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Recently, a national news source reported a finding by the National Labor Relations Board (NLRB) regarding Tesla’s illegal termination of a California employee. The findings affirmed a 2019 ruling that found that Tesla illegally threatened workers if they engaged in union activities. The employee, in this case, was organizing union participation by distributing pamphlets in the company’s California parking lot. Tesla fired the employee, attributing the termination to the employee’s posting of employees’ profiles on social media. About seven months after the termination, Elon Musk tweeted a statement that said, “why pay union dues & give up stock options for nothing?”

An NLRB administrative judge found that the termination was in retaliation for the employee engaging in union activities. Further, the judge ruled that the company engaged in employment law violations when it issued warnings to another worker for sending screenshots and sending them to the employee. Finally, the board ruled that Tesla’s confidentiality agreement contains an illegal provision that prohibits employees from speaking with the media without the company’s permission. The NLRB ruling requires Tesla to amend the provision in their confidentiality documents. Tesla has not issued a comment on the recent Board findings.

Certain federal and state laws protect California employees in organizing and joining a union. Unions are a critical way for employees to ensure that their employer negotiates in good faith over terms and conditions of employment, including work hours, and compensation. The National Labor Relations Act (NLRA) protects certain California employees from engaging in unionizing activities. Some protected activities include allowing employees to self-organize, form, join, or assist labor organizations, engage in collective bargaining agreements, and other related activities.

The law requires that employers provide non-exempt California employees the ability to receive meal breaks and rest periods. In some instances, employers must provide exempt employees with the right to take meal breaks. The law does not extend to certain workers such as farm and domestic workers, or personal attendants. Under the state’s wage and hour law, non-exempt employees must receive a thirty-minute meal break if they work more than five hours in a day. The employer must allow for the break within the first five hours of the workday. Those who work more than ten hours are entitled to a second 30-minute break. Similarly, employers must provide exempt employees with a ten-minute rest break for those working more than three and a half or more hours. Employers who violate these laws may be subject to a California employment lawsuit.

For instance, the Supreme Court of California recently decided two questions of law related to a class-action lawsuit against an employer for wage-and-hour violations. In this case, the defendant is a healthcare service and staffing company. The company assigned the plaintiff to work eight-hour days at various shifts. The defendant maintained a policy that the meal period was for an “uninterrupted” 30 minutes, and workers were relieved from job duties during and could leave the premises during this period. Further, the policy specified that supervisors should not discourage workers from using this meal period.

Although the policy seems to comply with the state’s wage and hour laws, an issue arose because the employees used an electronic timekeeping system that rounded their punched time to the nearest 10-minute allotment. For instance, if an employee clocked out for their break at 12:02 p.m. and returned at 12:25, p.m., the record would show a 30-minute break instead of a 23-minute break. This was most relevant when a nurse would take lunch at the end of their fifth hour of work. The defendants won their motions at trial on the basis that California’s wage-and-hour laws do not prohibit rounding.

California employees should familiarize themselves with the state’s strict mandates against non-compete and non-solicitation agreements. Unlike many other states, California Business and Professions Code section 16600 does not permit non-compete clauses, even if they are reasonable in scope and purpose. A non-compete clause or agreement, is also known as a “restrictive covenant.” These agreements dictate and restrict an employee’s actions after they are no longer working for an employer. In most cases, they work to restrict an employee’s ability to work for a competitor.

These clauses are against California employment law, and employers may be liable for wrongful termination if they terminate an employee who refuses to agree to the agreement. Public policy dictates that these agreements are unenforceable because of the fundamental power disparity between employers and employees. However, the bar on non-compete clauses generally only apply after termination, because employees have a common-law duty to their employer, while employed.

Despite these agreements’ illegality, California employers often present these agreements and take advantage of an employee’s lack of legal knowledge. Further, employers often evade liability for wrongful termination by utilizing a choice-of-law provision. This provision is an agreement that if the employer and employee are ever engaged in a dispute, they will use an agreed-upon state’s law to resolve the contention. However, California law prohibits employers from using choice-of-law provisions to get around the non-compete laws.

A state appellate court recently issued a decision in a plaintiff’s appeal regarding a trial court’s response to a jury question in a California hostile workplace lawsuit. The plaintiff alleged that she was sexually harassed by the principal of a school where she taught. She claimed that starting around September 2013 the principal sexually harassed her, resulting in a hostile work environment. The complaint also alleged that the school district failed to take the steps necessary to prevent harassment and retaliation.

