New California Law Will Protect Workers for Off-Duty Cannabis Use

Assembly Bill (AB) 2188, signed into law on September 18th, will soon protect employees who use cannabis before or after completing their workday.
The new law goes into effect until January 1, 2024, and will make it unlawful for an employer to discriminate against an individual due to the individual’s use of cannabis off the job, or when an employer-required drug test finds non-psychoactive cannabis in the individual’s system.
This means that employers will be prohibited from firing employees or denying applicants job positions if drug test results merely detect cannabis metabolites in hair, blood, urine, or other bodily fluids.
Importantly, employers can still maintain a drug-free workplace, and continue to discipline employees who possess or use cannabis on the clock. Additionally, AB 2188 specifies that the cannabis use protections do not apply to employees in building or construction trades, or for individuals applying to positions that require federal background investigations and clearance.
Fortunately, employers have ample time to prepare for AB 2188. This should include revisions to policies and handbook language. Additionally, if an employer’s current testing methods include non-psychoactive cannabis metabolites, alternative testing methods should be considered. We can assist with these efforts.
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Mandatory Arbitration of Employment Disputes May Be Back on the Table

Some employers desire, for various reasons, to ensure that disputes with employees are resolved through private arbitration rather than in court. A recent legal development could signal that employers may once again regain the opportunity to make arbitration agreements a condition of employment.

Some background. When Gov. Newsom signed Assembly Bill (AB) 51 in 2019, it prohibited employers from requiring employees to sign arbitration agreements as a condition of employment. When AB 51 took effect in 2020, the U.S. Chamber of Commerce obtained a preliminary injunction in federal court enjoining (halting) enforcement of AB 51 with respect to arbitration agreements governed by the Federal Arbitration Act (FAA) on the grounds that the FAA preempted laws preventing arbitration. The State of California appealed.

In 2021, in a ruling described by a dissenting Justice as “tortuous,” the federal Ninth Circuit Court of Appeals held that the FAA preempts AB 51 only with respect to its provisions that impose penalties on employers who execute arbitration agreements governed by the FAA.

The U.S. Chamber of Commerce immediately sought rehearing. The Ninth Circuit initially deferred but, on August 22, 2022, ultimately withdrew its prior opinion and granted rehearing.

It is worth noting that Judge William Fletcher, who originally supported the opinion, voted in favor of withdrawing the panel opinion and granting rehearing. Whether this signals that Judge Fletcher has been persuaded that the FAA preempts AB 51 in its entirety remains to be seen, but employers desiring mandatory arbitration may be encouraged.

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Inflation Fuels Minimum Wage Increase Effective Jan. 1, 2023

Changes in the consumer price index (CPI) from July 1, 2021 through June 30, 2022, will require California to raise the statewide minimum wage on January 1, 2023 to $15.50-per-hour. This applies to all employers regardless of size. This change was previously not slated to kick in until 2024. The California minimum wage law requires the rate adjustment to be the lower of 3.5% or the rate of inflation – 7.9% during the relevant period.

Importantly, the minimum wage rate hike will also affect whether certain employees (continue to) qualify to be exempt from overtime and rest and meal break requirements. To qualify as “Exempt,” from such requirements under the Executive, Administrative, and/or Professional exemptions a worker must, in addition meeting the strict “duties” test, meet the “Salary Threshold,” which requires they earn a monthly salary of at least twice the state minimum wage for full-time employment (defined as 40 hours per week).

To qualify for the Commission Sales overtime exemption, commissions must represent more than half of the worker’s compensation and he/she must earn more than 1½ times the minimum wage. Thus, whenever the state minimum wage increases, the Salary Threshold increases.

Additional issues triggered by a change in the statewide minimum wage include:

• For Piece Rate Workers: Employees paid on a piece-rate basis must be paid for rest and recovery periods and non-productive time. This time is paid at a rate that is the greater of the applicable (including local) minimum wage or the worker’s average hourly rate for the workweek.

• Tools & Equipment: Employers generally must provide and maintain tools and equipment. However, if the employee is paid at least twice the minimum wage, an employer may require him/her to provide and maintain necessary hand tools and equipment.

These are complex issues of law requiring detailed understanding and advance preparation to remain in compliance. We encourage you to reach out to The Law Offices of Alex Craigie to assist with planning and implementation.

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Case Serves as Reminder That Employers and “Others Acting on its Behalf” Individually on the Hook for Wage Violations

Business owners and managers are frequently unaware of the risk of individual liability for unpaid wages in California. However, the Court of Appeal, in Elsie Seviour-Iloff v. LaPaille, recently published an opinion with several important holdings relating to wage and hour claims pursued through the Labor Commissioner.

One standout from the opinion serves as a reminder that California Labor Code §558.1 grants discretion to an employee seeking unpaid wages to pursue individual liability against “Any employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages.”

This holding clarifies the issue presented to the Court whether the discretion to hold an employer or other person acting on its behalf individually liability belongs to the employee or the trial court.

