R.L. Adams, Enterprises

EDITOR'S NOTE

The laws relating to everyday Human Resources responsibilities continue to change quite rapidly. Due to the significant impact on employer/employee relationships, it is very important for employers to know of them. I only address changes, not proposals or upcoming laws. That is because there are so many changes there is not sufficient time to also consider the implications of what might or might not change in the future. I like my clients to know the actual changes so that they can evaluate the impact on their operation and use the information to make good management decisions.

I have summarized a number of new law changes and clarifications below.

CONTENTS (Click on the topic you desire to read)

• Arbitration Agreements
• At-Will Employer Rights
• Disabilities and Reasonable Accommodations
• Employer Penalties for Missed Rest and Meal Periods
• Employers' At-Will Rights
• Exempt Employee Jury Service
• Jury Service Changes
• Jury Service - Exempt Employee
• Meal Period Agreement - On-The-Job
• Meal Period Missed - Penalties
• On-The-Job Paid Meal Period Agreement
• Policy Termination Unilaterally
• Reasonable Accommodations and Disabilities
• Rest Period Missed - Penalties
• Termination of Unilateral Policies
• Time Card Certification
• Unilateral Policy Termination

EMPLOYER PENALTIES FOR MISSED REST AND MEAL PERIODS

For as long as I can remember employers have been required to provide rest and meal periods. Rest periods must be:

• 10 minutes for every four hours of work or major fraction thereof, and
• Taken as close to the middle of the four-hour work period as possible

• Thirty minutes, and
• Employee cannot work more than five hours without one

I informed you January 2000 that a new law, AB 60, went into effect January 1, 2000. At that time we were informed employers were going to have to pay penalties to those non-exempt employees who did not receive rest and meal periods. However, our state government was experiencing the ill effects of "foot in the mouth" disease and had some language to work out before "really" implementing all facets of the law. You see, it wasn't clear in January how the penalties were going to exactly apply.

So now, as of October 1, 2000, the Industrial Welfare Commission (IWC) Orders mandate the employers who fail to provide legally required rest periods and/or meal periods must pay the following penalties. The penalty will equal one hour of pay at the regular rate (not necessarily the straight time rate) for each day and for each category violation. For example, if one meal period and two break periods were missed, the penalty would be one hour of pay for the meal period and one hour of pay for the rest periods (even though two rest periods were missed). The penalty is payable to the employee and must be self imposed by the employer.

This penalty does not apply to legal exceptions, such as voluntary on-duty meal periods or when an employee legally waives a meal period. You may recall last year I discussed that on-duty meal periods were allowed when:

1. The nature of the work requires that the employee not be relieved of duty during the meal period and
2. The employee voluntarily in writing agrees to a work meal period. (See the attached On-The-Job Paid Meal Period Agreement)

1. The workday does not exceed six hours, or
2. Where the employee agrees to waive the second meal period and the shift is not more than 12 hours long

It is a good idea for employers to have a written employee time card certification that attests that rest and meal periods have been taken by the employee. It is advisable that such a certification be printed on the employee's time card or time sheet. You might want to use language along the lines of the attached example certification. (Of course I gotta tell ya to speak to your attorney about this language because I'm not one and so I can't give ya legal advice.)

Back to Table of Contents

JURY SERVICE CHANGES

California's jury system has undergone some changes in an attempt to improve jury service participation. The primary changes address an employee's ability to use company paid time off benefits during jury service, courts implementing the "one-day-one-trial" procedure and the more limiting use of the extreme financial hardship excuse.

To reduce the financial burden of jury service where employers do not provide paid jury duty leave, the government has made an amendment to Labor Code Section 230. It states: an employee may use vacation, personal leave, or compensatory time off that is otherwise available to the employee under the applicable terms of employment, as time off for jury service. Employees may augment or replace any loss of income due to jury service under this provision, which became effective on January 1, 2000.

