Blog: The Labor & Employment Law Blog

Download: Legal Alert.pdf

Pursuant to the Federal Trade Commission’s (“FTC”) Identity Theft Prevention Red Flags Rule (16 .C.F.R. § 681.2) which went into effect on January 1, 2008, all financial institutions and creditors must prepare and implement a written “Red Flags” Program by May 1, 2009. The determination of whether a business or organization is covered by the Red Flags Rule is not based on a particular industry or sector, but rather on whether the activities of the business or organization fall within the relevant definitions.

What Businesses are Covered?

“Financial institutions” are defined as a state or national bank, a state or federal savings and loan association, a mutual savings bank, a state or federal credit union, or any other person that, directly or indirectly, holds a transaction account belonging to a consumer.

The definition of “creditor” under the Red Flags Rule is broad and includes businesses or organizations that regularly defer payment for goods or services or provide goods or services and bill customers later. According to the FTC, this can include a wide variety of businesses from utility companies to health care providers.

Only financial institutions and creditors with “covered accounts” must implement a Red Flags Program. There are two types of “covered accounts”:

1. “Consumer accounts” which are those offered to customers primarily for personal, family, or household purposes that involves or is designed to permit multiple payments or transactions (e.g. credit card accounts, mortgage loans, automobile loans, cell phone accounts, and checking accounts); and
2. Any other account that a financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the financial institution or creditor from identity theft, including financial, operational, compliance, reputation, or litigation risks. The FTC advises that in determining if accounts are covered under this second category, businesses should consider how they are opened and accessed. For example, there may be a reasonably foreseeable risk of identity theft in connection with business accounts that can be accessed remotely (e.g. through the Internet or by telephone).

Requirements for an Effective “Red Flags” Program.

Financial institutions and creditors must develop, implement, and administer an Identity Theft Prevention Program, which must include four basic elements.

1. Identification of Red Flags. The Program must include reasonable policies and procedures to identity the “red flags” of identity theft they are likely to come across in their business. “Red flags” are potential patterns, practices, or specific activities indicating the possibility of identity theft. Some examples are alerts or notices from credit reporting agencies, certain suspicious documents, suspicious personal identification information, and suspicious account activity. Some red flags may also be relevant to the particular business or organization.
2. Detect Red Flags. The Program must be designed to detect the “red flags” that have been identified. The financial institution or creditor must lay out procedures for detecting them in the day-to-day operation of the business. In creating the procedures, the business needs to consider how detection may differ depending on whether an identity verification is taking place in person or at a distance (e.g. by telephone, mail, Internet, etc.).
3. Prevention and Mitigation. The Program must spell out appropriate actions the financial institution or creditor will take when it detects “red flags.” The procedures for responding to a “red flag” will depend upon the degree of risk posed. A business must be mindful to accommodate and/or comply with other legal obligations (e.g. privacy laws and other laws impacting the medical profession) when taking action.
4. Continued Evaluation. The Program must be re-evaluated and updated periodically due to the ever-changing threats associated with identity theft. According to the FTC, as technology changes or identity thieves change their tactics, financial institutions and creditors will need to update their Programs to ensure they keep current with the risks.

Administering Your “Red Flags” Program.

1. Approval. Pursuant to the FTC, if a financial institution or creditor is a corporation, its Red Flags Programs must be approved by the Board of Directors or a committee of the Board. If the business is not a corporation, the Program must be approved by someone in a senior management position.
2. Administration. The financial institution or creditor must appoint a designated individual(s) to serve as the Administrator of the Program. The Administrator will be responsible for implementing the Program, training personnel on the Program, reviewing documents and information for compliance with the Program, re-evaluating and updating the Program, and reporting to the Board or senior management annually regarding the Program.
3. Training. The Rule requires that financial institutions and creditors train relevant staff on the policies and procedures under the Red Flags Program.
4. Third-Party Providers. If a financial institution or creditor contracts with other service providers and any activity by the service providers implicates the Red Flags Rule, they should seek confirmation that the service providers have an appropriate Red Flags Program in place.

Conclusion.

Compliance with the Red Flags Rule is mandatory for all financial institutions and creditors with “covered accounts.” There is no one-size-fits-all Program and each business or organization should evaluate its “covered accounts” and the various activities or transactions related to those accounts that could give rise to identity theft.

