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The California Family Rights Act (CFRA) was established to ensure secure workplace leave rights for the birth of a child, for purposes of bonding, placement of a child in the employee’s family for adoption or foster care, for the serious health condition of the employee’s child, parent or spouse, or for the employee’s own serious health condition.

Importantly, the CFRA applies only to employers who employ 50 or more employees within a 75-mile radius. This is not new. However, the amended regulations clarify how to determine if this threshold is met for employees with no fixed worksite (i.e., work from home, etc.). The regulations now provide that such employees’ worksite is the location (1) to which they are assigned as their home base; (2) from which their work is assigned; or (3) to which they report.

CFRA leave is only available to employees who have been employed for at least 12 months and at least 1,250 hours during the preceding 12 months period. The amended regulations provide that employees who are not eligible for CFRA leave at the start of a leave because they did not meet this requirement, may become eligible for protected CFRA leave during their non-CFRA leave because their continued employment during such leave counts toward the 12 month threshold.

Formerly, employers could require an employee using CFRA leave to obtain a second opinion of the employee’s “serious health condition” if the employer had “reason” to doubt the validity of the first medical certification. This regulation has been amended to allow an employer to require a second opinion only where it has a “good faith, objective reason” to doubt the certification. Employers are also now prohibited from contacting health care providers except to authenticate a medical certification.

As amended, the regulations now provide that an employee who fraudulently uses CFRA leave is not protected for purposes of job restoration (at conclusion of leave) or health benefits.

Finally, the amended regulations require employers to post a notice explaining the CFRA and how to file a complaint with the Department of Fair Employment and Housing (DFEH).

In my last post, I highlighted a recent California Court of Appeal Decision, Nealy v. City of Santa Monica, in which the Court held that an employer is not required, as part of its duty to accommodate an employee’s disability, to eliminate an essential function of the employee’s job. At the time of my post, the case was not published, meaning it could not be cited as authority. In the interim, the case has been ordered published, meaning it is now citable authority. Good news!

The California Court of Appeal, in Nealy v. City of Santa Monica, recently provided insight about the extent of an employer’s obligation to provide reasonable accommodation to a disabled employee. Specifically, the Court addressed whether an employer is required to remove an “essential job function” as a reasonable accommodation.

Factual Background

The employee, Tony Nealy, worked for the City as a “solid waste equipment operator.” He suffered two work-related injuries, leaving him partially disabled. When the agreed medical examiner ultimately approved Nealy’s return to work, he stipulated that Nealy should be precluded from “kneeling, bending, stooping, squatting, walking over uneven terrain, running, and prolonged standing relative to the right knee, as well as climbing and heavy lifting.”

Nealy’s pre-injury job as a “solid waste equipment operator” requires workers be able to operate at least four different types of refuse collection vehicles, as well as refuse and recyclable collection/disposal duties, heavy lifting and equipment maintenance/inspection.

Nealy took the position that, even with his work restrictions, he could still work as a “solid waste equipment operator” if the job duties were altered in his case to limit his responsibility to a single refuse collection vehicle (automated side loader). When the City refused this suggestion, he sued, claiming disability discrimination and other theories.

Essential Function and Reasonable Accommodation

California law imposes on employers the obligation to make “reasonable accommodations” for known disabilities. “Reasonable accommodation” has been defined as “a modification or adjustment to the work environment that enables the employee to perform the essential functions of the job.” (Nadaf-Rahrov v. Neiman Marcus Grp., Inc., 166 Cal.App.4th 952, 974 (2008).)

An “essential function” of a given position has been defined as “the fundamental job duties of the employment position the individual with a disability holds or desires.” (Cal. Gov. Code §12926(f).) The City argued that the ability to operate multiple different refuse collection vehicles was an essential function of the job of “solid waste equipment operator” because (1) employees could be required to “fill-in” for one another, operating different vehicles, in the event of an absence; and (2) a natural disaster may dictate that larger vehicles than the automated side loader would be required to adequately clear debris.

Among the questions presented to the Court was whether the City’s duty to accommodate Nealy’s disability required it to eliminate an essential job function of a “solid waste equipment operator,” so that he would be required only to operate the automated side loader and not perform any of the other duties that fell outside his restrictions. Citing authorities, including Lui v. City and County of San Francisco, 211 Cal.App.4th 962, 985 (2012), and Dark v. Curry County, 451 F3d.1078, 1089 (9th Cir. 2006), the Court said no. Elimination of an essential function is not a reasonable accommodation of an employee’s disability.

Summary

Nealy v. City of Santa Monica is an unpublished opinion, which means it cannot be cited to a court as authority. However, it provides valuable insight into the extent of an employer’s obligation to provide reasonable accommodation to a disabled worker. Specifically, the case suggests reasonable accommodation does not require the elimination of an essential job function.

