Labor and Employment

For years, California courts have recognized the right of employers to use non-solicitation provisions in employment agreements to prevent employees from “soliciting” their coworkers to join them at a new employer.  For instance, in 1985, a California appellate court in Loral Corp v. Moyes, 174 Cal.App.3d 268 (1985), held that a non-solicitation of fellow employees provision in an employment agreement was lawful because the co-workers were free to seek employment with a competitor, they just couldn’t be contacted first by the departing employee.

The enforcement of non-solicitation of co-worker provisions remained relativity consistent until November 2018 when a court in AMN Healthcare, Inc. v. Aya HealthCare Services, Inc., 28 Cal.App.5th 923, enjoined an employer from enforcing a co-worker non-solicitation provision against former employees. The Court held that the co-worker non-solicitation provision violated section 16600 of the California Business and Professions Code, which provides that agreements that restrain a person’s trade or profession are unenforceable.  The AMN Healthcare Court relied heavily on the California Supreme Court’s ruling in Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008), which broadly struck down non-compete agreements preventing employees from competing with their former employer.

It remained an open question following the AMN Healthcare decision whether other courts would follow its holding concerning the unenforceability of an employee non-solicitation provision.  For instance, would other courts limit its holding and decline to follow it because:

(1) The former employees who were being sought to be restrained by AMN were recruiters such that any prohibition on solicitation would necessarily restrain them in their profession as recruiters; and

(2) The former co-workers they were targeting for recruitment were temporary nurses who served short assignments so that enforcing the non-solicitation provision could limit those employees’ ability to obtain new work after their temporary assignments ended.

Now, two months later, another court appears to be following the lead of the AMN Healthcare court and is allowing a claim to go forward attacking a co-worker non-solicitation provision.  In Barker v. Insight Global, LLC (Jan. 11, 2019 N.D. Cal.), Judge Beth Labson Freeman recently reversed herself and granted the plaintiff-employee’s motion for reconsideration to allow him to state a claim as a class representative against his former employer for the use of co-worker non-solicitation provisions in its employment agreements.  Judge Freeman held that the recent AMN Healthcare decision (her initial order dismissing the claim came three months prior to the AMN Healthcare decision) was likely consistent with the current state of California law regarding these non-solicitation provisions, especially in light of the Edwards v. Arthur Andersen decision. She denied the defendant-employer’s motion to dismiss the former employee’s claim and ruled that plaintiff should be allowed to present a claim that the use of an employee non-solicitation provision in his employment agreement violated section 16600 and was therefore an unfair business practice.

The Barker case is still in the early stages but employers should be concerned that a court has decided to follow the holding of the AMN Healthcare decision. In light of these recent developments, employers should carefully review any non-solicitation provisions in their employment agreements with their attorneys to determine whether they are at risk at facing claims similar to those asserted in the AMN Healthcare and Barker cases.

The Labor and Employment Law Blog

While it has always been good practice for employers of all sizes to train both their supervisory employees and non-supervisory employees on the prevention of harassment, California law now mandates such training by 1/1/20 (and every 2 years thereafter) for any employer with 5 or more employees.  The attorneys in Weintraub Tobin’s Labor & Employment Department have years of experience conducting energetic, compliant, and effective harassment prevention training for employers of all sizes and in all industries.  The Training Division of the Labor & Employment Department is headed up by Shareholder Beth West.  Feel free to reach out to her or Department assistant Ramona Carrillo if you are interested in scheduling training – we are available to discuss a training program that meets the specific needs of your workplace.

The Labor & Employment attorneys at Weintraub Tobin specialize in training supervisors on various workplace issues, including preventing harassment, discrimination, and retaliation; workplace health and safety; and managing leave laws.  For more information, please visit our Trainings page here

Effective January 1, 2019, California’s minimum wage rate increased to $12.00 per hour (from $11.00) for employers with 26 or more employees and $11.00 per hour (from $10.50) for employers with 25 or fewer employees. The minimum wage will continue to increase yearly until it reaches $15.00 per hour on January 1, 2022 for employers with 26 or more employees and January 1, 2023 for employers with 25 or fewer employees.