Weintraub Genshlea Chediak can provide assistance not only with the preparation of written Identity Theft Prevention (Red Flags) Programs, but also with training your employees under the Program. For more information or assistance please contact Lizbeth V. West, Esq. at (916) 558-6082.

Lizbeth “Beth” West is a shareholder in the Labor and Employment Law Section and Disputes, Trials & Appeals Section at Weintraub Genshlea Chediak. Beth’s practice focuses on counseling employers in all areas of employment law, and defending employers in state and federal court, as well as before administrative agencies. She has extensive experience in defending wage and hour claims, and complex whistle-blowing and retaliation claims. She also provides training services on various employment issues, such as sexual harassment and violence in the workplace. If you have any questions about this Legal Alert or other employment law related questions, please feel free to contact Beth West at (916) 558-6082. For additional articles on employment law issues, please visit Weintraub’s law blog at www.thelelawblog.com.

Download: Legal Alert and Notice 2009-27.pdf

The IRS has issued Notice 2009-27 which provides a thorough interpretation of Section 2001 of the American Recovery and Reinvestment Act of 2009 (“ARRA”) relating to premium assistance for COBRA continuation coverage.

Notice 2009-27 provides information in a question and answer format regarding various parts of the ARRA like:

1. What does “involuntary termination” mean?
2. Who is an “assistance eligible” individual?
3. How are premium reductions (or subsidies) calculated?
4. What plans are subject to the COBRA subsidy?
5. When does the premium reduction/subsidy apply?
6. How does the “extended” (or “second chance”) election opportunity work?

While lengthy, Notice 2009-27 provides helpful guidance and examples for employers trying to understand and comply with this new COBRA subsidy obligation. We are attaching a copy of the Notice and recommend that employers read it and contact their legal counsel with any questions.

Lizbeth “Beth” West is a shareholder in the Labor and Employment Law Section and Disputes, Trials & Appeals Section at Weintraub Genshlea Chediak. Beth’s practice focuses on counseling employers in all areas of employment law, and defending employers in state and federal court, as well as before administrative agencies. She has extensive experience in defending wage and hour claims, and complex whistle-blowing and retaliation claims. She also provides training services on various employment issues, such as sexual harassment and violence in the workplace. If you have any questions about this Legal Alert or other employment law related questions, please feel free to contact Beth West at (916) 558-6082. For additional articles on employment law issues, please visit Weintraub’s law blog at www.thelelawblog.com.

Download: Law Alert – DOL Model COBRA Subsidy Notices (1111263).PDF

On March 19, 2009, the DOL released the following model notices in connection with the COBRA subsidy outlined in the American Recovery and Reinvestment Act of 2009 (“ARRA”):

1. General Notice (Full Version). This General Notice is to be sent to all qualified beneficiaries who experienced a qualifying event at any time from September 1, 2008 through December 31, 2009, regardless of the type of qualifying event. This full version includes information on the COBRA subsidy (or premium reduction) as well as information required in a standard COBRA election form.

2. General Notice (Abbreviated Form). The abbreviated version of the General Notice includes the same information as the full version regarding the availability of the COBRA subsidy (or premium reduction) and other rights under the ARRA, but does not include the COBRA coverage election information. Pursuant to the DOL, it may be sent in lieu of the full version of the General Notice to individuals who experienced a qualifying event during, on, or after September 1, 2008, who have already elected COBRA coverage and still have it.

3. Alternative Notice. Insurers that provide group health insurance coverage must send the Alternative Notice to persons who became eligible for continuation coverage under a State law. As the DOL indicates, continuation coverage requirements vary among States and insurers should modify the model Alternative Notice as necessary to conform their notice to the applicable State law.

4. Notice in Connection with Extended Election Periods. This Notice must be sent to any assistance eligible individual (or any individual who would be an assistance eligible individual if a COBRA continuation election was in effect) who:

a. had a qualifying event at any time from September 1, 2008 through February 16, 2009; and

b. either did not elect COBRA continuation coverage, or who elected it but subsequently discontinued COBRA.

This Notice includes information on ARRA’s additional election opportunity, as well as information regarding the COBRA subsidy (premium reduction). This Notice must be provided by April 18, 2009.

More information and the model notices listed above can be found at the DOL’s website at: www.dol.gov/ebsa/COBRAmodelnotice.html.

