Labor and Employment

A ruling today by an appellate court gives ride-sharing companies Lyft and Uber roughly two more months to treat their drivers in California as independent contractors.  That ruling follows a recent decision by a trial court in San Francisco that made national news by concluding that those companies had been misclassifying their drivers as non-employees under California law.

The San Francisco County Superior Court issued an injunction on August 10, 2020, ordering Lyft and Uber to begin classifying its California drivers as employees, rather than independent contractors, within ten days.  Complying with that order would require those companies, among other things, to start paying those drivers minimum wage and applicable premium pay for overtime hours.

Lyft and Uber each appealed that order.  In so doing, they threatened to abandon their operations in the Golden State immediately unless the courts stayed the injunction requiring drivers to be classified as employees.  The trial court refused to stay its order.  Today, however, the Court of Appeal ruled (in Case Nos. A160701 and A160706) that the injunction will not be enforced pending the outcome of the two companies’ now-consolidated appeals.

In most civil cases, it generally takes anywhere from one to two years after a litigant appeals before a California appellate court sets the date for the oral argument.  In some cases, the California Court of Appeal has been known to take as long as five years after the notice of appeal to schedule oral argument.  The date of oral argument is important because the California Court of Appeal cannot issue a decision before holding an oral argument if any party requests such a proceeding.

However, the drive on appeal in this case promises to be much shorter.  California’s First Appellate District ordered an expedited briefing schedule, barred any extensions of time except for extraordinary circumstances, and set oral argument to take place less than two months from now, on October 13, 2020.  This all but ensures that, if this briefing and oral-argument schedule is maintained, a decision will be issued no later than mid-January 2021.  Accordingly, the injunction could be on hold until what lawyers and the courts call “the remittitur” issues to the trial court as late as late May 2021.

That is because Article VI, section 19, of the California Constitution bars any judge from being paid a salary “while any cause before the judge remains pending … for 90 days after it has been submitted for decision.”  Section 68210 of the California Government Code also prohibits a judge from being paid a salary unless the judge signs “an affidavit stating that no cause before him [or her] remains pending … for 90 days after it has been submitted for decision.”  A civil case in the Court of Appeal is submitted and becomes pending “when the court has heard oral argument or approved its waiver and the time has expired to file all briefs and papers.”  (Cal. Rules of Court, rule 8.257, subd. (d).)

If the appellate court upholds the trial court’s judgment, it will take effect once the remittitur issues (which take approximately 100 days, unless the appellate court grants rehearing or the California Supreme Court grants review).  Lyft or Uber would have to ask the California Supreme Court to extend the stay of enforcement at that time.

Still, persuading the high court to grant such a reprieve could be difficult.  Indeed, it was the Supreme Court’s landmark ruling just two years ago, in Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903, that spurred the state Legislature to pass A.B. 5.  That decision and its resulting legislation drastically curtailed the ability of California employers to classify workers as independent contractors.

Amidst all this litigation, voters will be asked to consider a ballot initiative this November, Proposition 22, that would overturn the Dynamex decision and A.B. 5.  If that ballot fails to pass, Lyft and Uber will be required to comply with the injunction within no more than 30 days after issuance of the remittitur in the appeal, which may be as late as May 2021.  Of course, if voters pass Proposition 22, this litigation may be moot.  Stay tuned, passengers in this case could be in for a bumpy ride.

On July 16, 2020, the DOL issued new model FMLA notices and forms with a June 2020 revision date.  The look of the notices and forms are somewhat different from previous versions but there are not a lot of substantive changes.  The DOL also issued some FAQs in connection with the release of the updated forms explaining that the FMLA does not require the use of any specific form or format, and that even though the DOL revised the FMLA forms to make them easier to understand, the revised forms convey and collect the same information which can be provided in any format.

The DOL’s FAQs also address the following questions:

Can my employer require me to provide a new certification, using the revised form, when I have already provided the required FMLA information using the old certification form?

No. You can provide the required information contained on a certification form in any format. If you used the old certification forms to provide your employer with the required FMLA information, you do not have to provide your employer with the same FMLA information using the revised certification forms.

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In the midst of the COVID-19 pandemic, an economic crisis that is predicted to be as bad as the great depression, and unrest over racial inequality and police brutality that is giving birth to a global movement for social change, the U.S. Supreme Court issued a landmark decision in Bostock v. Clayton County, Georgia (Case No. 17–1618) on June 15, 2020 and announced with finality that an employer who fires an individual merely for being gay or transgender violates Title VII.   The decision was a shock to some and long overdue for others.  Regardless of one’s political or social leanings, it is without question that the decision is an important one that will have far reaching consequences throughout the country.

Summary of Facts and Lower Court Rulings.

