57
      • 2.  When Employee Merely Requests Paid Time Off  6.58
      • 3.  Preliminary Designation While Awaiting Confirming Information [Deleted]  6.59
      • 4.  Timing and Form of Employer’s Designation  6.60
      • 5.  Retroactive Designation  6.61
        • a.  Exception: Employer Learns FMLA Purpose for Leave After Leave Has Begun [Deleted]  6.62
        • b.  Exception: Employer Learns FMLA or CFRA Purpose for Leave After Employee Returns [Deleted]  6.63
      • 6.  Effect of Employer’s Failure to Notify Employee of FMLA Leave Designation  6.64
    • I.  Employee Responsibilities
      • 1.  Notice of Need for Leave  6.65
        • a.  Form of Notice  6.66
        • b.  Form: Notice of Intent to Take Family or Medical Leave  6.67
        • c.  Form: Notice of Eligibility & Rights and Responsibilities Under the FMLA (Form WH-381)  6.68
      • 2.  Medical Certification  6.69
        • a.  Contents of Medical Certifications  6.69A
        • b.  Recertifications  6.69B
        • c.  Second and Third Opinions  6.70
        • d.  California Variation: Second or Third Opinion  6.71
        • e.  Medical Certification Forms  6.72
          • (1)  Form: Certification of Health Care Provider for Employee’s Serious Health Condition Under the FMLA (Form WH-380-E)  6.73
          • (2)  Form: Certification of Health Care Provider for Family Member’s Serious Health Condition Under the FMLA (Form WH-380-F)   6.73A
          • (3)  Form: Certification of Health Care Provider for Employee’s Serious Health Condition  6.74
      • 3.  Fitness-for-Duty Report  6.75
    • J.  Employee’s Right to Reinstatement After Leave
      • 1.  Right to Same Position  6.76
        • a.  Notice of Guarantee of Reinstatement  6.77
        • b.  Waiver of Rights; Light Duty Assignment  6.78
        • c.  Inability to Perform Essential Function on Return From Leave  6.79
        • d.  Layoff While on Leave  6.80
      • 2.  Special Reinstatement Rules for Key Employees
        • a.  “Key Employee” Defined  6.81
        • b.  Potential Denial of Reinstatement and Benefit Maintenance  6.82
    • K.  Relationship of FMLA and CFRA Leave to California Paid Family Leave  6.83
    • L.  Pay During FMLA/CFRA Leave  6.84
      • 1.  Substitution of Accrued Employer-Provided Paid Leave
        • a.  Under the FMLA  6.85
        • b.  Employer Credit for Paid Family and Medical Leave   6.85A
        • c.  Under the CFRA  6.86
      • 2.  Limitation on Substitution of Accrued Employer-Provided Paid Leave  6.87
      • 3.  Exempt Status and Deductions From Salary for Unpaid FMLA Leave  6.88
    • M.  Effect of FMLA/CFRA Leave on Employee Status and Benefits
      • 1.  Health Insurance
        • a.  Employer Obligation to Maintain  6.89
        • b.  Payment of Premiums  6.90
        • c.  When Employee Chooses Not to Retain Health Insurance During Leave  6.91
        • d.  When Employee Does Not Return to Work  6.92
        • e.  When Employee Takes Combined Pregnancy Leave  6.93
      • 2.  Benefit Levels, Vesting, and Seniority  6.94
      • 3.  Other Benefits  6.95
    • N.  Notice and Recordkeeping Requirements for Employers
      • 1.  Notices
        • a.  Leave Rights Notice  6.96
          • (1)  Form Notice: Your Rights Under the Family and Medical Leave Act of 1993 (DOL WH Publication 1420)  6.97
          • (2)  Form Notice: Family Care & Medical Leave & Pregnancy Disability Leave (Form DFEH-100-21ENG)  6.98
          • (3)  Form Notice: Your Rights and Obligations as a Pregnant Employee (DFEH-E09P-ENG)  6.99
        • b.  Specific Notices From Employer to Employee  6.100
          • (1)  Mandatory Provisions in the Rights and Responsibilities Notice  6.101
          • (2)  Optional Inclusions in Rights and Responsibilities Notice  6.102
      • 2.  Personnel Manuals [Deleted]  6.103
      • 3.  Recordkeeping Required of Employers Under the FMLA  6.104
    • O.  Effect on Other Laws or Benefits  6.105
    • P.  Prohibited Acts and Remedies  6.106
      • 1.  Remedies Under the FMLA  6.107
      • 2.  Individual Liability Under the FMLA  6.108
      • 3.  Remedies Under the CFRA  6.109
  • VIII.  LEAVES REQUIRED BY OTHER STATE AND FEDERAL LAWS PROTECTING INDIVIDUALS WITH DISABILITIES
    • A.  ADA and FEHA
      • 1.  Comparison of Acts
        • a.  Application of Acts  6.110
        • b.  Definitions
          • (1)  “Physical Disability”  6.111
          • (2)  “Mental Disability”  6.112
          • (3)  “Limits on Major Life Activities”  6.113
          • (4)  “Reasonable Accommodation”  6.114
          • (5)  “Undue Hardship”  6.115
      • 2.  Effect on Employer Leave Policy  6.116
    • B.  Rehabilitation Act  6.117
  • IX.  ACCOMMODATION OF RELIGIOUS BELIEFS  6.118
  • X.  ACCOMMODATION OF EMPLOYEES WHO VOLUNTARILY ENTER DRUG OR ALCOHOL REHABILITATION PROGRAMS  6.119
  • XI.  ACCOMMODATION OF EMPLOYEES WHO ENROLL IN ADULT LITERACY EDUCATION PROGRAMS  6.120
  • XII.  ACCOMMODATION OF CIVIC RESPONSIBILITIES
    • A.  Voting  6.121
    • B.  Service as Election Official  6.122
    • C.  Service as Juror or Witness  6.123
    • D.  Leave for Emergency Duty as Volunteer Firefighter, Reserve Peace Officer, or Emergency Rescue Person  6.124
    • E.  Training Leave for Volunteer Firefighter, Reserve Peace Officer, or Emergency Rescue Person  6.125
    • F.  Leave for Military Service
      • 1.  State Law  6.126
      • 2.  Federal Law: USERRA
        • a.  Application  6.127
        • b.  Employee Obligations
          • (1)  Notice of Leave  6.128
          • (2)  Notice of Intention to Return to Work  6.129
          • (3)  Documentation  6.129A
        • c.  Employer Obligations
          • (1)  Pay Issues  6.130
          • (2)  Benefits  6.131
          • (3)  Reinstatement of Employee  6.132
        • d.  Discrimination and Termination Protections  6.133
        • e.  Remedies  6.134
    • G.  FMLA Leave to Care for a “Covered Servicemember”  6.134A
      • 1.  Definition of “Covered Servicemember”  6.134B
      • 2.  Definition of “Serious Injury or Illness” and “Outpatient Status”  6.134C
      • 3.  Definition of “Son or Daughter”  6.134D
      • 4.  Definition of “Next of Kin”  6.134E
      • 5.  FMLA Leave Allowed to Care for a “Covered Servicemember”  6.134F
      • 6.  Certification  6.134G
      • 7.  Effect of Other FMLA Regulations  6.134H
    • H.  FMLA Leave Due to a Qualifying Exigency  6.134I
      • 1.  Definition of “Son or Daughter”  6.134J
      • 2.  Definition of “Covered Active Duty”  6.134K
      • 3.  Definition of “Contingency Operation”  6.134L
      • 4.  Definition of “Qualifying Exigency”  6.134M
      • 5.  Amount of FMLA Leave Allowed for Qualifying Exigencies  6.134N
      • 6.  Certification  6.134O
      • 7.  Effect of Other FMLA Regulations  6.134P
    • I.  Leave for Spouses of Military Personnel  6.134Q
  • XIII.  SCHOOL LEAVES
    • A.  Leave for School Suspension  6.135
    • B.  Leave for Participation in School Activities  6.136
  • XIV.  LEAVES FOR VICTIMS OF DOMESTIC VIOLENCE, SEXUAL ASSAULT, STALKING, OR OTHER CRIMES INVOLVING ABUSE OR INJURY  6.137
  • XV.  LEAVE FOR VICTIMS OF SERIOUS OR VIOLENT FELONIES AND THEIR RELATIVES  6.138
  • XVI.  LEAVE FOR ORGAN AND BONE MARROW DONATION  6.138A
  • XVII.  FORMS
    • A.  Form: Sample Policy for FMLA/CFRA Leave  6.139
    • B.  Form: Sample Policy for Pregnancy Disability Leave  6.139A
    • C.  Form: Sample Policy for Disability Leave [Deleted]  6.140
    • D.  Form: Sample Policy for Personal Leave  6.141
    • E.  Form: Sample Policy for Bereavement Leave  6.142
    • F.  Form: Sample Policy for Leave for Spouses of Military Personnel  6.143
  • XVIII.  CHART: OVERVIEW OF LEAVE LAWS  6.144

7

Tax Compliance

Richard A. Saffir

  • I.  OVERVIEW  7.1
    • A.  Importance of Tax Compliance  7.2
    • B.  Role of Attorney and Accountant  7.3
    • C.  Notifying Taxing Authorities  7.4
      • 1.  Notifying IRS  7.5
      • 2.  Notifying California Employment Development Department  7.6
      • 3.  Notifying California Franchise Tax Board  7.7
      • 4.  Notifying California Department of Tax and Fee Administration  7.8
      • 5.  Notifying Local Taxing Authorities  7.9
    • D.  Establishing Recordkeeping Procedures
      • 1.  Organizing Information  7.10
      • 2.  Collecting Employee/Payee Information  7.11
        • a.  Employees  7.12
        • b.  Other Payees  7.13
      • 3.  Use of Computers and Electronic Storage Data  7.14
    • E.  Withholding and Employment Taxes
      • 1.  Who Withholds and Pays Employment Taxes
        • a.  Federal  7.15
        • b.  California  7.16
      • 2.  Calculation of Withholding and Employment Taxes
        • a.  Federal  7.17
        • b.  California  7.18
          • (1)  Personal Income Tax (PIT) Withholding  7.19
          • (2)  State Disability Insurance (SDI)  7.20
          • (3)  Unemployment Insurance (UI)  7.21
          • (4)  Employment Training Tax (ETT)  7.22
          • (5)  New Employment Credit  7.22A
          • (6)  Work Opportunity Tax Credit  7.22B
          • (7)  Small Business Hiring Credit  7.22C
        • c.  Deposits of Federal Employment Taxes  7.23
          • (1)  Monthly Deposits  7.24
          • (2)  Semiweekly Deposits  7.25
          • (3)  One-Day Rule  7.26
          • (4)  Reporting Deposits  7.27
        • d.  Deposits of California Employment Taxes  7.28
        • e.  Penalties for Failure to Withhold, Deposit, or Pay Taxes  7.29
      • 3.  California Sales and Use Tax
        • a.  Sales Tax Coverage and Exemptions
          • (1)  Retailers Pay Sales Tax  7.30
          • (2)  Tax Measured by Gross Receipts  7.31
          • (3)  Tax on Tangible Personal Property  7.32
          • (4)  Use Tax on Consumption or Storage of Property  7.33
          • (5)  Tangible Personal Property Not Subject to Sales Tax  7.34
          • (6)  Resale Exemption  7.35
          • (7)  Occasional Sale Exemption  7.36
        • b.  Sales Tax on Transfers of Property to Start-Up; Mergers  7.37
        • c.  Sales and Use Tax Returns and Payment
          • (1)  Due Dates of Returns and Payments  7.38
          • (2)  Sales and Use Tax Return  7.39
          • (3)  Prepayment of Sales and Use Tax  7.40
        • d.  Penalties  7.41
      • 4.  Property Taxes
        • a.  Property Tax Coverage and Exemptions  7.42
          • (1)  Real Property  7.43
          • (2)  Personal Property  7.44
        • b.  Assessment of Tax  7.45
        • c.  Filing Property Statements  7.46
        • d.  Payment of Tax  7.47
        • e.  Purchase and Change in Ownership  7.48
          • (1)  Transfers of Property Between Legal Entities  7.49
          • (2)  Transfers of Ownership Interests in Legal Entities  7.50
        • f.  Protesting or Adjusting Assessed Values  7.51
      • 5.  Documentary Transfer Tax
        • a.  Assessment of Transfer Tax  7.52
        • b.  Tax Rate  7.53
      • 6.  Local Business Taxes  7.54
      • 7.  Excise and Miscellaneous Taxes
        • a.  What Businesses Pay Excise and Miscellaneous Taxes  7.55
        • b.  Compliance With Excise Tax  7.56
    • F.  Information Returns and Reporting Obligations
      • 1.  Activities and Payments That Must Be Reported; Required Forms  7.57
        • a.  Wages  7.58
        • b.  Individual Retirement Information  7.59
        • c.  Dividends  7.60
        • d.  Interest  7.61
        • e.  Service Fees, Commissions, Rentals, and Royalties  7.62
        • f.  Retirement Plan Distributions  7.63
        • g.  Real Estate Transactions  7.64
        • h.  Brokers and Barter Exchanges  7.65
        • i.  Restaurants, Tips  7.66
        • j.  Cash Transactions  7.67
        • k.  Other Transactions  7.68
      • 2.  Failure to File Information Returns  7.69
  • II.  TABLES AND LISTS
    • A.  Taxes Imposed on Different Forms of Business Entities  7.70
    • B.  Tax Forms Commonly Used by Business Entities  7.71
      • 1.  Sole Proprietorship Income Tax Forms  7.72
      • 2.  Corporation Income Tax Forms  7.73
      • 3.  Partnership and LLC Income Reporting Forms  7.74
      • 4.  Business Activities Reporting Forms  7.75
      • 5.  Employment Tax Forms  7.76
      • 6.  California Sales Tax Forms  7.77
      • 7.  Excise Tax Forms  7.78
      • 8.  Miscellaneous Tax Forms  7.79
    • C.  IRS Tax Compliance Publications
      • 1.  General Guides  7.80
      • 2.  Guides for Specific Transactions or Businesses  7.81
  • III.  COMBINED CALIFORNIA AND FEDERAL TAX CALENDAR
    • A.  Overview
      • 1.  Standard Filings for Calendar Year Taxpayers  7.82
      • 2.  Filings and Payment Obligations Without Fixed Due Dates
        • a.  Filings Triggered by an Event  7.83
        • b.  Recurring Monthly or Semiweekly Employment Tax Deposit Obligations  7.84
        • c.  Formation and Qualification Fees and Taxes  7.85
    • B.  January  7.86
    • C.  February  7.87
    • D.  March  7.88
    • E.  April  7.89
    • F.  May  7.90
    • G.  June  7.91
    • H.  July  7.92
    • I.  August  7.93
    • J.  September  7.94
    • K.  October  7.95
    • L.  November  7.96
    • M.  December  7.97

8

Unemployment Compensation and State Disability Insurance

Terence R. Savage

Eric Hendrickson

  • I.  FEDERAL-STATE SYSTEM  8.1
    • A.  Governing Laws  8.2
    • B.  Entitlement to Unemployment Compensation and Disability Insurance Benefits Generally  8.3
  • II.  OBLIGATION TO PAY OR WITHHOLD TAXES  8.4
    • A.  Employer-Employee Relationship Required  8.5
    • B.  Location of Employment  8.6
      • 1.  Services Localized in California  8.7
      • 2.  Services Deemed Performed in California  8.8
    • C.  Definition of “Employer”  8.9
    • D.  Definition of “Employee”  8.10
    • E.  Effect of Contract Language  8.11
    • F.  Services Included or Excluded by Statute  8.12
      • 1.  Excluded Services  8.13
        • a.  Specific Exclusions  8.14
        • b.  Directors of a Corporation  8.15
        • c.  Domestic Services  8.16
          • (1)  Wage Threshold for Unemployment Insurance Contribution  8.17
          • (2)  Wage Threshold for Disability Insurance Contribution  8.18
        • d.  Real Estate and Direct Salespersons  8.19
        • e.  Consultants  8.20
      • 2.  Exclusions Contingent on Similar Exclusions Under FUTA  8.21
      • 3.  Excluded Services for Public Entities or Nonprofit Organizations  8.22
      • 4.  Included Services  8.23
        • a.  Public Entities  8.24
        • b.  Leasing or Temporary Services Employers  8.25
        • c.  Substitute and Assistant Workers Hired by Employee  8.26
        • d.  Agricultural Employment  8.27
        • e.  Exempt Religious, Charitable, and Other Organizations  8.28
        • f.  Elective Employer Coverage  8.29
    • G.  Both Exempt and Nonexempt Services  8.30
  • III.  TAX WITHHOLDING AND PAYMENT
    • A.  Returns and Reports  8.31
      • 1.  Work Records  8.32
      • 2.  Filing Returns and Reports  8.33
      • 3.  New Employee Report Required for Certain “Transient” Occupations  8.34
      • 4.  Notices Required by Employer  8.35
    • B.  Employer Contributions to the Unemployment Fund
      • 1.  Contributions Rate  8.36
      • 2.  Wages as the Basis of Contribution
        • a.  Included Remuneration  8.37
          • (1)  General Inclusions  8.38
          • (2)  Taxable Value of Board and Lodging  8.39
          • (3)  Tips  8.40
          • (4)  Deferred Compensation Plans  8.41
        • b.  Excluded Remuneration
          • (1)  Business Expenses  8.42
          • (2)  Insurance  8.43
          • (3)  Payments to or From a Trust  8.44
          • (4)  Miscellaneous Exemptions  8.45
          • (5)  Other Exclusions  8.46
        • c.  Taxable Amount of Wages  8.47
      • 3.  Reserve Accounts  8.48
        • a.  Annual Statement of Account  8.49
        • b.  Protest of Charges  8.50
      • 4.  Quarterly Payments  8.51
      • 5.  Reimbursable Financing  8.52
    • C.  Assessments
      • 1.  When Assessments May Be Made  8.53
      • 2.  Penalties and Interest  8.54
      • 3.  When Assessments Become Final  8.55
      • 4.  Jeopardy Assessments  8.56
      • 5.  Cancellation of Erroneous Assessments  8.57
      • 6.  Statute of Limitations  8.58
    • D.  Liens and Successor Liability
      • 1.  Liens  8.59
      • 2.  Successor Liability  8.60
      • 3.  Liability of Corporate Officers  8.61
    • E.  Refunds and Overpayments
      • 1.  Claims for Credit or Refund of Overpayment  8.62
      • 2.  Notice of Denial of Claim  8.63
      • 3.  Reversal of Erroneous Denial  8.64
      • 4.  Recovery of Erroneous Refund  8.65
    • F.  Administrative Appellate Review
      • 1.  Review by Administrative Law Judge  8.66
      • 2.  Review of Jeopardy Assessments  8.67
      • 3.  Review by Unemployment Insurance Appeals Board  8.68
    • G.  Judicial Review  8.69
    • H.  Use of Information Obtained  8.70
      • 1.  Confidentiality  8.71
      • 2.  Purposes for Which Information May Be Used  8.72
        • a.  Exchange of Information With Other Governmental Agencies  8.73
        • b.  Exchange of Information With Law Enforcement Agencies and Others  8.74
  • IV.  CLAIMS FOR UNEMPLOYMENT COMPENSATION BENEFITS
    • A.  “Unemployment” as Basis for Benefits  8.75
      • 1.  Distinctions Between Total Unemployment and Partial Unemployment  8.76
      • 2.  “Wages” for Purposes of Defining “Unemployed”  8.77
    • B.  Maximum Benefits Payable  8.78
      • 1.  “Benefit Year” Defined  8.79
      • 2.  “Base Period” Defined  8.80
    • C.  Conditions of Eligibility
      • 1.  Availability for Work  8.81
      • 2.  Search for Suitable Work  8.82
      • 3.  Requirement of 1-Week Waiting Period  8.83
    • D.  Factors Not Affecting Eligibility
      • 1.  Physical or Mental Illness or Injury  8.84
      • 2.  Court-Related Duties  8.85
      • 3.  Emergency Hospitalization  8.86
      • 4.  Student Status  8.87
      • 5.  Death in Immediate Family  8.88
      • 6.  Unexpired Leave Time on Discharge From Armed Services  8.89
    • E.  Ineligible Persons
      • 1.  Aliens  8.90
      • 2.  Strikers  8.91
      • 3.  Recipients of Temporary Total Disability Indemnity  8.92
      • 4.  Persons Convicted of Making False Statements  8.93
    • F.  Disqualification for Voluntarily Quitting or Discharge for Misconduct  8.94
      • 1.  Presumption of Nondisqualifying Conduct  8.95
      • 2.  Definition of “Most Recent Work”  8.96
      • 3.  Voluntarily Leaving Work Without Good Cause
        • a.  What Constitutes “Voluntary” Leaving  8.97
        • b.  “Constructive” Quitting  8.98
        • c.  “Good Cause” Defined  8.99
        • d.  Employee’s Duty to Preserve Employment Relationship  8.100
        • e.  Situations Deemed “Good Cause” by Statute
          • (1)  Compulsory Retirement  8.101
          • (2)  Election to be Laid Off Under Collective Bargaining Agreement  8.102
          • (3)  Deprivation of Equal Employment Opportunities  8.103
          • (4)  Sexual Harassment  8.104
          • (5)  Accompanying Spouse or Domestic Partner to Another Location  8.105
          • (6)  Domestic Violence Abuse  8.106
        • f.  Application of Good-Cause Principles to Factual Examples
          • (1)  Religious or Ethical Reasons  8.107
          • (2)  Concerns for Health, Safety, or Morals  8.108
          • (3)  Dissatisfaction With Earnings  8.109
          • (4)  Transportation Difficulties  8.110
          • (5)  Attendance at School  8.111
          • (6)  Domestic Circumstances  8.112
          • (7)  Other Reasons  8.113
      • 4.  Discharge for Misconduct; What Constitutes “Misconduct”  8.114
        • a.  Requirement That Misconduct Be Connected With Most Recent Work  8.115
        • b.  Situations Giving Rise to Issues of Misconduct  8.116
      • 5.  Duration of Disqualification From Eligibility to Receive Benefits
        • a.  Misconduct or Voluntary Quit  8.117
        • b.  Refusal of Suitable Work  8.118
        • c.  False Statements  8.119
        • d.  Intoxication  8.120
    • G.  Effect of Remuneration During Period of Unemployment on Amount of Benefits
      • 1.  Reduction of Benefits by Amount of Retirement Pay  8.121
      • 2.  Employer Payments to Supplement Unemployment Compensation; Severance or Dismissal Pay  8.122
      • 3.  Vacation Pay  8.123
      • 4.  Holiday Pay  8.124
      • 5.  Sick Pay  8.125
    • H.  Claims Procedure
      • 1.  Types of Claims  8.126
        • a.  New Claim  8.127
        • b.  Continued Claim  8.128
        • c.  Partial Claim  8.129
        • d.  Additional Claim  8.130
        • e.  Reopened Claim  8.131
      • 2.  Steps in EDD’s Processing of Claims  8.132
        • a.  Filing of Claim and Notice to Last Employer  8.133
        • b.  Computation of Benefits  8.134
          • (1)  Notice of Computation  8.135
          • (2)  Protest of Computation  8.136
        • c.  Continued Claim Statement  8.137
        • d.  Determination of Eligibility and Notice of Determination  8.138
        • e.  Periodic Eligibility Review  8.139
        • f.  Attachment of Unemployment Benefits for Child Support  8.139A
      • 3.  Reconsideration of Determinations or Computations  8.140
    • I.  Payment of Claims  8.141
    • J.  Liability for Overpayment of Benefits  8.142
      • 1.  Notice of Overpayment and Assessment Determination  8.143
      • 2.  Appeal of Overpayment  8.144
      • 3.  Recovery of Overpayments
        • a.  Civil Action by the EDD  8.145
        • b.  Summary Judgment  8.146
        • c.  Offset  8.147
      • 4.  Penalties  8.148
    • K.  Invalidity of Waiver or Assignment of Benefits  8.149
  • V.  ADMINISTRATIVE APPEALS AND JUDICIAL REVIEW  8.150
    • A.  Appeals to Administrative Law Judge  8.151
    • B.  Appeals to Appeals Board
      • 1.  Appeals Procedure  8.152
      • 2.  Payment of Benefits During Appeals Procedure  8.153
        • a.  Before Administrative Law Judge Decision  8.154
        • b.  After Administrative Law Judge Decision  8.155
    • C.  Judicial Review of Appeals Board Decisions  8.156
      • 1.  Review of Benefit Determination by Administrative Mandate Proceedings  8.157
      • 2.  Scope of Judicial Review  8.158
  • VI.  CLAIMS FOR DISABILITY INSURANCE BENEFITS
    • A.  Governing Law  8.159
      • 1.  Statutes and Regulations  8.160
      • 2.  Case Law  8.161
    • B.  Nature and Source of Disability Benefits  8.162
      • 1.  State Disability Plan  8.163
      • 2.  Voluntary Plans  8.164
      • 3.  Elective Coverage  8.165
    • C.  What Constitutes a Disability  8.166
    • D.  Eligibility for Benefits  8.167
      • 1.  Departmental Medical Examination  8.168
      • 2.  Other Conditions of Eligibility  8.169
      • 3.  Physician and Practitioner Defined  8.170
    • E.  Ineligibility for Benefits
      • 1.  Employee Covered by Approved Voluntary Plan  8.171
      • 2.  Entitlement to Unemployment Compensation Benefits  8.172
      • 3.  Entitlement to Workers’ Compensation Benefits  8.173
        • a.  When Rate Is Less Than Disability Insurance Rate  8.174
        • b.  Payment of Disability Insurance Benefits While Workers’ Compensation Claim Is Pending  8.175
    • F.  Disqualifications
      • 1.  Alcoholism or Drug Addiction  8.176
      • 2.  Incarceration  8.177
      • 3.  Disqualification Under Certain Unemployment Compensation Provisions  8.178
    • G.  Amount of Benefits
      • 1.  Weekly Benefit Amount  8.179
      • 2.  Base Period  8.180
      • 3.  Maximum Benefits During One Disability Period  8.181
      • 4.  Reduction of Benefit Amount by Wages Received  8.182
      • 5.  Waiting Period  8.183
      • 6.  Disability Insurance Weekly Benefits  8.184
    • H.  Claim Procedures
      • 1.  Filing and Notice of Claim  8.185
      • 2.  Late Filing  8.186
      • 3.  Determination and Notice of Determination  8.187
      • 4.  Computation and Notice of Benefit Amount  8.188
      • 5.  Protest of Computation  8.189
      • 6.  Reconsideration  8.190
      • 7.  Continued Claims  8.191
      • 8.  Overpayments and Penalties  8.192
    • I.  Administrative Review  8.193
    • J.  Judicial Review  8.194
  • VII.  FAMILY TEMPORARY DISABILITY INSURANCE  8.195