Lizbeth “Beth” West is a shareholder in the Disputes, Trials & Appeals Section, and the Labor and Employment Law Section at Weintraub Genshlea Chediak. Beth’s practice focuses on counseling employers in all areas of employment law, and defending employers in state and federal court, as well as before administrative agencies. She has extensive experience in defending wage and hour claims, and complex whistle-blowing and retaliation claims. She also provides training services on various employment issues, such as sexual harassment and violence in the workplace. If you have any questions about this Legal Alert or other employment law related questions, please feel free to contact Beth West at (916) 558-6082. For additional articles on employment law issues, please visit Weintraub’s law blog at www.thelelawblog.com.

Download: March 12, 2009 Legal Alert (1106739).PDF

On February 17, 2009 President Obama signed the American Recovery and Reinvestment Act of 2009 (“ARRA” or “Recovery Act”) which contains a number of entitlements and obligations affecting the workplace. In order to comply with their new obligations and understand the benefits available to employees or former employees, employers should familiarize themselves with the ARRA promptly. Below is a summary of some of the various employment-related provisions from the ARRA.

1. COBRA Subsidy.

a. What is it?

The ARRA provides for a 65% COBRA premium subsidy for certain “assistance eligible individuals.” An “assistance eligible individual” is a COBRA “qualified beneficiary” who meets all of the following requirements:

a. Is eligible for COBRA continuation coverage at any time during the period between September 1, 2008 and December 31, 2009;

b. Elects COBRA coverage (when first offered or during the additional election period provided for under the ARRA); and

c. Has a qualifying event for COBRA coverage that is the employee’s involuntary termination during the period of September 1, 2008 and December 31, 2009.

The premium subsidy (or premium reduction) applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to 9 months. Individuals who are eligible for other group health coverage (e.g. under a spouse’s plan) or Medicare are not eligible for the premium subsidy. The subsidy also is not available to employees (or their dependents) who have an adjusted gross income of more than $125,000 ($250,000 for joint filers) in the year in which they would receive a subsidy.

As a result of the subsidy, eligible individuals pay only 35% of their COBRA premiums and the remaining 65% is paid by the former employer who then has the right to seek reimbursement through a tax credit.

b. What if a previously terminated employee didn’t elect COBRA?

The ARRA provides for a special 60-day election period for those eligible individuals who previously lost coverage and did not elect COBRA. The 60-day period begins on the date that notice is provided to the eligible individual about the special election period. The special election period does not extend the period of COBRA continuation coverage beyond the original maximum required period and, in most cases, COBRA continuation coverage elected pursuant to the special election period begins on the first period of coverage following the date the ARRA was enacted (i.e. March 1, 2009).

c. How are eligible individuals notified?

Employers have 60 days from the date the ARRA passed to notify affected former employees and their eligible dependents that they have a right to elect COBRA and receive the subsidy. In addition to a regular COBRA notice, a supplemental notice is required to be given to affected employees to provide information about the subsidy. The DOL is preparing a model of such supplemental notice.

d. How do employers get reimbursed for the subsidy?

Employers are permitted to claim the COBRA subsidy on line 12a of their IRS Form 941 (the quarterly employment tax return). Employers are not required to file any other documents or information with the Form 941 but must maintain separate supporting documents to justify the claimed credit (e.g. information regarding receipt of the assistance eligible individual’s 35% share of the premium, copies of invoices from the insurance carrier and proof of timely payment of the full premium, attestation of involuntary termination, including the date of such termination for each covered employee whose involuntary termination is the basis for eligibility of the subsidy, proof of eligibility for COBRA coverage during the 9/1/08 – 12/31/09 period, records of the SSN’s of all covered employees and the amount of the subsidy reimbursed for each, and any other relevant documents). The IRS has issued information notices to explain how employers can seek reimbursement and such notices can be obtained on the IRS website.

2. Unemployment Benefits.

The ARRA extends the Emergency Unemployment Compensation Act of 2008 (EUC) which was set to expire on March 31, 2009. The EUC will now be in place through December 31, 2009. The EUC went into effect last June and provided for an additional 13 weeks of federally-funded unemployment benefits to eligible unemployed individuals nationwide who had already collected all regular state benefits for which they were eligible. In November 2008, the EUC was expanded to 20 weeks of benefits, and was also amended to provide for a second tier of 13 additional weeks of benefits for individuals in states with high unemployment rates. Additionally, benefit payments are increased by $25 per week through December 31, 2009 for individuals receiving regular unemployment compensation, extended benefits, or benefits under the EUC. The ARRA also provides for a temporary suspension of taxation on the first $2,400 of unemployment benefits in 2009.

