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As previously covered , California has tightened the noose on noncompete clauses that could restrain employees from engaging in lawful professions, trades, or businesses.
As previously covered, California has tightened the noose on noncompete clauses that could restrain employees from engaging in lawful professions, trades, or businesses.
A new law, AB 1076, adds Business and Professions Code section 16600.1, requiring employers with in-state or California-based employees by February 14, 2024:
Failure to comply with the February 14 deadline constitutes a violation of California’s Unfair Competition Law, which may carry civil penalties.
Take-Aways:
Affected employers must comply with AB 1076’s February 14, 2024 deadline; ensure current and future employment contracts do not contain unenforceable noncompete provisions; and refrain from enforcing an unlawful noncompete provision.
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
Cindy Bamforth
February 8, 2024
While there have been a few employer-favored developments , claims under California’s 2004 Private Attorneys General Act (PAGA) continue to rise, permitting a single worker to seek Labor Code penalties on behalf of a company’s entire...
While there have been a few employer-favored developments, claims under California’s 2004 Private Attorneys General Act (PAGA) continue to rise, permitting a single worker to seek Labor Code penalties on behalf of a company’s entire payroll. Facing potentially crushing liabilities or without the resources to fight bogus accusations, many employers seek to promptly settle such claims, further encouraging PAGA lawyers to find other targets.
A recently encountered example: a building contractor, to its credit, had for years ensured its field workers accurately clocked out and back in for their mandated meal periods. Yet, facing a seemingly innocuous PAGA accusation that the company deprived its crews of their “lunch rights,” those records yielded an irregular pattern of meals potentially in Labor Code violation. The prospective impact of this single accusation? 30 workers, average 1.5 violations per week, $100/first violation and $200/further violation per worker per one-week pay period over minimum 12 months = $468,000.
The Supreme Court continues to confirm the unforgiving nature of this law. In Estrada v Royalty Carpet Mills (January 18, 2024), the Court invalidated a 2021 lower appeals court ruling that employers could nuke PAGA claims for their unmanageability. See, All Is Not Lost – Employers Protected from Out- of- Control PAGA Claims (September 17, 2021).
Management-side law firms have responded with helpful insights on how employers can still tactically deal with such law suits. See, e.g., Estrada v. Royalty Carpet Mills Largely Curtails Manageability Defense in California PAGA Cases (January 19, 2024); and The California Supreme Court Pulls the Carpet Out from Underneath Employers (January 18, 2024).
We aim to similarly assist our clients ensnared in such litigation. However, very few California employers have the resources necessary to make such moves, particularly all the way to a trial.
The Estrada decision once again confirms PAGA is here to stay. It takes but one ex-worker – perhaps rightfully disgruntled, perhaps not – and a seasoned plaintiff’s lawyer to crank-up a suit. PAGA requires no permission from any co-worker and no co-worker can opt out. The defendant employer in Estrada case had left California in 2017 for the high cost of doing business here and, with the case now headed back to the trial judge, still faces liability under this law.
Take-Aways:
By far the best PAGA defense is to never present or perpetuate the grounds to invite one. With the aid of experienced employment lawyers, thoroughly and regularly audit all relevant workplace pay policy and practices. Promptly correct all irregularities found. Spotless – or, at least, near spotless -- records and protocols are a powerful deterrent and the most effective response if, heaven forbid, PAGA comes knocking from the depths.
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
Tim Bowles
February 2, 2024
A vestige of the pandemic, California hospitality workers laid off due to COVID have continuing and dramatically expanded comeback rights under SB 723 .
A vestige of the pandemic, California hospitality workers laid off due to COVID have continuing and dramatically expanded comeback rights under SB 723. See: What’s New in 2024: Extended Comeback Rights: Hospitality Workers to Receive Longer Rehire Protection (November 10, 2023). Such rights extend not only to workers formerly employed by hotels, clubs, event centers, and airport-related hospitality providers, but also to janitorial and security guard companies.
The law imposes new – and very stringent -- burdens on employers hiring after any layoff (thus, even a termination of a single person) since March 4, 2020 for “a lack of business, reduction in force, or other economic, nondisciplinary reason.” Unless management can provide adequate evidence otherwise, that separation will be presumed to be “due to a reason related to the COVID-19 pandemic.”