9

Notice-Posting, Training, and Recordkeeping Requirements

Margaret Hart Edwards

Michael Pedhirney

  • I.  INTRODUCTION  9.1
  • II.  POSTING REQUIREMENTS  9.2
    • A.  Postings Related to Wages, Hours, and Working Conditions
      • 1.  Federal Law
        • a.  Fair Labor Standards Act  9.3
        • b.  Davis-Bacon Act  9.4
        • c.  Walsh-Healey Public Contracts Act  9.5
        • d.  Service Contract Act  9.6
        • e.  Migrant and Seasonal Agricultural Worker Protection Act  9.7
        • f.  Shipping Act  9.8
        • g.  American Recovery and Reinvestment Act of 2009  9.8A
        • h.  National Labor Relations Act  9.8B
      • 2.  California Law
        • a.  Payday Notice  9.9
        • b.  Security for Payroll: Certain Occupations  9.10
        • c.  Labor Disturbances  9.11
        • d.  Wage Orders  9.12
        • e.  California MW-2017 Minimum Wage Poster  9.13
        • f.  California Sick Leave  9.14
    • B.  LHWCA and Workers’ Compensation Postings
      • 1.  Federal Longshore and Harbor Workers’ Compensation Act  9.15
      • 2.  California Workers’ Compensation Act  9.16
    • C.  Occupational Safety and Health Postings  9.17
      • 1.  General Posting Requirements Under Cal/OSHA
        • a.  Overall Safety and Health Obligations in the Workplace  9.18
        • b.  Hazardous Substances  9.19
        • c.  Posting of Citations  9.20
        • d.  Posting After Investigation of Accident  9.21
        • e.  Notice of Exposure  9.22
        • f.  Annual Summary  9.23
        • g.  Notice of Unsafe Condition  9.24
        • h.  Notice of Access to Medical and Exposure Records  9.25
        • i.  Permits  9.26
        • j.  Injury and Illness Prevention Program Code of Safe Practices  9.27
        • k.  Emergency Action Plan and Telephone Numbers  9.28
        • l.  Fire Protection Plan  9.29
        • m.  Smoking Prohibition  9.30
      • 2.  Chart: Specific Posting Requirements for Certain Industries or Activities  9.31
    • D.  Antidiscrimination Law Postings
      • 1.  Federal Law
        • a.  Civil Rights Act of 1964, Title VII  9.32
        • b.  Age Discrimination in Employment Act  9.33
        • c.  Americans With Disabilities Act  9.34
      • 2.  California Fair Employment and Housing Act  9.35
    • E.  Affirmative Action Notice Postings
      • 1.  Under Executive Order No. 11246  9.36
      • 2.  For Vietnam Era Veterans  9.37
      • 3.  For Individuals With Disabilities  9.38
    • F.  Leave-of-Absence Postings
      • 1.  Family and Medical Leave Act  9.39
      • 2.  California Family Rights Act  9.40
      • 3.  Pregnancy Leave  9.41
      • 4.  Family Temporary Disability Leave  9.42
      • 5.  State Disability Insurance and Unemployment  9.43
      • 6.  Military Leave  9.44
    • G.  Miscellaneous Postings
      • 1.  Federal Law
        • a.  Posting of ERISA Plan “Notice to Interested Parties” Required by IRS  9.45
        • b.  Employee Polygraph Protection Act  9.46
        • c.  Drug-Free Workplace Act  9.47
        • d.  Union Elections  9.48
        • e.  Intention to Use Foreign Nationals  9.49
      • 2.  State Law
        • a.  Time Off to Vote  9.50
        • b.  California Drug-Free Workplace Act of 1990  9.51
        • c.  Organizing Agricultural Workers  9.52
        • d.  Whistleblower Hotline  9.53
        • e.  Sex Trafficking  9.53A
      • 3.  Local Ordinances  9.54
  • III.  TRAINING REQUIREMENTS  9.55
    • A.  Ethics Training Under Sarbanes-Oxley and Foreign Corrupt Practices Act  9.56
    • B.  Drug-Free Workplace Act Training
      • 1.  Federal Drug-Free Workplace Act  9.57
      • 2.  California Drug-Free Workplace Act  9.58
    • C.  Safety Training
      • 1.  Federal OSHA  9.59
      • 2.  California OSHA  9.60
    • D.  Discrimination Prevention Training
      • 1.  California Sexual Harassment Prevention Training  9.61
      • 2.  Harassment Training for Farm Labor Contractors   9.61A
      • 3.  Protections for Janitorial Service Workers  9.61B
      • 4.  Human Trafficking Awareness Training for Hotel Employees   9.61C
      • 5.  Discrimination Prevention Training Generally  9.62
      • 6.  As Part of Affirmative Defense to Federal Claims  9.63
      • 7.  As Part of Affirmative Defense to California Law Discrimination Claims  9.64
      • 8.  As Defense Against Punitive Damages Under Federal Law  9.65
      • 9.  Affirmative Action Training Requirements  9.65A
    • E.  Health Insurance Portability and Accountability Act  9.66
  • IV.  RECORDKEEPING REQUIREMENTS  9.67
    • A.  Records Relating to Wages, Hours, and Working Conditions
      • 1.  Federal Law
        • a.  Fair Labor Standards Act  9.68
        • b.  Labor-Management Reporting and Disclosure Act  9.69
      • 2.  California Law
        • a.  Employee Wage Records  9.70
        • b.  Public Works Contractors  9.71
        • c.  Industrial Homeworkers  9.72
        • d.  Garment Manufacturing  9.73
        • e.  Car Wash and Polishing  9.73A
        • f.  Janitorial Service Workers  9.73B
        • g.  Records for Unemployment Insurance Purposes  9.74
        • h.  Gratuities  9.75
        • i.  Employment of Minors  9.76
        • j.  Wage Orders  9.77
        • k.  Deductions From Cash Payment of Wages  9.78
    • B.  Occupational Safety and Health Records
      • 1.  Federal OSHA Form 300  9.79
      • 2.  California Occupational Safety and Health Act  9.80
        • a.  Monitoring Exposure to Hazardous Materials  9.81
        • b.  Training Records  9.82
        • c.  Records of Illnesses and Injuries  9.83
        • d.  Records of Workers’ Compensation Claims
          • (1)  Claim File  9.84
          • (2)  Claim Log  9.85
    • C.  Records Relating to Antidiscrimination Laws
      • 1.  Federal Law
        • a.  Records of Title VII Actions  9.86
        • b.  Records Required by ADEA  9.87
        • c.  Records Required by ADA  9.88
        • d.  Records Required by GINA  9.88A
      • 2.  California Law
        • a.  Records Required by FEHA  9.89
        • b.  Records for Monitoring Wage Discrimination on Basis of Gender, Race, or Ethnicity  9.90
    • D.  Affirmative Action Records Required of Government Contractors
      • 1.  Records Relating to Required Affirmative Action Programs  9.91
      • 2.  Records Relating to Veterans and Individuals With Disabilities  9.92
    • E.  Records Relating to Family and Medical Leave
      • 1.  FMLA Requirements  9.93
      • 2.  CFRA Requirements  9.94
    • F.  Tax Records
      • 1.  Federal Law
        • a.  Records Relating to Taxable Income  9.95
        • b.  Income Tax Withholding Records  9.96
        • c.  Federal Unemployment Tax Records  9.97
        • d.  FICA Contributions Records  9.98
      • 2.  California Income Tax Records  9.99
    • G.  Miscellaneous Recordkeeping Requirements
      • 1.  Federal Law
        • a.  Records Related to Immigration Law  9.100
        • b.  Polygraph Test Records  9.101
        • c.  Supply Contractor Records (Walsh-Healey Act)  9.102
        • d.  Service Contractor Records (Service Contract Act)  9.103
        • e.  Contractor Records (Davis-Bacon Act)  9.104
        • f.  Records on Migrant and Seasonal Agricultural Workers  9.105
        • g.  Shipping Records  9.106
        • h.  Records Relating to ERISA Benefits  9.107
        • i.  Bioterrorism Preparedness Act  9.108
        • j.  Fair and Accurate Credit Transactions Act of 2003  9.109
        • k.  HIPAA Records  9.110
      • 2.  California Law
        • a.  California Public Work Contracts  9.111
        • b.  Specialized Employers  9.112
    • H.  Additional Recordkeeping Recommendations
      • 1.  Chart: Retention of Personnel Records  9.113
      • 2.  Records Not to Be Kept in Personnel File  9.114
      • 3.  Spoliation of Evidence  9.115
    • I.  Chart: Summary of Posting Requirements  9.116
    • J.  Chart: Summary of Recordkeeping and Retention Requirements  9.117

10

Employee Handbooks

Denise N. Brucker

Lisa A. Frank

William B. Sailer

  • I.  INTRODUCTION
    • A.  Scope of Chapter  10.1
    • B.  Employee Handbooks Distinguished From Personnel Policy Manuals  10.2
    • C.  Advantages and Disadvantages  10.3
  • II.  LEGAL EFFECT OF EMPLOYEE HANDBOOKS
    • A.  Effect of Employer’s Policies on Employment Contract  10.4
    • B.  At-Will Disclaimers and Employee Handbooks  10.5
      • 1.  Contractual Effect of Handbook Receipt  10.6
        • a.  Agreement to At-Will Employment  10.7
        • b.  Disclaimer of Other Agreements  10.8
      • 2.  Form: Employee Handbook Receipt Acknowledgment  10.9
  • III.  POLICIES TO INCLUDE IN THE EMPLOYEE HANDBOOK
    • A.  Assessing Current Policies for Inclusion in Handbook  10.10
    • B.  Checklist: Potential Inclusions  10.11
    • C.  Introductory Comments  10.12
    • D.  Equal Employment Opportunity
      • 1.  Compliance With Statutory Prohibitions  10.13
      • 2.  Form: Equal Opportunity Employment Policy  10.14
    • E.  Employment At Will
      • 1.  Reaffirmation of Policy  10.15
      • 2.  Form: At-Will Employment Policy  10.16
    • F.  Introductory Period
      • 1.  May Create Implied-in-Fact Contract of Employment  10.17
      • 2.  Form: Introductory Period Policy  10.18
    • G.  Policy Against Discrimination, Harassment and Retaliation
      • 1.  Governing Law  10.19
      • 2.  Guidelines for Drafting a Policy Against Discrimination, Harassment, and Retaliation  10.20
    • H.  Dispute Resolution Policy
      • 1.  Advisability of Inclusion; Caveats  10.21
      • 2.  Guidelines for Drafting Dispute Resolution Policy  10.22
    • I.  Confidential Information  10.23
    • J.  Inspection of Work Stations, Personal Belongings, or Electronic Data  10.24
    • K.  Pay Policies and Practices
      • 1.  Employee Classifications  10.25
      • 2.  Work Hours, Payroll, and Other Issues  10.26
    • L.  Lactation Breaks for Nursing Mothers  10.26A
    • M.  Employee Benefits  10.27
    • N.  Leave Policies  10.28
    • O.  Employment of Relatives  10.29
    • P.  Regulation of Outside Employment  10.30
    • Q.  Standards of Performance and Conduct
      • 1.  Topics to be Covered in Handbook
        • a.  Punctuality and Attendance  10.31
        • b.  Solicitation Rules  10.32
        • c.  Dress and Grooming Standards  10.33
        • d.  Customer Relations  10.34
        • e.  Use of Drugs and Alcohol  10.35
        • f.  Performance Reviews and Evaluations  10.36
      • 2.  General Considerations Regarding Standards of Performance, Discipline, and Termination  10.37
        • a.  Specific Drafting Guidelines  10.38
        • b.  Form: Performance Standards; Misconduct, Discipline, and Termination  10.39
    • R.  References  10.40
    • S.  Policies Relating to Workplace Safety and Health
      • 1.  Workplace Safety Program
        • a.  Required Elements  10.41
        • b.  Guidelines for Drafting Workplace Safety Policy  10.42
      • 2.  Workplace Violence
        • a.  OSHA Guidelines  10.43
        • b.  Drafting Workplace Violence Policy  10.44
      • 3.  Smoking in the Workplace  10.45
      • 4.  Cell Phone and Wireless Devices Policy  10.46

11

Trade Secrets Protection and Unfair Competition

Sean A. O’Brien

  • I.  IMPORTANCE OF PROTECTING TRADE SECRETS AND PREVENTING UNLAWFUL COMPETITIVE BUSINESS PRACTICES  11.1
  • II.  FEDERAL DEFEND TRADE SECRETS ACT OF 2016; IMPACT ON EXISTING STATE TRADE SECRETS LAW   11.1A
  • III.  THE UNIFORM TRADE SECRETS ACT  11.2
    • A.  Defining “Trade Secret” Under UTSA  11.3
      • 1.  Information That Has Economic Value Because Not Generally Known
        • a.  In General  11.4
        • b.  Customer List/Information Cases  11.5
        • c.  Professional or New Job Announcement Exception  11.5A
        • d.  Special Rules for Financial Advisors and Brokers Subject to FINRA: The “Protocol for Broker Recruiting”  11.5B
      • 2.  Reasonable Efforts to Maintain Secrecy  11.6
      • 3.  TROs and Preliminary Injunctions—A Word of Caution [Deleted]  11.6A
    • B.  Defining Misappropriation Under UTSA; How Misappropriation Can Occur and Who Can Be Liable  11.7
      • 1.  Requirement That Misappropriating Party Actually “Use” or “Disclose” Trade Secret  11.7A
      • 2.  Reverse Engineering Not Misappropriation  11.8
      • 3.  Avoiding Misappropriation When Hiring Competitor’s Employees  11.9
      • 4.  Inevitable Disclosure Doctrine  11.10
      • 5.  Obtaining Personal Jurisdiction Over Out-of-State Defendants [Deleted]  11.11
    • C.  Loss of Trade Secret Protection Through Public Disclosure  11.12
      • 1.  Through Publication on the Internet or in Trade Journals  11.13
      • 2.  Through Patent Applications  11.14
      • 3.  Under Copyright Laws  11.15
      • 4.  Disclosure to Governmental Agencies Under Disclosure Laws  11.16
      • 5.  Disclosure Through Licensing Agreements  11.16A
      • 6.  Inadvertent Disclosure in Litigation or to Third Parties  11.17
      • 7.  Form: Protective Language for Submissions  11.18
    • D.  Security Measures to Protect Trade Secrets  11.19
      • 1.  When Hiring or Contracting With Another
        • a.  Areas of Concern  11.20
        • b.  Use of Indemnity Agreements  11.20A
        • c.  Conflicts of Interest  11.20B
        • d.  Form: Sample Offer or Hire Letter to New Employee  11.21
        • e.  Safeguard Measures  11.22
      • 2.  During Period of Employment or Contractual Relationship  11.23
        • a.  Use of Confidentiality, Nondisclosure, and Antisolicitation Agreements  11.24
        • b.  Identification of Trade Secret Information  11.25
        • c.  Implementation of Plant and Workplace Security Procedures  11.26
        • d.  Use of Confidential Stamps and Legends  11.27
        • e.  Use of Confidentiality or Secrecy Agreements With Customers, Clients, and Third Parties  11.28
        • f.  Information Inadvertently Disclosed to Others  11.29
        • g.  Protecting Digital or Electronically Stored Information; Computer Database Security Measures  11.30
        • h.  Importance of Implementing “BYOD” Policies  11.30A
        • i.  Other Technological Issues  11.31
        • j.  Forms for Ensuring Confidentiality and Nondisclosure
          • (1)  Form: Visitor Log-In  11.32
          • (2)  Form: Receipt Acknowledgment  11.33
          • (3)  Form: Confidentiality Legend  11.34
          • (4)  Form: Sample Approval of Information Release  11.35
          • (5)  Form: Notice for Facsimile Transmission  11.36
      • 3.  When Terminating Employment or Contractual Relationship  11.37
        • a.  Exit Interview: Reaffirmation of Confidentiality Obligations Through “Termination Certificate”  11.38
        • b.  Form: Employee Termination Certificate  11.38A
        • c.  Letter to Exiting Employee’s New Employer and to Existing Customers  11.39
        • d.  Form: Letter to Employee Confirming Exit Interview  11.40
        • e.  Form: Letter to New Employer  11.41
      • 4.  Investigation of Employees and Privacy Concerns  11.41A
        • a.  Eavesdropping, Recording Telephone Conversations, Video Surveillance, and Use of GPS Tracking Devices  11.41B
        • b.  Monitoring and Retrieving Computer Data or Accessing Employee’s Private Social Media or E-mail Accounts  11.41C
        • c.  Discovery From Third Parties Into Social Media Sites and Private Internet or “Cloud” Accounts  11.41D
        • d.  Searching Property, Offices, and Trash  11.41E
        • e.  Interrogating Persons; Physical Searches  11.41F
        • f.  Pretexting: Obtaining Personal Information Through False Pretenses  11.41G
        • g.  Use of Private Investigators  11.41H
        • h.  Form: Company Policy for Use of Company Computers, Internet, E-Mail, and Personal or Cloud-Based Electronic Storage Devices   11.41I
    • E.  Remedies Available to Plaintiff Whose Trade Secrets Have Been Misappropriated  11.42
    • F.  Recovery of Attorney Fees and Prejudgment Interest in Trade Secret Litigation  11.42A
    • G.  TROs, Preliminary Injunctions, and Expedited Discovery: A Word of Caution  11.42B
    • H.  Asserting Claims for Trade Secret Misappropriation in Litigation: The Compulsory Counterclaim Trap for the Unwary  11.42C
    • I.  Obtaining Personal Jurisdiction Over Out-of-State Defendants in Trade Secret/Unfair Competition Litigation  11.42D
    • J.  Use and Enforceability of Employment-Related Arbitration Contracts in Trade Secret Litigation  11.42E
    • K.  Protecting Against Unwanted Disclosure During Litigation
      • 1.  Disclosure of Trade Secrets at Outset of Case
        • a.  Trade Secret Must Be Identified With Reasonable Particularity  11.43
        • b.  Requisite Degree of Specificity  11.43A
      • 2.  Protective Orders  11.44
      • 3.  Sealing of Court Records  11.44A
      • 4.  Trade Secret Privilege  11.45
      • 5.  Preservation of Trade Secrets and Evidence  11.46
      • 6.  Managing the Burden and Expense of Electronic Discovery  11.46A
      • 7.  Protocols for Conducting Forensic Discovery of Electronic/Digital Stored Information  11.46B
    • L.  Insurance Coverage for Defense of Trade Secret Misappropriation and Unfair Competition Claims  11.47
    • M.  Employer’s Duty to Defend and Indemnify the Newly Hired Employee  11.47A
  • IV.  EMPLOYEE INVENTIONS
    • A.  Overview of Trade Secret and Invention Ownership Law  11.48
    • B.  Contractual Assignments of Employee/Independent Contractor Inventions  11.49
    • C.  Enforcement of Ownership Rights  11.50
  • V.  CONTRACTUAL RESTRAINTS ON COMPETITION AND THEIR ENFORCEABILITY  11.51
    • A.  Covenants Not to Compete  11.52
    • B.  Attempts to Circumvent California’s Strong Public Policy Against Covenants Not to Compete
      • 1.  “Sham” Employee Stock Sale or Repurchase Transactions  11.53
      • 2.  Postemployment “Forfeiture” of Benefits  11.54
      • 3.  Use of Choice of Law, Forum Selection, or Contractual Arbitration Clauses  11.55
        • a.  Choice of Law  11.55A
        • b.  Forum Selection Clauses and Their Enforceability  11.55B
        • c.  Contractual Arbitration  11.55C
      • 4.  Use of Narrowly Drawn Noncompete Provisions  11.56
    • C.  Antisolicitation Agreements
      • 1.  Employee Solicitation and No-Hire/No-Poaching Agreements  11.57
      • 2.  Customer Solicitation  11.58
    • D.  Confidentiality Agreements and Covenants Not to Disclose  11.59
    • E.  Remedies for Breach of Contractual Restraints  11.60
  • VI.  STATUTORY UNFAIR COMPETITION CLAIMS AND BUSINESS-RELATED TORTS  11.61
    • A.  Preemption by UTSA  11.61A
    • B.  Statutory Unfair Competition (Bus & P C §§17200–17210)  11.62
    • C.  Criminal Sanctions for Theft of Trade Secrets  11.63
    • D.  Common Law Misappropriation  11.64
    • E.  Breach of Confidence  11.65
    • F.  Inducing Breach of Contract; Interference With Prospective Business and Economic Advantage  11.65A
      • 1.  Tortious Interference With Contractual Relations  11.66
      • 2.  Tortious Interference With Prospective Economic or Business Relations  11.67
    • G.  Breach of Fiduciary Duty and Duty of Loyalty  11.68
      • 1.  Competing With Company  11.69
      • 2.  Corporate Opportunity Doctrine  11.70
      • 3.  Constructive Fraud Based on Fiduciary Relationship  11.71
    • H.  Trade Libel  11.72
    • I.  Conversion of Personal Property  11.73
    • J.  Civil Remedies for Theft, Destruction, or Misuse of Computer Data  11.74
    • K.  Civil Conspiracy and Aiding and Abetting Liability  11.74A
  • VII.  EMPLOYEE AGREEMENT: PROPRIETARY INFORMATION AND ASSIGNMENT OF INVENTIONS
    • A.  General Comment  11.75
    • B.  Form: Short Agreement for Protection of Proprietary Information  11.76
    • C.  Form: Long Agreement for Protection of Proprietary Information and Assignment of Inventions
      • 1.  Form: Introductory Provisions  11.77
      • 2.  Form: Definitions  11.78
      • 3.  Form: Duty of Trust and Confidentiality  11.79
      • 4.  Form: No Disclosure or Misappropriation of Proprietary Information  11.80
      • 5.  Provisions Regarding Invention Assignment
        • a.  Form: Assignment of Proprietary Information and Inventions  11.81
        • b.  Form: Proprietary Right Registrations; Execution of Necessary Documents  11.82
        • c.  Form: Exception to Assignment of Inventions  11.83
        • d.  Form: Disclosure of Inventions and Maintenance of Records  11.84
      • 6.  Form: Provisions Regarding Noncompetition and Nonsolicitation
        • a.  Form: Conflicting Employment or Business Opportunities  11.85
        • b.  Form: Nonsolicitation of Employees  11.86
        • c.  Form: Nonsolicitation of Customers  11.87
        • d.  Form: Noncompetition  11.88
      • 7.  Provisions Regarding Obligations on Termination of Employment
        • a.  Form: Returning Company Documents and Other Tangible Items  11.89
        • b.  Form: Reaffirmation of Obligations on Termination of Employment  11.90
        • c.  Form: Notification to New Employer  11.91
      • 8.  Miscellaneous Provisions
        • a.  Form: Representations and Warranties  11.92
        • b.  Form: At-Will Employment  11.93
        • c.  Form: Equitable Remedies  11.94
        • d.  Form: Choice of Law  11.95
        • e.  Form: Enforceability and Severability  11.96
        • f.  Form: No Waiver  11.97
        • g.  Form: Attorney Fees  11.98
        • h.  Form: Amendment and Modification  11.99
        • i.  Form: Entire Agreement  11.100
        • j.  Form: Successors and Assigns  11.101
        • k.  Form: Word Usage  11.102
        • l.  Form: Exhibits  11.103
        • m.  Form: Effective Date  11.104
      • 9.  Form: Conclusion  11.105
      • 10.  Form: Execution  11.106
      • 11.  Form: Exhibit A—California Labor Code §2870  11.107
      • 12.  Form: Exhibit B—Existing Inventions and Improvements  11.108
      • 13.  Form: Exhibit C—Termination Certificate  11.109

12

Workplace Safety

Fred Walter

Lisa Prince

  • I.  SCOPE OF CHAPTER  12.1
  • II.  NEW AND NOTEWORTHY  12.1A
  • III.  FEDERAL OVERVIEW
    • A.  Applicable Law: The Occupational Safety and Health Act of 1970
      • 1.  General Mandate to Employers; Historical Context  12.2
      • 2.  Jurisdiction  12.3
      • 3.  Federal Preemption; Cal/OSHA  12.4
    • B.  Navigating the Federal OSHA  12.5
      • 1.  Rulemaking  12.6
      • 2.  Enforcement  12.7
      • 3.  Adjudication and Administrative Appeals  12.8
        • a.  Appeals of Administrative Hearing Officer’s Decisions  12.9
        • b.  Appeals of Commission Decisions  12.10
  • IV.  NAVIGATING CAL/OSHA
    • A.  Applicable Law: California Occupational Safety and Health Act of 1973
      • 1.  General Mandate to Employers  12.11
      • 2.  Scope of Act  12.12
      • 3.  Regulatory and Administrative Scheme  12.13
    • B.  Occupational Safety and Health Standards Board
      • 1.  Authority and Composition  12.14
      • 2.  Adoption of Standards  12.15
      • 3.  Employer-Requested Variances
        • a.  Permanent Variance  12.16
          • (1)  Applying for Interim Variance [Deleted]  12.17
          • (2)  Before Hearing  12.18
            • (a)  Disqualification of Hearing Officer  12.19
            • (b)  Prehearing Motions, Discovery, and Evidence  12.20
          • (3)  Hearing Procedure  12.21
            • (a)  Party Representation  12.22
            • (b)  Admission of Evidence During Hearing  12.23
            • (c)  Continuances and Defaults  12.24
          • (4)  Posthearing Procedure  12.25
        • b.  Requesting Temporary Variances  12.26
          • (1)  Hearings  12.27
          • (2)  Appeals of Temporary Variances  12.28
    • C.  The Division of Occupational Safety and Health  12.29
      • 1.  Investigations Following Workplace Injury, Illness, or Death
        • a.  Notification of Serious Injury or Illness or Death  12.30
        • b.  Complaints About the Workplace  12.31
          • (1)  Formal Complaints  12.31A
          • (2)  Informal Complaints  12.31B
          • (3)  Discrimination  12.31C
      • 2.  Bureau of Investigations  12.32
      • 3.  Workplace Inspections
        • a.  Basis for Inspections  12.33
        • b.  Inspection Process  12.34
        • c.  Pros and Cons of Insisting on a Warrant  12.35
      • 4.  Citations
        • a.  Issuance of Serious Citation (1BY Letter)  12.35A
        • b.  Grounds for Issuance  12.36
        • c.  Multiemployer Worksite Liability  12.37
          • (1)  Exposing Employer Defense  12.37A
          • (2)  Controlling Employer "Due Diligence” Defense  12.37B
        • d.  Types and Degrees of Violations: Regulatory Definitions
          • (1)  Willful Violation  12.38
          • (2)  Repeat Violation  12.39
          • (3)  Serious Violation  12.40
          • (4)  General Violation  12.41
          • (5)  Regulatory Violation  12.42
        • e.  Notice in Lieu of Citation  12.43
        • f.  Information Memorandum  12.44
        • g.  Orders and Special Orders
          • (1)  Temporary Restraining Orders  12.45
          • (2)  Order Prohibiting Use  12.46
            • (a)  Notice Procedure  12.47
            • (b)  Contesting Order  12.48
          • (3)  Special Orders  12.49
      • 5.  Order to Take Special Action  12.50
      • 6.  Posting Requirements  12.51
      • 7.  Civil Penalties
        • a.  Service of Notice of Proposed Penalty  12.52
        • b.  Amounts of Civil Penalties  12.53
          • (1)  Basis for Assessing Penalty Amounts  12.54
          • (2)  Penalty Adjustment: Abatement Credit and Waiver  12.55
          • (3)  Chart: Violations Subject to Fixed Penalties or Mandatory Minimums  12.56
        • c.  Abatement  12.57
        • d.  Failure to Pay Civil Penalties  12.58
      • 8.  Criminal Penalties  12.59
        • a.  Summary: Criminal Liability Under Cal/OSHA  12.60
        • b.  Corporate Criminal Liability Act  12.61
  • V.  APPEALING CAL/OSHA CITATIONS
    • A.  Filing an Appeal
      • 1.  California Occupational Safety and Health Appeals Board  12.62
      • 2.  Initiating Appeal  12.62A
    • B.  Appealable Issues and Posting Requirements  12.63
    • C.  Expedited Hearing Process  12.63A
    • D.  Prehearing Procedure  12.64
    • E.  Settlement  12.65
    • F.  Mandatory Settlement Conference [Deleted]  12.65A
    • G.  Discovery  12.66
    • H.  The Hearing  12.67
      • 1.  Representation, Evidence, Oral and Written Argument  12.68
      • 2.  Failure to Appear  12.69
      • 3.  Division’s Burden  12.70
    • I.  Defenses to Citations  12.71
      • 1.  Independent Employee Act  12.72
      • 2.  Unforeseeable Isolated Employee Act  12.73
      • 3.  Void for Vagueness  12.74
      • 4.  Exposing Employer Defense  12.75
      • 5.  Logical Time Not Yet Reached  12.75A
    • J.  Findings and Order  12.75B
    • K.  Petition for Reconsideration  12.76
      • 1.  Grounds for Reconsideration  12.77
      • 2.  Pleadings, Service Requirements, Answer  12.78
      • 3.  Disposition of Petition  12.79
    • L.  Appealing an OSHAB Decision
      • 1.  Prerequisite of Exhaustion of Administrative Remedies  12.80
      • 2.  Application for Writ of Mandate  12.81
      • 3.  Review by Superior Court  12.82
    • M.  Costs  12.83
  • VI.  INJURY AND ILLNESS PREVENTION PROGRAMS
    • A.  Overview  12.84
    • B.  Requirements
      • 1.  Generally  12.85
      • 2.  Recordkeeping Requirements  12.86
      • 3.  Employers With Fewer Than 20 Employees  12.87
      • 4.  Communicating With Employees  12.88
      • 5.  Joint Labor-Management Safety and Health Committees  12.89
      • 6.  Procedures for Enforcement of IIPP  12.90
      • 7.  Chart: Summary of Employer Duties Under the IIPP and Other Laws  12.91
      • 8.  Trade Secret Preservation When Employee Requests Medical Records  12.92
      • 9.  IIPP Compliance Checklist  12.93
  • VII.  HAZARDOUS SUBSTANCES INFORMATION AND TRAINING ACT
    • A.  Navigating the Act  12.94
      • 1.  Who Is Covered  12.95
      • 2.  When It Applies  12.96
      • 3.  Exemptions From the Act  12.97
    • B.  Safety Data Sheets (SDS)  12.98
      • 1.  Information Required  12.99
      • 2.  Exceptions to Providing SDS  12.100
      • 3.  California Hazard Communication Standard (8 Cal Code Regs §5194)  12.101
        • a.  Hazard Communication Program  12.102
        • b.  Duty to Collect SDSs for Hazardous Substances  12.103
        • c.  Notice to Employees  12.104
        • d.  Form: Notice to Employees of Right to SDSs  12.105
        • e.  Employee Training  12.106
        • f.  Employer Labeling  12.107
  • VIII.  CAL/OSHA FORM 300 LOG AND ANNUAL SUMMARY
    • A.  Log of Occupational Injuries and Illnesses  12.108
      • 1.  Recordable Illnesses and Injuries  12.109
      • 2.  Contents of Cal/OSHA Form 300  12.110
      • 3.  Completing the Injury and Illness Incident Report (Cal/OSHA Form 301)  12.111
    • B.  Annual Summary: Cal/OSHA Form 300A  12.112
    • C.  Reporting Occupational Injury and Illness  12.113
  • IX.  SUMMARY OF EMPLOYEE SAFETY AND HEALTH RIGHTS  12.114
  • X.  OTHER WORKPLACE HEALTH AND SAFETY ISSUES
    • A.  Smoking in the Workplace  12.115
      • 1.  Employer Duties  12.116
      • 2.  Places of Employment  12.116A
      • 3.  Places of Employment Not Covered  12.117
      • 4.  Applicable Penalties  12.118
    • B.  Prevention of Workplace Violence
      • 1.  Workplace Violence Prevention in Healthcare  12.118A
      • 2.  Other Theories of Liability  12.119
      • 3.  Workplace Violence Safety Act  12.120
      • 4.  Gun Violence Restraining Orders  12.120A
      • 5.  Preventive Measures  12.121
    • C.  Workplace Ergonomic Requirements
      • 1.  Application  12.122
      • 2.  Required Program  12.123
  • XI.  USE OF CAL/OSHA CITATIONS IN CIVIL LITIGATION  12.124