In California, many cities are increasing their minimum wages faster than the state. Click here for a city-by-city chart of increases set to take place in 2019.

On December 10, 2018, the Fourth Appellate Court decision in Kennedy Donohue v.  AMN Services, LLC  (“AMN”) was certified for publication and it brings good news for California employers who use a neutral rounding timekeeping system. The case involved a class action and PAGA action brought by Ms. Donohue on behalf of nurse recruiters who worked for AMN.  Ms. Donohue claimed that AMN had violated various California wage and hour laws and brought claims for: 1) failure to provide meal and rest periods in violation of Labor Code sections 226.7 and 1197.1; 2)  failure to pay overtime and minimum wage in violation of Labor Code sections 510 and 1197.1; 3) improper wage statements in violation of Labor Code section 226; 4) unreimbursed business expenses in violation of Labor Code section 2802; 5) waiting time penalties in violation of Labor Code sections 201-203; 6) unfair business practices in violation of Business and Professions Code section 17200; and 7) civil penalties authorized by the Labor Code Private Attorneys General Act of 2004  (PAGA), under Labor Code section 2698 et seq.

The parties brought cross motions for summary judgment and summary adjudication and, following oral argument, the trial court granted AMN’s motion for summary judgment and denied Ms. Donohue’s motion for summary adjudication. Ms. Donohue timely appealed and the Fourth Appellate Court sustained the trial court’s decision in favor or AMN.

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Well September 30, 2018 has come and gone.  As my September 19, 2018 article indicated, that was the deadline for Governor Brown to either sign or veto a large number of employment-related bills passed by the California Legislature during the 2017-2018 Term.  Out of the 21 employment-related bills I summarized in my September 19^th article, 12 were signed into law, and 9 were vetoed.  Below is a list of the new laws California employers must comply with, as well as a list of vetoed bills where employers dodged the bullet.

To read the full article, please click here

Bills Signed into Law.

1. SB820. Prohibition on Non-Disclosure Provisions re: Sexual Misconduct & Harassment.
2. AB3109. Right to Testify re: Sexual Misconduct.
3. SB1300. Significant Revisions and Additions to FEHA; Prohibiting Certain Release and Non-Disparagement Provisions re: FEHA Claims; Expanding Employer’s Liability for Harassment by Third-Parties; Authorizing Bystander Training; and Outlining Legislative Declarations re: Litigating Sexual Harassment Claims.
4. SB1343. Expansion of Training Requirements re: Sexual Harassment.
5. AB2338. Sexual Harassment Training Requirements for Talent Agencies.
6. AB1976. Acceptable Lactation Locations for Employees.
7. SB970. Required Training of Hotel and Motel Employees re: Human Trafficking.
8. AB2034. Required Training of Mass Transit Employees re: Human Trafficking.
9. SB224. Sexual Harassment in the Professional Relationship.
10. SB1123. Expansion of PFL Wage Replacement Benefits.
11. SB1412. Clarifications on “Ban the Box” Law re: Criminal History Inquiries of Particular Convictions.
12. SB826. Females on Board of Directors of Publicly Held Corporations.

Vetoed Bills.

1. AB3080. [Prohibition on Non-Disclosures re: Sexual Harassment & Prohibition on Mandatory Arbitration Agreements re: FEHA claims].
2. AB1867. [Records of Sexual Harassment Complaints].
3. AB1870. [Extension of FEHA Statute of Limitations].
4. AB3081. [Rebuttable Presumption of Retaliation against Sexual Harassment Complainant].
5. AB2079. [Sexual Harassment Trainer Qualifications for Janitorial Workers].
6. SB937. [Acceptable Lactation Locations for Employees].
7. SB1223. [Harassment & Discrimination Prevention Policy & Training in Construction Industry].
8. AB2496. [Rebuttable Presumption of Employment Status for Janitorial Workers].
9. AB2732. [Immigration Documents & “Workers Bill of Rights

Takeaway:  California employers should evaluate the new employment laws discussed above as well as others that were passed, and take necessary steps to ensure compliance. The employment attorneys at Weintraub Tobin are happy to discuss the new laws and assist employers in complying with their legal obligations.