If that presumption holds, then for any job opening in 2024 and through 2025, “[w]ithin five business days of establishing [the] position, [the hospitality industries] employer shall offer its laid-off employees in writing, either by hand or to their last known physical address, and by email and text message to the extent the employer possesses such information, all job positions that become available … for which the laid-off employees are qualified. A laid-off employee is qualified for a position if the employee held the same or similar position at the enterprise at the time of the employee’s most recent layoff with the employer.”
[A “laid-off employee” is “any employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020.”]
“The employer shall offer positions to laid-off employees in an order of preference … If more than one employee is entitled to preference for a position, the employer shall offer the position to the laid-off employee with the greatest length of service based on the employee’s date of hire for the enterprise.
“A laid-off employee who is offered a position pursuant to this section shall be given at least five business days, from the date of receipt, in which to accept or decline the offer. A “business day” is any day except Saturday, Sunday, or any official state holiday. An employer may make simultaneous, conditional offers of employment to laid-off employees, with a final offer of employment conditioned on application of the [required] preference system …” Emphasis supplied.
Violations can be costly. Employers are subject to a $100 penalty per employee and $500 in damages per employee per day the violation is not cured.
Take-Aways:
Employers in the above hospitality industries must be especially careful on their hiring procedures, minimally over the coming two years. Best practices include thorough documentation of the basis for any employee layoff since the law’s March 4, 2020 pandemic start date – whether in any part for COVID or, alternatively, purely for other reasons. For any COVID-based layoff or for lack of such documentation otherwise, management must take care to follow such employee’s “rehiring” notice and acceptance rights summarized above and as contained in the full details of the new law.
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
Helena Kobrin
Timothy Bowles
February 2, 2024
The Fair Chance Act , California Government Code 12952 (also known as Ban-the-Box), prohibits employers of five or more people from asking for criminal background information until after a conditional job offer to an applicant.
The Fair Chance Act, California Government Code 12952 (also known as Ban-the-Box), prohibits employers of five or more people from asking for criminal background information until after a conditional job offer to an applicant. It also requires individual assessments of a person’s criminal record against job description and allowing the person a chance to respond to any employer decisions based on criminal history.
California’s Civil Rights Department has now filed suit against Ralphs for Fair Chance violations, asserting the supermarket chain:
The CRD is seeking a jury trial to recover lost wages, benefits, and emotional distress and punitive damages. It also seeks to require Ralphs’ future compliance with the Fair Chance Act.
Kevin Kish, Director of the CRD, said:
“The Fair Chance Act is about giving every Californian an opportunity to thrive. When roughly 70 million Americans have some sort of record, policies like those employed by Ralphs aren’t just discriminatory and against California law, they don’t make sense. We can’t expect people to magically gain the economic and housing stability needed to reintegrate into their communities and stay out of the criminal legal system without a fair chance at steady employment, particularly when the job has nothing to do with a past offense. Ralphs has continued to unlawfully deny jobs to qualified candidates and that’s why we’re taking them to court.”
As part of its efforts to enforce the Fair Chance Act, the CRD also reviews job advertisements online, notifying violators to correct their advertising.
Take-Aways:
Employers need to learn the requirements of the Fair Chance Act and incorporate them into their hiring practices to provide qualified former offenders a road back to being productive members of society.
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
Helena Kobrin
January 26, 2024
Protected classifications, or classes, in California include race, color, ancestry, national origin, religion, creed, age (40 and over), mental and physical disabilities, sex, gender (including pregnancy, childbirth, breastfeeding or...
Protected classifications, or classes, in California include race, color, ancestry, national origin, religion, creed, age (40 and over), mental and physical disabilities, sex, gender (including pregnancy, childbirth, breastfeeding or related medical conditions), sexual orientation, gender identity, gender expression, medical condition, genetic information, marital status, and military or veteran status. Harassing or discriminating against an employee because the person falls under one or more of those classification is strictly prohibited by law.
Effective January 1, 2024, California added another protected class to the Fair Employment and Housing Act for those who use cannabis off-the-job and off-workplace. It is now unlawful for an employer with five or more on payroll to discriminate against a person in hiring, termination, or any term or condition of employment for such use.