In this case, the court instructed the jury that the plaintiff’s claim for failure to prevent a hostile workplace required that she establish that the principal and school district failed to take all reasonable steps to prevent retaliation, and their failure was a substantial factor in her harm. During the trial, the jury asked the trial judge whether these questions referred to allegations before September 2013. The court instructed the jury to only consider the period after September 2013, reasoning that there was no evidence to substantiate any harassment before that time. On appeal, the plaintiff argued that the instruction excluded relevant evidence, ultimately denying her rights to a constitutional jury trial.

The California Fair Employment & Housing Act (FEHA), protects employees from discrimination and harassment in employment based on their protected class. The law prevents discrimination based on a person’s race, color, ancestry, national origin, religion, sex, age, genetic information, marital status, sexual orientation, gender identity, AIDS/HIV, medical condition, political affiliations, military status, and status as a victim of domestic violence or assault. In these cases, the plaintiff/employee bears the ultimate burden of proof.

Recently, the California Supreme Court decided that its ruling in Dynamex Operations West, Inc. v. Superior Court applies retroactively. The Dynamex case set a new legal standard for determining a California worker’s employee classification. Before the decision, businesses relied on a judicial “right to control” test for classifying workers under California’s Wage Orders. California Wage Orders regulate worker rest breaks, meal periods, and overtime. In line with several other states, the court replaced the “right to control” test, with the stringent “ABC” test.

Under the new legal standard, California wage orders carry a presumption that any worker performing work for a business is an employee. As such, the law entitles these employees to the protection set forth by California Wage Orders. A hiring entity can only overcome the presumption if they can prove three elements:

  • That the worker is free from the control and direction of the hiring entity, related to the worker’s performance and in connection with the parties’ contract;
  • The worker is engaged in work outside the hiring entity’s usual course of business; and
  • The worker is routinely engaged in an independently established trade, occupation or business, of the same nature as the work performed for the hirer.

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Like all laws, over time, employment laws change. In the wake of what was undoubtedly a tough year, 2021 is no exception. While both state and federal government laws govern the employer-employee relationship, California employment laws are generally more favorable to employees than federal laws. So, when state employment laws change, it is important that workers understand the changes and how they may impact their rights. Below are a few of the major changes to California employment law that have already gone into effect, or will be coming in the near future.

An Increase to the California Minimum Wage

As of January 1, 2021, California’s minimum wage increased. The state uses a tiered approach to determine the applicable minimum wage. Thus, the minimum wage for employers with 25 or fewer employees is $13, and the minimum wage for employers with more than 26 employees is $14. This is a one-dollar increase from last year. Notably, California is unique in that some cities impose their own minimum wage laws. Employers are required to pay the highest of the applicable state, federal, or local minimum wage.

Earlier this month, a state appellate court issued an opinion in a California age discrimination lawsuit. The lower court dismissed the plaintiff’s claim, finding that the statute of limitations did not toll, and the plaintiff’s case was filed too late. However, on appeal, the court reversed the lower court’s decision, allowing the plaintiff’s case to proceed.

The Facts of the Case

According to the court’s opinion, the plaintiff was employed as a sheet metal worker with the defendant employer. During his tenure there, the plaintiff received “exemplary” evaluations. However, on December 3, 2013, the employer fired the plaintiff.

After the plaintiff filed a grievance, it was discovered that the employees hired to replace him were all under 30 years of age. The company responded by agreeing to rehire the plaintiff, but refused to pay him back wages.

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Hundreds of thousands of California independent contractors and gig workers will likely not have to reimburse the state for overpaid Pandemic Unemployment Assistance (PUA) benefits.

The new COVID-19 stimulus package signed into law allows states to waive attempts to collect excessive PUA payments as long as workers meet two requirements:

  1. Their original PUA application was filed in good faith

A nearly decade-long court battle ends as national department store chain Burlington Stores Inc. has agreed to pay almost $20 million for misclassifying workers to avoid paying them overtime.

According to court records, roughly 1,630 employees will receive an average payment of $12,000 as part of the settlement. California workers are included under a second class-action suit filed against the company.

A nine-year court battle erupted over worker classifications

The November election appeared to provide some clarity over allowing companies like Lyft and Uber to avoid classifying their drivers as employees when voters approved Proposition 22.

The measure sought to free these companies from providing benefits to their workers, such as overtime, unemployment and sick leave. However, the fight over protections for these workers is likely to persist.

Companies still face challenges

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