The September 30^th deadline for Governor Brown to act on numerous employment-related bills passed by the California Legislature during the 2017-2018 Legislative Term is fast approaching. This Blog summarizes only 21 of the more than 40 employment-related bills currently on the Governor’s desk. Employers are encouraged to stay tuned to see which bills become law and which ones don’t make the cut.  NOTE: employment laws are constantly changing and employers must ensure that they make the necessary changes to policies and practices so that they are in compliance with current legal requirements.

1. SB820. [Prohibition on Non-Disclosure Provisions re: Sexual Misconduct & Harassment].
2. AB3080. [Prohibition on Non-Disclosures re: Sexual Harassment & Prohibition on Mandatory Arbitration Agreements re: FEHA claims].
3. AB3109. [Right to Testify re: Sexual Misconduct].
4. AB1867. [Records of Sexual Harassment Complaints].
5. AB1870. [Extension of FEHA Statute of Limitations].
6. SB1300. [Prohibition re: Release of Claims & Non-Disparagements re: Sexual Harassment].
7. SB1343. [Expansion of Training Requirements re: Sexual Harassment].
8. AB3081. [Rebuttable Presumption of Retaliation against Sexual Harassment Complainant].
9. AB2079. [Sexual Harassment Trainer Qualifications for Janitorial Workers].
10. AB2338. [Sexual Harassment Training Requirements for Talent Agencies].
11. AB1976. [Acceptable Lactation Locations for Employees].
12. SB937. [Acceptable Lactation Locations for Employees].
13. SB970. [Required Training of Hotel and Motel Employees re: Human Trafficking].
14. AB2034. [Required Training of Mass Transit Employees re: Human Trafficking].
15. SB224. [Sexual Harassment in the Professional Relationship].
16. SB1223. [Harassment & Discrimination Prevention Policy & Training in Construction Industry].
17. AB2496. [Rebuttable Presumption of Employment Status for Janitorial Workers].
18. AB2732. [Immigration Documents & “Workers Bill of Rights”].
19. SB1123. [Expansion of PFL Wage Replacement Benefits].
20. SB1412. [Clarifications on “Ban the Box” Law re: Criminal History Inquiries of Particular Convictions].
21. SB826. [Females on Board of Directors of Publicly Held Corporations].

To read the full article and summaries of each bill, please click here.

On July 18, 2018, Governor Brown signed Assembly Bill (AB) 2282 which provides answers and clarifications to a number of questions employers had about the new law that went into effect in January 2018 (Assembly Bill 168 – codified in Labor Code section 432.3). Section 432.3 prohibits employers from relying on the salary history information of an applicant for employment as a factor in determining whether to offer an applicant employment or what salary to offer an applicant, and also requires an employer, upon reasonable request, to provide the pay scale for a position to an applicant applying for employment.

Since its enactment, employers were questioning the scope of the restrictions contained in Section 432.3, and their obligations in connection with disclosing pay scale information upon request. In order to answer some of those questions, AB 2282 does the following:

1. It clarifies that the prohibitions under Section 432.3 do not apply when evaluating the salary of a current employee (e.g. if internal applications or employee promotions are being considered). Specifically, AB 2282 provides that: “For purposes of this section, the term “applicant” or “applicant for employment” means an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position.”

2. In connection with an applicant’s right to seek the pay scale for a position upon reasonable request, AB 2282 defines the two terms as follows:

– “For purposes of this section, “pay scale” means a salary or hourly wage range.”

– “For purposes of this section “reasonable request” means a request made after an applicant has completed an initial interview with the employer.”

Based on these definitions, employers now only have to provide a range of what the salary or hourly wage would be for a position rather than some fixed or guaranteed pay scale. Further, employers only have to provide this information to an applicant once he or she has completed an initial interview with the employer.

