Resources

Whether you needed a new hiring manager or not, you just got one. On January 23, 2012, the U.S. Supreme Court rejected an appeal by supermarket owners in Los Angeles. While the U.S. Supreme Court did not rule, the effect of their rejection of the appeal is to let stand the California Supreme Court’s earlier ruling, permitting local governments to pass ordinances that require the hiring or retention of employees when a business’s ownership changes hands.

In this case the supermarket owners were challenging the authority of California cities to mandate that workers be hired and kept when a company changes owners. Specifically, the case involved a Los Angeles ordinance requiring supermarkets to keep their workforce for 90 days after a new owner takes over, unless the owner has good cause to fire a particular employee. (Then of course, the employee can sue claiming they were not fired for good cause.) The Los Angeles ordinance at issue in this case passed in 2005 but was blocked by court rulings. However in July 2011, California’s Supreme Court upheld the ordinance in a 6-1 ruling. The California Supreme Court stated that it would not prevent state and local governments from regulating hiring and firing of employees.

Similar local ordinances exist for hotels in Oakland and Emeryville. Other industries are currently affected by these types of ordinances in Berkeley and San Jose. With the U.S. Supreme Court rejecting this appeal, they have cleared the way for other municipalities and even that State to pass similar ordinances. We will continue to monitor this trend as it develops. Now that the government is directly making our hiring decisions like they are employed by us, can we send them a W2? Just a thought…..

The employment lawyers at Weintraub Genshlea Chediak Tobin & Tobin (WGCT&T) want to remind all employers that their OSHA 300a Annual Summary Report must be posted in the workplace by February 1, 2012 and remain posted until April 30, 2012. Pursuant to OSHA’s recordkeeping requirements, the 300a Annual Summary Report must contain the appropriate information from the employer’s OSHA 300 Logs for workplace injuries and illnesses during 2011.

The 300a Annual Summary Report and guidance for completing it (as well as the 300 Logs) is included in the attached OSHA’s Work-Related Injuries and Illnesses Booklet.

If you have any questions regarding your obligations under OSHA’s recordkeeping requirements or need assistance in completing your 300a Annual Summary Report, please feel free to contact one of WGCT&T’s employment lawyers. Otherwise, we all wish you and your employees a healthy and injury-free 2012.

The Equal Employment Opportunity Commission (“EEOC”) thinks so. The EEOC recently posted a letter to its website stating that it may be unlawful for employers to require a job applicant to have obtained a high school diploma if the applicant suffers from a learning disability and has been unable to obtain one. The EEOC’s position represents a significant departure from traditional interpretation by the courts with regard to matters of unintentional discrimination resulting in a disparate impact on certain groups.

In an “informal discussion letter” the EEOC stated that requiring a high school diploma must be “job related for the position in question and consistent with business necessity.” Based on this statement, the EEOC apparently believes that employers might violate the Americans with Disabilities Act (“ADA”) if they require a high school diploma for a particular position which has the effect of disqualifying applicants who have been unable to graduate from high school due to a learning disability. The EEOC’s position appears to place employers in a very difficult position.

Employers who require their job applicants to have obtained a high school diploma generally do so in order to obtain applicants who have demonstrated the commitment and intellectual capacity to enable them to be trusted with more complex tasks in the workplace. Based on the EEOC’s decision, however, an applicant’s failure to have obtained a high school diploma may trigger a duty on the part of the prospective employer to query as to why that applicant has not obtained a high school diploma. Yet, this situation creates a catch-22 for employers. On one hand, an employer is potentially insulated from claims of discrimination asserted by mentally handicapped job applicants if the employer maintains an application process which does not consider (nor does it seek to learn) information regarding an applicant’s disabilities. Yet, on the other hand, turning a blind eye to a learning disability which precluded the applicant from obtaining a high school diploma, according to the EEOC, may violate the ADA. As a result, the EEOC’s position potentially exposes employers to allegations by disabled job applicants who claim that an adverse hiring decision was the result of discriminatory animus, either because the employer asked about disabilities, or because the employer did not select them for employment because they had not obtained a high school diploma and were unable to do so because of their disability.

This circumstance may be avoided where a high school diploma is in fact necessary for an applicant to perform the essential functions of the available job. Accordingly, where a high school diploma requirement is imposed, employers should carefully evaluate the job description and duties associated with the position to ensure that a high school education is actually required to perform the essential functions of the job. Where an employer determines that the essential functions of a job can be performed without having obtained a high school diploma, employers may wish to consider removing this condition as a basis upon which hiring decisions are made.

