California’s Fourth Appellate District, Division One, recently upheld a trial court judgment in favor of Certified Tire and Service Centers (“Certified Tire”), finding the company’s compensation system for its tire technicians complied with California’s wage and hour laws.

On September 25, 2018, the U.S. Ninth Circuit Court of Appeals held that the claims of potentially hundreds of thousands of Uber drivers for misclassification as independent contractors cannot proceed as a class action.  (O’Connor v. Uber Technologies, Ninth Circuit Case No. 16-15595.)  In this case, the drivers signed arbitration agreements containing class action waivers, which the Ninth Circuit initially refused to enforce based on the state of the law at the time.  However, in light of the U.S. Supreme Court’s decision in Epic Systems (Epic Systems Corp. v. Lewis, ––– U.S. ––––, 138 S.Ct. 1612, 200 L.Ed.2d 889 (2018)) which issued in June, the appellate court held that the waivers must be enforced and that the case cannot proceed as a class action.  The court ordered that the arbitration agreements be enforced so that the arbitrations proceed on an individual basis. 

In a decision issued by the U.S. Ninth Circuit Court of Appeals on September 10, 2018, the court rejected a challenge based on federal preemption grounds to the California Labor Commissioner’s use of the Borello standard for determining independent contractor status. The challenge was made based on the motor carrier provisions of the Federal Aviation and Administration Authorization Act of 1994 (“FAAAA”), 49 U.S.C. § 14501, et seq., which prohibit states from enacting or enforcing laws or regulations that relate to “a price, route or service of a motor carrier . . . with respect to the transportation of property.”

This summer, Governor Jerry Brown signed Assembly Bill 2282, which resolves ambiguities created by prior pay equity legislation AB 1676 (2016) and AB 168 (2017).  As you may recall, AB 168 prohibits questions on applications and during interviews regarding salary history.  The law also requires employers to provide a pay scale upon demand by applicants.     

The DFEH recently released its Sample Equal Opportunity Policy. The Sample Policy is available in PDF and Word form on the DFEH’s employment resources page at https://www.dfeh.ca.gov/resources/posters-and-brochures-and-fact-sheets/poster-and-brochure-tab-list/?target=employment.

In Golden v. California Emergency Physicians Medical Group, et al., a divided Ninth Circuit panel held that a settlement agreement between a doctor and his former employer violated Cal. Prof. & Bus. Code § 16600 because a “no re-hire” provision of the agreement placed a “restraint of a substantial character” on the doctor’s medical practice.

On July 18, 2018, the Ninth Circuit Court of Appeals threw out a proposed class action lawsuit alleging that Taco Bell had violated California’s meal period and overtime requirements by requiring employees who purchased discounted meals to stay on the premises during their meal period.  The Court held that Taco Bell did not violate California law and affirmed an order granting summary judgment in favor of Taco Bell in a proposed class action suit titled Rodriquez v. Taco Bell Corp. (9th Cir. Case No. 16-15465).

On July 5, 2018, U.S. District Judge John Mendez of the Eastern District of California struck down two provisions of AB 450 (United States v. California (No. 218-cv-490-JAM-KJN)).  Judge Mendez held that the U.S. government is likely to succeed on the merits in challenging parts of AB 450 that barred employers from voluntarily consenting to federal enforcement agents’ access to nonpublic areas of business, and barred employers from voluntarily allowing immigration agents access to employee records.  Further, Judge Mendez struck down the provision prohibiting employers from re-verifying a worker’s employment status, but upheld one part of AB 450, requiring that employers post notice of any inspections of employment eligibility documents.

On June 25, 2018, a California court of appeal offered employers who use rounding systems to calculate employee payroll a reassuring ruling, approving a policy that rounded employee’s time to the nearest quarter hour. In AHMC Healthcare, Inc. v Superior Court (2018) No. B285655, the issue arose out of AHMC Healthcare’s use of a payroll system that automatically rounded employee hours up or down to the nearest quarter hour prior to calculating wages and issuing paychecks (instead of using the employee’s exact check-in and check-out times). Emilio Letona and Jacquelyn Abeyta, both employees of AHMC Healthcare, brought a class-action suit against AHMC Healthcare, Inc. for failure to pay wages and failure to furnish timely and accurate wage statements. The plaintiffs claimed this rounding system was in direct violation of the Labor Code, and presented evidence of time records from San Gabriel Valley Medical Center L.P. (where Letona was employed) and AHMC Anaheim Regional Medical Center L.P. (where Abeyta was employed).

The following cities and counties in California are scheduled to increase minimum wage rates on July 1, 2018.

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