13

Workplace Privacy

Everett F. Meiners

  • I.  SCOPE OF CHAPTER  13.1
  • II.  CONSTITUTIONAL, STATUTORY, AND COMMON LAW PRIVACY ISSUES
    • A.  United States Constitutional Privacy Protections  13.2
    • B.  California Constitutional Privacy Protections  13.3
    • C.  Statutory Law Privacy Rights  13.3A
    • D.  Common Law Privacy Rights  13.4
      • 1.  Unreasonable Intrusion Into Private Affairs  13.5
      • 2.  Public Disclosure of Private Facts About an Individual  13.6
      • 3.  False-Light Publicity  13.7
      • 4.  Unauthorized Appropriation of an Individual’s Name or Likeness  13.8
    • E.  Contractual Theories of Recovery  13.9
  • III.  SPECIFIC INFORMATION-GATHERING PRACTICES INVOLVING EMPLOYEE PRIVACY ISSUES
    • A.  Criminal History Inquiries
      • 1.  Inquiries Regarding Convictions  13.10
      • 2.  Arrests Versus Convictions  13.10A
      • 3.  Remedies  13.11
    • B.  Fingerprints and Photographs  13.12
    • C.  Polygraph Examinations
      • 1.  Federal Law
        • a.  Application of Employee Polygraph Protection Act  13.13
        • b.  Limited Use of Polygraph Procedure  13.14
        • c.  Remedies  13.15
      • 2.  California Law  13.16
      • 3.  Summary of Factors to Consider Before Implementing Polygraph Testing  13.17
      • 4.  Form: Polygraph Consent Form  13.18
    • D.  Voice Stress Analysis  13.19
    • E.  Psychological and Integrity Tests  13.20
    • F.  Eavesdropping on or Recording Confidential Communications
      • 1.  Federal Law  13.21
        • a.  Consent Exception  13.22
        • b.  Business Extension Exception  13.23
        • c.  Remedies  13.24
      • 2.  California Law
        • a.  Activities Prohibited  13.25
        • b.  Wiretapping  13.26
        • c.  Eavesdropping  13.27
        • d.  Penalties for Wiretapping or Eavesdropping  13.28
        • e.  Monitoring Employee’s Telephone Calls With the Public  13.29
    • G.  Retrieval of E-Mail, Voice-Mail, and Employee Information on Company Computer
      • 1.  Restrictions on Access  13.30
      • 2.  Internet Content  13.31
      • 3.  Social Media and Blogging  13.32
      • 4.  Form: Sample Computer/E-Mail Usage Policy  13.33
    • H.  Use of Two-Way Mirrors, Surveillance Cameras, and Audio Recording  13.34
    • I.  Investigations and Use of Private Investigators
      • 1.  Guidelines for Disciplinary Investigations  13.35
      • 2.  Potential Claims for False Imprisonment  13.36
      • 3.  Potential Claims for False Arrest  13.37
      • 4.  Use of Private Investigators  13.38
    • J.  Use of Undercover Shoppers  13.39
    • K.  Workplace Searches
      • 1.  Constitutional Limitations
        • a.  Public Employers  13.40
        • b.  Private Employers  13.41
      • 2.  Practical Advice About Searches  13.42
      • 3.  Form: Workplace Search Policy  13.43
    • L.  Medical and Physical Examinations
      • 1.  Limitation Under Constitutional Privacy Protection  13.44
      • 2.  Limitation Under Common Law Privacy Protection  13.45
      • 3.  Potential Areas of Liability in Addition to Privacy Violation  13.46
      • 4.  Applicant Testing
        • a.  Constraints Imposed by FEHA and ADA  13.47
        • b.  HIV/AIDS Testing  13.48
    • M.  Medical Records
      • 1.  Federal Law  13.49
      • 2.  California Law
        • a.  Information Protected; Exceptions  13.50
        • b.  Written Authorization  13.51
        • c.  Waivers and Effect of Separate Policy or Agreement  13.52
        • d.  Penalties for Unauthorized Disclosure  13.53
        • e.  Special Rules for Health Care Providers and Insurance Transactions  13.54
        • f.  Employee Assistance Program Records: Confidentiality Versus Required Disclosure  13.55
        • g.  Access by Government Agencies  13.56
        • h.  Inspection by Employee Representatives; Union Inspection  13.57
    • N.  Drug and Alcohol Issues
      • 1.  Employee Participation in Rehabilitation Program  13.58
      • 2.  Drug Testing
        • a.  Drug-Free Workplace Acts for Public Employers and Contractors  13.59
        • b.  Types of Testing
          • (1)  Applicant Testing  13.60
          • (2)  Random Testing
            • (a)  Private Employers  13.61
            • (b)  Government Employees and Government Contractors  13.62
            • (c)  Automatic Postaccident Testing  13.63
          • (3)  Reasonable-Suspicion Testing  13.64
        • c.  Potential Areas of Liability  13.65
        • d.  Form: Sample Drug and Alcohol Policy  13.66
        • e.  Guidelines for Implementing Drug- and Alcohol-Testing Policy  13.67
        • f.  Employee Consent to Testing and Release of Results  13.68
        • g.  Form: Sample Consent to Drug and Alcohol Test  13.69
      • 3.  Adult Use of Marijuana and Compassionate Use Acts  13.69A
    • O.  Psychological Tests [Deleted]  13.70
    • P.  Checklist: Questions to Consider Before Implementing Any Form of Employee Testing  13.71
  • IV.  USE AND DISCLOSURE OF PRIVATE INFORMATION ABOUT EMPLOYEES
    • A.  Employee’s Right to Personnel Records  13.72
    • B.  Employee Rights Under the California Consumer Privacy Act   13.72A
    • C.  Financial Records  13.73
    • D.  Disclosure to Persons Other Than Employee
      • 1.  Disclosure to Union  13.74
      • 2.  Disclosures to Prospective Employers  13.75
      • 3.  Voluntary Disclosure to Government Officials  13.76
      • 4.  Internal Dissemination of Personnel Records  13.77
      • 5.  Mandatory Disclosures
        • a.  Required Disclosures to Government  13.78
        • b.  Subpoena Duces Tecum  13.79
    • E.  Negligent Maintenance of Employment Records  13.80
    • F.  Nondisclosure of Social Security Numbers  13.81
    • G.  Notice of Unauthorized Access  13.82
  • V.  ATTEMPTS TO REGULATE EMPLOYEE PERSONAL CHOICE
    • A.  Limitations  13.83
    • B.  Dress and Grooming Standards
      • 1.  Valid Reason Required  13.84
      • 2.  Form: Sample Dress and Grooming Policy  13.85
    • C.  Moonlighting
      • 1.  Prohibition May Be Legitimate  13.86
      • 2.  Form: Sample Outside Employment Policy  13.87
    • D.  Employment of Spouses, Relatives, or Cohabitants
      • 1.  Employer’s Policy May Prohibit  13.88
      • 2.  Form: Sample Policy on Employment of Relatives  13.89
    • E.  Workplace Romances  13.90
    • F.  Sexual Activities or Sexual Orientation
      • 1.  Constitutional and Statutory Limitations  13.91
      • 2.  Local Ordinances and Regulations  13.92
    • G.  Employee Communications  13.92A
    • H.  First Amendment Rights of Government Employees  13.93

14

Employer Liability for Acts of Employees

Joanie L. Roeschlein

Thomas G. Mackey

  • I.  TORT THEORIES OF EMPLOYER LIABILITY  14.1
    • A.  Agency Law—Employer Directs or Ratifies  14.2
    • B.  Negligent Hiring and Retention  14.3
    • C.  Respondeat Superior Doctrine  14.4
  • II.  WHO IS AN EMPLOYEE?
    • A.  Right-of-Control Test  14.5
    • B.  Borrowed and Leased Employees: Special and Dual Employment Situations  14.6
  • III.  TESTS FOR DETERMINING WHETHER TORTIOUS CONDUCT FALLS WITHIN SCOPE OF EMPLOYMENT
    • A.  General Rules and Interpretive Decisions
      • 1.  Interests of Employer Versus Employee’s Personal Motives  14.7
      • 2.  Narrowing of Scope of Respondeat Superior Liability  14.8
    • B.  Test to Determine Whether Injurious Conduct Falls Within Scope of Employment  14.9
      • 1.  Comparison to Workers’ Compensation Test  14.10
        • a.  The Going-and-Coming Rule  14.11
          • (1)  Special Mission Requested by Employer  14.12
          • (2)  Exception to Going-and-Coming Rule When Travel Time Is Compensated  14.13
          • (3)  Exception When Employer Substantially Benefits  14.14
          • (4)  Exception When Use of Automobile Is Required  14.15
          • (5)  Exception for Social Functions  14.16
          • (6)  Work-Related Risk  14.17
        • b.  Off-Duty and Break-Time Conduct  14.18
        • c.  Personal Business and Errands  14.19
        • d.  Use of Cell Phones or Other Mobile Devices  14.19A
      • 2.  Violation of Employer’s Rules and Regulations  14.20
  • IV.  LIABILITY FOR ACTIONS OF INDEPENDENT CONTRACTORS
    • A.  General Rule of No Liability  14.21
    • B.  Exception for Peculiar Risks  14.22
    • C.  Exception for Nondelegable Duties  14.23
    • D.  Possible Exception for Intentional Torts  14.24
  • V.  DAMAGES
    • A.  Availability of Punitive Damages Against Employer  14.25
    • B.  Noneconomic Damages Under Proposition 51: Joint and Several Liability  14.26
  • VI.  EMPLOYER LIABILITY FOR CONTRACTS ENTERED INTO BY EMPLOYEES
    • A.  Actual Authority
      • 1.  May Be Expressed or Implied  14.27
      • 2.  Equal Dignities Rule  14.28
    • B.  Ostensible Authority  14.29
    • C.  Ratification of Contracts  14.30
    • D.  Undisclosed Principal  14.31
    • E.  Employer’s Liability for Contracts in Excess of Employee’s Authority  14.32
    • F.  Employee-Agent’s Liability to Third Party  14.33
  • VII.  EMPLOYEE-AGENT’S RIGHT TO INDEMNIFICATION FROM EMPLOYER  14.34
  • VIII.  CORPORATE EMPLOYER’S LIABILITY FOR CRIMINAL ACTS OF EMPLOYEES  14.35

15

Discrimination and Harassment

Teresa R. Tracy

  • I.  OVERVIEW  15.1
  • II.  PRINCIPAL STATUTES AND ORDERS
    • A.  Tables: Common Acronyms and Abbreviations  15.1A
    • B.  Federal Laws  15.2
      • 1.  Civil Rights Act of 1964 (Title VII)
        • a.  Coverage: Employers and Employees  15.3
        • b.  Persons Who Are Typically Not Employees  15.3A
          • (1)  Partners  15.3B
          • (2)  Board Members  15.3C
          • (3)  Independent Contractors  15.3D
          • (4)  Volunteers  15.3E
        • c.  Foreign Employment Issues  15.4
        • d.  What Is Prohibited  15.5
        • e.  Special Issues Relating to Race and Color  15.5A
        • f.  Special Issues Relating to Religion  15.5B
        • g.  Special Issues Relating to Sex, Pregnancy, Sexual Orientation, and Gender Identity  15.5C
        • h.  Special Issues Relating to National Origin  15.5D
        • i.  Exceptions
          • (1)  Particular Organizations and Employees  15.6
          • (2)  Bona Fide Occupational Qualification  15.7
            • (a)  Customer Preferences Typically Do Not Excuse Discrimination  15.8
            • (b)  Employee Safety May Excuse Discrimination  15.9
          • (3)  Other Exceptions  15.10
      • 2.  Civil Rights Act of 1866: Contracts and Race (§1981)
        • a.  Coverage Broadened by Civil Rights Act of 1991  15.11
        • b.  What Is Prohibited  15.12
        • c.  Exceptions  15.13
      • 3.  Civil Rights Act of 1871 (§1983)
        • a.  Coverage  15.14
        • b.  What Is Prohibited  15.15
        • c.  Exceptions  15.16
      • 4.  Civil Rights Act of 1871 (§1985)  15.17
      • 5.  Equal Pay Act of 1963
        • a.  Coverage  15.18
        • b.  What Is Prohibited  15.19
        • c.  Exceptions  15.20
      • 6.  Lilly Ledbetter Fair Pay Act of 2009  15.20A
      • 7.  Age Discrimination in Employment Act
        • a.  Coverage  15.21
        • b.  What Is Prohibited  15.22
        • c.  Additional Protections of OWBPA  15.23
        • d.  Exceptions
          • (1)  Seniority System, Benefit Plan, Retirement Incentives  15.24
          • (2)  Efficiency and Safety Concerns  15.25
          • (3)  Other Factors  15.26
        • e.  Defenses  15.27
      • 8.  Immigration Reform and Control Act of 1986
        • a.  Coverage  15.28
        • b.  What Is Prohibited  15.29
        • c.  Exceptions  15.30
      • 9.  Americans with Disabilities Act
        • a.  Coverage  15.30A
        • b.  What Is Prohibited  15.30B
      • 10.  Genetic Information Nondiscrimination Act of 2008
        • a.  Coverage  15.30C
        • b.  What Is Prohibited  15.30D
      • 11.  Rehabilitation Act of 1973  15.30E
        • a.  Coverage  15.30F
        • b.  What Is Prohibited  15.30G
      • 12.  First Amendment Issues  15.30H
    • C.  California Laws
      • 1.  Fair Employment and Housing Act
        • a.  Coverage
          • (1)  Employers  15.31
          • (2)  Employees  15.31A
          • (3)  Partners  15.31B
          • (4)  Special Rules for Religious Entities  15.32
        • b.  What Is Prohibited  15.33
          • (1)  Issues Relating to Age  15.34
          • (2)  Issues Relating to Physical or Mental Disability  15.35
          • (3)  Issues Relating to Medical Condition  15.36
          • (4)  Issues Relating to Religion  15.37
          • (5)  Issues Relating to Marital Status  15.38
          • (6)  Issues Relating to Sexual Orientation  15.39
          • (7)  Issues Relating to Gender Expression, Gender Identity, and Sex Stereotype  15.40
          • (8)  Issues Relating to Military and Veteran Status  15.40A
          • (9)  Issues Relating to National Origin  15.40B
          • (10)  Release of a Claim or Right Under FEHA  15.40C
        • c.  Affirmative Defenses Under FEHA  15.41
          • (1)  Bona Fide Occupational Qualification  15.42
          • (2)  Business Necessity  15.43
          • (3)  Preemption and Other Defenses  15.44
        • d.  Failure to Prevent Discrimination  15.44A
      • 2.  California Constitution  15.45
      • 3.  California Family Rights Act of 1993  15.46
      • 4.  California Equal Pay Law [Deleted]  15.47
      • 5.  Immigration Protection Under State Law  15.47A
      • 6.  Unruh Civil Rights Act and Related Statutes  15.48
      • 7.  Tom Bane Civil Rights Act  15.49
      • 8.  Local Laws  15.50
  • III.  APPLICATION OF EQUAL EMPLOYMENT LAW
    • A.  Who Is Protected [Deleted]
      • 1.  Employees, Unpaid Interns, Volunteers, and Independent Contractors [Deleted]  15.51
      • 2.  Partnership “Employees” [Deleted]  15.52
      • 3.  More Than One Employer [Deleted]  15.53
      • 4.  Immigration Status [Deleted]  15.53A
    • B.  Basic Theories of Unlawful Discrimination  15.54
      • 1.  Disparate Treatment  15.55
        • a.  Prima Facie Case  15.56
        • b.  Employer’s Rebuttal That Action Was Not Discriminatory  15.57
          • (1)  Nondiscriminatory Motive Shown by “Same Actor Inference”  15.58
          • (2)  Stray Remarks  15.58A
          • (3)  Meeting Customer Preferences [Deleted]  15.59
          • (4)  “Cat’s Paw” Theory of Liability  15.59A
        • c.  Burden Shifts Back to Plaintiff  15.60
        • d.  Other Proof Issues  15.61
      • 2.  Disparate Impact
        • a.  Prima Facie Case  15.62
        • b.  Employer’s Rebuttal  15.63
        • c.  Plaintiff’s Showing That Nondiscriminatory Alternative Exists  15.64
      • 3.  Interplay of Theories: Ricci v DeStefano  15.64A
    • C.  Specific Prohibited or Restricted Practices
      • 1.  Recruiting  15.65
        • a.  Advertising  15.66
        • b.  Word-of-Mouth Referrals  15.67
      • 2.  Hiring Standards
        • a.  Reinstatement  15.67A
        • b.  Business Necessity Justification  15.68
        • c.  Testing  15.69
        • d.  Dress and Personal Appearance  15.70
        • e.  Use of Arrest and Conviction Records  15.70A
        • f.  Physical Requirements  15.71
        • g.  Overqualification  15.72
        • h.  Test Scores  15.73
        • i.  Waivers  15.73A
      • 3.  Promotion
        • a.  Seniority Systems  15.74
        • b.  Grounds for Promotion  15.75
      • 4.  Other Terms and Conditions of Employment
        • a.  Pregnancy-Related Issues  15.76
        • b.  Age-Related Issues  15.77
        • c.  Sex and Gender-Related Issues  15.78
        • d.  Providing or Canceling Pension Benefits  15.79
        • e.  Language Requirements [Deleted]  15.80
        • f.  Accommodation of Religion  15.81
        • g.  Health Issues Not Amounting to Disability  15.81A
      • 5.  Retaliation  15.82
        • a.  Engaging in Protected Activity  15.83
        • b.  Adverse Employment Action  15.84
          • (1)  Federal Cases  15.85
          • (2)  California Cases  15.86
        • c.  Causal Link  15.87
        • d.  Anti-SLAPP Defense  15.87A
      • 6.  Reorganizations or Job Elimination Decisions  15.88
      • 7.  Workers With Caregiving Responsibilities  15.88A
    • D.  Harassment  15.89
      • 1.  Sexual Harassment
        • a.  Generally  15.90
        • b.  Form: Acknowledgment of Consensual Relationship  15.90A
        • c.  Same-Sex Harassment  15.91
        • d.  Welcomeness  15.92
        • e.  Failure to Take Steps to Prevent  15.92A
        • f.  Standard for Judging Sexual Harassment
          • (1)  Quid pro Quo  15.93
          • (2)  Hostile Environment  15.94
      • 2.  Sources of Liability
        • a.  Agents and Supervisors  15.95
        • b.  Employees and Third Parties  15.96
      • 3.  Legislative Declarations About Harassment Claims  15.96A
      • 4.  Affirmative Defense to Harassment  15.97
        • a.  No Tangible Employment Action  15.98
        • b.  Reasonable Care to Prevent and Promptly Correct Harassment  15.99
        • c.  Plaintiff’s Failure to Act  15.100
        • d.  California Law  15.101
      • 5.  Discovery Issues  15.102
      • 6.  Preventive Steps for Employers  15.103
      • 7.  Form: Sample Policy Prohibiting Harassment  15.104
      • 8.  Form: Complaint for Harassment  15.105
      • 9.  Sexual Harassment Brochure (DFEH-185)  15.106
      • 10.  Form: Sample Investigation Documentation  15.106A
      • 11.  Form: Sample Training Documentation  15.106B
      • 12.  Checklist: Suggested Action Plan for Employer  15.107
      • 13.  Confidentiality Limits for Sexual Harassment Settlement Agreements  15.107A
      • 14.  Nonmanagement Employees’ Liability for Harassment  15.108
  • IV.  DISCRIMINATION AGAINST INDIVIDUALS WITH DISABILITIES
    • A.  Americans With Disabilities Act
      • 1.  Coverage
        • a.  Employers  15.109
        • b.  Employees  15.110
      • 2.  What Is Prohibited
        • a.  Generally  15.111
        • b.  Selection Criteria That Screen Out Individuals With Disabilities  15.112
        • c.  Inappropriate Employment Tests  15.113
        • d.  Accommodation Requirements  15.114
        • e.  Limiting Job Classifications  15.115
        • f.  Discrimination Based on Association With Individual With Disability  15.116
        • g.  Relationships With Entities Whose Practices May Violate ADA  15.117
      • 3.  Key Terms
        • a.  Disability  15.118
          • (1)  Physical or Mental Impairment  15.119
          • (2)  Substantially Limiting  15.120
          • (3)  Major Life Activities  15.121
          • (4)  Past Record of Physical or Mental Impairment  15.122
          • (5)  Regarded as Disabled  15.123
        • b.  What Is Not a Disability?  15.124
        • c.  Qualified Individual  15.125
          • (1)  Employer’s Judgment About Essential Job Functions  15.126
          • (2)  EEOC Standards  15.127
      • 4.  Reasonable Accommodation Requirement
        • a.  General Principles  15.128
        • b.  Rules Developed by Courts and EEOC  15.129
        • c.  Specific Types of Reasonable Accommodations  15.130
          • (1)  Retrofitting  15.131
          • (2)  Job Restructuring  15.132
          • (3)  Part-Time or Modified Work Schedules and Medical Leave  15.133
          • (4)  Reassignment  15.134
          • (5)  Use of Interpreters  15.135
          • (6)  Acquisition or Modification of Equipment  15.136
          • (7)  Further Examples of Reasonable Accommodations  15.137
        • d.  Interactive Process  15.138
        • e.  Undue Hardship  15.139
      • 5.  Permissible Grounds for Making an Adverse Employment Decision  15.140
        • a.  Job-Related  15.141
        • b.  Business Necessity  15.142
        • c.  No Reasonable Accommodation Is Possible  15.143
        • d.  Direct Threat to Health and Safety  15.144
      • 6.  Benefits and Insurance Considerations  15.145
        • a.  Preexisting Condition Exclusions on Health Insurance Still Acceptable  15.146
        • b.  Insured Benefits Subject to Discrimination Provisions  15.147
        • c.  Pension Issues  15.147A
      • 7.  ADA Compliance Guidelines  15.148
    • B.  FEHA
      • 1.  Who Is Covered?  15.149
      • 2.  California Law More Protective Than ADA  15.150
      • 3.  State Remedies Are Broader Than ADA’s  15.151
  • V.  REMEDIES AND PROCEDURES UNDER EQUAL EMPLOYMENT LAWS
    • A.  General Overview  15.152
      • 1.  State  15.153
      • 2.  Federal  15.154
      • 3.  Choice of Jurisdiction  15.155
      • 4.  Effect of “After-Acquired Evidence” Doctrine  15.156
      • 5.  Effect of Arbitration Clauses  15.157
    • B.  State Administrative Procedures
      • 1.  Complaint  15.158
        • a.  Time for Filing  15.159
        • b.  Filing Procedure  15.160
        • c.  Parties Named in the Complaint  15.161
        • d.  Claims Alleged  15.161A
        • e.  Service  15.162
      • 2.  Investigation
        • a.  Fact Gathering by DFEH  15.163
        • b.  Discovery  15.164
        • c.  Confidentiality  15.165
      • 3.  Employer’s Response
        • a.  Position Statement  15.166
        • b.  Defenses  15.167
      • 4.  Disposition of the Complaint
        • a.  Pre-Determination Settlement  15.168
        • b.  Dismissal and Closure  15.169
        • c.  Dispute Resolution [Deleted]  15.170
        • d.  Accusation [Deleted]  15.171
        • e.  Right-to-Sue Notice  15.172
        • f.  Mandatory Dispute Resolution and DFEH Litigation  15.172A
      • 5.  Prehearing Procedures [Deleted]
        • a.  Parties [Deleted]  15.173
        • b.  Notice of Defense and Representation of Respondent [Deleted]  15.174
        • c.  Transfer to Court [Deleted]  15.175
        • d.  Discovery and Motions [Deleted]  15.176
      • 6.  Evidentiary Hearing [Deleted]
        • a.  Hearing Officer [Deleted]  15.177
        • b.  Prehearing Procedures [Deleted]  15.178
        • c.  The Hearing [Deleted]  15.179
        • d.  Posthearing Briefs and Motions [Deleted]  15.180
      • 7.  Decision and Order [Deleted]
        • a.  Proposed Decision [Deleted]  15.181
        • b.  FEHC’s Decision [Deleted]  15.182
        • c.  Reconsideration [Deleted]  15.183
        • d.  Relief That FEHC May Order [Deleted]  15.184
      • 8.  Judicial Review and Enforcement [Deleted]
        • a.  Review [Deleted]  15.185
        • b.  Enforcement [Deleted]  15.186
    • C.  Federal Procedures
      • 1.  The Charge or Complaint  15.187
        • a.  Who May File  15.188
        • b.  Time for Filing  15.189
        • c.  Filing Procedure  15.190
        • d.  Service  15.191
      • 2.  EEOC Investigation
        • a.  Workshare Arrangement With DFEH  15.192
        • b.  Mediation and Fact Gathering  15.193
        • c.  Subpoenas and Discovery  15.194
        • d.  Confidentiality  15.195
      • 3.  Employer’s Response
        • a.  Internal Investigation  15.196
        • b.  Position Statement  15.197
        • c.  Defenses  15.198
      • 4.  Disposition of Charge
        • a.  Settlement  15.199
        • b.  Withdrawal  15.200
        • c.  Formal Determination by the EEOC  15.201
        • d.  Conciliation  15.202
        • e.  Notice of Right to Sue  15.203
      • 5.  EEOC Litigation  15.204
        • a.  Administrative Prerequisites  15.205
        • b.  Statute of Limitations  15.206
        • c.  Intervention by the Employee  15.207
        • d.  Scope of the Litigation  15.208
      • 6.  Special Issues Relating to Federal Employees  15.208A

16

Whistleblower Issues

Cynthia E. Fruchtman

  • I.  INTRODUCTION  16.1
  • II.  WHISTLEBLOWING AS PROTECTED ACTIVITY  16.2
  • III.  WHO QUALIFIES FOR WHISTLEBLOWER STATUS?  16.3
  • IV.  PUBLIC POLICY PROTECTS WHISTLEBLOWERS  16.4
  • V.  PRIVILEGE AND IMMUNITY EXCEPTIONS TO WHISTLEBLOWER PROTECTION
    • A.  Privilege of Confidentiality Is Breached or Trade Secrets Are Disclosed  16.5
    • B.  Privilege for Statements Made in Judicial or Official Proceedings  16.5A
    • C.  Tribal Immunity  16.5B
    • D.  Administrative Investigations  16.5C
  • VI.  SARBANES-OXLEY ACT  16.6
  • VII.  WHISTLEBLOWER’S MOTIVATION  16.7
  • VIII.  WHEN WHISTLEBLOWER PROTECTIONS ARISE  16.8
  • IX.  EMPLOYER MEASURES; WHISTLEBLOWER POLICY  16.9
  • X.  EXHAUSTION REQUIREMENT  16.9A
  • XI.  EMPLOYER RESPONSE TO WHISTLEBLOWING
    • A.  Inappropriate Response  16.10
    • B.  Appropriate Response  16.11
  • XII.  TIMELINESS OF WHISTLEBLOWER COMPLAINT  16.12
  • XIII.  PENALTIES FOR RETALIATION  16.13
  • XIV.  INSURANCE COVERAGE FOR DEFENSE OF WHISTLEBLOWER CLAIMS  16.14
  • XV.  PRACTICAL ADVICE  16.15