Finally, the ARRA contains a number of provisions to assist states in administering their unemployment programs. It provides that: (1) the extended unemployment benefits will be 100% federally funded through January 1, 2010; (2) states can get a waiver of interest due on loans received by state unemployment trust funds through December 31, 2010; and (3) that states can obtain federal funds to help them administer their unemployment programs and reform such programs to provide greater coverage (e.g. to cover part-time employees).

3. Work Opportunity Tax Credit (WOTC).

The WOTC is a program designed to help move people from welfare into gainful employment and obtain on-the-job experience. It provides a tax credit to employers who hire members of targeted groups. The ARRA added unemployed veterans and disconnected youth who begin work in 2009 and 2010 to the targeted groups covered under the WOTC. Other targeted groups already recognized under the WOTC include: long-term TANF (Temporary Assistance and Needy Families) recipients; qualified food stamp recipients; residents of a federally designated empowerment zone, enterprise community, or renewal community, vocational rehabilitation referrals, a qualified ex-felon, and an SSI recipient.

In order to obtain a tax credit under the WOTC program, employers must obtain a certification that a new employee qualifies the employer for the tax credit. Certain IRS forms must be completed at the time the job offer is made and after the individual is hired. The forms and guidelines on their completion can be obtained from the IRS website.

4. Other Funding for Various Programs Administered by the DOL.

The ARRA also provides almost $4 billion dollars for various programs administered by the DOL, including adult employment and training activities, youth activities including summer jobs, dislocated worker activities, grant programs for worker training and placement in high growth and emerging industry sectors, employment opportunities for low income seniors, and employment service grants to states.

5. Whistleblower Protections Under the ARRA.

The ARRA contains whistleblower protections that apply to non-federal employers (“Covered Entities”) who receive funds under the ARRA. The provision appears to also cover private employers if they contract with entities receiving funds under the ARRA. Also, supervisors, managers, and agents of an employer appear to be at risk of individual liability under the language of the provision.

The whistleblower protections prohibit a Covered Entity from discharging, demoting, or otherwise discriminating against an employee for his or her disclosure to the Recovery Act Accountability and Transparency Board (RAAT Board), an inspector general at the Interior Department, another governmental agency, a grand jury, or a court, any of the following which the employee reasonably believes has or is taking place:

a. Gross mismanagement of any agency contract or grant relating to covered funds;

b. A gross waste of covered funds;

c. A substantial and specific danger to public health or safety related to the implementation or use of covered funds;

d. An abuse of authority related to the implementation or use of covered funds; or

e. A violation of law, rule or regulation related to an agency contract (including the competition for or negotiation of a contract) or grant awarded or issued relating to covered funds.

Employers who receive covered funds are required to post notices in the workplace to apprise employees of their rights under the new law.

An employee who believes he/she has been retaliated against may submit a complaint to the appropriate inspector general at the RAAT Board. There is no statute of limitations in the ARRA for making such complaint and the employee’s burden of proof is relatively low. The employee must only show that the protected activity he/she engaged in was a “contributing factor” (not the “motivating factor”) for the employer’s retaliation. The inspector general shall investigate within 180 days from receipt of the complaint (unless extended) and either: 1) issue a report of his/her findings to the complainant, the employer, and the head of the appropriate agency; or 2) make a determination that the complaint is frivolous and/or does not relate to covered funds. The agency head will determine whether there is a sufficient basis to conclude that the employer has violated the Act by retaliating against the employee. If there is a sufficient basis, the head of the agency can take one or more of the following actions: 1) order the employer to take affirmative action to abate the reprisal; 2) order the employer to reinstate the employee to the position that he/she held before the reprisal (along with back pay, compensatory damages, and employment benefits); or 3) order the employer to pay the complainant an amount equal to the aggregate amount of all costs and expenses (including attorneys fee and witness fees) that were incurred by the complainant for bringing the complaint.

Upon exhausting his/her administrative remedies, an employee also has the right to bring a civil action against a Covered Entity.