Employers facing questions of reasonable accommodation of an employee’s known disability would be wise to consult with their employment law counsel, to help reduce the likelihood of a violation of state and/or federal law.

Many employers are familiar with the fact that an employee who brings and wins a discrimination case will recover his or her attorney’s fees. In order for a winning employer to recover its attorney’s fees, by contrast, the employer is required to show that the employee’s claims were frivolous, unreasonable or groundless, which is an extremely difficult standard to meet. The policy underlying this distinction is not to discourage employees from bringing discrimination lawsuits out of fear they will, if they lose, be “on the hook” for thousands of dollars in attorney’s fees.

Notwithstanding this limitation on a prevailing employer’s ability to recover attorney’s fees, winning employers have historically been able to claim and obtain a judgment for out-of-pocket litigation costs, without a showing the claims were frivolous, unreasonable and groundless. These costs include filing fees, deposition and court transcript fees and certain witness expenses.

A case now pending before the California Supreme Court, Williams v. Chino Valley Independent Fire District, will resolve a split of authority among California appellate courts whether prevailing employers in discrimination cases will continue to be able to claim litigation costs without being required to meet the frivolous, unreasonable or groundless standard. The plaintiff bar is urging the Supreme Court to resolve the split of authority by holding that prevailing employers seeking to recover attorney’s fees or costs must prove the claim was frivolous, unreasonable or groundless.

The California Supreme Court has ruled that “hours worked” under the California Labor Code and Industrial Wage Commission (“IWC”) Wage Order No. 4-2001 includes all time spent at an employer’s workplace and under the employer’s control, including sleep time.

In Mendiola v. CPS Security Solutions, Inc. (Jan. 8, 2015), a trailer guard required to spend his night at assigned jobsites in residential trailers sued because the employer’s on-call agreement only compensated guards for on-call time spent actually responding to alarms and investigations. The Guard argued that this policy violated IWC Wage Order No. 4-2001, which requires that employers “pay to each employee . . . not less than the applicable minimum wage for all hours worked in the payroll period.”

While the trial and appellate courts agreed with the security guards with respect to weekday on-call, the California Court of Appeal held that weekend on-call time constituted non-compensable sleep time.

The California Supreme Court reversed the holding of the Court of Appeal. It held the trailer guards’ on-call time constituted compensable “hours worked” under the Wage Order because the employer exercised significant control over the guards’ activities. This included the requirement that they live onsite and they were expected to respond promptly, in uniform, to alarms. Additionally, although the guards were allowed to engage in personal activities, including sleeping and watching television, the Court found it significant that the “guards’ mere presence [at the jobsite] was integral” to the employer’s business.

California’s meal period rules generally prohibit employers from having employees work more than 5 hours without providing a meal period of at least 30 minutes. However, the Wage Orders do recognize an exception to this rule where (1) the nature of the work performed by the employee prevents him/her from being relieved of all duty; and (2) the employee and employer agree in writing to an “on-duty” meal period.

It is important to bear in mind this is not a waiver of the meal period. A couple of additional points:

• The written agreement must clarify that the employee will be paid for his/her “on-duty” meal period.
• The written agreement must expressly state that the agreement may be revoked by the employee at any time. I would also include the buzzword “voluntary” in any agreement that I drafted.

A persistent question is when does “the nature of the work” performed prevent the employee from being relieved of all duty for at least 30 minutes. Department of Labor Standards Enforcement (DLSE) opinion letters and case law suggest this determination must be made on a case-by case basis. Employers who avail themselves of this meal period exception should be wary of any kind of “blanket” application of the “on-duty” meal period for all employees, restricting its use to only those situations in which the employer can make a colorable argument that a normal, “off-duty” meal period is unrealistic.

Politicians in several states have been lobbying for years to make “bullying” in the workplace illegal. While Tennessee is the only state with such a law currently on its books, California took a step closer when Governor Brown signed AB 2053, which will require certain employers to provide “abusive conduct” training as a component of already mandatory sexual harassment prevention training for supervisory employees.

The existing requirement, found in Government Code section 12950.1, applies to employers with 50 or more employees and requires supervisory employees receive two hours of sexual harassment prevention training, within six (6) months following their assumption of a supervisory role. Follow up training is required every two years.

Here is what the amendment adds to Section 12950.1:

• Training must now include a component on the “prevention of abusive conduct.” This need not necessarily extend the length of the training beyond two hours.
• “Abusive conduct” is “conduct with malice that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests.”
• “Abusive conduct” may include repeated infliction of verbal abuse (e.g., derogatory remarks, insults, and epithets), verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance.
• “Abusive conduct” need not be based on any otherwise protected classification, such as race, age, gender, disability or religion.
• A single act does not constitute “abusive conduct” for purposes of the training, unless it is especially severe or egregious.
• The amendment takes effect January 1, 2015.