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Court Holds Employment Applicants Not Entitled to Wages or Travel Costs For Pre-Employment Drug Test

The Ninth Circuit Court of Appeals recently held, in Johnson v. WinCo Foods Holdings, Inc., that WinCo job applicants were not entitled to pay for time required to take a pre-employment drug test, nor was WinCo required to cover the travel expenses associated with undergoing the test. (The employer must shoulder the cost of the testing.)
The Court rejected an argument advanced by the job applicants that, because the tests were administered under the control of WinCo, they must be categorized as employees under California’s “control test” used to determine whether an employment relationship exists.
The Court held the control test did not apply because drug testing was a way to secure employment rather than a responsibility for those already employed.
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California Agencies Fund Grant for Small Businesses with Employees on Paid Family Leave (PFL)

The California Employment Development Department (EDD) administers Paid Family Leave (PFL), which provides eligible employees with up to 8 weeks of wage replacement benefits when an employee is off work for certain qualifying reasons.
Recognizing that small businesses with employees using PFL experience increased ancillary costs such as cross-training existing staff and hiring and training new or temporary employees to cover for the employees on leave, the California Employment Training Panel and California Labor and Workforce Development Agency have funded a grant program for small employers.
Small businesses in California with 1 to 100 employees who have at least one employee on PFL on or after June 1, 2022, may be eligible for grant monies, up to $2,000 per employee. A grant recipient must be registered to do business in the State of California, on an active status with the California Secretary of State and have an active California Employer Account Number under which employees are listed for payroll.
Employers interested in applying for the grant can apply through the grant website: Californiapfl.com.
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Deadline Looms for Employers with 5+ Employees to Offer A Qualified Retirement Savings Plan

Employers with just five (5) W-2 employees must be prepared for the June 30, 2022 deadline to offer a qualified retirement savings plan (including a 401(a), 401(k), 403(a), 403(b), 408(k), 408(p), or 457(b)) to their employees.
One option for employers that do not already have a plan in place is to register with the California state offered Calsavers program (formerly known as Secure Choice). Information about this plan is available here.
If employers fail to offer a plan by the deadline, they may receive a notice of noncompliance and face steep fines. A penalty of $250 per eligible employee if noncompliance extends 90 days or more after the notice. If found to be in non-compliance 180 days or more after the notice, the employer is responsible for an additional penalty of $500 per eligible employee.
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California Appeals Court Delivers Victory for Employers on “Suitable Seating” Claims

A California appellate court recently affirmed a trial court victory on behalf of Ralphs Grocery Co., in a case alleging the grocer should have provided suitable seating to its cashiers. 
By way of background, most California Industrial Wage (IWC) orders require employers to provide workers “suitable seating” under two circumstances: (1) when the nature of the work reasonably permits the use of seats; and (2) when an employee is not actively engaged in duties that require standing, or during “lulls in operation.”
Former Ralphs employee Jill LaFace sued Ralphs, arguing that cashiers could reasonably perform their cashiering duties while seated and that the company was also obligated to provide seats for cashiers to use during “lulls in operation.” Following a nonjury trial, Los Angeles Superior Court Judge Patricia Nieto held that the nature of LaFace’s work did not permit sitting because “Ralphs cashiers continuously perform work that should or even must be performed while standing.” She also held that Ralphs had no obligation to provide seating for use during “lulls in operation” because the cashiers were expected to remain busy between customers.
LaFace appealed. The appellate court ruled that an employer does not have to provide seating where the employer expects employees to keep busy and not stand, which functionally means there is no “lull” in duties. The court also held that employees bringing suitable seating claims and other claims for penalties under California’s Private Attorneys General Act (PAGA) are not entitled to a jury trial, which may also be seen as a victory for California employers.
For employers of workers where there is some question whether seating may be required, this case highlights the need for an established, clearly comunicated policy. Either employees may be permitted to sit while performing their job or during lulls, in which case suitable seating should be provided, or written policies communicated to workers should make it clear that employees are expected to remain busy, even during lulls in operation.
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Alex Craigie Selected for Inclusion in 2022 Southern California SuperLawyers for Employment Litigation

The Law Offices of Alex Craigie is excited to announce that Alex Craigie has been selected by Thomson Reuters for inclusion in the 2022 Southern California SuperLawyers for Employment Litigation.

Super Lawyers selects attorneys using a multiphase selection process. Peer nominations and evaluations are combined with independent research. Each candidate is evaluated on 12 indicators of peer recognition and professional achievement. Selections are made on an annual, state-by-state basis. The objective is to create a credible, comprehensive and diverse listing of outstanding attorneys that can be used as a resource for attorneys and consumers searching for legal counsel. Only 5% of attorneys in Southern California receive this distinction.

Alex Craigie is a trial lawyer recognized for his innovative, cost-effective and, where necessary, highly aggressive approach to Employment dispute advocacy. After 10 years as a Partner at a leading national law firm, Alex launched his own practice in 2014 with the aim of using the skills and experience he gained representing Fortune 500 companies in high-stakes lawsuits throughout the nation, to represent clients exclusively in Employment Law throughout California.