Finally, the ARRA expressly provides that waivers and releases of the rights and remedies provided for by the whistleblowing provisions are not permitted in any agreement, including pre-dispute arbitration agreements (unless contained in a collective bargaining agreement). The language of the provision also suggests that an employer may not be able to obtain such a waiver or release in a separation or settlement agreement. However, it is unknown whether the language would prohibit a voluntary agreement to arbitrate a whistleblower claim under the ARRA if both parties agree to do so after the claim has been made and a dispute exists.

_________________________________
Lizbeth “Beth” West is a shareholder in the Disputes, Trials & Appeals Section, and the Labor and Employment Law Section at Weintraub Genshlea Chediak. Beth’s practice focuses on counseling employers in all areas of employment law, and defending employers in state and federal court, as well as before administrative agencies. She has extensive experience in defending wage and hour claims, and complex whistle-blowing and retaliation claims. She also provides training services on various employment issues, such as sexual harassment and violence in the workplace. If you have any questions about this Legal Alert or other employment law related questions, please feel free to contact Beth West at (916) 558-6082. For additional articles on employment law issues, please visit Weintraub’s law blog at www.thelelawblog.com.

In Edwards v. Arthur Andersen, LLP, Case No. BC294853 (August 7, 2008) the California Supreme Court holds that non-solicitation of customer agreements are per se unenforceable unless they fall within the statutory or other exception permitted under the law. California law has long protected the rights of employees to lawfully pursue any trade or profession. For more than 100 years California law has invalidated any agreement between an employer and an employee which purports to limit or restrict an employee’s ability to work in their trade or profession following the employment. Many other states permit such “non-compete” agreements between employers and employees as long as the restraints on competition are reasonable. In the Arthur Andersen case, the California high court rejected arguments that more narrow agreements – those that limit a former employee’s ability to solicit the former employer’s customers for some specified period of time – did not run afoul of Business and Professions Code §16600 and thus, were valid.

California’s Business and Professions Code §16600 provides that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void, except as provided in this Chapter [§§16600-16602.5].”

Arthur Andersen argued that such a restraint should not be invalid because it did not limit the former employee’s ability to practice their profession but instead only limited their ability to practice that profession in regard to specific Arthur Andersen customers. The high court rejected that notion and rejected the “narrow restraint” rule adopted by some federal courts considering the enforceability of such non-solicitation agreements under California law, including the Ninth Circuit, the federal district that covers California.

Arthur Andersen argued that a non-solicitation agreement does not violate §16600 if it imposes a limited restriction and “leaves a substantial portion of the market available to the employee.” The California Supreme Court resolved the dispute between federal and state courts and rejected this “narrow restraint” doctrine. In doing so, the California Supreme Court reaffirmed California’s fundamental public policy that is expressed in Business and Professions Code §16600. The Court declared “Section 16600 is unambiguous, and if the legislature intended the statute to apply only to restraints that were unreasonable or overbroad, it could have included language to that effect.” Because the decision was from the California Supreme Court, federal courts considering the question under California law are now obligated to follow the California Supreme Court interpretation.

The California Supreme Court decided another issue in the Arthur Andersen case as well. It examined the scope of a release of claims that a former employee had been required to execute and it concluded that such releases, regardless of the broad scope of their language, do not include a release of rights and claims that are statutorily unwaivable. Specifically, the California Supreme Court concluded that a release of claims which purported to release “any and all” claims arising from or related to employment did not purport to release claims for indemnity under California Labor Code §2802. The same rationale would apply to any other claim which, as a matter of statute, cannot be waived by the employee.

For more information regarding the contents of this article, please feel free to contact any of the employment lawyers at Weintraub Genshlea Chediak: Lizbeth West, Charles Post, or Anthony Daye.

Download: Legal Alert. SB 940 and AB 2232 (1056069).PDF

Legal Alert: Governor Approves SB 940 and AB 2232

Anthony B. Daye, Esq.

Weintraub Genshlea Chediak

Senate Bill 940.

Effective January 1, 2009, Senate Bill 940 creates new wage and hour requirements for temporary service employers. Along with adding section 210.3 to the Labor Code, SB 940 also amends sections 203, 203.1, 204, 210, 215, 220, and 2699.5 of the Labor Code. Existing law requires that employers pay their employees twice during each calendar month. SB 940 creates a special set of requirements for temporary service employers with employees’ working week-to-week or day-to-day. Employees on week-to-week assignments are now required to be paid weekly, while employees working day-to-day must be paid daily. Further, employees assigned to clients engaged in a trade dispute must be paid daily. These new requirements do not apply to employees who are assigned to a client for more than 90 consecutive calendar days.