16A

Workplace Investigations

Patricia C. Perez

  • I.  INTRODUCTION
    • A.  Scope of Chapter  16A.1
    • B.  Duty to Investigate  16A.2
    • C.  Types of Claims Requiring Investigation; Scope  16A.3
  • II.  CASE LAW GOVERNING WORKPLACE INVESTIGATIONS  16A.4
  • III.  PRELIMINARY ISSUES TO CONSIDER BEFORE STARTING THE INVESTIGATION
    • A.  Ethical Considerations  16A.5
    • B.  Privacy Issues  16A.6
  • IV.  WHO SHOULD INVESTIGATE?  16A.7
  • V.  STARTING THE INVESTIGATION  16A.8
  • VI.  STRATEGIC PLANNING  16A.9
  • VII.  INTERVIEWS AND DOCUMENT REVIEW  16A.10
    • A.  Identity of Interviewee; Scheduling Interviews  16A.11
    • B.  Checklist: Suggested Interview Procedures and Questions  16A.11A
  • VIII.  REACHING FAIR AND WELL-REASONED CONCLUSIONS  16A.12
  • IX.  DRAFTING AN INVESTIGATION REPORT  16A.13
  • X.  INSTITUTING CORRECTIVE ACTION AND DOCUMENTING THE INVESTIGATION  16A.14
    • A.  Communicating the Results  16A.15
  • XI.  ADDITIONAL ISSUES
    • A.  Unionized Employees  16A.16
    • B.  Police Officers and Firefighters  16A.16A
    • C.  Litigation Issues  16A.17

17

Discipline and Termination

Douglas J. Farmer

  • I.  AT-WILL EMPLOYMENT
    • A.  Presumption in California  17.1
    • B.  Overcoming Presumption of Employer’s Right to Terminate at Will  17.2
      • 1.  Statutory Limitations on At-Will Terminations
        • a.  Equal Employment Opportunity Statutes  17.3
        • b.  Antiretaliation and Whistleblower Statutes  17.4
        • c.  Leave of Absence Statutes  17.5
        • d.  Labor Code Protections  17.6
      • 2.  Public Policy Limitations on At-Will Terminations  17.7
        • a.  “Fundamental” Public Policy Must Be at Stake  17.8
        • b.  Policy Must Benefit Public at Large  17.9
        • c.  Policy Must Apply to Defendant Employer  17.10
        • d.  Retaliatory Terminations Deemed to Violate Public Policy  17.11
          • (1)  Termination for Refusing to Further Employer’s Unlawful Conduct  17.12
          • (2)  Termination for Satisfying a Legal Obligation  17.13
          • (3)  Termination for Exercising a Legal Right  17.14
          • (4)  Termination for Opposing or Reporting Employer’s Unlawful Conduct  17.15
          • (5)  Termination for Engaging in “Protected Activity” Under NLRA  17.15A
        • e.  Private Disputes Not Protected  17.16
      • 3.  Contractual Limitations on At-Will Termination
        • a.  Express and Implied-in-Fact Contracts to Terminate Only for Good Cause  17.17
          • (1)  Express Contracts
            • (a)  Oral Contracts  17.18
            • (b)  Written Contracts  17.19
          • (2)  Implied-in-Fact Contract  17.20
            • (a)  Employment Policies  17.21
            • (b)  Past Employment Practices  17.22
            • (c)  Employee’s Length of Service  17.23
            • (d)  Promises of Job Security, Promotions, Raises, and Bonuses  17.24
            • (e)  Other Employer Writings  17.25
        • b.  Covenant of Good Faith and Fair Dealing  17.26
          • (1)  Violation of Good Cause Standard Is Prerequisite to Establishing Breach of the Covenant  17.27
          • (2)  No Tort Recovery for Bad Faith Denial of Existence of Contract  17.28
  • II.  ADVERSE EMPLOYER ACTIONS SHORT OF TERMINATION
    • A.  Constructive Termination  17.29
      • 1.  Intolerable Conditions
        • a.  Extraordinary and Egregious Conditions; Resignation Coerced  17.30
        • b.  Determination by Objective Standard
          • (1)  No Alternative But to Quit  17.31
          • (2)  Demotions, Transfers, Salary Decreases, and Performance Ratings Insufficient Alone to Support Claim  17.32
      • 2.  Actual Notice to Employer Required  17.33
      • 3.  Statute of Limitations  17.33A
    • B.  Wrongful Discipline  17.34
    • C.  Action Short of Termination May Support Retaliation or Discrimination Claim  17.34A
  • III.  CAUSES OF ACTION RELATED TO WRONGFUL TERMINATION
    • A.  Defamation
      • 1.  Elements  17.35
      • 2.  Defenses
        • a.  Preemption  17.36
        • b.  Privileged Communications  17.37
    • B.  Intentional and Negligent Infliction of Emotional Distress  17.38
    • C.  Interference With Contract or Prospective Economic Advantage  17.39
    • D.  Other Related Causes of Action
      • 1.  Fraud  17.40
      • 2.  Misrepresentation Preventing Former Employee’s Reemployment  17.41
      • 3.  Negligent Performance of Contractual Duty to Evaluate  17.42
      • 4.  Loss of Consortium or Negligent Infliction of Emotional Distress Claims by Employee’s Spouse  17.43
  • IV.  REMEDIES IN WRONGFUL TERMINATION ACTIONS
    • A.  Contract Damages  17.44
    • B.  Tort Damages
      • 1.  General Damages  17.45
      • 2.  Special Damages  17.46
      • 3.  Punitive Damages  17.47
    • C.  Mitigation of Damages  17.48
    • D.  Equitable Remedies  17.49
  • V.  DEFENSES TO A WRONGFUL TERMINATION ACTION
    • A.  Preemption by Statutory Remedy
      • 1.  Termination Involving Federal Labor Law Issues
        • a.  Engaging in Protected Activities  17.50
        • b.  Terminated Employee Covered by Collective Bargaining Agreement  17.51
        • c.  Claims Against Union by Former Union Employee  17.52
        • d.  Termination Claims by Railway Employee or Airline Worker  17.53
        • e.  Preemption by Federal Banking Laws  17.54
        • f.  Preemption by Immigration Reform and Control Act  17.54A
      • 2.  Termination Involving Discrimination Issues
        • a.  Preemption by FEHA  17.55
        • b.  Preemption by Federal Discrimination Statutes  17.56
      • 3.  Termination Involving Pension Benefits  17.57
      • 4.  California Workers’ Compensation Law  17.58
    • B.  Termination for Cause  17.59
    • C.  Termination Based on Good Faith Investigation  17.60
    • D.  After-Acquired Evidence of Employee Misconduct  17.61
    • E.  No Employment Relationship  17.62
    • F.  Statute of Limitations  17.63
  • VI.  INSURANCE COVERAGE FOR WRONGFUL TERMINATION CLAIMS  17.64
  • VII.  AVOIDING WRONGFUL TERMINATION CLAIMS
    • A.  Stress At-Will Policy of the Company  17.65
      • 1.  Include At-Will Language in Employment Applications  17.66
      • 2.  Form: Sample At-Will Statement and “After-Acquired Evidence” Clause for Employment Application  17.67
    • B.  Draft Offer Letters to Avoid “Good Cause” Presumption
      • 1.  Specific Language to Avoid  17.68
      • 2.  Form: Offer Letter  17.69
    • C.  Employment Agreements
      • 1.  Recommended Content  17.70
      • 2.  Form: Sample At-Will Provision for Employment Agreement  17.71
    • D.  Employee Handbooks
      • 1.  At-Will Statements in Employee Handbooks  17.72
      • 2.  “Introductory Period” Provisions  17.73
      • 3.  Discipline and Termination Policies
        • a.  Potential Consequences of Ill-Drafted Provisions  17.74
        • b.  “Progressive Discipline” Issues  17.75
    • E.  Performance Evaluations
      • 1.  Common Mistakes  17.76
      • 2.  Guidelines for Employee Evaluation  17.77
        • a.  Utilize Objective Standards  17.78
        • b.  Avoid Generic Preprinted “Check the Box” Forms  17.79
        • c.  Coordinate Evaluation Forms With Employee Job Descriptions  17.80
        • d.  Include Specific Examples of Strengths and Weaknesses  17.81
        • e.  Discuss Evaluation With Employee  17.82
        • f.  Allow Employee to Provide Feedback to the Evaluation  17.83
        • g.  Consider Review by More Than One Level  17.84
        • h.  Periodically Audit the Evaluation System  17.85
        • i.  Train and Evaluate the Evaluators  17.86
        • j.  Establish Effective Recordkeeping System  17.87
        • k.  Utilize Evaluation System to Prevent Lawsuits  17.88
    • F.  Grievance Policies  17.89
    • G.  Protecting Internal Investigations  17.90
    • H.  Discipline Checklist  17.91
  • VIII.  TERMINATION OF THE EMPLOYMENT RELATIONSHIP  17.92
    • A.  Termination Checklist  17.93
    • B.  Additional Preventive Measures in “High Risk” Situations  17.94
    • C.  Required Pamphlet and Notice of Termination  17.94A
    • D.  Termination Letter  17.95
    • E.  Termination Meeting  17.96
    • F.  Time Limit for Payment of Final Wages  17.97
    • G.  Exit Interview  17.98
    • H.  Severance Pay and Settlement Agreements  17.98A
    • I.  Avoiding Posttermination Liability  17.99
  • IX.  SEVERANCE AND SETTLEMENT AGREEMENTS
    • A.  Releases of Liability
      • 1.  General Principles  17.100
      • 2.  Unilateral or Mutual Release of Claims  17.101
      • 3.  Releases of Age Discrimination Claims Under the OWBPA  17.102
      • 4.  Releases of Wage Claims  17.103
      • 5.  Release of Workers’ Compensation Claims  17.104
      • 6.  No Waiver of Unemployment Insurance Claims  17.105
      • 7.  Waiver of Unknown Claims  17.106
    • B.  Tax Considerations
      • 1.  Settlement Amounts  17.107
      • 2.  Attorney Fees  17.108
    • C.  Confidentiality  17.109
    • D.  Employment References  17.110
    • E.  Waiver of Reemployment Rights  17.111
    • F.  Form: Sample Settlement Agreement and Mutual Release  17.112
    • G.  Form: Short Form Severance Agreement  17.113
  • X.  POSTTERMINATION ISSUES
    • A.  Employment References  17.114
      • 1.  No-Reference or Limited-Reference Policies  17.115
      • 2.  Truthful Reference Guidelines  17.116
    • B.  Unemployment Insurance Claims  17.117
  • XI.  SUMMARY OF LAWS GOVERNING TERMINATION AND DISCIPLINE
    • A.  Chart: Federal Statutes Limiting Termination and Discipline  17.118
    • B.  Chart: California Statutes Limiting Termination and Discipline  17.119

18

Reductions in Force and Plant Closings

Cynthia L. Jackson

  • I.  INTRODUCTION  18.1
  • II.  PLANNING A REDUCTION IN FORCE (RIF)  18.2
    • A.  Consider Alternatives to Layoff and Termination
      • 1.  Offering Incentives for Voluntary Termination  18.3
        • a.  Releases and Waivers of Claims
          • (1)  Basic Requirements for Standard Waiver  18.4
          • (2)  Requirements for Waiver by Employees Age 40 and Over: OWBPA  18.5
          • (3)  Waiver for Group RIF  18.6
            • (a)  No Ratification of Voidable Releases  18.7
            • (b)  Form: Release  18.8
        • b.  Claims Not Subject to Waiver  18.9
        • c.  Tax Issues in Releasing ADEA and Title VII Claims  18.10
      • 2.  Transfers, Bumping, and Recall  18.11
    • B.  Establish Selection Criteria for Termination
      • 1.  Neutral Criteria  18.12
      • 2.  Typical Criteria for Retaining or Laying Off Employees
        • a.  Merit  18.13
        • b.  Versatility  18.14
        • c.  Seniority  18.15
        • d.  Salary  18.16
      • 3.  Prohibited Criteria  18.17
    • C.  Notice  18.18
    • D.  Checklist: RIF Guidelines for Minimizing Litigation Risk  18.19
  • III.  WORKER ADJUSTMENT AND RETRAINING NOTIFICATION ACT (WARN)
    • A.  Background  18.20
    • B.  Covered Employers  18.21
      • 1.  Requisite Number of Employees
        • a.  Employees Counted  18.22
        • b.  Employees Not Counted  18.23
      • 2.  Application to Independent Contractors and Subsidiaries  18.24
      • 3.  Application on Sale or Acquisition  18.25
    • C.  Triggering Events  18.26
      • 1.  Definitions of “Plant Closing,” “Termination,” and “Mass Layoff”
        • a.  Duration; Number of Employees Affected  18.27
        • b.  Strikes and Other Exemptions  18.28
      • 2.  Definition of “Employment Loss” and “Layoff”  18.29
    • D.  Notice
      • 1.  Required Recipients  18.30
      • 2.  Contents  18.31
      • 3.  Timing of Notice
        • a.  General Rule  18.32
        • b.  Exceptions  18.33
          • (1)  Faltering Company Exception  18.34
          • (2)  Unforeseen Business Circumstance Exception  18.35
          • (3)  Natural Disaster Exception  18.36
      • 4.  Manner of Service  18.37
      • 5.  Forms  18.38
        • a.  Form: Notice to Employees or Representative re: Mass Layoff  18.39
        • b.  Form: Notice to Chief Elected Government Official, State Dislocated Worker Unit, or Workforce Investment Board re: Mass Layoff  18.40
        • c.  Form: Notice to Chief Elected Government Official or Dislocated Worker Unit re: Plant Closing/Termination or Relocation  18.41
    • E.  Liability for Violation of WARN Notice Requirements  18.42
    • F.  Defenses
      • 1.  Statute of Limitations  18.43
      • 2.  Waiver  18.44
  • IV.  CONTINUING HEALTH INSURANCE BENEFITS
    • A.  COBRA  18.45
    • B.  Labor Code §2807  18.46
  • V.  DISCRIMINATION CLAIMS
    • A.  Protected Categories  18.47
    • B.  Showing Necessary to Support Discrimination Action
      • 1.  Disparate Treatment
        • a.  Prima Facie Case  18.48
        • b.  Rebuttal  18.49
        • c.  Pretext  18.50
      • 2.  Disparate Impact
        • a.  Prima Facie Case  18.51
        • b.  Rebuttal  18.52
        • c.  Nondiscriminatory Alternatives  18.53
        • d.  Adverse Impact Analysis for Age Discrimination  18.54
    • C.  Defenses  18.55
  • VI.  BREACH OF CONTRACT AND RELATED CLAIMS  18.56
  • VII.  NLRA COMPLIANCE  18.57
    • A.  Subjects of Decision Bargaining  18.58
      • 1.  Total Plant Closings  18.59
      • 2.  Partial Plant Closings  18.60
      • 3.  Plant Relocations  18.61
      • 4.  Subcontracting to Nonunion Employees  18.62
    • B.  Subjects of Effects Bargaining  18.63
    • C.  The Duty to Bargain  18.64
      • 1.  Decision Bargaining  18.65
      • 2.  Effects Bargaining  18.66
    • D.  The Duty to Disclose  18.67
    • E.  NLRB-Imposed Remedies  18.68
      • 1.  Decision Bargaining  18.69
      • 2.  Effects Bargaining  18.70
    • F.  Third Party Liability
      • 1.  Parent-Subsidiary  18.71
      • 2.  Effect of Bankruptcy Proceedings  18.72
    • G.  Statute of Limitations  18.73
    • H.  Preemption of State Law Claims by LMRA  18.74
  • VIII.  BANKRUPTCY ISSUES  18.75
    • A.  Employer Bankruptcy
      • 1.  Priority for Certain Wages and Benefits Claims  18.76
      • 2.  Employee Benefit Plan Contributions  18.77
      • 3.  Retiree Benefits  18.78
      • 4.  Employee Contract Termination Claims  18.79
      • 5.  Collective Bargaining Agreements  18.80
      • 6.  Non-NLRA Employment Agreements  18.81
      • 7.  Labor Union Standing and Plan of Reorganization  18.82
      • 8.  Nondischargeable Claims  18.83
    • B.  Employee Bankruptcy  18.84

19

Insurance Coverage for Employment Claims

Larry M. Golub

  • I.  SCOPE OF CHAPTER  19.1
  • II.  COVERAGE UNDER STANDARD BUSINESS GENERAL LIABILITY POLICIES
    • A.  Overview of Coverage  19.2
    • B.  Specific Coverage Issues
      • 1.  Bodily Injury and Property Damage Coverage  19.3
      • 2.  Requirement of an “Occurrence”  19.4
      • 3.  Advertising Injury and Personal Injury Coverage Issues  19.5
      • 4.  General Liability Policy Exclusions  19.6
      • 5.  Nonstandard General Liability Policies  19.7
      • 6.  Employment-Related Practices Exclusion  19.7A
      • 7.   Is the Defendant an Insured?  19.7B
  • III.  COVERAGE UNDER EXCESS OR UMBRELLA POLICIES  19.8
  • IV.  COVERAGE UNDER WORKERS’ COMPENSATION POLICIES  19.9
  • V.  COVERAGE UNDER DIRECTORS AND OFFICERS LIABILITY POLICIES  19.10
  • VI.  COVERAGE UNDER ERRORS AND OMISSIONS POLICIES  19.11
  • VII.  COVERAGE UNDER EMPLOYMENT PRACTICES LIABILITY POLICIES  19.12
    • A.  Form: Employment Practices Liability Coverage (NAS Insurance Services Form 1808BO-0910)  19.13
    • B.  Form: Extension of Coverage for Defense Only of Wage and Hour Claims (NAS Insurance Services Form 1808B-0912)  19.13A
    • C.  Form: Employment Practices Liability Coverage Section (Chubb Form 14-02-3797)  19.14
    • D.  Form: Broad-Form Employment Practices Liability Insurance  19.15
  • VIII.  RESPONDING TO AN EMPLOYEE CLAIM
    • A.  Tender to All Potentially Applicable Insurers  19.16
    • B.  Form: Tender of Claim  19.17
    • C.  Factors to Consider in Analyzing Coverage  19.18
      • 1.  Occurrence Versus Claims-Made Coverage  19.19
      • 2.  Coverage Preclusion by Any Applicable Statutes  19.20
      • 3.  Defendants Named in the Action  19.21
        • a.  Is the Employee Covered?  19.22
        • b.  Is the Employer Covered?  19.23
      • 4.  Insurer’s Duty to Defend  19.24

20

Mediation and Arbitration of Employment Disputes

Joel Grossman

  • I.  OVERVIEW  20.1
  • II.  MEDIATION
    • A.  Available at All Stages of Dispute  20.2
    • B.  Factors to Consider in Deciding Whether to Mediate  20.3
    • C.  Selecting the Mediator  20.4
    • D.  Mediator’s Methodology  20.5
    • E.  Who Pays for Mediation?  20.6
    • F.  Checklist: Premediation Steps  20.7
    • G.  Mediation Session  20.8
    • H.  Practice Points: Strategies for Successful Mediation  20.9
    • I.  Mediated Settlement Agreement  20.10
    • J.  Terms to Include in Mediated Settlement Agreement
      • 1.  Recital of Settlement  20.11
      • 2.  Payment Terms  20.12
      • 3.  Release  20.13
      • 4.  Confidentiality  20.14
      • 5.  More Formal Agreement to Follow  20.15
      • 6.  Employment References  20.16
      • 7.  Controlling Law and Enforcement Provisions  20.17
      • 8.  Execution  20.18
      • 9.  Language Mandated by OWBPA  20.19
    • K.  Form: Sample Mediated Settlement Agreement  20.20
  • III.  ARBITRATION
    • A.  Practical Considerations in Deciding Whether to Compel Arbitration  20.21
      • 1.  Rule of Law  20.22
      • 2.  Competence and Bias of Decision-Maker  20.23
      • 3.  Discovery Rights  20.24
      • 4.  Statement of Decision  20.25
    • B.  Policy Considerations
      • 1.  When Arbitration Agreement Is Binding  20.26
      • 2.  Who Decides Whether Parties Agreed to Arbitrate  20.27
      • 3.  When Arbitration Agreement Is Not Enforceable
        • a.  “Contracts of Employment” Exclusion  20.28
        • b.  Title VII and Other Federal Claims  20.29
        • c.  Issues Outside Scope of Agreement to Arbitrate  20.30
        • d.  Unconscionability  20.31
        • e.  Class Action Waivers  20.31A
        • f.  Grounds for Rescission  20.32
        • g.  Waiver of Right to Arbitrate  20.33
      • 4.  Collective Bargaining Agreements  20.34
      • 5.  State Efforts to Regulate Arbitration Agreements  20.35
      • 6.  Effect of Arbitration Agreements on Administrative Claims  20.36
    • C.  Judicial Arbitration  20.37
    • D.  Selection of Arbitrator  20.38
      • 1.  Under California Arbitration Act  20.39
      • 2.  Under AAA and JAMS Rules
        • a.  AAA  20.40
        • b.  JAMS  20.41
    • E.  Penalties for Arbitration Proceeding Delays   20.41A
    • F.  Prearbitration Discovery
      • 1.  Under California Arbitration Act  20.42
      • 2.  Under AAA and JAMS Rules
        • a.  AAA  20.43
        • b.  JAMS  20.44
    • G.  Arbitration Hearing
      • 1.  Under California Arbitration Act  20.45
      • 2.  Under AAA and JAMS Rules
        • a.  AAA  20.46
        • b.  JAMS  20.47
    • H.  Preparing for Arbitration Hearing  20.48
      • 1.  Pleadings  20.49
      • 2.  Arbitration Brief  20.50
      • 3.  Opening Statement  20.51
      • 4.  Witness Preparation  20.52
      • 5.  Examination of Opposing Party’s Witnesses  20.53
      • 6.  Closing Arguments  20.54
    • I.  Arbitrator’s Award
      • 1.  Requirements  20.55
      • 2.  Time for Making Award  20.56
      • 3.  Relief Granted  20.57
      • 4.  Correction of Award by Arbitrator  20.58
      • 5.  Collateral Effect of Award
        • a.  Res Judicata  20.59
        • b.  Unconfirmed Award as Contract  20.60
      • 6.  Court Review
        • a.  Confirmation, Vacation, or Correction of Award  20.61
        • b.  Pearson Dental Supplies, Inc. v Superior Court  20.61A
        • c.  Powers of Reviewing Court  20.62
        • d.  Review Procedure  20.63
    • J.  Alternative Arbitration Procedures
      • 1.  High-Low Arbitration  20.64
      • 2.  Baseball Arbitration  20.65
    • K.  Form: Sample Mediation/Arbitration Clause for Employment Agreement  20.66

21

Public Employment Issues

Bonnie Bogue

Erich W. Shiners

  • I.  LEGAL FRAMEWORK FOR PUBLIC EMPLOYEE COLLECTIVE BARGAINING  21.1
    • A.  State Executive Branch  21.2
    • B.  Local Government  21.3
    • C.  Public Schools  21.4
    • D.  Higher Education  21.5
    • E.  Public Transit  21.6
    • F.  Trial Courts  21.7
    • G.  Judicial Council  21.7A
  • II.  REPRESENTATION RIGHTS AND DUTIES
    • A.  Employees’ Right to Be Represented  21.8
    • B.  Self-Representation Right  21.9
    • C.  Managerial, Supervisory and Confidential Employees  21.10
    • D.  Union’s Right to Represent  21.11
    • E.  Union Access to Employees  21.12
    • F.  Union’s Duty of Fair Representation  21.13
    • G.  Organizational Security  21.14
  • III.  RECOGNITION PROCEDURES  21.15
    • A.  Unit Determination  21.16
      • 1.  Unit Determination Under PERB Regulations  21.17
      • 2.  Unit Determination Under MMBA and Trial Court Acts  21.18
    • B.  Representation Elections and Recognition Procedures  21.19
    • C.  Decertifying the Representative  21.20
  • IV.  COLLECTIVE BARGAINING RIGHTS  21.21
    • A.  Scope of Representation  21.22
    • B.  Duty to Bargain  21.23
      • 1.  Good Faith Bargaining  21.24
      • 2.  Unilateral Action  21.25
    • C.  Impasse Resolution  21.26
      • 1.  Mediation  21.27
      • 2.  Factfinding  21.28
      • 3.  Arbitration of Impasses  21.29
      • 4.  Impasse Resolution in Transit Districts  21.29A
    • D.  Strikes  21.30
      • 1.  Right to Strike  21.31
      • 2.  Enjoining Strikes  21.32
      • 3.  Discipline of Strikers  21.33
    • E.  Agreements  21.34
  • V.  ENFORCEMENT OF STATUTORY RIGHTS AND OBLIGATIONS
    • A.  PERB-Administered Statutes  21.35
      • 1.  PERB Unfair Practice Procedures  21.36
      • 2.  Judicial Review of Board Decisions  21.37
    • B.  Enforcement of Non-PERB Statutes  21.38
  • VI.  ENFORCEMENT OF CONTRACT RIGHTS  21.39
    • A.  Deferral to Arbitration  21.40
    • B.  Enforcement of Arbitration Awards  21.41
    • C.  Arbitrability  21.42

ADVISING CALIFORNIA EMPLOYERS AND EMPLOYEES

(1st Edition)

March 2021

TABLE OF CONTENTS

 

File Name

Book Section

Title

CH01

Chapter 1

Hiring Guidelines and Pitfalls

01-047

§1.47

Notice and Disclosure

01-048

§1.48

Certification to Credit Reporting Agency

01-049

§1.49

Certificate of Compliance by Agency

01-050

§1.50

Notification of Request for Investigative Consumer Report

01-051

§1.51

Authorization to Obtain Investigation Reports

01-052

§1.52

Pre-Adverse Action Disclosure

01-053

§1.53

Summary of Rights Under Fair Credit Reporting Act

01-054

§1.54

Post-Adverse Action Disclosure

01-055

§1.55

Notification of Intent to Procure Investigative Consumer Report

01-075

§1.75

Checklist: Paperwork for New Employees

01-076

§1.76

Checklist: Trade Secret Concerns in Interviewing Applicant

01-077

§1.77

Checklist: Issues to Consider Before Implementing Employee Testing

01-079

§1.79

Applicant’s Statement

01-080

§1.80

Notification of Rejection of Application

01-081

§1.81

Employment Offer Letter

01-082

§1.82

Mutual Agreement to Arbitrate Claims

01-083

§1.83

Authorization for Job-Related Medical Examination and Drug-Testing and for Release of Information

01-084

§1.84

Sample Job Description Questionnaire

01-085

§1.85

Sample Job Description for Receptionist

CH02

Chapter 2

Employment Contracts and Executive Compensation

02-011

§§2.11-2.102

Preamble to Employment Contract

 

§2.13

Recitals

 

§2.19

Term of Employment

 

§2.20

Place of Employment

 

§2.22

Employee’s Duties and Authority

 

§2.25

Outside Business Activities Precluded or Restricted

 

§2.26

Reasonable Time and Effort Required

 

§2.27

Covenant Not to Compete During Employment Term

 

§2.28

Morality Clause

 

§2.30

Consulting Services

 

§2.36

Base Salary

 

§2.37

Adjustment to Base Salary

 

§2.38

Incentive Compensation

 

§2.39

Stock Bonus

 

§2.40

Stock Options

 

§2.41

Cash Bonus

 

§2.42

Commissions

 

§2.43

Royalties

 

§2.44

Deferred Compensation

 

§2.46

Additional Benefits

 

§2.47

Vacation

 

§2.49

Board Membership

 

§2.51

Expense Reimbursement

 

§2.52

Automobile Allowance

 

§2.53

Life Insurance

 

§2.55

Repayment of Compensation Held Excessive

 

§2.57

Ownership of Intangibles

 

§2.61

Proprietary Information Obligations

 

§2.62

Noninterference

 

§2.64

Use of Employee’s Name and Image

 

§2.66

Indemnification by Employer

 

§2.67

Employer-Provided Indemnity Insurance

 

§2.68

Qualification for Surety Bond

 

§2.69

Indemnification by Employee

 

§2.72

Termination of Employment; Termination Date

 

§2.73

Involuntary Termination

 

§2.74

Termination Payment

 

