Hunton Employment & Labor Perspectives

HuntonAK labor and employment partner Roland Juarez was listed among the Los Angeles Business Journal’s 2021 Top Leaders of Influence: Top Litigators & Trial Lawyers. This is Roland’s third consecutive year to be included, he was selected from over 300 nominations.

Earlier this month, the U.S. Department of Labor’s Wage and Hour Division issued a Notice of Proposed Rulemaking (“NPRM”) seeking to repeal a 2011 rule that significantly impacted the compensation of hospitality workers.  Specifically, the NPRM proposes to allow hospitality employers to control the distribution of the tips they pool assuming their employees are paid the full minimum wage.  By way of background, the FLSA requires employers to pay employees a minimum wage (currently $7.25 per hour) plus overtime for all hours worked over 40 in a single workweek.  Employees who “customarily and regularly receive tips” must still receive the minimum wage, but employers may elect to take a “tip credit” by counting up to $5.12 per hour of those employees’ tips toward the minimum wage, meaning employers may pay a reduced wage of $2.13 to tipped employees.  Historically, employers that take the tip credit have been prohibited from sharing money from a tip-pooling system to employees who do not traditionally receive direct tips (cooks, dish washers, etc.).  In 2011, the DOL extended the tip-pooling prohibition to apply to employers even if they do not take the tip credit and pay their employees the full federal minimum wage.

Date: Thursday, November 16, 2017
Time: 12:00 PM to 1:00 PM PST

Please join Hunton & Williams LLP for a complimentary webinar that will address current concerns faced by employers in California. This program, co-sponsored by Welch Consulting, will examine the following issues:

• Fair Pay issues
• Recent PAGA concerns
• “Ban the Box” and background checks
• Sick leave
• Changing local and regional ordinances
• Sexual harassment

We will also discuss ways to address potential risks proactively, including the use of statistical analyses to avoid future litigation.

We hope you can join us for ...

California’s Fair Employment and Housing Act (“FEHA”) not only prohibits discrimination, harassment and retaliation, but goes a step farther than similar state laws in its explicit requirement that employers take reasonable steps to prevent and correct such conduct.  Cal. Gov’t Code § 12940(k).  In 2016, the California Fair Employment and Housing Council promulgated regulations which set forth the required elements of a compliant prevention and correction program (2 CCR §§ 11023-11024), and in May 2017 the California Department of Fair Employment and Housing (“DFEH”) issued a Workplace Harassment Guide (the “Guide”) to clarify further employers’ obligations under these regulations.  

The Second Circuit recently held that Rite-Aid lawfully fired a long-tenured pharmacist after he refused to comply with the company’s new mandate that pharmacists administer immunizations.  The Court’s decision overturned a jury verdict of $2.6 million in the pharmacist’s favor and reminds employers what it takes to show that a given function is “essential” and what accommodations are reasonable.  The former pharmacist had claimed Rite-Aid illegally discharged and retaliated against him, and refused to accommodate his disability—trypanophobia, or needle phobia—under the Americans with Disabilities Act and similar state law.

In a decision that could trigger similar action in multiple states, the Fifth Circuit recently decided that an employee could bring a wrongful-termination claim in Mississippi after being terminated for having a gun in his truck, which was parked on company property.   Following the Mississippi Supreme Court’s decision on referral, the Fifth Circuit held that a Mississippi statute—which prohibits employers from establishing, maintaining, or enforcing policies that prohibit an employees from storing a firearm in a vehicle on company property and from taking action against an employee who violates that policy—creates an exception to the state’s employment-at-will doctrine.

Roland Juarez will present a webinar on “Final, New DOL Overtime Rule: Strategies to Mitigate Impact of 100% Increase in White-Collar Exemption” on June 22, 2016.

Details and Registration

The recently enacted Defend Trade Secrets Act of 2016 (DTSA) provides a new form of expedited relief in federal court for owners of misappropriated trade secrets through an ex parte seizure of property. In “extraordinary circumstances,” DTSA permits a court to issue an order to authorize law enforcement officials to seize property – without advanced notice to the accused – in order to prevent the propagation or dissemination of the trade secret. The utilization of this ex parte seizure does not come without risk. Section 2(b)(2)(G) provides that in the case of wrongful or excessive seizure, a person who suffers damages has a cause of action against the applicant and can seek reasonable attorneys’ fees, damages for lost profits, cost of materials, loss of good will and punitive damages.