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San Diego Court Rejects Claim Worker Brought Covid-19 Home

In February, a United States District Court in San Diego dismissed a lawsuit brought by a spouse against her husband’s employer, Kuciemba v. Victory Woodworks, Inc. The suit alleged that the husband contracted Covid-19 while at work due to the employer’s negligence and brought the virus home, where his wife contracted it. The husband brought a separate worker’s compensation claim against Victory Woodworks.

The court initially dismissed the wife’s claim on the basis that worker’s compensation is the exclusive remedy for her claims. Following amendment of the complaint, the court again dismissed the claims, holding that an employer’s duty is only to provide a safe workplace for its employees, and that this duty does not extend to nonemployees, including spouses at home.

While this was certainly a favorable ruling for the employer, the fact it was issued by a federal judge sitting in San Diego may mean the same issue decided by a state court judge sitting elsewhere in the state might reach a different result. Federal judges tend to be more willing to dismiss marginal claims, particularly in San Diego, a conservative jurisdiction.

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Los Angeles County Requires Employers to Provide Paid Leave for Employees to Get Vaccinated

On May 18th, Los Angeles County passed an emergency ordinance requiring employers within unincorporated areas of the county to provide employees with up to 4 hours of paid leave (in addition to ordinary Paid Sick Leave and the state-wide Covid-19 Supplemental Paid Sick Leave (SPSL) which took effect in March, 2021.

This applies to all employers, regardless of size of workforce. Full-time employees are defined as either those designated by the employer as full-time, or who were scheduled to work on average at least 40 hours per week in the two weeks preceding the leave. Again, these employees are entitled to take up to 4 hours of paid leave for each vaccination injection.

Part-time employees are entitled to a prorated portion of additional paid leave for vaccination. For example, a part-time employee who worked 20 hours in the two weeks preceding the leave are entitled to just 2 hours of additional vaccination leave.

Additional details:

  • This leave is only available to employees who have fully exhausted all California Paid Sick Leave and SPSL;
  • Employers can request written verification of Covid-19 vaccination;
  • Employees receive their normal rate of pay for this leave, which may be calculated by using the employee’s highest average two-week pay from January 1 – May 18, 2021.
  • Covered employers must “conspicuously display” a written notice of this ordinance; and
  • Covered employers must maintain records demonstrating compliance with this ordinance for four (4) years; failure to provide these records creates a presumption of noncompliance.
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Mastering The Strongly-Worded Letter, Part I

I always thought that “The Strongly-Worded Letter” would be a decent name for an indie rock band. Right up there with “The Wheelchair Assassins.” It would have been fun to be a rock star. But I hawked my drums and went to law school, so I do that thing now instead. Plus, I’d look silly with a mohawk.

This post is about the strongly-worded letter we write as litigators, though no one calls it that. Sometimes it is a “cease and desist letter” or it could be a “demand letter.” In each instance, it is often the first opportunity the opposition–and their lawyers–have to see what they’re up against. In my view, it is not an opportunity to squander.

Why is this letter so important? Well, in my experience sending a cease and desist or demand letter rarely achieves its stated goal. While our clients would like nothing more than to immediately get their way, it almost never occurs that someone undertakes any major action after receiving a cease and desist or demand letter. It just doesn’t work that way. Even in those rare instances in which an entity knows it did the wrong thing, knows it will have to pay eventually, and–rarest of all–the demand contained in the letter is not all that unreasonable, it would be contrary to human nature to receive a demand letter, sit down and just write a check. And everybody knows this.

As a result, while these letters ostensibly demand a stated change or outcome, they are fundamentally dishonest in that they are written by a writer, and intended for an audience, that implicitly understand that that stated change or outcome is not going to come without a fight. A letter alone won’t do it. In my view, then, such letters should be written, not with any expectation they will be heeded and their demands will be immediately met. Rather, they should be approached for what they really are, and what they really do. So, what do they really do?

-They alert a party that he/she/it has been found out. They serve notice.

-They identify our client, whether an individual, a family, an organization or a corporation.

-They attempt to describe a set of facts and circumstances that require redress.

-They educate the opposition and its lawyers who we are, who our clients have chosen to represent them in this dispute.

But this is superficial. The letters do these things, but they do more. They can create leverage (or not). Most importantly:

-They give the opposition an idea how serious our client is about the issue.

-They paint a picture of our client’s financial resources. Who can they afford to hire? How much can they invest in this controversy.

-They can educate the opposition (or not) about how much our clients know about the facts underlying the controversy. Are our clients grossly misinformed?

-They establish credibility.

It’s this last point that I feel is most important. The letter establishes our client’s credibility and our own, as well. It is this credibility that sets the stage, establishes relative power and will remain important throughout the life of the dispute. Is your client serious about this dispute, serious about getting his/her/its way and serious about doing what it takes, and spending what it costs, to achieve its desired result? This first letter will communicate much of this.

In my next post, I will discuss what you and your client should and should not do to gain credibility in any strongly-worded letter.

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