§2.75

Termination of Employment by Employee

 

§2.76

Termination for Cause

 

§2.77

Termination on Resignation

 

§2.78

Termination on Retirement

 

§2.79

Termination Because of Disability

 

§2.80

Termination on Death

 

§2.81

Employer Has Right to Terminate or Assign Agreement

 

§2.82

Agreement Survives Combination or Dissolution

 

§2.83

Rights and Obligations After Notice of Termination

 

§2.84A

Other Benefits

 

§2.84B

IRC §409A

 

§2.86

Arbitration

 

§2.88

Injunction

 

§2.90

Liquidated Damages for Employer

 

§2.91

Liquidated Damages for Employee

 

§2.91A

Statute of Limitations

 

§2.92

Integration

 

§2.93

Choice of Law

 

§2.94

Notices

 

§2.95

Severability

 

§2.96

Employee’s Representations

 

§2.97

Counterparts

 

§2.98

Successors and Assigns

 

§2.99

Attorney Fees

 

§2.100

Amendments

 

§2.101

No Third Party Rights

 

§2.102

Execution

CH03

Chapter 3

Independent Contractors, Leased Workers, and Outsourcing

03-067

§3.67

Sample Independent Contractor Data Sheet

03-068

§3.68

Sample Agreement Between Principal and Independent Contractor

CH04

Chapter 4

Immigration Law Requirements for Employers

04-031

§4.31

Checklist: Establishing Employment Practices That Comply With Immigration Laws

04-032

§4.32

Checklist: Identity and Employment Authorization Documents

CH06

Chapter 6

Vacations, Family and Medical Leave, and Other Time Off

06-010

§6.10

Checklist: Guidelines for Drafting Vacation Policy

06-017

§6.17

Checklist: Guidelines for Drafting Holiday Pay Policy

06-067

§6.67

Notice of Intent to Take Family or Medical Leave

06-139

§6.139

Sample Policy for FMLA/CFRA Leave

06-139A

§6.139A

Sample Policy for Pregnancy Disability Leave

06-141

§6.141

Sample Policy for Personal Leave

06-142

§6.142

Sample Policy for Bereavement Leave

06-143

§6.143

Sample Policy for Leave for Spouses of Military Personnel

CH10

Chapter 10

Employee Handbooks

10-009

§10.9

Employee Handbook Receipt Acknowledgment

10-011

§10.11

Checklist: Potential Inclusions

10-014

§10.14

Equal Opportunity Employment Policy

10-016

§10.16

At-Will Employment Policy

10-018

§10.18

Introductory Period Policy

10-039

§10.39

Performance Standards; Misconduct, Discipline, and Termination

CH11

Chapter 11

Trade Secrets Protection and Unfair Competition

11-018

§11.18

Protective Language for Submissions

11-021

§11.21

Sample Offer or Hire Letter to New Employee

11-032

§11.32

Visitor Log-In

11-033

§11.33

Receipt Acknowledgment

11-034

§11.34

Confidentiality Legend

11-035

§11.35

Sample Approval of Information Release

11-036

§11.36

Notice for Facsimile Transmission

11-038A

§11.38A

Employee Termination Certificate

11-040

§11.40

Letter to Employee Confirming Exit Interview

11-041

§11.41

Letter to New Employer

11-041I

§11.41I

Company Policy for Use of Company Computers, Internet, E-Mail, and Personal or Cloud-Based Electronic Storage Devices

11-076

§11.76

Short Agreement for Protection of Proprietary Information

11-077

§§11.77-11.109

Introductory Provisions

 

§11.78

Definitions

 

§11.79

Duty of Trust and Confidentiality

 

§11.80

No Disclosure or Misappropriation of Proprietary Information

 

§11.81

Assignment of Proprietary Information and Inventions

 

§11.82

Proprietary Right Registrations; Execution of Necessary Documents

 

§11.83

Exception to Assignment of Inventions

 

§11.84

Disclosure of Inventions and Maintenance of Records

 

§11.85

Conflicting Employment or Business Opportunities

 

§11.86

Nonsolicitation of Employees

 

§11.87

Nonsolicitation of Customers

 

§11.88

Noncompetition

 

§11.89

Returning Company Documents and Other Tangible Items

 

§11.90

Reaffirmation of Obligations on Termination of Employment

 

§11.91

Notification to New Employer

 

§11.92

Representations and Warranties

 

§11.93

At-Will Employment

 

§11.94

Equitable Remedies

 

§11.95

Choice of Law

 

§11.96

Enforceability and Severability

 

§11.97

No Waiver

 

§11.98

Attorney Fees

 

§11.99

Amendment and Modification

 

§11.100

Entire Agreement

 

§11.101

Successors and Assigns

 

§11.102

Word Usage

 

§11.103

Exhibits

 

§11.104

Effective Date

 

§11.105

Conclusion

 

§11.106

Execution

 

§11.107

Exhibit A—California Labor Code §2870

 

§11.108

Exhibit B—Existing Inventions and Improvements

 

§11.109

Exhibit C—Termination Certificate

CH12

Chapter 12

Workplace Safety

12-093

§12.93

IIPP Compliance Checklist

12-105

§12.105

Notice to Employees of Right to SDSs

CH13

Chapter 13

Workplace Privacy

13-018

§13.18

Polygraph Consent Form

13-033

§13.33

Sample Computer/E-Mail Usage Policy

13-043

§13.43

Workplace Search Policy

13-066

§13.66

Sample Drug and Alcohol Policy

13-069

§13.69

Sample Consent to Drug and Alcohol Test

13-071

§13.71

Checklist: Questions to Consider Before Implementing Any Form of Employee Testing

13-085

§13.85

Sample Dress and Grooming Policy

13-087

§13.87

Sample Outside Employment Policy

13-089

§13.89

Sample Policy on Employment of Relatives

CH15

Chapter 15

Discrimination and Harassment

15-090A

§15.90A

Acknowledgment of Consensual Relationship

15-104

§15.104

Sample Policy Prohibiting Harassment

15-105

§15.105

Complaint for Harassment

15-106A

§15.106A

Sample Investigation Documentation

15-106B

§15.106B

Sample Training Documentation

15-107

§15.107

Checklist: Suggested Action Plan for Employer

CH16A

Chapter 16A

Workplace Investigations

16A-011A

§16A.11A

Checklist: Suggested Interview Procedures and Questions

CH17

Chapter 17

Discipline and Termination

17-067

§17.67

Sample At-Will Statement and “After-Acquired Evidence” Clause for Employment Application

17-069

§17.69

Offer Letter

17-071

§17.71

Sample At-Will Provision for Employment Agreement

17-091

§17.91

Discipline Checklist

17-093

§17.93

Termination Checklist

17-112

§17.112

Sample Settlement Agreement and Mutual Release

17-113

§17.113

Short Form Severance Agreement

CH18

Chapter 18

Reductions in Force and Plant Closings

18-008

§18.8

Release

18-019

§18.19

Checklist: RIF Guidelines for Minimizing Litigation Risk

18-039

§18.39

Notice to Employees or Representative re: Mass Layoff

18-040

§18.40

Notice to Chief Elected Government Official, State Dislocated Worker Unit, or Workforce Investment Board re: Mass Layoff

18-041

§18.41

Notice to Chief Elected Government Official or Dislocated Worker Unit re: Plant Closing/Termination or Relocation

CH19

Chapter 19

Insurance Coverage for Employment Claims

19-017

§19.17

Tender of Claim

CH20

Chapter 20

Mediation and Arbitration of Employment Disputes

20-007

§20.7

Checklist: Premediation Steps

20-020

§20.20

Sample Mediated Settlement Agreement

20-066

§20.66

Sample Mediation/Arbitration Clause for Employment Agreement

APP

Appendix

APPENDIX

APP

APP

Workplace Audit Checklist

 

Selected Developments

March 2021 Update

Practitioners are strongly advised to check the latest federal rules and regulations for updates, as new developments are emerging under the Biden administration.

Chapter 1: Hiring Guidelines and Pitfalls

The U.S. Supreme Court granted certiorari (in part) in R.G. & G.R. Harris Funeral Homes, Inc. v EEOC (2019) ___ US ___, 139 S Ct 1599, to consider whether Title VII prohibits discrimination against transgender people or sex stereotyping under Price Waterhouse v Hopkins (1998) 490 US 228, 109 S Ct 1775. In Bostock v Clayton County, Ga. (2020) 590 US ___, 140 S Ct 1731, the Court affirmed R.G., stating that because discrimination on the basis of homosexuality or transgender status requires an employer to intentionally treat individual employees differently because of their sex, an employer who intentionally penalizes an employee for being homosexual or transgender also violates Title VII. See §§1.10, 1.12.

In Babb v Wilkie (2020) 589 US ___, 140 S Ct 1168, the Court held that the plain meaning of 29 USC §633a(a) (“made free from any discrimination based on age”) demands that personnel actions be untainted by any consideration of age. To obtain relief, a plaintiff must show that age was a but-for cause of the challenged employment decision. But if age discrimination played a lesser part in the decision, other remedies may be appropriate. See §1.8.

Rizo v Yovino (9th Cir 2020) 950 F3d 1217 held that unlike Title VII, the Equal Pay Act does not require proof of discriminatory intent. See §§1.10, 5.13A, 5.42A.

An employer seeking criminal arrest records is required to provide the applicant with a list of the specific offenses under Pen C §290 for which disclosures are sought. Note that Health & S C §11590 was repealed by Stats 2019, ch 580, §1 (AB 1261), effective January 1, 2020. See §§1.29, 13.10A.

Chapter 3: Independent Contractors, Leased Workers, and Outsourcing

Proposition 22 (related to Uber, Lyft, DoorDash, and other gig-economy businesses) was passed by voters in November 2020. It allows app-based ride-hailing and delivery companies to continue treating their workers as independent contractors, effectively carving them out of AB 5. Now that California voters have carved out the law’s main target, other businesses and workers may push to escape AB 5’s reach. See §§3.9A–3.9B, 5.61B.

In 2018, the California Supreme Court issued its landmark decision in Dynamex Operations W., Inc. v Superior Court (2018) 4 C5th 903, articulating a new legal test (the “ABC test”) for determining whether someone is an independent contractor or an employee. Assembly Bill 5 codified the Dynamex ABC test, with certain exceptions, such as for doctors, lawyers, freelance writers, and certain construction industry workers, in Lab C §2750.3. In 2020, AB 2257 repealed Lab C §2750.3 and replaced it with Lab C §§2775–2784, which incorporated and renumbered the former Lab C §2750.3 language. In addition, the legislature added additional exceptions for certain recording artists, musicians, songwriters, managers of recording artists, record producers, musical engineers, and mixers. See §§3.9A–3.9B.

In Vazquez v Jan-Pro Franchising Int’l (Jan. 14, 2021, S258191) 2021 Cal Lexis 1, *11, the California Supreme Court decided that Dynamex applies retroactively, stating that “the well-established general principle affirming the retroactive application of judicial decisions interpreting legislative measures supports the retroactive application of Dynamex.” See §§3.9A–3.9B.

New case law. Ridgeway v Walmart Inc. (9th Cir 2020) 946 F3d 1066 (the panel rejected Wal-Mart’s claims that plaintiffs should not have been awarded damages for layovers, rest breaks, and inspections; under California law, time drivers spent on layovers was compensable if Wal-Mart exercised control over the drivers during those breaks). See §3.56.

Joint employers. There are now two joint employer scenarios per the Fair Labor Standards Act of 1938 (FLSA). See 2020 Department of Labor (DOL) guidance at 85 Fed Reg 2858 (2020); see also 29 CFR §791.2.

The first joint employer scenario, known as vertical joint employment, applies a four-part “economic realities” test for determining joint employment under the FLSA (the other person is the employee’s joint employer only if that person is acting directly or indirectly in the interest of the employer in relation to the employee). Those four factors are whether the other person

(1) Hires or fires the employee,

(2) Supervises and controls the employee’s work schedule or conditions of employment to a substantial degree,

(3) Determines the employee’s rate and method of payment, and

(4) Maintains the employee’s employment records.

See 29 CFR §791.2(a).

In the second joint employer scenario, known as horizontal joint employment, one employer employs a worker for one set of hours in a workweek, and another employer employs the same worker for a separate set of hours in the same workweek. The jobs and the hours worked for each employer are separate, but if the employers are joint employers, both employers are jointly and severally liable for all of the hours the employee worked for them in the workweek. If the employers are sufficiently associated with respect to the employment of the employee, they are joint employers and must aggregate the hours worked for each for purposes of determining compliance with FLSA. The employers will generally be sufficiently associated if

  • There is an arrangement between the employers to share the employee’s services, as, for example, to interchange employees;

  • One employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee; or

  • Employers may be deemed to share control of the employee, directly or indirectly, because one employer controls, is controlled by, or is under common control with the other employer.

See DOL guidance at 85 Fed Reg 2858 (2020); 29 CFR §791.2(e).

However, in New York v Scalia (SD NY, Sept. 8, 2020, No 1:20-cv-1689-GHW) 2020 US Dist Lexis 163498, the court struck down the DOL’s revised rule applicable to vertical joint employment. Among other reasons, the court found that the revised rule ignored the FLSA’s broad definitions and unlawfully limited the factors the DOL may consider. However, the court upheld the rule applicable to horizontal joint employment, 29 CFR §791.2(e), in which the the DOL made only nonsubstantive revisions. Until this is resolved by the DOL or the courts, employers and employees may look to case law applying the prior regulations.

See also §§3.42, 5.4A.

Chapter 4: Immigration Law Requirements for Employers

Due to the extraordinary and unprecedented COVID-19 public health emergency, the production of certain Employment Authorization Documents (Form I-766, EAD) has been delayed. On August 19, 2020, the U.S. Citizenship and Immigration Services (USCIS) issued a notice indicating that employers could accept Form I-797, Notice of Action, as acceptable Form I-9, Employment Eligibility Verification. This temporary concession was initially granted until December 1, 2020, and was extended to February 1, 2021. This only applies to I-797, Notice of Action, with a Notice date on or after December 1, 2019, through and including August 20, 2020, informing an applicant of approval of an Application for Employment Authorization (Form I-765). The I-797 Approval Notice may be used as a  Form I-9, Employment Eligibility Verification, List C #7 document that establishes employment authorization issued by the Department of Homeland Security under 8 CFR §274a.2(b)(1)(v)(C)(7), even though the Notice states it is not evidence of employment authorization. See https://www.uscis.gov/i-9-central/form-i-9-related-news/form-i-9-verification-during-ead-production-delays-due-to-covid-19. When completing the I-9, the employer should select “Employment Authorization Document Issued by DHS” as the document title and enter February 1, 2021, as the document expiration date. Additionally, new hires must present a valid List B document establishing identity. See §4.9.

As states began implementing stay-at-home orders due to COVID-19 and employees began to work from home, employers had to assess whether or not the home location was deemed a worksite triggering the posting and/or filing of a Labor Condition Application (LCA). The U.S. Department of Labor (DOL) Office of Foreign Labor Certification (OFLC) issued COVID-19 FAQs on March 20, 2020. See https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/DOL-OFLC_COVID-19_FAQs_Round%201_03.20.2020.pdf and https://www.dol.gov/agencies/whd/fact-sheets/62j-h1b-worksite. See §4.39.

On October 8, 2020, the DOL issued an Interim Final Rule restructuring the prevailing wage system, thereby significantly increasing wage requirements for beneficiaries of H-1B, E-3, H-1B1 petitions, and PERM applications. See Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States (85 Fed Reg 63872 (Oct. 8, 2020)). The regulation took effect on October 8, 2020, without any advance notice, and will impact Labor Condition Applications filed on or after October 8, 2020, and prevailing wage determinations issued on or after October 8, 2020. Employers are able to continue to use alternative wage sources instead of DOL prevailing wage data for LCAs and PERM applications. The Interim Final Rule has been challenged in court on procedural grounds, alleging that the agency violated the rulemaking process under the Administrative Procedure Act (APA). On December 1, 2020, ruling on summary judgment, the court found that the DOL did not have good cause to bypass notice and comment rulemaking procedures in violation of the APA. See U.S. Chamber of Commerce v U.S. Dep’t of Homeland Sec. (ND Cal, Dec. 1, 2020, No. 20-cv-7331-JSW) 2020 US Dist Lexis 224974. See also §4.38.

On October 8, 2020, Department of Homeland Security (DHS) issued an Interim Final Rule aimed at introducing stricter eligibility criteria for the H-1B specialty occupation classification, placing new restrictions on the placement of H-B workers at third party worksites, and reinstating strict evidentiary policies that had been rescinded earlier in 2020. The rule, which was to take effect on December 7, 2020, was challenged in court under procedural grounds for violating the rulemaking process under the APA. On December 1, 2020, a federal district court, ruling on summary judgment, set aside the DHS regulation, finding that the agency did not have good cause to bypass notice and comment rulemaking procedures. See U.S. Chamber of Commerce v U.S. Dep’t of Homeland Sec., supra. See also §4.40.

On October 21, 2020, the Department of State (DOS) published proposed regulations seeking to revise the B-1 visa classification, including eliminating the B-1 in lieu of H-1B and B-1 in lieu of H-3 subcategories. See https://www.federalregister.gov/documents/2020/10/21/2020-21975/visas-temporary-visitors-for-business-or-pleasure. See §4.61.

In response to the economic downturn in the spring of 2020 and under §§212(f) and 215(a) of the Immigration and Nationality Act (INA), then-President Trump issued two proclamations: Proclamation 10014 (on Apr. 22, 2020) suspending the entry of new immigrants and Proclamation 10052 (on June 22, 2020) restricting the entry of certain nonimmigrant visa categories to include the H-1B, H-2B, L-1, and certain J-1, as well as their dependents to the United States. Both proclamations provided exemptions and provide for discretionary waivers in limited circumstances. Both of these travel restrictions were due to sunset on December 31, 2020. See §4.63.

If an H-2A nonimmigrant who is physically present in the United States seeks to change employers during the COVID-19 National Emergency, the prospective new H-2A employer may file an H-2A petition on Form I-129, accompanied by a valid temporary agricultural labor certification, requesting an extension of the alien’s stay in the United States. To be approved, an H-2A petition must be received on or after December 18, 2020, but no later than June 16, 2021. If the new petition is approved, the extension of stay may be granted for the validity of the approved petition for a period not to exceed the validity period of the temporary agricultural labor certification. See 8 CFR §214.2(h)(22); 85 Fed Reg 82298 (Dec. 18, 2020). See also §4.63.

On February 24, 2020, DHS implemented an Inadmissibility on Public Charge Grounds final rule nationwide. The final rule requires applicants for Adjustment of Status (AOS) who are subject to the public charge ground of inadmissibility to report certain information related to public benefits on Form I-944, Declaration of Self-Sufficiency. This final rule has been challenged in court since late 2019. On December 3, 2020, the Ninth Circuit reinstated two lower court preliminary injunctions that had temporarily barred enforcement of the DHS public charge rule in several states and Washington, D.C. Washington v U.S. Dep’t of Homeland Sec. (9th Cir, Nov. 25, 2020, No. 19–35914) 2020 US App Lexis 37242. The Ninth Circuit ruling temporarily bars the public charge rule. However, the government may appeal and seek a stay or reversal. USCIS has further instructed that applications submitted without the public charge Form I-944 and documentation risk rejection by the agency. See §4.85.

Chapter 5: Wage and Hour Laws

With the increase in the state minimum wage on January 1, 2021, the equivalent of two times the minimum wage of $13 per hour for small employers (25 employees or less) equals $54,080 per year, and two times the minimum of $14 per hour for large employers (26 employees or more) equals $58,240 per year to qualify for the white collar exemptions. It is important to note that the salary basis test is set according to the California state minimum wage, not the applicable minimum wage that may apply in the various local cities and counties in California. See §§5.17, 5.56.

As of January 1, 2021, the minimum wage for employees of federal contractors and subcontractors is $10.95 per hour, which will be adjusted for inflation on each January 1. Tipped employees may be paid a cash wage of $7.65 per hour as of January 1, 2021. See 29 CFR §10.5. See also §§5.17, 5.19.

Private security officers subject to a valid collective bargaining agreement may be required to remain on the premises during rest periods and to remain on call, and carry and monitor a communication device during rest periods. If rest period is interrupted, the security officer shall be permitted to restart the rest period as soon as practicable. The security officer’s employer satisfies the rest period obligation if the security officer is then able to take an uninterrupted rest period. If on any workday a security officer is not permitted to take an uninterrupted rest period of at least 10 minutes for every 4 hours worked, or major fraction thereof, then the security officer shall be paid 1 additional hour of pay at the employee’s regular base hourly rate of compensation. See Lab C §226.7; Stats 2020, ch 343 (AB 1512). See also §§5.45, 5.48.

California’s wage statement requirements apply only to employees whose principal place of work is in California. Ward v United Airlines, Inc. (2020) 9 C5th 732, 760 (test satisfied if employee works majority of time in California or, for interstate transportation employees whose work is not primarily performed in any single state, if employee has their base of work operations in state). Likewise, California laws governing the timing of wage payments apply only to employees whose principal place of work is in California. Oman v Delta Air Lines, Inc. (2020) 9 C5th 762, 770 (rejecting claim for late payment of wages where employees only worked de minimis amount of time in California; ranging from 2.6 percent to high of 14 percent). See §§5.13, 5.14B.

In Ridgeway v Walmart Inc. (9th Cir 2020) 946 F3d 1066, the Ninth Circuit held that an employer violated California law by not compensating truck drivers for pre-trip and post-trip inspections. The employer’s compensation system was activity-based, and was silent on compensation for the inspections. The court explained that an employer may not satisfy the payment requirements by “borrowing” from other compensation sources, such as an hourly rate or mileage payment. 946 F3d at 1084. See also §§5.47–5.48, 5.51.

In Frlekin v Apple Inc. (2020) 8 C5th 1038, the supreme court held that time spent on the employer’s premises waiting for, and undergoing, required exit searches of packages, bags, or personal technology devices voluntarily brought to work purely for personal convenience by employees is compensable as “hours worked” within the meaning of Wage Order No. 7–2001 (8 Cal Code Regs §11070); but see Griffin v Sachs Elec. Co. (9th Cir, Nov. 20, 2020) 2020 US App Lexis 38840, *2 (all the employees had to do was flash their badges to guard at security gate, which is significantly less invasive than the exit searches at issue in Frlekin, so that time was not compensable). See §§5.45, 5.47.

In Naranjo v Spectrum Sec. Servs., Inc. (review granted Nov. 14, 2019, S258966; superseded opinion at 40 CA5th 444), the California Supreme Court will decide the following issues: (1) Does a violation of Lab C §226.7, which requires payment of premium wages for meal and rest period violations, give rise to claims under Lab C §§203 and 226 when the employer does not include the premium wages in the employee’s wage statements but does include the wages earned for meal breaks? (2) What is the applicable prejudgment interest rate for unpaid premium wages owed under Lab C §226.7? See §§5.14B, 5.16.

In Ferra v Loews Hollywood Hotel (review granted Jan. 22, 2020, S259172; superseded opinion at 40 CA5th 1239), the California Supreme Court will decide whether the legislature intended the term “regular rate of compensation” in Lab C §226.7, which requires employers to pay a wage premium if they fail to provide a legally compliant meal period or rest break, to have the same meaning and require the same calculations as the term “regular rate of pay” under Lab C §510(a), which requires employers to pay a wage premium for each overtime hour. See §5.48.

Chapter 6: Vacations, Family and Medical Leave, and Other Time Off

Senate Bill 1159 (emergency legislation) defines “injury” for an employee to include illness or death resulting from the 2019 novel coronavirus disease (COVID-19) under specified circumstances, until January 1, 2023, and creates a disputable presumption that the injury arose out of and in the course of the employment and is compensable, for specified dates of injury. The bill limits the applicability of the presumption under certain circumstances. The bill requires an employee to exhaust their paid sick leave benefits and meet specified certification requirements before receiving any temporary disability benefits or, for police officers, firefighters, and other specified employees, a leave of absence. The bill also makes a claim relating to a COVID-19 illness presumptively compensable after 30 days or 45 days, rather than 90 days. Until January 1, 2023, the bill allows for a presumption of injury for all employees whose fellow employees at their place of employment experience specified levels of positive testing, and whose employer has five or more employees. See Lab C §§77.8, 3212.86–3212.88). See also §§6.11, 6.14, 6.39, 13.34, 19.9.

Assembly Bill 2992 expanded the right to take time off work under Lab C §230. The new law permits employees to take time off if they are victims “of a crime that caused physical injury or that caused mental injury and a threat of physical injury” or for anyone “whose immediate family member is deceased as the direct result of a crime.” Employers must update any relevant crime victim leave policies to comply with the new requirements. See Lab C §230(j); Stats 2020, ch 224 (AB 2992). See also §§6.14, 6.137–6.138.

Senate Bill 1383 expands the California Family Rights Act (CFRA) to make it an unlawful employment practice for any employer with five or more employees to refuse to grant a request by an employee to take up to 12 workweeks of unpaid protected leave during any 12-month period to bond with a new child of the employee or to care for themselves or a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner, as specified. The bill requires an employer who employs both parents of a child to grant leave to each employee. The bill also makes it an unlawful employment practice for any employer to refuse to grant a request by an employee to take up to 12 workweeks of unpaid protected leave during any 12-month period due to a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States. The bill defines employee for these purposes as an individual who has at least 1250 hours of service with the employer during the previous 12-month period, unless otherwise provided. See Govt C §12945.2; Stats 2020, ch 86 (SB 1383). See also §§6.23, 6.30A–6.38, 6.60.

Government Code §12945.21 requires the DFEH to create a small employer family leave mediation pilot program for employers with between 5 and 19 employees. The pilot program authorizes a small employer or the employee to request all parties to participate in mediation through the DFEH’s dispute resolution division within 30 days of receipt of a right-to-sue notice. It prohibits an employee from pursuing civil action until the mediation is complete if an employer or employee requests mediation, and tolls the statute of limitations for the employee, including for additional related claims, from receipt of a request to participate in the program until the mediation is complete. This section will be repealed on January 1, 2024. See Stats 2020, ch 45 (AB 1867). See also §6.30C.

Public Law 116–127, 134 Statutes 178 is the Families First Coronavirus Response Act 2020 (FFCRA). On March 18, 2020, then-President Trump signed into law the FFCRA, which creates two new emergency paid leave requirements in response to the COVID-19 global pandemic. Division E of the FFCRA, the Emergency Paid Sick Leave Act (EPSLA), entitles certain employees of covered employers to take up to 2 weeks of paid sick leave if the employee is unable to work for specific qualifying reasons related to COVID-19; Div C of FFCRA permits certain employees of covered employers to take up to 12 weeks of expanded family and medical leave, 10 of which are paid, if the employee is unable to work due to a need to care for their son or daughter whose school, place of care, or childcare provider is closed or unavailable due to COVID-19–related reasons. See §6.31.

Public Law 116–136, 134 Statutes 281 is the Coronavirus Aid, Relief, and Economic Security Act 2020 (CARES Act). The Paycheck Protection Program (CARES Act §§1101–1114) provides an incentive for employers to keep workers on their payrolls. The FFCRA authorizes the Secretary of Health and Human Services to issue EPSLA and Emergency Family and Medical Leave Expansion Act (EFMLEA) regulations under two exceptions to the usual requirements of the Administrative Procedure Act (APA) (5 USC §§551–596). One of those exceptions permits issuing a rule without prior public notice or the opportunity for the public to comment if there is good cause to believe that doing so is “impractical, unnecessary, or contrary to the public interest”; the other permits a rule to become effective immediately, rather than after a 30-day delay, if there is good cause to do so. FFCRA §3102(b) (as amended by §3611(7) of the CARES Act), §5111 (referring to 5 USC §553(b)(3), (d)(3)). Relying on those exceptions, DOL promulgated a temporary rule to carry out the EPLSA and EFMLEA, which was made public on April 1, 2020. 85 Fed Reg 19326 (2020); see also 85 Fed Reg 20156–02 (Apr. 10, 2020, correction and correcting amendment to Apr. 1 rule). See §6.31.

On April 14, 2020, the State of New York filed suit in the U.S. District Court for the Southern District of New York challenging certain parts of the temporary rule under the APA. New York v U.S. Dep’t of Labor (SD NY, Aug. 3, 2020, No. 20-CV-3020 (JPO)) 2020 WL 4462260. On August 3, 2020, the New York district court ruled that four parts of the temporary rule are invalid: (1) the requirement under 29 CFR §826.20 that paid sick leave and expanded family and medical leave are available only if an employee has work from which to take leave; (2) the requirement under 29 CFR §826.50 that an employee may take FFCRA leave intermittently only with employer approval; (3) the definition of an employee who is a “health care provider,” set forth in 29 CFR §826.30(c)(1), whom an employer may exclude from being eligible for FFCRA leave; and (4) the statement in 29 CFR §826.100 that employees who take FFCRA leave must provide their employers with certain documentation before taking leave. See §6.31.