As we previously reported, the newly-enacted Defend Trade Secrets Act (DTSA) represents a significant new weapon for companies to prosecute trade secret violations. Among other features, the DTSA’s nationwide reach and its provision for judicial seizure, double damages, and attorneys’ fees provide a much more robust enforcement and remedy scheme than is currently available under many state laws.

Congress gave companies a new weapon to fight trade secret theft this week. President Obama signed a law that addresses several issues that often mire trade secret litigation – cross border battles when multiple states are involved, venue and choice of law disputes, and lack of ability to seize trade secrets before they escape a state or the United States. Companies now have a civil federal cause of action (original federal jurisdiction) for trade secret theft and the ability to seize trade secrets through an ex parte temporary injunction procedure that could prove to be incredibly costly for the unfortunate company whose newly hired employee stole trade secrets from a former employer. There will be more to come on these elements over the next few weeks.

Under the Fair Labor Standards Act (FLSA), employers who use a tip credit to satisfy their minimum wage obligations for tipped employees must follow certain rules related to those tips.  One of those rules relates to  the use of tip pools – i.e., pooling of tips received by multiple tipped employees and then dividing the total among the pool participants based on a specified formula.  Under Section 3(m) of the FLSA, employers who rely on the tip credit and who require their tipped employees to contribute their tips to a tip-pooling arrangement must ensure that the only employees who participate in the pool are those that “customarily and regularly” receive tips.  This typically means that managers, hostesses, cooks, dishwashers, and other non-tipped employees cannot participate in the tip pool if the employer wants to rely on the FLSA’s tip credit.

Roland Juarez will present a webinar on “Defending California Wage and Hour Litigation Amid New Legislation and Court Decisions” on Wednesday, October 28, 2015.

Details and Registration

In late August, California legislators advanced Senate Bill 358 which aimed to further close gender pay gaps in California.  Considered one of the strongest proposed equal pay laws in the nation, Governor Brown indicated he would support SB 358, known as the California Fair Pay Act.  The bill was presented to Governor Brown for signing in early September.  Over a month after SB 358 was placed onto Governor Brown’s desk, on October 6, 2015, Governor Brown signed the bill into law.  The SB 358 amends Section 1197.5 of the California Labor Code and requires that an employer “not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” For an in-depth discussion of the California Fair Pay Act’s provisions, please visit Hunton & Williams LLP’s previous blog post.

The Ninth Circuit ruled on Monday, September 28, that California Private Attorney General Act (“PAGA”) claims cannot be waived in employment arbitration agreements, following the rule announced by the California Supreme Court in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014).  With this 2-1 ruling, the Ninth Circuit majority found that the Iskanian rule barring PAGA waivers is not preempted by the Federal Arbitration Act (“FAA”).

California Governor Jerry Brown indicated in late August that he intends to sign into law a California Senate Bill aimed at further closing gender pay gaps in California. On August 31, 2015, the California State Senate unanimously passed the bill which aims to eliminate gender wage gaps in California by amending the California Equal Pay Act to prohibit employers from compensating employees at wage rates less than rates paid to employees of the opposite sex for “substantially similar” work. Governor Brown was presented with Senate Bill 358 (“SB 358”) in early September, and it is anticipated he will sign it soon.

California’s paid sick leave law, which only went into effect on July 1, 2015 and was recently further clarified on July 13, 2015, continues to raise questions for California employers. Most recently, California’s Division of Labor Standards Enforcement (“DLSE”) was asked by an employer to clarify what the use of the word “day” meant for employees who work ten hour shifts, i.e. more than the traditional eight-hour work day. The DLSE found that such employees would be entitled to the wage they normally earn, meaning for those employees a day would mean ten, as opposed to eight hours, entitling them to an additional two hours of leave.