The "one-day-one-trial" system is another recent court reform that is being phased in statewide. It is intended to make jury duty more convenient and to lessen the financial hardship, thereby making service more bearable to jurors. While the law, enacted in January 1999, required every trial court to implement the new system by January 2000, Los Angeles County has been among the last to affect the change. Conversion of all the county's courthouses is scheduled to be completed be early 2002.

Under "one-day-one-trial" Rule 861 of the California Rules of Court, a prospective juror is on telephone standby for five days (as opposed to spending five to thirty days in a waiting room). If called in and not selected for a trial that day, service is complete and the juror will not be required to return for a minimum of one year. If assigned to a jury, service for that trial satisfies the juror's obligation.

Back to Table of Contents

EXEMPT EMPLOYEE JURY SERVICE (Salaried employees)

There are some exceptions to the standard definition of a salaried employee. Jury service is one of them. Deductions may not be made for partial week absences of exempt employees caused by jury duty. (29 CFR Sec. 541.118(a)(4). If an exempt employee works only a portion of the workweek and is called to jury service within the same workweek, the employee must be paid his salary for the entire week. The employer may offset the salary by any amount received by the employee as juror pay for a particular week without loss of the exemption. If an employee is absent from work for jury service for an entire workweek and performs no work, the employee need not be paid.

Back to Table of Contents

ARBITRATION AGREEMENTS

The California Supreme Court issued its long-awaited ruling in Armendariz v. Foundation Health, August 24, 2000. The court held that employers can require prospective or current employees to arbitrate wrongful termination or employer discrimination claims, as long as the employee can obtain the same result that would be available in a court of law.

In order for the Agreement to be valid, the Agreement should include:

1. Express recitation of claims included
2. Bilateral agreements to arbitrate
3. A neutral arbitrator
4. No limitation on damages
5. Adequate discovery
6. A written award either required or upon written request of either party and limited judicial review, and
7. No unreasonable costs/fees to employee

Back to Table of Contents

EMPLOYERS' AT-WILL RIGHTS

A California Supreme Court decision, October 5, 2000, in Guz v. Bechtel, put some teeth back into employers at-will termination rights, but it is important to understand these suits are decided on a case by case base and no two are ever exactly alike.

In a prior case, Foley, the Court had established what has become known as the Foley factors:

1. The employer's personnel policies and practices
2. The employee's longevity
3. The employer's conduct or communications reflecting assurance of continued employment
4. Industry practices

In the Guz v. Bechtel case the Supreme Court clarified that not every vague combination of Foley factors shaken together in a bag supports a claim of implied contract.

Back to Table of Contents

TERMINATION OF UNILATERAL POLICIES

In a decision in Asmus v. Pacific Bell, employers have the right to terminate or modify unilateral policies if their change is done after a reasonable time and with reasonable notice. Vested employee benefits, however, must be maintained.

This came from a decision by the California Supreme Court in which Pacific Bell had issued a unilateral policy that it would offer all management employees who continued to meet its changing business expectations, employment security through reassignment to, and retraining for, other management positions, even if their present jobs were eliminated. It stated that the policy would be maintained so long as there was no change that would materially affect the company's business plan achievement. Five years later the company announced it would unilaterally terminate this policy so that it could achieve more flexibility in conducting its business and compete more successfully in the marketplace. Eight employees filed an action in federal court challenging the termination policy.

The Appeals court requested the Supreme Court to answer the following question: "Once an employer's unilaterally adopted policy (which requires employees to be retained so long as a specified condition does not occur) has become a part of the employment contract, may the employer thereafter unilaterally terminate the policy, even though the specified condition has not occurred?" The answer was yes. An employer may unilaterally terminate a policy that contains a specified condition, if the conditions one of indefinite duration, and the employer effects the change after a reasonable time, on reasonable notice, and without interfering with the employees' vested benefits.