The DOL reaffirmed that an employee may take paid sick leave or expanded family and medical leave only to the extent that any qualifying reason is a but-for cause of the employee’s inability to work. Because the DOL agreed with district court that there was no basis, statutory or otherwise, to apply the work-availability requirement only to some of the qualifying reasons for FFCRA leave, and in keeping with the DOL’s original intent, the DOL amended 29 CFR §826.20(a)(3), (a)(4) to state explicitly, as §826.20(a)(2), (a)(6), and (a)(9) does, that an employee is not eligible for paid leave unless the employer would otherwise have work for the employee to perform. The DOL similarly added 29 CFR §826.20(a)(10) to make clear such requirement was likewise needed when an employee requests paid leave for a substantially similar condition as specified by the Secretary of Health and Human Services. See §6.31.

Chapter 7: Tax Compliance

Every limited liability company doing business in this state as described in Rev & T C §17941(a) that organizes or registers with the Secretary of the State under Rev & T C §17941(b) on or after January 1, 2021, and before January 1, 2024, shall not be subject to the tax imposed under this section for its first taxable year. See Rev & T C §17941(g)(1); Stats 2020, ch 8 (AB 85). This shall become operative only for a taxable year in which any budget measure appropriates one dollar ($1) or more to the Franchise Tax Board for the costs associated with administration of this subdivision. Rev & T C §17941(g)(2). See §7.85.

Small business hiring credit. Taxpayers may use the credit to offset income taxes or even sales and use taxes (which take a special irrevocable election by the taxpayer). For each employee the business hires, the taxpayer receives $1000 in credit. The credit is maxed out at $100,000. To claim the credit, the taxpayer must obtain a tentative credit reservation from the California Department of Tax and Fee Administration (CDTFA). The taxpayer must elect sales and use tax or the credit will default to income taxes. To qualify for the credit, taxpayer-employers must have 100 or fewer employees as of December 31, 2019 (this includes part-time employees); must have suffered a 50 percent or more decrease in gross receipts from April to June of 2020 as compared to the same time period in 2019; and must have applied for the tentative credit reservation (described above) by January 15, 2021 (applications accepted starting Dec. 1, 2020). See Rev & T C §§6902.7, 6902.8, 17053.72, 23627; Stats 2020, ch 41 (SB 1447). See §7.22C.

Chapter 8: Unemployment Compensation and State Disability Insurance

The Coronavirus Aid, Relief, and Economic Security Act 2020 (CARES Act) expanded unemployment benefits under CARES Act §§2101–2116 and provided help to workers whose positions have been affected by COVID-19. Programs provide relief with respect to (1) employed individuals whose employers continue to pay them, (2) employed individuals who must take leave from work, and (3) unemployed individuals who no longer had work or had as much work. See Pub L 116–136, 134 Stat 281. See §8.78.

Chapter 9: Notice-Posting, Training, and Recordkeeping Requirements

Assembly Bill 685 requires a public or private employer that receives a notice of potential exposure to COVID-19 to provide specified notifications to its employees within 1 business day of the notice of potential exposure. Employers must provide prescribed notice to all employees, and the employers of subcontracted employees, who were on the premises at the same worksite as a qualifying individual within the infectious period that they may have been exposed to COVID-19. The bill requires an employer, if the employer or representative of the employer is notified of the number of cases that meet the definition of a COVID-19 outbreak, within 48 hours, to report prescribed information to the local public health agency in the jurisdiction of the worksite. The bill also requires an employer that has an outbreak to continue to give notice to the local health department of any subsequent laboratory-confirmed cases of COVID-19 at the worksite. The bill exempts a health facility, as defined, from this reporting requirement. AB 685 (effective Jan. 1, 2021); see Lab C §6409.6. See also §§9.18, 9.24, 12.1A, 12.30.

Senate Bill 973. On or before March 31, 2021, and on or before March 31 of each year thereafter, every private employer with 100 or more employees and who is required to file an annual Employer Information Report (EEO-1) under federal law must submit a pay data report for the prior year to the Department of Fair Employment and Housing (DFEH). DFEH shall make the reports available to DLSE on request. The report must include the number of employees by race, ethnicity, and sex in various job categories as well as their annual earnings with each of the pay bands used by the U.S. Bureau of Labor Statistics. Govt C §12999(a); Stats 2020, ch 363 (SB 973). See §9.70; see also §5.42A.

Chapter 11: Trade Secrets Protection and Unfair Competition

Courts continued to recognize that there are few, if any, differences in judicial application of the federal Defend Trade Secrets Act (DTSA) (Pub L 114–153, 130 Stat 376) and the California Uniform Trade Secrets Act (UTSA) (CC §§3426–3426.11). See, e.g., Oh My Green v Cuffe (CD Cal, June 9, 2020, No. CV 20-2509 PA (PVCx)) 2020 US Dist Lexis 131827, *8 (“Given the substantial similarities in claims of misappropriation under the DTSA and CUTSA, courts often assess them together”). See §11.1A.

The Ninth Circuit in InteliClear, LLC v ETC Global Holdings, Inc. (9th Cir 2020) 978 F3d 653, 658, further clarified which types of pleadings would be insufficient to state a trade secrets claim (for example, plaintiffs may not rely on “catchall” phrases or categories of trade secrets they intend to pursue at trial). Further, the court in Inteliclear applied within the federal context the rule of CCP §2019.210, requiring a plaintiff suing for trade secret misappropriation under the DTSA to identify with “sufficient particularity” at the outset of the case. Additionally, Inteliclear held that confidentiality provisions constituted reasonable steps to maintain privacy. See §§11.1A, 11.6, 11.19, 11.43A.

Federal practice generally requires heightened or more detailed pleading than California state court practice. This is true even when pleading a trade secrets claim under both the federal DTSA and California UTSA. Additional cases beyond Inteliclear provided examples of types of pleadings that would be insufficient to state a claim. See TGG Mgmt. Co. v Petraglia (SD Cal, May 28, 2020, No. 19-cv-2007-BAS-KSC) 2020 US Dist Lexis 93215; Calsoft Labs, Inc. v Panchumarthi (ND Cal, Jan. 31, 2020, No. 19-cv-04398-NC) 2020 US Dist Lexis 17214, *20; but see Zoom Imaging Solutions, Inc. v Roe (ED Cal, Jan. 30, 2020, No. 2:19-cv-01544 WBS KJN) 2020 US Dist Lexis 15933 (amended complaint sufficiently alleged existence of trade secrets); Cisco Sys., Inc. v Chung (ND Cal 2020) 462 F Supp 3d 1024. See §§11.1A, 11.4, 11.68.

Thus, for federal cases, consider filing a Fed R Civ P 12(b)(6) motion to dismiss based on inadequacy of the allegations, or failure to plead with “sufficient particularity” the trade secrets misappropriated. See, e.g., Ahern Rentals, Inc. v Equipmentshare.com, Inc. (ED Cal, June 29, 2020, No. 2:19-cv-01788-MCE-KJN) 2020 US Dist Lexis 113340, *11(formulaic and conclusory allegations insufficient); Acrisure of Cal., LLC v SoCal Commercial Ins. Servs., Inc. (CD Cal, Mar. 27, 2019, No. CV 18-10187-CJC (ADSx)) 2019 US Dist Lexis 170027, *8 (vague and conclusory allegations of generic types of customer information failed to state claim); Power Integrations, Inc. v De Lara (SD Cal, Mar. 26, 2020, No. 20-CV-410-MMA (MSB)) 2020 US Dist Lexis 52724. See §11.1A.

In Javo Beverage Co. v California Extraction Ventures, Inc. (SD Cal, Dec. 2, 2019, No. 19-CV-1859-CAB-WVG) 2019 US Dist Lexis 207483, the 3-year statute of limitations for the UTSA/DTSA is triggered when plaintiff knows or has reason to know a third party has knowingly acquired, used, or disclosed its trade secrets. See §11.2.

In Albert’s Organics, Inc. v Holzman (ND Cal 2020) 445 F Supp 3d 463, the court continued to hold that specific customer information was sufficient to allege a trade secret and gave further examples of the types of information that may qualify for trade secret protection. See §11.3.

As set forth in CC §3426.1(d)(1), and as the Ninth Circuit affirmed: A trade secret is information that derives value “from not being generally known to the public or to other persons who can obtain economic value from its closure or use.” Prostar Wireless Group, LLC v Domino’s Pizza, Inc. (ND Cal 2018) 360 F Supp 3d 994, 1013, aff’d (9th Cir 2020) 815 Fed Appx 117, 119. See §11.4.

Conversely, court decisions to date have found that the following specific types of information generally do not constitute a protectable trade secret. In Hooked Media Group, Inc. v Apple Inc. (2020) 55 CA5th 323, for example, the court found that employees’ general knowledge did not constitute a protectable trade secret. More specifically, the court in Hooked held that the former employee’s mere possession of trade secrets that were lawfully obtained from the former employer was not in itself actionable when the employee merely changed jobs. Mere “speculation” that former employees must have taken trade secrets based solely on their decision to change employers will not suffice. Hooked also held that hiring an at-will employee normally does not, in itself, constitute misappropriation of trade secrets by a competitor. It is only if an employee subsequently uses or discloses trade secrets learned during prior employment to the detriment of the former employer that a cause of action for trade secret misappropriation arises. See §§11.4, 11.7A, 11.9.

Cisco Sys., Inc. v Chung, supra, also held that independent economic value can be shown by “circumstantial evidence of the resources invested in producing the information, the precautions taken to protect its secrecy, and the willingness of others to pay for its access.” See §11.4.

Liability can attach to the new employer either under a theory of vicarious liability (respondeat superior) or “direct” liability, where the employer has either authorized the tortious act or subsequently ratified an originally unauthorized tort. Cisco Sys., Inc. v Chung, supra. See also WeRide Corp. v Huang (ND Cal 2019) 379 F Supp 3d 834 (citing and applying PMC, Inc. v Kadisha (2000) 78 CA4th 1368); but see Genentech, Inc. v JHL Biotech, Inc. (ND Cal, Mar. 5, 2019, No. C 18-06582 WHA) 2019 US Dist Lexis 35177 (holding that under DTSA and UTSA there can be no independent claim for conspiracy). See §11.7.

In some circumstances, employers have a duty to make sufficient inquiry when hiring to determine whether the new employee might be placed in a position to disclose the former employer’s trade secrets. WeRide Corp. v Huang (ND Cal, Nov. 5, 2019, No. 5:18-cv-07233-EJD) 2019 US Dist Lexis 192212. See §11.9.

California courts have refused to adopt the “inevitable disclosure” doctrine because the state has a strong public policy favoring mobility of its workforce and because it would conflict with the prohibition against covenants not to compete under Bus & P C §16600. See Hooked Media Group, Inc. v Apple Inc., supra; Cypress Semiconductor Corp. v Maxim Integrated Prods., Inc. (2015) 236 CA4th 243. As stated in Hooked Media Group, Inc., 55 CA5th at 413: “Allowing an action for trade secret misappropriation against a former employee for using his or her own knowledge to benefit a new employer is impermissible because it would be equivalent to retroactively imposing on the employee [an unlawful] covenant not to compete.” See §11.10.

With respect to governmental disclosures, counsel for the discloser should check whether the statute requiring disclosure specifically provides a mechanism to maintain the confidentiality of the information disclosed. If not, counsel should attempt to negotiate an appropriate confidentiality agreement with the governmental agency. For a case that discusses the potential pitfalls and waiver of trade secrecy protection, see Amgen Inc. v Health Care Servs. (2020) 47 CA5th 716. See §11.16.

In Carr v AutoNation, Inc. (9th Cir 2020) 798 Fed Appx 129, 130, the Ninth Circuit held that a business plan sent to a third party was not protected as trade secret where distributor did not undertake reasonable efforts to ensure secrecy through an NDA or other means putting recipient on notice. See §11.28.

The “Form: Employee Termination Certificate” has been updated to include additional technologies on which proprietary information may have been stored. See §11.38A.

Providing a new employer with a copy of an already filed complaint against the former employee should be protected either on state or on federal privilege grounds. Hill Phoenix, Inc. v Classic Refrigeration SoCal, Inc. (CD Cal, Mar. 15, 2020, No. 8:19-cv-00695-DOC-JDE) 2020 US Dist Lexis 44539, *25.

Tilkey v Allstate Ins. Co. (2020) 56 CA5th 521 provides a caution that employers must be careful in postemployment letters to a new employer or customers not to defame the former employee. See §11.40.

In a decision involving an issue of first impression, a California court held that even one-way recordings (i.e., where the party recording the conversation only tapes its side of the communication but not the other person’s side) are subject to the the California Invasion of Privacy Act. Gruber v Yelp Inc. (2020) 55 CA5th 591. That same decision also addressed whether telephone and recording systems that employ Voice over Internet Protocol (VoIP) technology were covered by the Act, and found that the issue was not yet settled under the law. See §11.41B.

Another limitation on employers is set forth in the federal Electronic Communications Privacy Act (ECPA) (18 USC §§2510–2522), which prohibits intentionally intercepting and using captured electronic communications. See 18 USC §2510. Thus, for an e-mail to be unlawfully “intercepted” under the ECPA, it must be acquired during transmission, not while it is in “electronic storage.” Konop v Hawaiian Airlines, Inc. (9th Cir 2002) 302 F3d 868, 878 n6; see also In re Facebook, Inc. Internet Tracking Litig. (9th Cir 2020) 956 F3d 589, 608 n9 (citing Konop). See §11.41C.

The “Form: Company Policy for Use of Company Computers, Internet, E-Mail, and Personal or Cloud-Based Electronic Storage Devices” has been updated to include updated technologies. See §11.41I.

In Ajaxo, Inc. v E*Trade Fin. Corp. (2020) 48 CA5th 129, 164, the court analyzed the sufficiency of evidence in the record to reject an award of reasonable royalty. Enertrode, Inc. v General Capacitor Co. Ltd. (ND Cal, Apr. 17, 2019, No. 16-cv-02458-HSG) 2019 US Dist Lexis 65830 provides further discussion of royalties and exemplary damages. See §11.42.

Attorney fees and costs incurred to litigate (and arbitrate) trade secret claims may be recoverable by the plaintiff or the defendant, depending on the circumstances, and if willfulness or bad faith is demonstrated under the UTSA, or if an attorney fee provision in a contract is implicated (CC §§1717, 3426.4), fees may be awarded. Attorney fees may be awarded

  • To a prevailing party if the trade secret misappropriation claims were based, in part, on alleged breach of confidentiality provisions in an employment contract that contained an attorney fee clause. Sandler Partners, LLC v Masergy Communications, Inc. (CD Cal, Apr. 28, 2020, No. CV 19-6841-JFW(MAAx)) 2020 US Dist Lexis 102486.

  • To the trade secret owner if willful and malicious misappropriation is shown to exist. BladeRoom Group Ltd. v Emerson Elec. Co. (ND Cal, Mar. 11, 2019, No. 5:15-cv-01370-EJD) 2019 US Dist Lexis 38829; Swarmify, Inc. v Cloudflare, Inc. (ND Cal, Mar. 3, 2018, No. C 17-06597 WHA) 2018 US Dist Lexis 34727, *12 (preliminary injunction denied based on plaintiff’s “overbroad,” “shape-shifting,” and “conclusory” allegations and descriptions of its trade secrets).

  • To the defendant if the plaintiff made a claim of misappropriation in “bad faith.” But see Green v Monrovia Nursery Co. (CD Cal, Jan. 23, 2020, No. 2:18-CV-05257-RGK-GJS) 2020 US Dist Lexis 34873, *6 (plaintiff’s loss on summary judgment did not result in finding of “bad faith”); M. A. Mobile LTD v Indian Inst. of Technol. (ND Cal, Dec. 4, 2019, No. 3:08-cv-02658-WHO) 2019 US Dist Lexis 209226, *6 (same).

In addition, prejudgment interest may be awarded to a prevailing plaintiff to make it whole. BladeRoom Group Ltd. v Emerson Elec. Co., supra. See also Aerotek, Inc. v Johnson Staffing Group Co. (2020) 54 CA5th 670, 677 (holding attorney fees awarded under CC §3426.4 (excluding fees client has already paid), absent agreement with defendant/client, belong to attorneys who represented client). See §11.42A.

Ex parte temporary restraining orders (TROs) (i.e., sought without first providing notice to the other side) are rarely considered, let alone granted, by courts. See, e.g.,CBRE, Inc. v Bowyer (CD Cal, Oct. 28, 2019, No. 2:19-cv-09108-RGK-E) 2019 US Dist Lexis 227317, *7. In Lamont v Krane (ND Cal, May 7, 2019, No. 5:18-cv-04327-EJD) 2019 US Dist Lexis 77249, a preliminary injunction was denied where the plaintiff failed to identify alleged trade secrets with “reasonable particularity” or establish “irreparable harm.” In Zeetogroup, LLC v Fiorentino (SD Cal, Feb. 24, 2020, No. 19-CV-458JLS (NLS)) 2020 US Dist Lexis 31169, *7, a lack of supporting evidence of use of the trade secret by one of the individual defendants precluded injunctive relief against her. See §11.42B.

Where there is evidence that a departing employee has taken trade secrets near or at the time of departure, the employer should consider seeking a TRO or preliminary injunction to preserve (or prevent the former employee from destroying) hard copy documents or electronic files, which may contain potentially discoverable evidence on the issue of trade secret misappropriation. See ExamWorks v Baldini (ED Cal, May 8, 2020, No. 2:20-CV-00920-KJM-DB) 2020 US Dist Lexis 81746 (TRO granted); First Found. Inc. v Giddings (CD Cal, Mar. 7, 2020, No. CV 20-00359-DOC-KES) 2020 US Dist Lexis 40327 (preliminary injunction granted); Comet Technols. United States of Am., Inc. v Beurman (ND Cal, Mar. 15, 2018, No. 18-CV-01441-LHK) 2018 US Dist Lexis 224356. See §11.42B.

Generally, economic injury alone does not support a finding of irreparable harm. However, a showing of imminent or continued use of a trade secret or disclosure to a competitor will almost always show irreparable harm. Likewise, the threatened loss of prospective customers or goodwill can also support a finding of the possibility of irreparable harm. See First Found. Inc. v Giddings, supra; TGG Mgmt. Co. v Petraglia (SD Cal, Jan. 14, 2020, No. 19-CV-2007-BAS-KSC) 2020 US Dist Lexis 6376. A delay in seeking preliminary injunctive relief will imply a lack of urgency and irreparable harm. Javo Beverage Co. v California Extraction Ventures, Inc. (SD Cal, Feb. 24, 2020, No. 19-CV-1859-CAB-WVG) 2020 US Dist Lexis 31167 (denying preliminary injunction in trade secrets case). See §11.42B.

Expedited discovery is not the norm, however. Therefore, the moving party must make a showing of “good cause” to obtain it early in the case, such as when seeking a preliminary injunction. Federal courts weigh the reasonableness of the request by considering a nonexhaustive set of factors. See, e.g., Medimpact Healthcare Sys., Inc. v IQVIA Holdings, Inc. (SD Cal, Nov. 25, 2019, No. 19:-cv-1865-GPC-LL) 2019 US Dist Lexis 205468; TGG Mgmt. Co. v Petraglia (SD Cal, Nov. 25, 2019, No. 19-cv-2007-BAS-KSC) 2019 US Dist Lexis 205528. It is often much easier to obtain expedited discovery if a TRO is granted before the preliminary inunction hearing is set to take place. See ExamWorks v Baldini (ED Cal, May 8, 2020, No. 2:20-CV-00920-KJM-DB) 2020 US Dist Lexis 81746. See §11.42B.

An injunction narrowly designed to stop or protect against trade secret misappropriation is appropriate, and is not an unlawful restraint on competition or violative of Bus & P C §16600. International Petroleum Prods. & Additives Co. v Black Gold (ND Cal 2019) 418 F Supp 3d 481, 491. See §11.42B.

The posting of a bond is normally required in order for a preliminary injunction to become effective. See, e.g., Cutera, Inc. v Lutronic Aesthetics, Inc. (2020) 444 F Supp 3d 1198, 1211 (minimal bond of $5000 imposed despite request by plaintiff for $3 million bond). See §11.42B.

Several California decisions have addressed the exercise of personal jurisdiction, both general and specific, over out-of-state or foreign defendants who are sued for misappropriation of trade secrets and unfair competition. See, e.g., Cleanfish, LLC v Sims (ND Cal, Mar. 17, 2020, No. 19-cv-03663-HSG) 2020 US Dist Lexis 46191; MedImpact Healthcare Sys., Inc. v IQVIA Holdings Inc. (SD Cal, Mar. 24, 2020, No. 19-cv-1865-GP (LL)) 2020 US Dist Lexis 50955. See §11.42D.

With respect to personal jurisdiction, in Krypt, Inc. v Ropaar (ND Cal, Jan. 2, 2020, No. 19-cv-03226-BLF) 2020 US Dist Lexis 118207, an allegation that an out-of-state codefendant “conspired” with an in-state codefendant to misappropriate trade secrets was insufficient to establish personal jurisdiction; and in Hungerstation LLC v Fast Choice LLC (ND Cal, Jan. 13, 2020, No. 19-cv-05861-HSG) 2020 US Dist Lexis 5442, there was found to be no personal jurisdiction in a trade secret case where the defendant’s only contact was storing data on servers located in California. In Terra Tech Corp. v Vandevrede (CD Cal, Feb. 27, 2019, No. SACV-18-602-JVS (JDEx)) 2019 US Dist Lexis 74636, there was no personal jurisdiction over out-of-state, individual, New Jersey–based defendants for tort claims despite the existence of a California contractual permissive forum selection clause. See §11.42D.

Section 11.44A includes further discussion regarding the “compelling reasons” standard. See, e.g., CBRE, Inc. v Bowyer (CD Cal, Oct. 28, 2019, No. 2:19-cv-09108-RGK-E) 2019 US Dist Lexis 227317, *5. It is not enough to assert that documents are highly confidential; this standard is invoked “even if the dispositive motion, or its attachments, were previously filed under seal or protective order.”

In Cutera, Inc. v Lutronic Aesthetics, Inc. (ED Cal 2020) 444 F Supp 3d 1198, 1204, an evidence preservation order was issued in conjuction with the issuance of a TRO. See §11.46.

WeRide reiterated parties’ duties and obligation to preserve electronically stored information (ESI) through established electronic information retention and storage policies. WeRide Corp. v Huang (ND Cal, Apr. 24, 2020, No. 5:18-cv-07233-EJD) 2020 US Dist Lexis 72738 (striking defendants’ answers, entering defaults, imposing terminating sanctions, plus awarding attorney fees to plaintiff, for intentional destruction and deletion of material e-mails and source code). See §11.46A.

In authorizing a forensic examination, the courts will rely on a host of factors: (1) the record evidence suggesting the likely loss of potentially significant corporate documents (mainly e-mails), (2) the record evidence that defendants failed to make an adequate search for documents, (3) evidence of certain anomalies in the documents produced (including e-mails that may have been altered, and contradictory or absent metadata), and (4) incomplete production of documents even in the last few months. See Beef Prods. v Hesse (D SC, Dec. 12, 2019, No. 4:17-CV-04130-KES) 2019 US Dist Lexis 215845, *26 (citing Klipsch Group, Inc. v Big Box Store Ltd. (SD NY, Mar. 4, 2014, No. 12 Civ 6283 (VSB) (MHD)) 2014 US Dist Lexis 31509. Absent a showing of misconduct, courts are also reluctant to allow the deposition of a party’s employees or IT persons to confirm that an adequate search for and retrieval of ESI has occurred, or that a party has behaved improperly—so-called discovery about discovery. See, e.g., Freed v Home Depot U.S.A., Inc. (SD Cal, Feb. 13, 2019, No. 18-cv-359-BAS (LL)) 2019 US Dist Lexis 6584. See §11.46A.

Courts will shift the cost of forensic experts and ESI discovery to the defendant where evidence is presented that there has been unlawful misappropriation or spoliation of evidence. See ExamWorks v Baldini (ED Cal, May 8, 2020, No. 2:20-CV-00920-KJM-DB) 2020 US Dist Lexis 81746, *4. Conversely, e-discovery costs may be awarded to a defendant at the end of the litigation as the prevailing party in a trade secrets case. See Hooked Media Group, Inc. v Apple Inc. (2020) 55 CA5th 323, 417 (court awarded defendant $92,000 in e-discovery expenses for use of outside vendor to assist in data conversion). See §11.46B.

Conversion Logic, Inc. v Measured, Inc. (CD Cal, Dec. 13, 2019, No. 2;19-cv-05546-OWD (FFMx)) 2019 US Dist Lexis 215195, *15, reiterated that attempts by an employer to contractually require an employee to assign ideas or inventions developed after termination of employment will be struck down as a form of noncompete agreement in violation of Bus & P C §16600. See §11.49.

California has been one of the leading states to look unfavorably on contractual restraints on competition, especially in the context of employment agreements seeking to restrict an employee’s ability to compete post-employment. This position is rooted in public policy and codified in Bus & P C §16600, and courts have broadly held (with certain limited statutory exceptions) that §16600 applies to every contract that imposes “a restraint of a substantial character,” regardless of whether the contract includes an express noncompete clause. Golden v California Emergency Physicians Med. Group (9th Cir 2015) 782 F3d 1083, 1091; SPS Technols., LLC v Briles Aerospace, Inc. (CD Cal, Oct. 30, 2019, No. CV 18-9536-MWF (ASx)) 2019 US Dist Lexis 219610, *39. See §11.51.

Midwest Motor Supply Co. v Superior Court (2020) 56 CA5th 702, 713, affirmed that an amendment to an employment contract after January 1, 2017, rendered a forum selection clause voidable by employee. See §§11.51, 11.55, 11.55B.

In a surprising decision, the “rule of reasonableness” was applied to enforce covenants not to compete in commercial and business contracts outside of the employment context despite the plain language of §16600. See Ixchel Pharma, LLC v Biogen, Inc. (2020) 9 C5th 1130, 1148. For those who have spent years studying, practicing, and advising clients in this area of law, the California Supreme Court decision in Ixchel is confusing in that it seems to ignore the plain and unambiguous language of §16600 and years of case law (including prior California Supreme Court decisions) construing §16600 and rejecting the “rule of reason” in any type of business relationship or contract, and not just employment and sale of business interest contexts. A closer reading of Ixchel, however, shows that it is limited to certain situations, discussed further in §11.52.

Techno Lite, Inc. v Emcod, LLC (2020) 44 CA5th 462, 473, continued to hold that employers and franchisors also can prohibit competitive activities of their employees and franchisees during the term of their relationships, usually by contract (through “in-term” restrictive covenants) or by virtue of the employee’s separate duty of loyalty. See §11.52.

Healy v Qognify (CD Cal, Jan. 10, 2020, No. 2:18-cv-06318-ODW (MRW)) 2020 US Dist Lexis 5580, *7, continued to caution that preemptive claims for declaratory relief may be rendered moot or not ripe either because the employer has not sued for breach of the covenant not to compete or because the time period for the restrictive covenant has expired before trial. See §11.52.

In Power Integrations, Inc. v De Lara (SD Cal, Mar. 26, 2020, No. 20:cv-410-MMA (MSB)) 2020 US Dist Lexis 52724, *13, the court applied “governmental interest analysis” to determine that California had materially greater interest in having its noncompete law applied in disregarding Philippine choice of law provisions in defendants’ employment agreements; see also Healy v Qognify (CD Cal, Mar. 15, 2019, No. 2:18-cv-06318-ODW (MRW)) 2019 US Dist Lexis 44111, *7 (New Jersey choice of law clause unenforceable where employee lived and worked remotely from California, which also had materially greater interest than chosen state law in having its noncompete law applied). Davis v MacuHealth Distrib., Inc. (ED Cal, May 29, 2020, No. 2:19-cv-01947 WBS KJN) 2020 US Dist Lexis 94578 continued to illustrate that a divergence of rulings often leads to procedural gamesmanship, forum shopping, and races between former employees and their former employers to the courthouse in their respective state and federal courts. See §11.55A.

Employment contracts entered into or subsequently amended with California-based employees after 2016 that contain out-of-state forum selection clauses are voidable. See Lab C §925; Midwest Motor Supply Co. v Superior Court, supra (amendment to employment contract after January 1, 2017, renders forum selection clause voidable by employee). See §11.55B.