What Employers Should Do – Employers with 50 or more employees should immediately consult with their regular employment attorneys to update training to comply with the new law.

[This originally appeared in the Los Angeles Daily Journal.]

I was recently vetting some potential mediators with a colleague whose opinion I generally respect. In response to one of his proposals, I said, “yeah, but I’ve heard he doesn’t really know employment law.” My colleague responded, and I’m quoting, “I’ve become increasingly jaded that mediators believe the law and facts are impediments to the process.” This struck me as an interesting remark and I’ve continued to ponder it.

There is good reason for lawyers in the defense bar to be at least occasionally jaded about ADR methodologies. I’ve blogged a fair amount about the frustration we feel in knowing that many neutrals feel no compunction about bypassing or loosely enforcing evidence rules when conducting a binding arbitration. In my view, this undermines predictability and erodes the process. On the other hand, at least in the employment context, it is generally the defense that seeks to compel arbitration.

What about mediation? Are the law and facts of a case a waste of time–not only irrelevant, but actually impediments to the mediation process? There’s no point in fence sitting, so I’m going to commit to the ostensibly untenable view that this is both true, and false.

Yes, it’s true. All those times I diligently pursued discovery, and groomed my case to get it in front of a mediator; all that effort I spent meticulously crafting a brief, with notated exhibits; all that time I spent explaining, trying hard to educate the neutral why we had every right to whatever it was we were looking for–all that time and energy was wasted. Utterly.

This is because, from the mediator’s point of view, the deeper my client and I are entrenched in our position, believing our stance is firmly rooted in favorable law and good facts, the harder and longer she will need to work to get us to contribute, to give, to help her bridge the wide gulf that presently divides the parties.

Sure, she read my brief. She was paid to read it. And she has to know what the dispute is about. She might even be slightly impressed with my evidence gathering and presentation of the law. But beyond that, her focus needs to be much more on the dynamics of the parties. What’s at stake? Is the lawsuit ostensibly about money, but really about jealousy or feeling unappreciated? She knows the quicker she penetrates to the heart of the dispute the better her chances of finding a solution. The law and the facts–those that support a claim or defense–might really be impediments if they’re so good for one side that there’s little fear or risk.

I’m speaking here only of the very best mediators. I’m not talking about carrier pigeons, who simply shuttle demands and offers back and forth until the parties–basically on their own–get close enough that one caves simply to avoid seeing the neutral any more. Neither am I referring to mediators who use the raised-voice-cram-down method, essentially trying to procure settlement through intimidation. Interestingly, there is a place for both styles of mediators; they actually can get some cases resolved, but only certain kinds of cases, and the process can be torturous and messy.

The neutrals truly worth their fees, though, go well beyond shuttling demands and fist pounding. They take the time to get the psychic lay of the land. They determine which of the many impediments to settlement will be the biggest challenge and concentrate their energies there. In many instances, at least in the psychology surrounding what it will take to satisfy, scare or discourage the plaintiff sufficiently to reach a settlement, the admissible facts or applicable law may play only a minor role.

* * *

No, it’s false. I promised an inconsistent, untenable view and I will deliver. From the perspective of any civil defendant, the facts and law cannot be an impediment to settlement. There is nothing more important. Sure, the venue, judge and opposing counsel can play a role in the outcome of a lawsuit, but we rarely, if ever, highlight these inputs in a mediation brief or presentation. They are unspoken intangibles.

When a defendant or its lawyers permit the law and the (likely admissible) facts to take a back seat in the mediation process, it is regrettable. If it happens, the defendant trades its status as an agent, capable of acting, evaluating and defending its actions as appropriate or lawful, for the identity of a faceless, soulless “deep pocket,” nothing more.

It is routine, in cases in which the defendant has both a solid legal defense and good facts, for the mediator to harp away on the exorbitant cost of defending the case through trial and the risk, however small, of an adverse verdict. Of course it is–where else is she going to apply pressure to persuade a confident defendant to fork over what it will take to reach a settlement?

I don’t begrudge any defendant the need to think long and hard about defense costs when engaging in settlement negotiations, even if a case seemed otherwise completely airtight. But I believe a defense lawyer’s role in mediation requires him to continuously redirect the discussion back to the favorable law and facts when the neutral attempts to discount these to bring the parties closer (i.e., get my client to pay more). It is crucial to push back against this tendency to marginalize law and facts. In most instances, they are our only leverage.

This is not to say that, backstage, in confidential communications with our clients, we aren’t completely open and honest about risks and costs, regardless how solid its defense may be. In many instances, a defendant’s blind adherence to some good law and facts would be a recipe for disaster. After all, nobody knows what a jury will think and do. But these words are exchanged in private. At the mediation poker table, the defense lawyer must resist a neutral’s efforts to treat the facts and the law as impediments.