These protections do not apply to workers in the building and construction trades or to anyone hired for jobs requiring federal government background investigation or security clearance.
All employers can continue to prohibit – and to discipline -- employees from possessing, being impaired by, or using cannabis on the job.
Take-Aways:
Covered employers should:
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
Cindy Bamforth
January 25, 2024
The Internal Revenue Service has announced its 2024 optional standard mileage reimbursement rate for employee business use of a personal vehicle, effective January 1, 2024, up from 65.5 to 67 cents/mile.
The Internal Revenue Service has announced its 2024 optional standard mileage reimbursement rate for employee business use of a personal vehicle, effective January 1, 2024, up from 65.5 to 67 cents/mile.
These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.
These standard business mileage rates stem from annual government studies of fixed and variable automotive operating costs, including insurance, repairs, maintenance, gasoline and oil.
Under California Labor Code section 2802, employers must reimburse employees for all actual work-related expenses necessarily incurred.
Take-Aways:
Employers applying the IRS standard should reimburse work-related employee vehicle use at the new 67 cent/mile rate starting January 1, 2024.
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
Cindy Bamforth
January 18, 2024
The federal Department of Labor (DOL) is suing Mathias Wakrat and Jean-Christophe Febbrari, owners of Entre Nous French Bistro in Old Town Pasadena, for keeping hundreds of thousands of dollars in cash and credit card tips intended for...
The federal Department of Labor (DOL) is suing Mathias Wakrat and Jean-Christophe Febbrari, owners of Entre Nous French Bistro in Old Town Pasadena, for keeping hundreds of thousands of dollars in cash and credit card tips intended for their staff to cover the restaurant’s business expenses. DOL investigation also found Entre Nous misclassified some employees as independent contractors and failed to keep proper pay records.
The lawsuit seeks to collect – for 18 employees – $250,000 in back wages and the same amount in liquidated damages (a statutory doubling of unpaid wages).
Mark Pilotin, the DOL’s San Francisco Regional Solicitor of Labor, stated:
“Illegal practices by restaurant employers such as Entre Nous French Bistro in Pasadena hurt employees and also law-abiding employers who face unfair competition due to the stealing of tips by unscrupulous employers. Customers expect — and the law requires — that tips go to employees, not their employer. We seek to recover the wages owed, enjoin this company from future violations and protect the significant public interest at stake.”
In apparent response, Entre Nous’ online menu states: “A 20% fee will be added to your bill. This is not a gratuity or tip. We are a no tipping establishment. The fee is revenue that is not segmented or designated in any way; it is taxed per state law and is used to fund all of our operations.”
State and federal laws govern who owns tips, whether they can be split with anyone, and whether employers can take a credit against minimum wage for tips received (in California, they cannot under Labor Code 351, regardless of federal law permitting such credits). Tips received by employees belong to the employees who receive them and may be part of a shared tip pool with certain other staff. Employers and managers may never keep a portion of a tip for themselves.
Take-Aways:
If employees receive tips, the employer must comply with applicable law to their distribution. While a business must never keep a portion, it may pool tips for sharing by certain employees. Best practice is to spell out such pooling in clearly written policy.
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
Helena Kobrin
January 12, 2024
In the memory of a dear friend Jan Silber, who recently passed, I am prompted to redouble our African outreach.
In the memory of a dear friend Jan Silber, who recently passed, I am prompted to redouble our African outreach. Though she was never able to come to Liberia, Jan loved and generously supported our work with the Global Cares Academy and Orphanage.
In Jan's name and on her request to be remembered through donations to that school, we, yet again, reach to our supporters -- former, current and those to come -- to help Global Cares achieve its decades-long dream, a model institution to serve the children and transform a nation so long plagued by illiteracy, poverty and war. See, https://www.gofundme.com/f/global-cares-mission-academy-and-orphanage-2024.
***
Little did I know on my first journey to West Africa -- volunteering in 2005 to assist in a one-week youth conference on human rights -- that at least in spirit I would never fully return home. Humanity reached out, not so much to take me by the hand as to grab a hold of my heart. Now, nearly two decades on, helping the peoples of “The Continent” is my continuing calling and joy.