3. Finally, Section 432.3 already provides that nothing in the section prohibits an applicant from voluntarily and without prompting disclosing salary history information to a prospective employer. However, the law was silent on whether an employer could ask an applicant about his or her salary expectations.

AB 2282 clarified that the law does not prohibit an employer from asking an applicant for his or her salary expectations. Specifically, AB 2282 states: “Nothing in this section shall prohibit an employer from asking an applicant about his or her salary expectation for the position being applied for.”

Takeaway: While AB 2282 provided some much needed clarification to the new law, employers must still be sure that anyone involved in the hiring process is aware of the restrictions contained in Section 432.3 in connection with an applicant’s prior salary history. The employment attorneys at Weintraub Tobin regularly counsel employers in all areas of employment law compliance, including wage and hour and equal pay issues. Feel free to contact us if we can be of assistance.

Back in December, Beth West informed our readers that the NLRB had issued new (and more realistic) guidelines for evaluating whether employment policies and rules violate the National Labor Relations Act (“NLRA”). As a reminder, the NLRB issued a new two-prong test for determining if facially neutral employment policies could interfere with the exercise of NLRA rights, evaluating: (1) the nature and extent of the potential impact on NLRA rights, and (2) the legitimate justifications associated with the rule.

The National Labor Relations Board’s General Counsel recently issued a memorandum (the “Memo”) providing guidance as to how the NLRB will enforce workplace policies, in light of that decision. The Memo evaluates common workplace rules to assess whether or not such rules may be permissible, evaluating the rules under three main categories: (1) lawful to maintain; (2) warrant individualized scrutiny; and (3) unlawful to maintain.

Category 1: Rules that are Generally Lawful to Maintain.

According to the Memo, the “types of rules in this category are generally lawful, either because the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of rights guaranteed by the Act, or because the potential adverse impact on protected rights is outweighed by the business justifications associated with the rule.” The following rules were identified as being “generally lawful to maintain”:

*Civility Rules

*No-photography/No-recording Rules

*Rules against insubordination, non-competition, or on-the-job conduct that adversely affects operations

*Disruptive Behavior Rules

*Rules protecting confidential, proprietary, and customer information or documents

*Rules against defamation or misrepresentation

*Rules against using employer logos or intellectual property

*Rules requiring authorization to speak on the employer’s behalf

*Rules banning disloyalty, nepotism, or self-enrichment

Category 2: Rules that Warrant Individualized Scrutiny.

Category 2 rules are explained as rules that “are not obviously lawful or unlawful, and must be evaluated on a case-by-case basis to determine whether the rule would interfere with rights guaranteed by the NLRA, and if so, whether any adverse impact on those rights is outweighed by legitimate justifications.” It lists possible examples of Category 2 rules to be:

*Broad conflict of interest rules that do not specifically target fraud and self-enrichment and do not restrict membership in, or voting for, a union

*Confidentiality rules referring to “employer business” or “employer information” (as opposed to prohibiting use of customer or proprietary information

*Rules relating to an employee’s use of the employer’s name (as opposed to use of the employer’s logo/trademark)

*Rules generally restricting an employee’s ability to generally speak to the media or third parties (as opposed to prohibiting speaking on behalf of the employer)

*Rules banning off-duty conduct that might harm the employer (as opposed to activity that causes a disruption in the workplace)

*Rules against making false or inaccurate statements (as opposed to defamatory statements)

Category 3: Rules that are Unlawful to Maintain.

The Memo states that “Rules in this category are generally unlawful because they would prohibit or limit NLRA-protected conduct, and the adverse impact on the rights guaranteed by the NLRA outweighs any justifications associated with the rule.” It specifically notes that (1) confidentiality rules specifically regarding wages, benefits, or working conditions; or (2) rules against joining outside organizations or voting on matters concerning the employer are prohibited.

Employers should review their employment policies to ensure compliance with this updated guidance. Weintraub’s Labor & Employment attorneys have extensive experience counseling and auditing employee handbooks. Please contact any member of our team for assistance in updating your policies.