Because existing law imposes civil and criminal penalties for wage violations, SB 940 also creates state-mandated local programs to enforce these existing civil and criminal penalties for violations of the new temporary employee wage requirements.

Assembly Bill 2232.

The Digital Infrastructure and Video Competition Act of 2006 governs telephone corporations and video providers, such as cable companies, in the State of California. Under existing law, telephone corporations are required to perform background checks for all applicants for employment who would have access to the corporation’s network, central office, or subscriber premises.

Effective January 1, 2009, AB 2232 expands the current law to require video providers to perform the same background checks for all applicants for employment who would have access to the video provider’s network, central office, or subscriber premises. This requirement is also applicable to vendors and independent contractors working on behalf of telephone corporations and video providers.

If you have any questions about employee background checks, California wage and hour laws, or any other Labor and Employment Law issues, please feel free to contact any of the employment lawyers at Weintraub Genshlea Chediak: Lizbeth West, Charles Post, or Anthony Daye.

Download: Legal Alert. Brinker Decision Provides Guidance (1055970).PDF

NOTE: Since this article was posted, the California Supreme Court has accepted review of this case.

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The recent California Court of Appeal decision Brinker Restaurant Corporation v. Superior Court (4th Dist. July 22, 2008) not only takes the wind out of the sails of class-action plaintiff attorneys, it also provides some long awaited guidance for employers.

Summary of the Case and the Court’s Decision.

In Brinker, a group of hourly non-exempt employees brought a class action against the restaurant employer claiming that the employer failed to comply with meal and rest period obligations and also required employees to work off the clock. The employees specifically claimed that: 1) the employer’s practice of having employees take “early lunches” shortly after starting their shift and then requiring them to work another five to ten hours without receiving another meal period violated Labor Code section 512(a) and the wage orders; 2) they were not provided their rest periods between their second and fourth hour of work, and were not provided the rest period before the first meal period; and 3) they were required to work off the clock when they were clocked out for their meal periods.

The employees argued that the wage and hour violations were amenable for class treatment because the employer’s non-compliance with wage and hour requirements could be determined by time card records and the employer’s policies and practices. The trial court agreed and granted class certification. The employer petitioned for a writ of mandate to the court of appeal. The court of appeal issued an unpublished decision which went up to the California Supreme Court. The Supreme Court vacated the court of appeal’s original decision and transferred the matter back to the court of appeal for reconsideration. It was on reconsideration that the court of appeal concluded that the class certification order from the trial court was erroneous and must be vacated because the trial court failed to properly consider the elements of the employees’ claims in determining whether they are susceptible to class treatment. In discussing the elements of the employees’ claims, the court of appeal handed down the following encouraging pronouncements:

1. While employers cannot impede, discourage, or dissuade employees from taking rest periods, they need only provide, not ensure, rest periods are taken;

2. Employers need only authorize and permit rest periods every four hours or major faction thereof and they need not, where impracticable, be in the middle of each work period;

3. Employers are not required to provide a meal period for every five consecutive hours worked;

4. While employers cannot impede, discourage, or dissuade employees from taking meal periods, they need only provide them and not ensure they are taken;

5. While employers cannot coerce, require or compel employees to work off the clock, they can only be held liable for employees working off the clock if they knew or should have known they were doing so;

6. Because the rest and meal breaks need only be “made available” and not “ensured,” individual issues predominate and, [based upon the evidence presented to the trial court], they are not amenable to class treatment; and

7. Off-the-clock claims are also not amenable to class treatment as individual issues predominate on the issue of whether [Brinker] forced employees to work off the clock, whether [Brinker] changed time records, and whether [Brinker] knew or should have known employees were working off the clock.

Reaction from the Governor’s Office and the Labor Commissioner.