The California Supreme Court recently addressed whether insurance claims adjusters qualify for the administrative exemption under California law. (Harris v. Superior Court (Liberty Mutual Insurance Co.).) The Court’s decision in late December 2011, focused on the issue of the “administrative/production worker dichotomy.” Here the Court was looking at whether employees who fall on the “production” side can ever qualify for the administrative exemption.

The lower court held the claims adjusters dealt with individual claims, as opposed to providing advice on general policies or operations of the company. As a result, the Court found the adjusters were production workers and could not qualify for the administrative exemption as a matter of law.

Thankfully, the California Supreme Court reversed, finding that the lower court was too simplistic in their application of the administrative/production worker dichotomy. This does not mean that the Court eliminated the administrative/ production worker analysis. The Court did not address whether the claims adjusters at issue actually qualified for the administrative exemption. However, the Court cited with approval several federal cases finding claims adjusters to be administratively exempt. In dicta, the Court noted that an employee may be exempt where the employee’s duties in “servicing” a company are sufficiently important and the employee’s duties involve the regular use of discretion and independent judgment.

This is a positive step in defending against misclassification lawsuits. However, employers should be mindful that a successful defense in this area takes planning well in advance of your first lawsuit. Employers should carefully analyze their employees’ job duties and then commit them to job descriptions in order to demonstrate that those duties are sufficient important and involve the use of discretion and independent judgment.

Including arbitration provisions in employment agreements or employee handbooks is not a guaranteed way to avoid the courtroom. On January 3, 2012, the California Court of Appeal upheld a decision from the Sacramento County Superior Court holding that an arbitration provision contained in a pre-employment agreement was unconscionable, and, therefore, unenforceable.

In Wisdom v. AccentCare, Inc. (Super. Ct. No. 34-2009-00063028 CU OE GDS), the plaintiffs filed a complaint alleging they were not paid for all of the overtime and time they spent handling off-hour calls while they were employed by AccentCare as on-call staffing coordinators.

When they applied for a job with AccentCare, four of the six plaintiffs signed an acknowledgment form titled: “Acknowledge Your Understanding of the following Statements and Agreements by Placing Your Initials in Each Paragraph, then Sign and Date Below.” One of the paragraphs was an arbitration agreement that stated:

“I hereby agree to submit to binding arbitration all disputes and claims arising out of the submission of this application. I further agree, in the event that I am hired by AccentCare, that all disputes that cannot be resolved by informal internal resolution which might arise out of my employment with AccentCare, whether during or after employment, will be submitted to binding arbitration. I agree that such arbitration shall be conducted under the rules then in effect of the American Arbitration Agreement.”

After the lawsuit was filed, AccentCare sought to compel arbitration based on the signed acknowledgments. The trial court denied the motion on the ground that the arbitration agreement was unconscionable, and the Court of Appeal affirmed the judgment.

First, the trial court noted that the plaintiffs were not informed that signing the agreement was optional, and the heading indicated that signing was mandatory. Second, there was unequal bargaining power between the parties as few employees are in a position to refuse a job because of an arbitration agreement, and the nature of the employer-employee relationship leads to an inherent power imbalance. The agreement also implied that there was no opportunity to negotiate its terms as the other statements the applicants were directed to acknowledge were terms that an applicant would not expect to negotiate. For example, that the statements in the application were true, that AccentCare could investigate the applicant’s references, that AccentCare is a smoke-free and drug-free workplace, and that employment would be at-will.

The trial court also stated that an element of surprise was present because the arbitration agreement was located in the middle of five uniform, single-spaced paragraphs, and was not distinguished in any manner, the meaning of the agreement was not explained, and the plaintiffs did not know what “binding arbitration” meant. Thus, the employees’ reasonable expectation that they were entitled to a trial was disappointed.

Further, the trial court held the agreement was unenforceable because it was not mutual – there was no language indicating AccentCare agreed to submit to arbitration. The trial court noted the one-sidedness of the agreement due to the unambiguous phrases “I hereby agree” and “I agree,” and pointing out that only the applicant signs at the bottom of the form.

Lastly, the agreement stated that arbitration would be conducted under the rules of the American Arbitration Association, but the rules were not attached. Thus, the employee is “forced to go to another source to find out the full import of what he or she is about to sign — and must go to that effort prior to signing.”

This decision is yet another signal that enforcing pre-employment arbitration agreements continue to be increasingly difficult for employers. Employers should review their arbitration agreements with their legal counsel to determine whether any changes should be made to reduce the risk that the agreement will ultimately be deemed unenforceable.