Up-to-date information for employers on topics and issues that may affect workplace operations. The posts are current as of the date of the posting.


by D. Gregory Valenza | The Daily Journal | Dec 16, 2010

As 2010 comes to a close, we lawyers send good wishes to our clients, co-workers, and even our adversaries. Well, most of them, anyway. The new year brings the chance for a fresh start, change, new challenges, and the promise of a different world.

Most everyone hopes 2011 will bring world peace, an end to homelessness, a stronger economy, a cure for baldness – you know, the really important things. I, too, hope all of these happen in 2011. But we management-side employment lawyers have wishes for the new year that may not be universally embraced, particularly among the plaintiffs’ bar. Here is a portion of my wish list for employment law developments in 2011.

Brinker: A decision in Brinker v. Superior Court (Hohnbaum) (No. S166350) has to be high on every employment lawyer’s list. California is one of a few states that require employers to provide periodic, unpaid meal breaks and paid rest periods. Failing to comply with these laws can result in significant additional wages and penalties. Must an employer force employees to take meal periods, or merely make them available? The state Supreme Court’s answer to this and other questions presented in Brinker and its companion cases will significantly affect employers’ obligations and potential liabilities.

Harris: Perhaps the justices also will issue a crucial decision regarding the “administrative exemption” from minimum wage and overtime law. Currently, employees working in a “bona fide administrative” capacity are exempt. The definition of “administrative” is contained in federal regulations and California’s wage orders, and has been extensively litigated. In Harris v. Superior Court (Liberty Mutual Ins. Co.) (S156555), the Court of Appeal evaluated the exempt status of insurance claims administrators for Liberty Mutual, and held that the administrative exemption did not apply for two reasons. First, the adjusters’ work was not “administrative” but rather, was a part of the insurance company’s “production” of insurance services. Secondly, the court decided that these lower-level employees could not be exempt because they were not high enough in the organization to be truly “administrative” under the applicable definitions. The state Supreme Court’s decision in this case may affect the exempt status of thousands of employees in California. Employers and their lawyers need guidance to aid their compliance with wage and hour laws.

Concepcion: The Federal Arbitration Act is supposed to facilitate the enforceability of employment arbitration agreements. The law requires arbitration contracts to be treated like any other contract under state law. State courts have used the doctrine of unconscionability, which does apply to all contracts, to invalidate arbitration agreements. Some argue the law of unconscionability has evolved into a moving target for employers, as courts invalidate arbitration agreements because they contain provisions unique to arbitration contracts.

In AT&T Mobility LLC v. Concepcion (No. 09-893), the U.S. Supreme Court will decide whether the Federal Arbitration Act pre-empts California’s unconscionability law, in the context of an arbitration agreement that banned class action arbitration. California courts and the 9th U.S. Circuit Court of Appeals have decided that a waiver of the right to arbitrate on a classwide basis generally is unconscionable under California law. But the High Court also has said, in Stolt-Nielsen v. AnimalFeeds Inc., 2010 DJDAR 6107, that if an arbitration agreement is silent as to whether it permits class actions, federal courts cannot infer consent to classwide arbitration. The Concepcion decision either will revitalize employment arbitration, or continue the trend towards its demise.

Paycards: There is a growing trend to issue paychecks via paycards. Banks and employers advocate them as cost-effective alternatives to paper checks. Employees can use paycards to withdraw cash, or to purchase goods. Typical programs permit employees to make at least one withdrawal without paying a fee. Therefore, a paycard seems to be at least as employee-friendly as a check.

It seems, though, that banking law treats paycards like a form of direct deposit. Direct deposit is supposed to be voluntary under many states’ laws, including California’s, and under federal banking regulations. The state Division of Labor Standards Enforcement has approved the use of paycards, but there is ambiguity regarding whether employers must offer a paper check as an option. In the meantime, banks are imposing fees for cashing payroll checks, even when the issuing bank cashes it. Those fees create potential liabilities for employers.

Can an employer mandate paying employees via paycard without offering a paper check as an option? My wish is for a definitive answer to that question. It may be that only Congress can address this issue definitively. I may need a bigger chimney.

Leaves: Can we have a year without a new basis for employees to take job-protected leave? I didn’t think so. So, my backup wish is for some certainty regarding the issue of granting extended leaves of absence to employees with disabilities.

The Americans With Disabilities Act and California’s Fair Employment and Housing Act require employers to provide “reasonable accommodation” to employees with disabilities. A reasonable accommodation is a change to the terms of employment or the work environment that will permit a qualified employee to perform his or her essential job functions. Under current law, a medical leave can be a form of accommodation if the leave is reasonably definite in duration and effective in enabling the employee to perform essential job functions upon the leave’s conclusion.

How much leave is “reasonable?” Can it be said definitively that an employee requiring six months or even a year of leave cannot perform the essential functions of the job? How many times must an employer accept repeated, one-month extensions to a medical leave before concluding that additional leave is not reasonable? These issues currently are decided case-by-case. That makes it nearly impossible for us employment lawyers to provide definitive advice. I wish for new regulations and case law that will better guide employers’ decisions in this area.

Same-sex marriage: The continuing see-saw over same-sex marriage has wreaked havoc on many lives, most significantly the lives of those who wish to marry but are precluded from doing so. The decision whether same-sex marriage is protected under the Constitution is an issue of civil rights that transcends the workplace and workplace law. However, most affected individuals also are employees. So, one cannot ignore the importance of the issue to employers and employees alike. My wish is for a final resolution in 2011. A final decision will help employers, particularly those with multi-state operations, make lawful and consistent decisions regarding benefit plans and policies that depend on marital status.

Online state court dockets and documents: Finally, in some counties, Alameda for one, a lawyer or a party can check the status of a case online, and even obtain tentative and case management rulings. Others – not so much. I know there is a debate raging about recent efforts to make courts more “paperless,” and that funding is tight. But this is my holiday wish list. And my wish is for all dockets and filings to be available online, reliably accessible, and (hi, Los Angeles) free of charge, or at least inexpensive.

So, there is my holiday wish list, employment law-style. I’ve been good. Santa is an employer too. Maybe I have a shot.

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