Immediately following the Brinker decision, Governor Schwarzenegger issued a statement applauding the decision. The Governor said expressly:

“We are pleased that the California Court of Appeal issued today a decision squarely addressing many of the central issues in dispute concerning meal and rest periods. The confusing and conflicting interpretations of the meal and rest period requirements have harmed both employees and employers. Today’s decision promotes the public interest by providing employers, employees, the courts and the labor commissioner the clarity and precedent needed to apply meal and rest period requirements consistently.” (Governor’s Statement)

Also, on July 25, 2008, the Labor Commissioner, Angela Bradstreet, along with the Deputy Chief and Chief Counsel of the Division of Labor Standards Enforcement (DLSE), issued a memo to all DLSE staff advising them of the Brinker ruling and directing them to apply the holdings in the Brinker decision to all meal and rest period cases brought before the DLSE.

Conclusion.

While the Brinker case and the Governor’s and Labor Commissioner’s reaction to the case are all good news for employers, a final word of caution is warranted. It is anticipated that the plaintiffs will petition the California Supreme Court for review of the decision. If the Supreme Court grants review, employers will have to wait and see how it rules. Nevertheless, the current state of affairs is that the rules outlined in the Brinker case will govern meal and rest period claims brought before the Labor Commissioner (DLSE) and most likely will be followed by other state courts.

For more information regarding the contents of this article or for assistance in complying with meal and rest period obligations, please feel free to contact any of the employment lawyers at Weintraub Genshlea Chediak: Lizbeth West, Charles Post, or Anthony Daye.

Download: Legal Alert – Updating Employment Policies (1025969).pdf

Updating Employment Policies

Below is a Notice from the U.S. Department of Labor regarding the new Military Family Leave entitlement added to the Family Medical Leave Act (FMLA). For those employers covered by the FMLA, this new entitlement will require that FMLA policies in employee handbooks and policy manuals be updated to appropriately reflect the new law.

However, this is not the only new law that recently went into effect which requires employers to review and update their employee handbooks and policy manuals. A number of other laws, such as California’s new Military Spouse Leave; changes in state minimum wage and minimum salary requirements for exempt employees; the upcoming restrictions on cell phone usage while driving; health insurance and mandatory sick leave requirements for employees in San Francisco; and compliance with certain statutory training requirements, also impact the employer’s policy and handbook language.

We recommend that employers have their employee handbooks or policy manuals audited for compliance with employment laws no less than every two years. If you have not updated your employee handbook or policy manual to reflect the recent changes and updates in federal and state law, now is the time to do so. We would be happy to assist you in this audit and update. Please feel free to contact us if you are interested in these services.

Upcoming Seminars:

We also want to let you know that the following seminars are on the horizon and separate invitations will be mailed out shortly.

May 15, 2008: “Untangling the Complex Web of Leaves and Absences: FMLA/CFRA, PDL, ADA/FEHA, and Workers’ Compensation.”

June 19, 2008: “Wage and Hour Laws: Understanding Some Important Intricacies Like: “Exempt” v. “Non-Exempt” Status; Proper Calculation of the “Regular Rate of Pay” and “Overtime Premiums;” and the True Meaning of “Hours Worked.”

We hope you can join us.

NOTICE

Military Family Leave

On January 28, President Bush signed into law the National Defense Authorization Act for FY 2008 (NDAA), Public Law 110-181. Section 585(a) of the NDAA amended the FMLA to provide eligible employees working for covered employers two important new leave rights related to military service:

(1) New Qualifying Reason for Leave. Eligible employees are entitled to up to 12 weeks of leave because of “any qualifying exigency” arising out of the fact that the spouse, son, daughter, or parent of the employee is on active duty, or has been notified of an impending call to active duty status, in support of a contingency operation. By the terms of the statute, this provision requires the Secretary of Labor to issue regulations defining “any qualifying exigency.” In the interim, employers are encouraged to provide this type of leave to qualifying employees.

(2) New Leave Entitlement. An eligible employee who is the spouse, son, daughter, parent, or next of kin of a covered servicemember who is recovering from a serious illness or injury sustained in the line of duty on active duty is entitled to up to 26 weeks of leave in a single 12-month period to care for the servicemember. This provision became effective immediately upon enactment. This military caregiver leave is available during “a single 12-month period” during which an eligible employee is entitled to a combined total of 26 weeks of all types of FMLA leave.

Additional information on the amendments and a version of Title I of the FMLA with the new statutory language incorporated are available on the FMLA amendments Web site at http://www.dol.gov/esa/whd/fmla/NDAA_fmla.htm.