In Brown v TGS Mgmt. Co. (2020) 57 CA5th 303, the court reversed an arbitration award, finding the arbitrator exceeded his powers by issuing an award that violated an unwaivable statutory right or contravened an explicit legislative expression of public policy, such as that contained in Bus & P C §16600. In Mejia v DACM Inc. (2020) 54 CA5th 691, an arbitration clause was rendered unenforceable under McGill where it barred plaintiff from seeking public injunctive relief. See §11.55C.

Hamilton v Juul Labs, Inc. (ND Cal, Sept. 11, 2020, No. 20-cv-03710-EMC) 2020 US Dist Lexis 166718, *22, held that employee nonsolicitation clauses may be permissible under §16600 and Loral if they do not negatively affect an individual’s chosen profession. But see AMN Healthcare, Inc. v Aya Healthcare Servs., Inc. (2018) 28 CA5th 923 (holding employee nonsolicit agreement unenforceable under §16600; doubting continued viability of Loral after Edwards decision); WeRide Corp. v Huang (ND Cal 2019) 379 F Supp 3d 834, 851 (same). See §11.57.

Although the California Supreme Court struck down the enforceability of customer nonsolicitation clauses as violating §16600, the court has not, for the time being, expressly extended its holding to employee nonsolicitation provisions. See Edwards v Arthur Andersen LLP (2008) 44 C4th 937, 946 n4; see also Hamilton v Juul Labs, Inc., supra (employee nonsolicitation clauses may be permissible under §16600 and Loral if they do not negatively affect an individual’s chosen profession); Power Integrations, Inc. v De Lara (SD Cal, Mar. 26, 2020, No. 20:cv-410-MMA (MSB)) 2020 US Dist Lexis 52724; Conversion Logic, Inc. v Measured, Inc. (CD Cal, Dec. 13, 2019, No. 2;19-cv-05546-OWD (FFMx)) 2019 US Dist Lexis 215195. Again, Ixchel Pharma, LLC v Biogen, Inc., 9 C5th at 1148, affirmed Edwards’ per se rule against post-employment nonsolictation provisions entered in the context of employment-related agreements, but also applied the “rule of reasonableness” to potentially uphold a covenant not to compete in nonemployment business or other commercial contract relationships. See §11.57.

Despite the general unenforceability of customer nonsolicitation clauses, parties in litigation may nonetheless agree, as part of a negotiated settlement, to have the court enter a stipulated injunction prohibiting one side from soliciting the other’s customers. And, based on the recent California Supreme Court decision in Ixchel Pharma, LLC v Biogen, Inc., 9 C5th at 1148, such litigation settlements also may be separately enforceable, at least between business competitors (but maybe not the former employee) if “reasonable” in scope and duration. See §11.58.

One recent California case has warned against confidentiality provisions or agreements that broadly define the scope of “confidential information” as encompassing information about an entire industry or profession, or beyond what the employee is exposed to while employed. Such overbroad definitions, on the face, can be ready to prevent an employee from lawfully competing and therefore violate the noncompete provision of Bus & P C §16600 and render the confidentiality provision or agreement void and unenforceable. Brown v TGS Mgmt. Co. (2020) 57 CA5th 303. See §11.59.

Recent California decisions have found that the UTSA may preempt related tort and statutory claims typically asserted in the field of unfair competition. See Acrisure of Cal., LLC v SoCal Commercial Ins. Servs., Inc. (CD Cal, Mar. 27, 2019, No. CV 18-10187-CJC (ADSx)) 2019 US Dist Lexis 170027 (tortious interference and unfair competition claims preempted). The test employed is whether the non-UTSA claims are “based on the same nucleus of facts,” as the trade secret misappropriation claim. See, e.g., Snapkeys, Ltd. v Google LLC (ND Cal 2020) 442 F Supp 3d 1196; JEB Group, Inc. v San Jose III (CD Cal, Mar. 31, 2020, No. CV 19-04230-CJC (AGRx)) 2020 US Dist Lexis 96186. Put another way, “[c]laims are not preempted … when based upon a broader spectrum of misconduct than trade secret misappropriation.” Javo Beverage Co. v California Extraction Ventures, Inc. (SD Cal, Dec. 2, 2019, No. 19-CV-1859-CAB-WVG) 2019 US Dist Lexis 207483, *14. See §11.61A.

The federal courts that have considered the issue are split. Compare, e.g.: Erhart v Bofi Holding, Inc. (SD Cal, Mar. 31, 2020, No. 15-cv-02287-BAS-NLS) 2020 US Dist Lexis 57137, *101 (court granted partial summary judgment, based on UTSA preemption, on claims for fraud, negligence, conversion and breach of duty of loyalty); Navigation Holdings, LLC v Molavi (ND Cal 2020) 445 F Supp 3d 69, 75 (preemption of tortious interference and part of fiduciary duty claims); Calsoft Labs, Inc. v Panchumarthi (ND Cal, Jan. 31, 2020, No. 19-cv-04398-NC) 2020 US Dist Lexis 17214, *4 (finding UTSA preemption of claims for breach of fiduciary duty, conversion, intentional interference with contract and prospective economic relationships); Albert’s Organics, Inc. v Holzman (ND Cal 2020) 445 F Supp 3d 463 (finding preemption of tortious interference and statutory unfair competition claims, but not breach of duty of loyalty claim); CleanFuture, Inc. Motive Energy, Inc. (CD Cal, Apr. 15, 2019, No. SACV 19-00084 AG (KESx)) 2019 US Dist Lexis 132841, *7 (preemption of various tortious interference, unfair competition, and unjust enrichment claims where based on unauthorized disclosure and use of trade secrets) with the following: Zoom Imaging Solutions, Inc. v Roe (ED Cal, Nov. 8, 2019, No. 2:19-cv-01554–WBS-KJN) 2019 US Dist Lexis 195374 (no preemption of tortious interference and breach of fidcuiary duty claims, but preemption of UCL claim); ChromaDex, Inc. v Elysium Health, Inc. (CD Cal 2019) 369 F Supp 3d 983, 989 (no preemption of breach of fiduciary duty claim based on theory other than trade secret misappropriation); Javo Beverage Co. v California Extraction Ventures, Inc. (SD Cal, Dec. 2, 2019, No. 19-CV-1859-CAB-WVG) 2019 US Dist Lexis 207483 (no preemption of tortious interference claim where wrongful conduct pled was distinct from alleged misappropriation of trade secrets claim); Heieck v Federal Signal Corp. (CD Cal, Nov. 4, 2019, No. SACV 18-02118 AG (KESx)) 2019 US Dist Lexis 219591 (preemption of breach of fiduciary duty and loyalty, UCL and conversion claims, but not claims for tortious and negligent interference with economic advantage or violation of Pen C §502 (computer fraud)). See §11.61A.

Five Star Gourmet Foods, Inc. v Fresh Express, Inc. (ND Cal, Jan. 31, 2020, No. 19-cv-05611-PJH) 2020 US Dist Lexis 16368 considered and rejected plaintiff’s argument that it would be “premature” to address UTSA preemption at the motion to dismiss stage. See §11.61A.

SPS Technols., LLC v Briles Aerospace, Inc. (CD Cal, Oct. 30, 2019, No. CV 18-9536-MWF (ASx)) US Dist Lexis 219610, *18, adopted the minority view that a competitor need not plead and prove reliance to state a UCL claim. Under the “fraudulent” prong of the UCL, a plainitff must meet the heightened pleading standards under state and federal law and plead with the requisite “specificity”; that is, by alleging “the who, what, when, where and how.” Power Integrations, Inc. v De Lara (SD Cal, Mar. 26, 2020, No. 20:cv-410-MMA (MSB)) 2020 US Dist Lexis 52724. See §11.62.

Under Caliber Paving Co. v Rexford Indus. Realty & Mgmt., Inc. (2020) 54 CA5th 175, 183, a noncontracting party with economic interest in the contract is not immune from a tort claim of intentional interference with the contract. Additional cases confirmed that plaintiff must plead with greater specificity the facts surrounding the type and nature of the contracts with which defendant’s conduct allegedly interfered. Zoom Imaging Solutions, Inc. v Roe (ED Cal, Jan. 30, 2020, No. 2:19-cv-01544 WBS KJN) 2020 US Dist Lexis 15933, *6 (amended pleading that alleged “at least 74 Zoom customers ha[d] cancelled their agreements with [plaintiff]” sufficiently stated claim); Calsoft Labs, Inc. v Panchumarthi (ND Cal, Nov. 7, 2019, No. 19-cv-04398-NC) 2019 US Dist Lexis 194939, *11. See §§11.66–11.67.

Until recently, there was some uncertainty in the law when the underlying contract at issue was terminable on notice by either party or “at will.” The issue was recently resolved by the California Supreme Court in Ixchel Pharma, LLC v Biogen Inc., 9 C5th at 1141, which held that to state a claim for “tortious interference” with “at-will contracts” requires proof of an independent wrongful act, not just the interference itself. One preceding line of cases indicated there was no tort claim for interference with the contract, only for tortious interference with prospective business or economic relations. Conversely, the other prior cases, now disapproved, had found that it was actionable to induce a party to a contract to terminate the contract according to its own terms or even if the contract is “at-will.” These two lines of cases were reconciled in Ixchel, which now requires pleading and proof of an independent wrong, in addition to mere interference itself, regardless of whether the at-will nature of the contract is for employment or other commercial or business purposes. See §11.66.

The tort of tortious interference with prospective business relations does not protect hypothetical relationships not developed at the time of the allegedly tortious acts. A plaintiff may not “vaguely claim a defendant disrupted a potential economic relationship with ‘prospective customers’ or ‘the general public.’” Spice Jazz LLC v Youngevity Int’l, Inc. (SD Cal, Mar. 11, 2020, No. 19-cv-583-BAS-WVG) 2020 US Dist Lexis 42364, *8; AlterG, Inc. v Boost Treadmills LLC (ND Cal 2019) 388 F Supp 3d 1133, 1151; Calsoft Labs, Inc. v Panchumarthi (ND Cal, Nov. 7, 2019, No. 19-cv-04398-NC) 2019 US Dist Lexis 194939. See §11.67.

High-level corporate officers and directors who participate in the management of the company owe fiduciary duties to their corporation. Hooked Media Group, Inc. v Apple Inc., 55 CA5th at 414. A fiduciary, such as a corporate officer or director, as opposed to a mere lower-level employee, arguably has a heightened duty to the corporation. That duty not only includes “affirmatively to protect the interests of the corporation … but also to refrain from doing anything that would work injury to the corporation, or to deprive it or profit or advantage which his skill and ability might properly bring to it.” Bancroft-Whitney Co. v Glen (1966) 64 C2d 327, 345; ChromaDex, Inc. v Elysium Health, Inc. (CD Cal 2019) 369 F Supp 3d 983, 989. Moreover, the duty of officers and directors to protect privileged and confidential information is a duty that extends beyond termination, and continues even after their resignation and even after they leave the company. AlterG, Inc. v Boost Treadmills LLC, 388 F Supp 3d at 1148; Calsoft Labs, Inc. v Panchumarthi, supra. Further, Albert’s Organics, Inc. v Holzman (ND Cal 2020) 445 F Supp 3d 463, 480, set forth elements to establish aiding and abetting breach of fiduciary duty. Even lower-level employees may have similar duties of loyalty to the employer under principles of agency law. See Techno Lite, Inc. v Emcod, LLC (2020) 44 CA5th 462, 472. See also Erhart v Bofi Holding, Inc. (SD Cal, Mar. 31, 2020, No. 15-cv-02353-BAS-NLS) 2020 US Dist Lexis 57137 (explaining subsidiary obligations under the duty of loyalty). See §11.68.

Again, a claim for breach of fiduciary duty may or may not be preempted by the UTSA, depending on the allegations and facts. Five Star Gourmet Foods, Inc. v Fresh Express, Inc. (ND Cal, Jan. 31, 2020, No. 19-cv-05611-PJH) 2020 US Dist Lexis 16368, *40 (“For example, a claim alleging a violation of a duty of loyalty is not displaced by CUTSA where the duty of loyalty would be violated by undertaking competitive acts, regardless of whether any proprietary information was implicated. … However, ‘where the allegation is that [a defendant] breached his duty of loyalty by disclosing trade secrets, the claim for breach of fiduciary duty is based on the same operative facts and is therefore preempted by CUTSA.’”); Albert’s Organics, Inc. v Holzman 445 F Supp 3d at 475 (alleged breach of fiduciary duty was broader than disclosing trade secrets or confidential information and included a duty not to compete against one’s current employer; i.e., a duty of loyalty). See §11.68.

In CleanFuture, Inc. v Motive Energy, Inc. (CD Cal, Apr. 15, 2019, No. SACV 19-00084 AG (KESx)) 2019 US Dist Lexis 132841, *16, the court granted a motion to dismiss where plaintiff failed to “allege the speaker, recipient, timing and location of each allegedly libelous statement.” See §11.72.

As a general rule, certain intangible property interests can be converted, but exactly what type of “intangible” property in the trade secret/unfair competition realm is still unclear. Erhart v Bofi Holding, Inc. (SD Cal, Mar. 31, 2020, No. 15-cv-02287-BAS-NLS) 2020 US Dist Lexis 57137. See §11.73.

The Computer Fraud and Abuse Act (CFAA) is subject to a 2-year statute of limitations. 18 USC §1030(g); Stage 32, LLC V Tuccio (CD Cal, Oct. 29, 2019, No. 2:18-cv-098000-ODW (JEMx)) 2019 US Dist Lexis 187582,*7. The Comprehensive Computer Data Access & Fraud Act (CCDAFA) has a 3-year statute of limitations. See Pen C §502(e)(5); Brodsky v Apple Inc. (ND Cal 2020) 445 F Supp 3d 110, 134. See §11.74.

The definition of the term “inventions” has been modified in the “Form: Definitions.” See §11.78.

Chapter 12: Workplace Safety

Amended regulations. The Occupational Safety and Health Appeals Board (OSHAB) announced a new regulation package effective October 1, 2020. The amended regulations include a new process for docketing and perfecting appeals, issuance of subpoenas by attorneys, new advice on discovery, and changes to the expedited appeals process. See 8 Cal Code Regs §§359.1, 361.3, 372.2 for amendments. See §§12.1A, 12.62A, 12.66.

Title 8 California Code of Regulations §3203 has been amended to require procedures to allow employee access to the Injury and Illness Prevention Program (IIPP). The written program, but not the records of the steps taken to implement and maintain the program, must be provided on request of an employee or designated employee representative. See §§12.1A, 12.85, 12.90.

Cal/OSHA and COVID-19. These updates include actions taken in response to occupational hazards associated with COVID-19 and are intended to identify changes, either temporary or permanent, to the administration of the California Occupational Safety and Health Act of 1973 (Cal/OSHA). This is a rapidly changing area. All issues noted herein should be reviewed for continued accuracy, updates, and amendments. See §12.1A.

Assembly Bill 685 requires a public or private employer that receives a notice of potential exposure to COVID-19 to provide specified notifications to its employees within 1 business day of the notice of potential exposure. Employers must provide prescribed notice to all employees, and the employers of subcontracted employees, who were on the premises at the same worksite as a qualifying individual within the infectious period that they may have been exposed to COVID-19. The bill requires an employer, if the employer or representative of the employer is notified of the number of cases that meet the definition of a COVID-19 outbreak, within 48 hours, to report prescribed information to the local public health agency in the jurisdiction of the worksite. The bill also requires an employer that has an outbreak to continue to give notice to the local health department of any subsequent laboratory-confirmed cases of COVID-19 at the worksite. The bill exempts a health facility, as defined, from this reporting requirement. See Lab C §6409.6; AB 685 (effective Jan. 1, 2021). See §§12.1A, 12.30.

Executive Orders. Governor Gavin Newsom has issued various executive orders that may impact enforcement of Cal/OSHA regulations, including Executive Orders No. N–63–20 (May 7, 2020) and No. N–71–20 (June 30, 2020), temporarily extending the time to issue a citation and to file a complaint claim or appeal, and authorizing the use of electronic means to conduct hearings, provided certain criteria are met. In response, OSHAB has begun noticing and conducting video hearings. Prehearing procedures, including prehearing identification of witnesses and submission of exhibits, have been amended accordingly. See §12.1A.

Emergency regulations. On November 19, 2020, the Occupational Safety and Health Standards Board (Standards Board) approved emergency regulations to address COVID-19 prevention. The emergency regulations, including 8 Cal Code Regs §§3205, 3205.1, 3205.2, 3205.3 and 3205.4, were approved by the Office of Administrative Law and became effective November 30, 2020. See https://www.dir.ca.gov/OSHSB/COVID-19-Prevention-Emergency.html. The emergency regulations apply to employees and places of employment, with limited exception. They require employers to establish, implement, and maintain an effective COVID-19 prevention program, provide detailed requirements for responding to COVID-19 outbreaks in the workplace, and address COVID-19 prevention in employer-provided housing and transportation. The regulations are comprehensive and create many new obligations for employers. They should be reviewed carefully for implementation as is appropriate. The Standards Board has directed the Division of Occupational Safety and Health (the Division or DOSH) to work with the Board to convene an advisory committee to review and recommend amendments to the emergency regulations and, after the COVID-19 pandemic subsides, to convene an advisory committee to consider the necessity for a permanent regulation. Without a permanent regulation or renewal, the current version will expire October 2, 2021. See §12.1A.

Cal/OSHA guidance. Cal/OSHA has published various documents to be used as guidance on requirements to protect workplaces from COVID-19. These are not regulations but may be seen as a map toward compliance with existing regulations that require, among other things, workplace inspections, identification and correction of hazards, and employee communication and training. The Cal/OSHA website notes that the guidance documents are subject to change as new information is received and the situation evolves. See https://www.dir.ca.gov/dosh/coronavirus/Guidance-by-Industry.html. See §12.1A.

The definition of a serious injury and illness was changed by amendment of Lab C §6302(h) effective January 1, 2020. The definition was subsequently updated by Cal/OSHA on February 10, 2020. 8 Cal Code Regs §330(h). See §12.30.

The total statutory minimum and maximum penalties have been updated for 8 Cal Code Regs §336. See §12.56.

If an appeal initiated by phone, in writing, or by online form is incomplete or does not include contact information as required by 8 Cal Code Regs §§355.1 and 359.1, the additional information must be submitted to OSHAB within 20 days of the written or electronic acknowledgment by the Board. Failure to do so constitutes grounds for dismissal. 8 Cal Code Regs §359.1(b). See §12.62A.

Effective October 1, 2020, OSHAB updated the requirements for perfecting an appeal. An employer is no longer required to submit a copy of the citations with its appeal. Instead, once an appeal is properly filed by an employer, OSHAB will serve each party with a notice of docketed appeal. Cal/OSHA must then provide a copy of all appealed citations to the Appeals Board within 15 working days after service of the notice of docketed appeal. The Division’s failure to timely comply with this requirement will not prejudice an employer’s appeal. 8 Cal Code Regs §359.1(e), (f). See §12.62A.

Effective October 1, 2020, OSHAB updated its discovery rules, requiring licensed members of the California State Bar, who are acting as an attorney of record for a party, to issue their own subpoenas and subpoenas duces tecum. 8 Cal Code Regs §372.2(c). See §12.66.

Every employer must establish, implement, and maintain an effective Injury and Illness Prevention Program (IIPP). Lab C §6401.7. The additions reflect the most up-to-date requirements. See §§12.85, 12.91, 12.114.

Chapter 13: Workplace Privacy

A new “Statutory” privacy issues section has been added to address the California Privacy Rights Act (CPRA), passed as a ballot proposition in November 2020. The CPRA amended and expanded the California Consumer Privacy Act of 2018 (CCPA) (CC §§1798.100–1798.199), which was enacted in 2018 and amended in 2019. Portions of the CCPA took effect in January 2020. However, provisions of the CCPA that apply to the employer-employee relationship had not taken effect when the CPRA passed, and implementation of those provisions is now scheduled for 2023. The CPRA establishes a new administrative agency, the California Privacy Protection Agency, to implement and enforce the CCPA. This agency will promulgate regulations in addition to regulations that were adopted before passage of the CPRA. Because the CPRA was enacted through a ballot measure, any material change will require another ballot measure. See §13.3A.

Statutory references have been updated in §13.10.

Labor Code §432.7(f) permits health facilities to ask applicants for positions with regular access to patients about convictions that require registration under the Sex Offender Registration Act (Pen C §290). However, the statute imposes limits on health facilities regarding inquiries about juvenile-related offenses. Specifically, Lab C §432.7(f)(2)(A) prohibits inquiries from health facilities about juvenile-related arrests, detentions, and so forth, unless the information relates to a juvenile court conviction of a misdemeanor or felony for specified crimes within 5 years of the employment application. An employer seeking such disclosures will be required to provide the applicant with a list of specific offenses under Pen C §290 for which disclosures are sought. Health providers are precluded from inquiring into an applicant’s juvenile offense history that has been sealed by the juvenile court. Lab C §432.7(f)(2)(B). See §13.10A.

The discussion regarding “interception” under federal law has been expanded. See §13.21.

The definition of “intercept” was expanded to include GET requests as discussed in Davis v Facebook, Inc. (In re Facebook Inc. Internet Tracking Litig.) (2020) 956 F3d 589. A GET request includes information identifying the computer user and the searched topic. Facebook was compiling its users’ browser histories by duplicating and collecting the users’ GET requests. See §13.30.

Health risks associated with COVID-19 have allowed employers to conduct daily health screens, including taking employees’ temperatures and requiring employees to certify that they do not have any symptoms typical of the disease, before entering the workplace. Information gathered during such screens must be treated confidentially, as with any medical information. Employers should discontinue screening practices once a vaccine is widely available and the pandemic is adequately controlled. See Lab C §§3212.86–3212.88, added by Stats 2020, ch 85 (SB 1159). See §13.44.

Civil Code §47(c) provides a safe harbor against defamation liability by allowing employers to provide information during reference checks involving employees who previously engaged in sexually harassing behavior. The former employer or its agent may state that the former employee is not eligible for rehire based on the former employer’s determination that the former employee engaged in sexual harassment. The privilege applies only when the statement is made without malice. See §13.75.

With respect to required notice of unauthorized access, “personal information” is defined. Notably, per CC §1798.82(h)(1)(A)–(B), “personal information” does not include information publicly available from federal, state, or local government records. See §13.82.

Language to explicitly permit “natural hairstyles, including afros, braids, twists, and locks” has been added to the “Form: Sample Dress and Grooming Policy.” See §13.85.

Chapter 15: Discrimination and Harassment

The U.S. Supreme Court granted certiorari (in part) in R.G. & G.R. Harris Funeral Homes, Inc. v EEOC (2019) ___ US ___, 139 S Ct 1599, to consider whether Title VII prohibits discrimination against transgender people or sex stereotyping under Price Waterhouse v Hopkins (1998) 490 US 228, 109 S Ct 1775. In Bostock v Clayton County, Ga. (2020) 590 US ___, 140 S Ct 1731, the Court affirmed R.G., stating that because discrimination on the basis of homosexuality or transgender status requires an employer to intentionally treat individual employees differently because of their sex, an employer who intentionally penalizes an employee for being homosexual or transgender also violates Title VII. See §§1.10, 1.12, 15.55–15.56, 15.60.

In Babb v Wilkie (2020) 589 US ___, 140 S Ct 1168, the Court held that the plain meaning of 29 USC §633a(a) (“made free from any discrimination based on age”) demands that personnel actions be untainted by any consideration of age. This does not mean that a plaintiff may obtain all forms of relief that are generally available for a violation of §633a(a), including hiring, reinstatement, backpay, and compensatory damages, without showing that a personnel action would have been different if age had not been taken into account. To obtain such relief, a plaintiff must show that age was a but-for cause of the challenged employment decision. But if age discrimination played a lesser part in the decision, other remedies may be appropriate. See §§1.8, 15.55–15.56, 15.60–15.61, 18.48–18.51, 18.54.

Rizo v Yovino (9th Cir 2020) 950 F3d 1217 held that unlike Title VII, the Equal Pay Act does not require proof of discriminatory intent. See §§15.20, 15.55–15.56, 15.60, 18.48–18.51, 18.54.

In Our Lady of Guadalupe Sch. v Morrissey-Berru (2020) 591 US ___, 140 S Ct 2049, 2053, the Court held that the First Amendment foreclosed the adjudication of employment discrimination claims by private school teachers who performed vital religious duties educating their students in the Catholic faith. “When the ‘ministerial exception’ reached this Court in Hosanna-Tabor, the Court looked to precedent and the ‘background’ against ‘the First Amendment was adopted,’ and unanimously recognized that the Religion Clauses foreclose certain employment-discrimination claims brought against religious organizations” (quoting Hosanna-Tabor Evangelical Lutheran Church & Sch. v EEOC (2011) 565 US 171, 183, 132 S Ct 694). See §15.30H.

In Frappied v Affinity Gaming Black Hawk LLC (10th Cir 2020) 966 F3d 1038, the Tenth Circuit upheld sex-plus-age disparate impact claims under Title VII (alleged by female workers over 40 years of age) against casino operator Affinity Gaming and reversed the district court’s order of dismissal. A prima facie case ordinarily requires proof of four elements under the McDonnell Douglas framework. While many courts have interpreted the fourth element as requiring evidence of replacement by a younger comparator, the court held that “in light of Bostock, we conclude that a sex-plus plaintiff does not need to show discrimination against a subclass of men or women. Instead, if a female plaintiff shows that she would not have been terminated if she had been a man—in other words, if she would not have been terminated but for her sex—this showing is sufficient to establish liability under Title VII.” See §§15.55–15.56, 15.60, 18.48–18.51, 18.54.

See also Comcast Corp. v National Ass’n of African American-Owned Media (2020) 589 US ___, 140 S Ct 1009 (whether or not McDonnell Douglas has some useful role to play in 42 USC §1981 cases, it does not mention motivating factor test, let alone endorse its use only at pleadings stage); Astre v McQuaid (9th Cir 2020) 804 Fed Appx 665 (evidentiary strictures of McDonnell Douglas do not determine the sufficiency of 42 USC §1981 claim). See §§15.55–15.56, 15.60, 18.51.

Senate Bill 1383 expands the California Family Rights Act (CFRA) to make it an unlawful employment practice for any employer with five or more employees to refuse to grant a request by an employee to take up to 12 workweeks of unpaid protected leave during any 12-month period to bond with a new child of the employee or to care for themselves or a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner. It requires an employer who employs both parents of a child to grant leave to each employee. The bill defines employee for these purposes as an individual who has at least 1250 hours of service with the employer during the previous 12-month period, unless otherwise provided. Stats 2020, ch 86 (SB 1383). See §15.76.

Government Code §12950.1 (sexual harassment training) was amended in 2018 by SB 1343 to broaden required sexual harassment prevention training. It was amended again in 2019 by SB 778, to extend the deadline for compliance and to clarify certain issues. As amended, the statute requires that by January 1, 2021, employers with five or more employees must provide the training to all employees, not just supervisory employees, once every 2 years. However, the mandatory harassment training required for nonsupervisory employees is for 1 hour, rather than the 2 hours for supervisory employees. See §§9.61, 15.103.

Chapter 16: Whistleblower Issues and Chapter 17: Discipline and Termination

The California Labor Code expressly prohibits employers from retaliating against employees for refusing to participate in activities “that would result in a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation” under Lab C §1102.5(c). The court is now authorized to award reasonable attorney fees to a plaintiff who brings a successful action for a violation of these provisions. Lab C §1102.5(j). See Stats 2020, ch 344 (AB 1947). See also §§16.13, 17.12.

Assembly Bill 749 prohibits and invalidates any provisions in settlement agreements entered into on or after January 1, 2020, that prevent workers from obtaining future employment with the settling employer or its affiliated companies under certain circumstances. Assembly Bill 2143, passed in 2020, provides an exception to this ban, if the employer documented in good faith, prior to a claim, that a person engaged in sexual harassment, sexual assault, or criminal conduct. See Stats 2020, ch 73 (AB 2143). See §17.111.

Chapter 18: Reductions in Force and Plant Closings

The Coronavirus Aid, Relief, and Economic Security Act 2020 (CARES Act) introduced the Paycheck Protection Program, CARES Act §§1101–1114, which provides an incentive for employers to keep workers on their payrolls. See Pub L 116–136, 134 Stat 281. See also §18.1.