Back to Table of Contents

DISABILITIES AND REASONABLE ACCOMMODATION

I have always tried to avoid the issue of a disability related reasonable accommodation for an applicant/employee, by first maintaining the disability wasn't covered under California disability laws and the ADA. However, effective January 1, 2001, in California state AB 2222 our politicians have broadened the definition of "disability" considerably thereby making it almost mandatory to consider anybody claiming a disability to be disabled. It also places stricter limits upon employer inquiries about disabilities. What this means is that we now have to take each situation to the next step and automatically consider "reasonable accommodation." This includes applicants, employees returning from a personal medical leave with permanent limitations and employees returning from workers' compensation injuries/illnesses with permanent limitations.

In summary, the new law does the following:

1. Applies a broad definition to the term disability. To qualify, an impairment need only "limit" an individual's ability to participate in major life activities, as opposed to the federal standard to "substantially limit." An impairment now causes such a limitation if it makes achievement of the major life activity merely difficult;
2. Requires the determination of whether a limitation exists, to be done without consideration to mitigating measures;
3. Requires that "major life activities" be broadly construed to include physical, mental, social activities and working. Working is a major life activity regardless of whether the actual or perceived working limitation implicates a particular employment or a class or broad range of employments. Plaintiffs, therefore will likely now argue that to qualify as a "disability," the impairment need only to limit the particular job held by the employee, as opposed to working in general;
4. Requires an employer and the disabled employee or applicant to engage in a timely, good faith, interactive process to determine and provide effective reasonable accommodation, if any;
5. Prohibits employers from inquiring about medical issues, unless the examination or questions are job related and consistent with business necessity. Job related examinations of applicants are permissible only if given to all employees entering the same job classification after a job offer is made;
6. Protects individuals from discrimination due to an actual physical or mental impairment that is disabling or potentially disabling as well as one that is perceived or regarded as disabling or potentially disabling; and
7. Sets up co-workers to be personally liable for any harassment they inflict on another employee regardless of whether the employer knows of the conduct.

We can therefore expect the following:

1. An individual whose corrected vision with prescription glasses is 20/20 will now be considered disabled;
2. An individual that successfully controls a condition with meditation (e.g. totally controls high blood pressure with meditation) in now considered disabled;
3. One is now disabled if a minor personality disorder renders the individual unlikable and thus makes social interaction more difficult;
4. An employer which prefers an applicant with a good personality and who is physically attractive will be legally liable to those who are less personable and less physically attractive;
5. One who walks with a limp and would not be regarded as substantially limited in the major life activity of walking by the ADA will now be considered disabled by AB 2222;
6. An individual who can lift up to 50 pounds but not over 50 pounds would not be disabled under federal law because the individual would not be disqualified from a broad range of employment, however under AB 2222 must be considered disabled because the limitation applies to some physically demanding job;
7. A polio victim applies for a physically demanding job for which he clearly does not posses the ability to perform the essential duties, and demands a "timely, good-faith, interactive process." The company ignores the ridiculous request. Under federal law, since no accommodation was possible, there is no violation. Under AB 2222, the mere failure to engage in an interactive process is in itself a violation;
8. Employees will sue co-workers because one does not like the other and/or in retaliation for unspecified acts, seeking unlimited pain and suffering and punitive damages.

Clearly the changes in the law providing for broader definitions will impact litigation of disability discrimination claims by making it more difficult for a defendant employer to challenge an individual's status as "disabled" on summary judgement. Therefore, unless the disability is temporary, I recommend employers in California, posed with a disability issue, take each situation to the next step and automatically consider "reasonable accommodation."

Employers remain free to refuse employment to individuals with a physical or mental disability if the disability leaves the employee either "unable to perform essential duties even with reasonable accommodations" or unable to "perform those duties in a manner that would not endanger their health or safety or the health or safety of others even with reasonable accommodations." Furthermore, employers need not agree to an accommodation which would cause undue hardship to the employer.

Back to Table of Contents