The Bostock case is actually a consolidation of three separate cases. In each of these cases, an employer allegedly fired a long-time employee simply for being homosexual or transgender. Clayton County, Georgia, fired Gerald Bostock for conduct “unbecoming” a county employee shortly after he began participating in a gay recreational softball league. Altitude Express fired Donald Zarda days after he mentioned being gay. And R. G. & G. R. Harris Funeral Homes fired Aimee Stephens, who presented as a male when she was hired, after she informed her employer that she planned to “live and work full-time as a woman.” Each employee sued, alleging sex discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”). The Eleventh Circuit held that Title VII does not prohibit employers from firing employees for being gay and so Mr. Bostock’s suit could be dismissed as a matter of law. The Second and Sixth Circuits, however, allowed the claims of Mr. Zarda and Ms. Stephens, respectively, to proceed. The Supreme Court granted review of the cases and its decision puts to rest the split of authority between the Circuits as to whether Title VII protects LGBTQ employees from discrimination in the workplace.

Supreme Court Analysis.

Justice Neil Gorsuch wrote the majority opinion (joined by Chief Justice John Roberts and Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan).  In a direct and no-nonsense fashion, Justice Gorsuch said that few facts were needed to appreciate the legal question the Court faced:

Each of the three cases before us started the same way: An employer fired a long-time employee shortly after the employee revealed that he or she is homosexual or transgender—and allegedly for no reason other than the employee’s homosexuality or transgender status.

The Court said that with this in mind, their “task is clear.”  The Court had to determine the ordinary meaning of Title VII’s command that it is “unlawful . . . for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” To do so, the Court said it had to orient itself and examine the key statutory terms in Title VII when adopted in 1964, and examine the impact of those terms on the cases before them considering the Court’s precedents.

The only statutorily protected characteristic at issue in the cases and which the parties dispute was based on, is “sex.”  The employers claimed that the term “sex” in 1964 referred to “status as either male or female [as] determined by reproductive biology.” The employees countered by submitting that, even in 1964, the term bore a broader scope, capturing more than anatomy and reaching at least some norms concerning gender identity and sexual orientation. However, candidly, the Court said that the parties’ debate over the meaning of “sex” in 1964 is not the real focus of the analysis.  According to the Court, the question isn’t just what “sex” meant, but what Title VII says about it. Most notably, the statute prohibits employers from taking certain actions “because of” sex but it doesn’t matter if other factors besides sex contribute to the action.  Also, when analyzing a discrimination case under Title VII, the focus is not on class or group (men v. women) treatment, but rather individual treatment.

Prior precedent has made clear that Title VII’s message is “simple but momentous”: An individual employee’s sex is “not relevant to the selection, evaluation, or compensation of employees.” (Price Waterhouse v. Hopkins, 490 U. S. 228, 239 (1989) (plurality opinion).  The Court said that the statute’s message for the cases before it was equally simple and momentous: “An individual’s homosexuality or transgender status is not relevant to employment decisions. That’s because it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.” 

To help illustrate its reasoning, the Court provided a number of hypotheticals.

• “Consider, for example, an employer with two employees, both of whom are attracted to men. The two individuals are, to the employer’s mind, materially identical in all respects, except that one is a man and the other a woman. If the employer fires the male employee for no reason other than the fact he is attracted to men, the employer discriminates against him for traits or actions it tolerates in his female colleague. Put differently, the employer intentionally singles out an employee to fire based in part on the employee’s sex, and the affected employee’s sex is a but-for cause of his discharge.”
• “Or take an employer who fires a transgender person who was identified as a male at birth but who now identifies as a female. If the employer retains an otherwise identical employee who was identified as female at birth, the employer intentionally penalizes a person identified as male at birth for traits or actions that it tolerates in an employee identified as female at birth. Again, the individual employee’s sex plays an unmistakable and impermissible role in the discharge decision.”

As the Court pointed out, homosexuality and transgender status are inextricably bound up with sex. Not because homosexuality or transgender status are related to sex in some vague sense or because discrimination on these bases has some disparate impact on one sex or another, but because to discriminate on these grounds requires an employer to intentionally treat individual employees differently because of their sex. Also, it doesn’t matter that when an employer treats one employee worse because of that individual’s sex, other factors may contribute to the decision. For example, the Court said consider this hypothetical:

• “Consider an employer with a policy of firing any woman he discovers to be a Yankees fan. Carrying out that rule because an employee is a woman and a fan of the Yankees is a firing “because of sex” if the employer would have tolerated the same allegiance in a male employee.”

The Court said the same is true in the cases before it.  “When an employer fires an employee because she is homosexual or transgender, two causal factors may be in play – both the individual’s sex and something else (the sex to which the individual is attracted or with which the individual identifies). But Title VII doesn’t care. If an employer would not have discharged an employee but for that individual’s sex, the statute’s causation standard is met, and liability may attach.”

Finally, an employer musters no better a defense by responding that it is equally happy to fire male and female employees  who are homosexual or transgender. According to the Court, “Title VII liability is not limited to employers who, through the sum of all of their employment actions, treat the class of men differently than the class of women. Instead, the law makes each instance of discriminating against an individual employee because of that individual’s sex an independent violation of Title VII.”

The Bostock decision ends years of conflicting decision between federal Circuit courts as to the coverage of Title VII protections against discrimination for LGBTQ employees.  For those employers who are not located in a state that already provided those protections under state law, now is the time to ensure that policies, practices, and trainings address these protections.

The employment lawyers at Weintraub Tobin have years of experience counseling, training, and defending employers in all areas of employment law, including harassment and discrimination under Title VII and California law.  Please reach out to us if we can assist you in your employment law compliance.