Chapter 19: Insurance Coverage for Employment Claims

Senate Bill 1159 (emergency legislation) defines “injury” for an employee to include illness or death resulting from the 2019 novel coronavirus disease (COVID-19) under specified circumstances, until January 1, 2023. The bill creates a disputable presumption, as specified, that the injury arose out of and in the course of the employment and is compensable, for specified dates of injury. It limits the applicability of the presumption under certain circumstances, and it requires an employee to exhaust their paid sick leave benefits and meet specified certification requirements before receiving any temporary disability benefits or, for police officers, firefighters, and other specified employees, a leave of absence. The bill also makes a claim relating to a COVID-19 illness presumptively compensable after 30 days or 45 days, rather than 90 days. Until January 1, 2023, SB 1159 allows for a presumption of injury for all employees whose fellow employees at their place of employment experience specified levels of positive testing, and whose employer has five or more employees. See Lab C §§77.8, 3212.86–3212.88. See §19.9.

Chapter 20: Mediation and Arbitration of Employment Disputes

In Rittmann v Amazon.com, Inc. (9th Cir 2020) 971 F3d 904, the Ninth Circuit held that the district court properly concluded that delivery providers fall within the scope of the FAA’s transportation worker exemption under 9 USC §1 because they deliver goods shipped from across the United States. See §20.28.

See also California Trucking Ass’n v Becerra (9th Cir, Mar. 30, 2020, Nos. 20–55106, 20–55107) 2020 US App Lexis 10066 (truckers not independent contractors under Dynamex ABC test (AB 5); state law not preempted by FAAAA); Gonzales v San Gabriel Transit, Inc. (review granted Jan. 15, 2020, S259027; superseded opinion at 40 CA5th 1131) (court of appeal held that Dynamex’s “ABC test” applies retroactively to certification of class of employees allegedly misclassified as independent contractors); but see Waithaka v Amazon.com Inc. (1st Cir 2020) 966 F3d 10 (criticized by Rittmann, 971 F3d at 920 n11, “We recognize that the First Circuit’s decision in Waithaka reached a different result in interpreting identical contract terms. However, it is not clear that the court applied the Washington state law principles of contract interpretation that we identify here.”). See §20.28.

About the Authors

BONNIE BOGUE (chapter 21: Public Employment Issues) has been an arbitrator and mediator since 1977 and is a member of the National Academy of Arbitrators. Formerly director of the California Public Employee Relations Program at the University of California, Berkeley, she contributed to its journal, CPER, from 1970 until 1994. She also is coauthor of several titles in CPER’s Pocket Guide Series. She is a past Chair of the Labor and Employment Law Section of the California State Bar.

DENISE N. BRUCKER (chapter 10: Employee Handbooks) is a 1997 graduate of Northeastern School of Law and is associated with Paul, Plevin, Sullivan & Connaughton LLP in San Diego. She has over 6 years of experience in employment litigation and counseling. Ms. Brucker’s current practice is devoted to counseling management and human resource professionals on compliance issues and risk avoidance. Her areas of expertise cover a broad range of employment issues, including wage and hour, family and medical leaves, employment discrimination and harassment, trade secrets, and contract issues. Ms. Brucker also defends employers in administrative proceedings before the Department of Labor, DFEH, and EEOC.

ARTHUR CHINSKI (chapter 3: Independent Contractors, Leased Workers, and Outsourcing) is a shareholder with the firm of Buchalter Nemer, P.C., in Los Angeles. Mr. Chinski graduated in 1967 from the University of California, Los Angeles, and received his law degree in 1970 from the University of California, Davis, School of Law. From 1971 to 1974, he was an attorney with the Region 21 office of the National Labor Relations Board in Los Angeles. For the Business Law Institute, he was Director and Chair of the Employment Regulations Program, Director of the Compensation and Benefits Program, and Director and Chair of the Human Resources Program. Mr. Chinski has served on the Executive Board of the Los Angeles County Bar Association’s Labor Law Section and has served as Vice-Chair and a member of the Executive Committee of the Bar Association’s Arbitration Committee. He is currently Adjunct Professor of Law at Southwestern University School of Law, where he teaches Entertainment Industry Labor and Employment Law in the School’s Biederman Media and Entertainment Law Institute, which offers a Masters in Law Degree in Entertainment Law.

MARGARET HART EDWARDS (chapter 2: Employment Contracts and Executive Compensation and chapter 9: Notice-Posting, Training, and Recordkeeping Requirements) is a shareholder in the firm of Littler Mendelson P.C., San Francisco. Ms. Edwards graduated (cum laude) in 1972 from the University of Chicago and received her law degree (cum laude) in 1975 from Northwestern University. Ms. Edwards was a former member of the Board of Contributing Editors for the California Business Law Reporter. She is the author of Posting and Recordkeeping Requirements for Employers (Cal CEB Client Handbook Series 1997), A Model Employee Handbook for California Businesses (Cal CEB Client Handbook Series 1994), and Americans with Disabilities Act: A Practical Guide for Employers (Cal CEB Client Handbook Series 1994). In addition, Ms. Edwards has written over 30 articles on labor and employment topics for a wide range of publications. She has lectured before such groups as the Administrative Law Judges Association, the Employers Group, the Merchants and Manufacturers Association, the Northern California Human Resources Council, the Council on Education in Management, the Defense Research Institute, the California Continuing Education of the Bar, the American Council on International Personnel, the American Payroll Association, the California Hospitality and Lodging Association, the California Downtown Association, the California Mortgage Bankers Association, and a variety of legal professional organizations. Ms. Edwards is a member of the Board of Directors of the National Employment Center for the American Foundation of the Blind and served for 10 years as a member of the Board of Directors of the Legal Aid Society of San Francisco.

DOUGLAS J. FARMER (chapter 17: Discipline and Termination) received his A.B. (magna cum laude) from Harvard University and his J.D. from Harvard Law School. Mr. Farmer is a partner with Sheppard, Mullin, Richter & Hampton LLP in San Francisco, where he specializes in employment law counseling and class action litigation. He was recently identified by Chambers USA as one of California’s leading employment lawyers. He is a former EEOC Trial Attorney, a frequent speaker for human resources groups nationwide, and the author of several employment law publications for lawyers. He created one of the first Spanish-language sexual harassment training programs, which has been used by California employers to train managers and employees throughout the Southwest. Mr. Farmer is a member of the San Francisco Bar Association’s Diversity Committee.

LISA A. FRANK (chapter 10: Employee Handbooks) is co-founder of Kasper & Frank LLP. Ms. Frank advises employers on issues such as hiring, leaves of absence, disability accommodation, performance management, wage and hour compliance, reductions in force, and the protection of intellectual property. She also regularly provides management and human resources training and conducts workplace investigations and is a skilled litigator. Before founding Kasper & Frank, she served as partner at one of San Diego’s leading employment law firms, in-house counsel at the world’s largest independent biotechnology company, and associate at a prominent international law firm. Ms. Frank earned her B.A. (Phi Beta Kappa) from the University of California, Santa Cruz, in 1995, and her J.D. from the University of California, Berkeley, School of Law in 1999.

CYNTHIA E. FRUCHTMAN (chapter 16: Whistleblower Issues) earned her B.A. from Northwestern University in 1979 and her J.D. from Chicago-Kent College of Law in 1986. She was a law clerk to The Honorable N. Fred Woods of the Los Angeles County Superior Court and to The Honorable Prentice H. Marshall of the U.S. District Court for the Northern District of Illinois. She has been in sole practice in Santa Monica since 1997. Ms. Fruchtman has served as a Guest Lecturer at the University of California, Los Angeles, School of Law and as an Adjunct Professor at California State University in Los Angeles and at Whittier Law School. She is a mediator and Judge Pro Tem for the Los Angeles County Superior Court. In addition, she was Co-Chair of the Los Angeles County Bar Association Bioethics Committee from 1998 to 2000 and is active in the bioethics field, having been appointed to the Joint Bioethics Committee of the Los Angeles County Bar Association and the Los Angeles County Medical Association and serving as a Board Member of The Center for Research and Training in Humane and Ethical Medical Care at the Santa Monica/UCLA Medical Center. Her practice focuses on labor law and civil litigation in the areas of employment, business, and real estate. She has written extensively on employment law and assisted-reproduction topics.

JEFFREY P. FUCHSMAN (chapter 5: Wage and Hour Laws) is a partner in the Glendale firm Ballard Rosenberg Golper & Savitt, LLP, a labor and employment law firm representing management exclusively. For more than 25 years, Mr. Fuchsman has successfully defended employers in a wide range of employment law matters, including wage and hour class actions, wrongful termination, discrimination, and sexual harassment lawsuits. Mr. Fuchsman has appeared in state and federal courts throughout California, and has argued cases before the California Court of Appeal and the Ninth Circuit of Appeals. Mr. Fuchsman was co-counsel for the employer in a landmark case before the California Supreme Court on constructive discharge, Turner v Anheuser-Busch, Inc. (1994) 7 C4th 1238. He also counsels companies on day-to-day employment law issues, including wage and hour, family and medical leave, drug testing, investigations, employee discipline, and terminations. Mr. Fuchsman is also a frequent author and speaker on various labor and employment law topics. He received his B.A. in Economics from the State University of New York at Albany in 1979 and is a 1982 graduate of the University of San Diego School of Law.

LAWRENCE J. GARTNER (chapter 1: Hiring Guidelines and Pitfalls) is a partner with the firm of Ballard Spahr LLP in Los Angeles. Mr. Gartner graduated in 1967 from the University of California, Berkeley, and received his law degree in 1970 from Harvard Law School. He is a former trial attorney for the Equal Employment Opportunity Commission. In 1985–1986, he was the Chair of the Public Employment Committee of the Labor and Employment Law Section of the State Bar.

LARRY M. GOLUB (chapter 19: Insurance Coverage for Employment Claims) is a partner with the firm of Sacro & Walker LLP in Glendale. Mr. Golub graduated magna cum laude in 1979 from the University of California, Los Angeles, and received his law degree magna cum laude in 1983 from the University of California, Hastings College of the Law, where he was the Note and Comment Editor of the Law Review. He served as a Judicial Extern to California Court of Appeals Justice Joseph Grodin in 1982. Among Mr. Golub’s insurance-related publications are the following: “Analyzing Coverage: Reading & Interpreting Insurance Policies” and “Claims Involving Excess Insurance,” both for California Liability Insurance Practice: Claims & Litigation (Cal CEB); “Business General Liability Policies,” for California Insurance Law & Practice (LexisNexis 1992); “Products Liability Insurance,” for California Insurance Law & Practice (LexisNexis 1994); and “Identifying and Using Insurance Coverage in Business Litigation,” for a CEB business law program presented in 1986, 1989, 1991, and 1993. Mr. Golub also lectures extensively on insurance coverage issues, including the issue of insurance coverage for employment claims.

JOEL GROSSMAN (chapter 20: Mediation and Arbitration of Employment Disputes) is a mediator and arbitrator with JAMS in Santa Monica. He graduated from the University of Pennsylvania with honors in 1972, received a Masters Degree in English from the University of California, Santa Barbara, in 1974, and received a J.D. from the University of California, Los Angeles, School of Law in 1979, where he was elected to the Order of the Coif. He clerked for the Hon. Eugene Wright of the Ninth Circuit Court of Appeals and then joined the Los Angeles office of O’Melveny & Myers, where he practiced labor and employment law. During this period, he coauthored a leading treatise on employment law, The Modern Law of Employment Contracts, with Charles G. Bakaly, Jr. After O’Melveny & Myers, Mr. Grossman was a partner with Selvin & Weiner, where he handled labor and litigation matters. In early 1989, he left private practice to become the head of the Labor Relations and Litigation Divisions of Sony Pictures Entertainment, a major studio that produces motion pictures and television. After nearly 15 years at Sony, he became a mediator at ADR Services, Inc., and then moved to JAMS, the nation’s leading provider of mediation and arbitration services. He has been selected five times as one of the top neutrals in California by the Daily Journal.

STEFANIE M. GUSHÁ (chapter 1: Hiring Guidelines and Pitfalls) is Manager of Labor Relations with SUPERVALU INC. in Fullerton. She earned a B.A. from the University of California, Berkeley, in 2000 and a J.D. from Stanford Law School in 2003, where she served as an advocate for low-income students with disabilities during special education proceedings in conjunction with the Youth and Education Law Clinic. She also served as co-chairperson of academic affairs for the Stanford Law School Association and Senior Editor of the Stanford Law and Policy Review.

ERIC HENDRICKSON (chapter 8: Unemployment Compensation and State Disability Insurance) is a Staff Counsel with the Legal Office of the Employment Development Department in Sacramento.

CYNTHIA L. JACKSON (chapter 18: Reductions in Force and Plant Closings) is a partner with Baker & McKenzie LLP in the firm’s Palo Alto office. She is chair of the firm’s North America Compensation and Employment Law Practice Group and serves on both the Global Employment and North America Corporate Compliance steering committees. She has over 30 years of experience working on domestic and international employment counseling and litigation. Ms. Jackson has been consistently recognized as a leader in her field by Chambers USA, Legal 500, Best Lawyers of America, Northern California Super Lawyers, and America’s Leading Lawyers for Business. Her articles have appeared in numerous publications, including The San Francisco and Los Angeles Daily Journal and Financier Worldwide. She is also a frequent speaker for various seminars and institutions, such as the Association of Corporate Counsel, Bay Area Council, and Sciences Politiques (Paris). Ms. Jackson graduated in 1976 from Stanford University and received her law degree in 1979 from the University of Texas.

THOMAS G. MACKEY (chapter 14: Employer Liability for Acts of Employees) is of counsel to Jackson Lewis in Los Angeles. Mr. Mackey graduated in 1991 from California State University at Northridge and received his law degree in 1994 from the University of California, Hastings College of the Law.

EVERETT F. MEINERS (chapter 13: Workplace Privacy) is a senior member of the Labor and Employment Department of Parker, Milliken, Clark, O’Hara & Samuelian in Los Angeles. Mr. Meiners graduated in 1961 from the University of California, Riverside, and received his law degree in 1964 from the University of California, Los Angeles, School of Law, where he was the Chief Justice of the Moot Court Honors Program. He served as the law clerk to Justice Gordon L. Files of the California Court of Appeals from 1964 to 1965 and joined the law firm of Parker, Milliken in 1965. Mr. Meiners is a member of the Board of Directors of the Los Angeles Chapter of IRRA (Industrial Relations Research Association), an officer of the Orange County Chapter of IRRA, and a member and mentor for PIHRA (Professionals in Human Resources Association). He has spoken regularly at the Annual Labor Law Conference presented by Region 21 of the NLRB, the Orange County IRRA, and the Federal Mediation and Conciliation Service. He is a Member of the Southern California Mediation Association and a graduate of the Straus Institute for Dispute Resolution at Pepperdine University School of Law. Mr. Meiners is also a member of the Los Angeles Superior Court Mediation Panel and a Trustee of the San Fernando Valley Bar Association. He is a regular contributor to the CEB Topics website on issues concerning employment law and the editor of PMCOS Labor News. In 2005 and 2006, he was selected as a Super Lawyer by Los Angeles Magazine in the category of Employment Litigation.

SEAN A. O’BRIEN (chapter 11: Trade Secrets Protection and Unfair Competition) is an attorney with the firm of Payne & Fears LLP and practices in Irvine. Mr. O’Brien graduated in 1983 from the University of California, Los Angeles, received an M.B.A. in 1986 from the University of California, Berkeley, and received his law degree in 1987 from the University of California, Berkeley, School of Law. (Mr. O’Brien can be contacted at sao@paynefears.com.)

MICHAEL PEDHIRNEY (chapter 2: Employment Contracts and Executive Compensation and chapter 9: Notice-Posting, Training, and Recordkeeping Requirements) is a shareholder in the San Francisco office of Littler Mendelson, P.C. He received a B.A. from the University of Notre Dame in 2001, where he graduated magna cum laude, and a J.D. from the University of Washington School of Law in 2004. While attending law school, he worked as an extern at the Associate Regional Solicitor’s Office for the Department of Labor. He also served as an associate notes and comments editor for the Washington Law Review. Mr. Pedhirney specializes in the representation of management in all aspects of labor and employment law, including contract negotiations, collective bargaining, appellate matters, and arbitration and mediation.

PATRICIA C. PEREZ (chapter 16A: Workplace Investigations) is founder and president of Puente Consulting, Inc. in San Diego. A graduate of the University of California, Los Angeles, School of Law and a certified Senior Professional in Human Resources, Ms. Perez has practiced employment law since 1992. A native Spanish speaker, she has worked in Mexico with judicial education programs; has trained thousands of HR, legal, and other professionals; and has extensive experience as an employment attorney and an HR executive. Ms. Perez is active in community and professional organizations, including the Society for Human Resource Management’s (SHRM) national and local chapters, the California State Bar and the San Diego County Bar Association (she is Chair of the Executive Committee of the Labor and Employment Law Section of the California State Bar), the UCLA Alumni Association (she is a past member of its Board of Directors), San Diego MANA (she is a member of its Advisory Board), and the National Association of Women Business Owners (NAWBO). Ms. Perez was a 2006 finalist for NAWBO’s Business Owner of the Year Award and was recently named one of San Diego Metropolitan Magazine’s “40 under Forty”—an award given to the region’s outstanding young business and civic leaders. Ms. Perez makes frequent presentations about HR and employment law topics, including recent speaking engagements for the California State Bar, the California Restaurant Association, and the Hospitality Human Resources Association. She was a featured speaker at SHRM’s 2006 Annual National Diversity Conference. Additionally, Ms. Perez has taught employment law at the University of California, San Diego.

LISA PRINCE (chapter 12: Workplace Safety) is a partner with Walter & Prince LLP in Santa Rosa. Ms. Prince earned her B.A. cum laude at Sonoma State University and her J.D. cum laude from Empire College School of Law in Santa Rosa. She is a member of the American, California, and Sonoma County Bar Associations and the American Society of Safety Professionals.

JOANIE L. ROESCHLEIN (chapter 14: Employer Liability for Acts of Employees) is Director for Employment Law, Ethics & Compliance for Synopsys, Inc., in Mountain View. Ms. Roeschlein earned a B.A. from the University of California, Los Angeles, in 1994 and graduated summa cum laude from Southwestern University School of Law in 2000, where she was Managing Editor of the Law Review and a member of the Moot Court Honors Program. She received a first-place brief award and was a semifinalist oralist in the 1998–1999 Nationals Moot Court Competition. She has written articles for the Los Angeles Lawyer and for the 18th Annual Advanced ALI-ABA Course of Study on “Seeking and Defeating Summary Judgment in Light of Reeves v. Sanderson Plumbing Products and Its Progeny.”

RICHARD S. ROSENBERG (chapter 5: Wage and Hour Laws) is one of the founding partners of Ballard, Rosenberg, Golper & Savitt LLP in Universal City. Mr. Rosenberg graduated in 1974 from the College of Industrial and Labor Relations at Cornell University and received his law degree magna cum laude from the University of Santa Clara in 1977, where he was an editor of the Law Review. He has devoted his entire career to the representation of employers in employment law matters and frequently lectures to management groups on the subject of wage hour law compliance and labor and employment law.

KATE WEST ROWAN (chapter 2: Employment Contracts and Executive Compensation) is a shareholder of Littler Mendelson, practicing in its San Francisco office. Ms. Rowan advises employers on all aspects of the design, implementation, taxation, and administration of employee benefits and executive compensation arrangements, including stock-related compensation programs such as option plans, restricted stock plans, and employee stock purchase plans; retirement plans such as qualified retirement plans and deferred compensation arrangements; and welfare and fringe benefit programs such as health plans, cafeteria plans, and severance programs. She has extensive experience with fiduciary issues involved with benefit plan fund investment (including prohibited transactions and private equity investments). Ms. Rowan provides expertise to employers regarding benefits issues arising in the context of mergers, acquisitions, and other business transactions, including negotiating benefits representations, warranties and covenants, and handling golden parachute issues. She also has extensive experience advising employers regarding employment law issues, including WARN Act compliance. Ms. Rowan earned a B.A. from the University of California, Berkeley, in 1975, and a J.D. from the University of California, Hastings College of the Law, in 1982. Ms. Rowan coauthored “Age, Sex and Disability Discrimination in Employee Benefit Plans,” for the BNA Tax Management Portfolio, 2d ed., and served as contributor and coeditor for the chapter on ERISA Reporting and Disclosure in Employee Benefits Law, 2d ed., published by the American Bar Association Labor Section. Ms. Rowan is a member of the Employee Benefits Committees of the Labor and Tax Sections of the American Bar Association and serves on the Advisory Board for Practicing Law Institute. She is also a member of the Western Pension & Benefits Conference and the San Francisco Bar Association. She has been a speaker before numerous employer and professional groups on employee benefits topics, including, most recently, programs on stock option plans and 401(k) plans.

RICHARD A. SAFFIR (chapter 7: Tax Compliance) received his B.A. in 1983 from State University of New York, Binghamton (Harpur College), his J.D. in 1986 from Albany Law School, and his LL.M. in 1987 from New York University. Mr. Saffir, who is licensed in New York and California, is Associate General Counsel for Imagine Media, Inc., in Brisbane. He specializes in tax and business planning for closely held start-up companies.

WILLIAM B. SAILER (chapter 10: Employee Handbooks), is Senior Vice President, Legal Counsel for Qualcomm Incorporated in San Diego, where he supervises all employment law issues for the company. He was formerly a partner with the firm of Gray Cary Ware & Freidenrich, representing employers in all labor and employment law matters. Mr. Sailer graduated with Honors in 1982 from Swarthmore College and received his law degree cum laude in 1985 from the University of Michigan Law School. He is President of the California Employment Law Council, a past member of the State Bar’s Labor and Employment Law Section Executive Committee, past President of the San Diego Chapter of the Industrial Relations Research Association, and past Chair of the San Diego County Bar Association’s Labor and Employment Law Section. Mr. Sailer is a multiple recipient of the State Bar’s Wiley E. Manual Pro Bono Service Award and the San Diego Volunteer Lawyer Program Distinguished Service Award. He is a frequent speaker for CEB and other organizations on the subject of employment law and has written extensively on employment law issues.

TERENCE R. SAVAGE (chapter 8: Unemployment Compensation and State Disability Insurance) is Staff Counsel III with the Legal Office of the Employment Development Department in Sacramento, where he is Supervisor of the Benefit Team responsible for Unemployment, Disability, and Paid Family Leave Benefits. Mr. Savage earned a B.A. in 1971 from La Grange College in Georgia, and a J.D. in 1975 from Widener College, The Delaware Law School, in Wilmington.

DEBORAH CRANDALL SAXE (chapter 6: Vacations, Family and Medical Leave, and Other Time Off) is a partner in the Los Angeles office of Jones Day. Ms. Saxe graduated Phi Beta Kappa in 1971 from Pennsylvania State University. She received a Master’s Degree in Comparative Literature in 1973 from the University of California, Los Angeles, and her law degree in 1978 from the University of California, Los Angeles, School of Law, where she was a member of the Law Review. Ms. Saxe is the author of Family and Medical Leave: A Practical Guide for Employers (Cal CEB Handbook Series 1995). She is a frequent lecturer on employment and labor issues for business and professional groups. She is a Fellow in the College of Labor and Employment Lawyers and was selected by her peers to be included in the 2006 edition of Best Lawyers of America. Ms. Saxe also was ranked by Chambers & Partners USA as a “leading lawyer” in employment law (2004 and 2005) and was recognized by her peers as one of the top 50 female Super Lawyers in Los Angeles and Orange counties (2004 and 2005).

ERICH W. SHINERS (chapter 21: Public Employment Issues) is a Board Member at the California Public Employment Relations Board, where he participates in deciding appeals, formulating regulations, and overseeing agency operations. Before his appointment to the Board, he represented public agency and nonprofit employers in labor and employment matters. He can be reached at e_shiners@u.pacific.edu.

TERESA R. TRACY (chapter 15: Discrimination and Harassment) is a partner with Freeman Freeman Smiley LLP in Los Angeles. Ms. Tracy graduated magna cum laude in 1974 from California State University, Northridge, and received her law degree cum laude in 1979 from Loyola University School of Law, where she was a member of the Law Review. She authored an article for the Law Review entitled “Comparative Fault and Intentional Torts.” She frequently writes articles on employment law topics and has participated in many national teleconferences addressing employers on such topics as discrimination and harassment, class actions, wage and hour cases, and noncompete agreements.

MATTHEW T. WAKEFIELD (chapter 5: Wage and Hour Laws) is a partner with the firm of Ballard Rosenberg Golper & Savitt, LLP in Cornelius, North Carolina. Mr. Wakefield graduated in 1984 from California State University, Hayward, and received his law degree in 1994 from the University of San Diego Law School, where he was a member of the Order of the Coif and the Executive Editor of the Law Review. He is a recipient of the Brundage and Zellmann Award for Excellence in Labor Law and the American Jurisprudence Award for Civil Procedure.

FRED WALTER (chapter 12: Workplace Safety) is a founding partner of Walter & Prince LLP in Santa Rosa. He graduated in 1970 from San Jose State University with a B.A. in Political Science (honors colloquium) and obtained his J.D. in 1978 from Lincoln University School of Law in Sacramento.

MITCHELL L. WEXLER (chapter 4: Immigration Law Requirements for Employers) is a partner and member of the Executive Committee of the worldwide immigration law firm Fragomen, Del Rey, Bernsen & Loewy, LLP. Mr. Wexler oversees the firm’s three Southern California offices, which are in Los Angeles, Irvine, and San Diego. He is certified in immigration and nationality law by the State Bar Board of Legal Specialization. He is past Vice Chair of that certifying body and past Chair of the Southern California Chapter of the American Immigration Law Association (AILA). He has written in excess of 200 articles on various immigration law-related topics and is a frequent speaker on employment-related immigration topics. He teaches a regular business immigration module at UCI Law School. He received his undergraduate degree from Hofstra University and his J.D. from Southwestern University School of Law.

About the 2021 Update Authors

LISA BAIOCCHI is an update coauthor of chapter 12 (Workplace Safety). She is a Senior Associate with The Prince Firm in Santa Rosa, a law firm serving California employers in all aspects of workplace safety, Cal/OSHA consultation, and litigation. She earned her B.S. from the University of Colorado at Boulder and her J.D. from the University of Houston Law Center. She is a member of the American, California, and Sonoma County Bar Associations and the American Society of Safety Professionals.

LARRY M. GOLUB is the original author and continuing update author of chapter 19 (Insurance Coverage for Employment Claims). For biographical information, see About the Authors.

MARGARET J. GROVER is the update author of chapter 13 (Workplace Privacy). She is an experienced mediator, workplace investigator, and counselor. She received her law degree from Case Western Reserve University School of Law. For more than 35 years, she has helped employers and employees understand the complex state and federal laws governing California employment relationships. Her favorite aspect of lawyering is helping parties to resolve thorny issues. When she is not practicing law at Grover Workplace Solutions in Oakland, she is usually enjoying the beauty of Northern California on a bicycle or rowing in the Oakland Estuary.

SEAN A. O’BRIEN is the original author and continuing update author of chapter 11 (Trade Secrets Protection and Unfair Competition). For biographical information, see About the Authors.

LISA PRINCE is an original author and continuing update coauthor of chapter 12 (Workplace Safety). She is the principal of The Prince Firm in Santa Rosa, a law firm serving California employers in all aspects of workplace safety, Cal/OSHA consultation, and litigation. For biographical information, see About the Authors.

MATTHEW T. WAKEFIELD is an original author and the continuing update author of chapter 5 (Wage and Hour Laws). For biographical information, see About the Authors.

KARINE WENGER is an update coauthor of chapter 4 (Immigration Law Requirements for Employers). She is the Managing Partner of the San Diego office of Fragomen, Del Rey, Bernsen & Loewy, LLP. She serves as corporate immigration counsel to a wide range of clients, from small domestic entities to large multinational corporations in varying industries. She has proven leadership skills in building collaborative relationships, strategic thinking, and leading in times of change and growth, and effectively provides cutting-edge immigration solutions to corporate clients and counsels them on all matters of U.S. immigration and nationality law, regulation, policy and compliance. She represents clients across industries, from start-ups to Fortune 500, as well as high net-worth individuals. Ms. Wenger has practiced exclusively in the field of U.S. corporate immigration and nationality law for over 20 years. She is a frequent presenter to numerous professional and legal organizations on the topic of U.S. immigration law, as well as to corporate clients, and continues to provide extensive pro bono legal services to nonprofit organizations. She has held numerous board positions and has received several awards and accolades for her contribution to the field. She earned her B.A. from University of California, San Diego, and received her J.D. from Golden Gate University School of Law.

MITCHELL L. WEXLER is the original author and a continuing update coauthor of chapter 4 (Immigration Law Requirements for Employers). For biographical information, see About the Authors.

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