Over recent decades, West Africa has been one of the most challenging regions of the planet, including the Liberian and Sierra Leonean civil wars and genocides (1988-2003 and 1991-2002 respectively), Ebola (2014-2015), COVID (2020-2022) and, through it all, one of the highest regional illiteracy rates on the planet.
And so, I have worked – along with many courageous and inspired West African youth leaders and our Western world donors and supporters – to make the human right to education a regional reality by training teachers and students on L. Ron Hubbard’s Study Technology through Applied Scholastics International.
Partnership in Liberia with the Global Cares Mission Academy and Orphanage and its founder Florence Morris has been a key aspect of our work since my first trip to that country, in 2006. Against all the seemingly insurmountable hardships in one of the world’s poorest nations, “Mother Florence” has taken in, raised and educated thousands of children, many of them orphans, since the slaughters stopped with United Nations intervention in 2003.
While our support of Global Cares through the past 19 years has been meaningful – monies for essential building repairs, paper, pens, books, rice and other provisions (out of which, and to my amazement, they added my name to the school early last year!) – Mother Florence, her teachers and staff remain starkly poor yet defiantly resolute in their mission, taking on 150-200 students in leaky, broken buildings lacking electricity, running water.
In keeping with Jan's wish, it is time to take our Global Cares support to the next level. Along with my close Liberian collaborator Joseph Jay Yarsiah and a well-respected local contractor, we are embarked on a full renovation of the Global Cares facility, including solid foundation, walls, roofing and windows, along with insulation, plumbing and electrical power.
With construction projected to begin as soon as feasible this year, we are seeking the funds needed – tax deductible as donations to Applied Scholastics International -- for renovation labor and materials along with furniture, books and related materials. As above,
https://www.gofundme.com/f/global-cares-mission-academy-and-orphanage-2024
We of course hope you can help us meet this immediate target to bring Mother Florence’s long sought attainment of a model institution dedicated to the children and thus the future of Liberia.
Again, thanks and best wishes,
Tim Bowles
Pasadena, California
January 12, 2024
The Labor Commissioner targets industries where “ wage theft ” -- any failure to legally and timely pay required wages, including paid sick leave and premium pay for missed breaks -- is prevalent.
The Labor Commissioner targets industries where “wage theft” -- any failure to legally and timely pay required wages, including paid sick leave and premium pay for missed breaks -- is prevalent.
One such industry is board and care i.e., residential facilities housing elderly or disabled people in need of living assistance. There are 8,100 such RCFEs in California.
In 2018, we wrote about the Labor Commissioner citing Adat Shalom Board and Care in Los Angeles County, which ran six such facilities, more than $7 million for unpaid minimum wage, overtime, penalties for not providing required breaks, liquidated (double) damages, and civil penalties involving 148 workers between 2014 and 2017. See Busted: Adult Care Facilities Must Pay Minimum Wage and Overtime or Face Expensive Consequences (February 2, 2018). The Labor Commissioner found employees worked for 24 hours/day, while being paid for six hours, thereby making less than $3.00/hour.
Adat Shalom appealed that ruling with a hearing officer upholding the citations in 2021, increasing the citation to $8.5 million. The Commissioner then went to court to stop the transfer of its assets to be used for collecting the judgment. The case recently settled for $5.5 million, of which Adat Shalom has thus far paid $2 million. Labor Commissioner Lilia Gracia-Brower stated:
“For years, the employer paid these caregivers less than three dollars an hour and attempted to avoid liability by hiding assets. Our team took the employer to court to stop the illegal transfer of assets. My office is committed to collecting owed wages from employers engaged in wage theft and stopping these illegal practices. This settlement also secures an agreement by the employer to no longer operate a residential care business in California.”
RCFE owners sometimes think that they do not have to pay for caregiver sleeping time or other times when they do not need to be actively working. But if RCFE workers must remain available on the premises and respond to residents’ needs, they must be paid, including overtime for all hours over eight in a day or 40 in a week.
Take-Aways:
Board and care operators should consult with employment legal counsel to ensure they are paying all employees in accordance with the law. Best practice ensures income will support operations that include correct pay practices.
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
Helena Kobrin
January 5, 2024