Except, of course, when the facts and the law aren’t so favorable.

California lawmakers and Governor Brown have been busy enacting new laws that are guaranteed to impact California businesses, particularly small employers. One requires employers to provide accrued, paid sick leave beginning on July 1, 2015.

The Healthy Workplaces, Healthy Families Act of 2014 (“Act”) will apply to all employers. It will cover employees, including otherwise exempt employees, who work 30 or more days in California within a year from the commencement of their employment. Excluded from the Act are: (1) employees covered by a collective bargaining agreement (“CBA”) that provides for paid sick leave; (2) certain construction employees covered by a CBA, even if it does not provide for paid sick leave; (3) airline flight crew employees who already accrue paid time off of at least one hour for every hour worked; and (4) in-home support service providers. There are additional requirements to trigger these exclusions.

Paid sick leave is accrued at a rate of “not less than” one hour for every 30 hours worked. Employers can limit accrued sick leave to 48 hours (6 days), and can limit carryover to 24 hours (3 days) each year. The hourly rate for sick pay is calculated by dividing the employer’s total wages (no overtime premium) by the total hours worked in the full pay periods of the prior 90 days. Calculating this rate may be challenging for employees paid at varying rates depending on work.

Sick leave will be available for treatment of a health condition or preventative care for the employee or a family member, or if the employee was a victim of domestic violence, sexual assault or stalking. There is a 90-day “threshold” period of employment that the employee must cross before first taking sick leave under the Act.

There are posting requirements. Employers must display a poster explaining the new sick leave accrual requirements. New employees must be informed in writing of sick leave accrual rights. All employees must be given notice of sick time accrued after each pay period. Employers must maintain records reflecting hours worked and sick leave accrued and used for three (3) years, so they can make them available if requested by the employee or Labor Commissioner.

Employers should act proactively to protect themselves from liability under either new law. Over the next few months, employers should revise policies, including handbooks, to reflect compliance with the new paid sick leave law. Employers are encouraged to consult with their regular employment attorneys to ensure they are in full compliance.

When California employees initiate complaints for unpaid wages (including misclassification or for unpaid overtime), the typical procedure is for the Labor Commissioner to schedule a conference, under California Labor Code Section 98.3, to include a Deputy Commissioner, the employer and the aggrieved employee.

A pamphlet issued by the Labor Commissioner says this about these conferences:

“The conference will be conducted informally and the parties will not be under oath.  The purpose of the conference is to determine if the claim can be resolved without a hearing.  Plaintiffs are not required to prove their case at the conference.  The parties should be prepared to talk with the deputy about the claim, including whether there are any witnesses.  However, the parties do not need to bring witnesses to the conference.  Plaintiffs should bring a copy (not the original) of any document that supports the claim, but should not bring documents that have already been submitted with the claim form.  Defendants should also bring any documents that support their position.”

The vast majority of wage claims resolve at this conference. And this should be a goal, since it’s essentially a “free” settlement conference, though the Deputy Labor Commissioners are not usually unbiased, which is why I strongly recommend that employers have attorneys accompany them to the conference.

If the claim does resolve during the conference, the Deputy Labor Commissioner has a form “settlement agreement” that they will fill out which purports to document the settlement. The parties will sign the agreement.

Unfortunately, this agreement is about as narrow as possible, meaning that, in exchange for the employer agreeing to pay a sum, the agreement provides only that the employee releases and waives her rights to further pursue the wage claim, but nothing else. If the employee subsequently decides to pursue a retaliation, discrimination or harassment claim, the agreement will have no impact.

I believe it is a prudent practice, when attending these conferences, to come prepared with a broader settlement agreement that, in exchange for the same sum of money, requires the employee to effectively release all claims she could have up until that point. A poorer alternative, I’ve found, is to make the settlement subject to the employee signing an agreement to be subsequently prepared and provided by the employer’s counsel. This is a poorer alternative because, after the employee leaves the conference, she may decide she wants to pursue additional claims, but will not be bound by any agreement.

What should a full blown settlement agreement include? Lawyers may disagree on this, but my practice is to spell out all potential statutes (i.e., Title VII, FEHA, Railroad Act, etc.). A California Civil Code Section 1542 waiver is routine. My agreement typically also includes both a nondisparagement and confidentiality clause (concerning the terms of the settlement). If the employee is no longer working for my client, I will also include a clause precluding her from applying for future employment, which effectively eliminates any claim that she was subject to retaliation or discrimination if not re-hired. Finally, my agreements always include choice of law, integration and merger clauses.

An employee, either alone or represented by counsel, might refuse to sign such a broad settlement agreement, and insist instead on the narrow agreement provided by the Labor Commissioner. You and your client will need to decide whether this is satisfactory. Perhaps it is. Perhaps it isn’t. Either way, you’ve come prepared.