U.S. DOL Proposes Revised FMLA Regulations

The U.S. DOL has been hard at work considering revisions to the FMLA regulations. We posted about the initial report here. Lots of time has passed, and the present administration is coming to a conclusion. So, I'm sure employers were wondering if there would indeed be new regulations as much as we were.

Wait no longer! There will be new proposed regulations published in the Federal Register on February 11. Here they are, all 470ish pages of discussion, analysis and proposed regulations. There also are proposed regulations regarding the new FMLA amendments regarding servicemembers.

We will publish an article on the draft regulations in the coming weeks. Until then, get your reading glasses, you're on your own. Thank you Ross Runkel and your Employment Law Memo!

DGV

Court of Appeal Holds IT Employee Is... Exempt

A network administrator's job is described as follows in the opinion -

Combs served first as manager of capacity planning, and then as director of network operations. He voluntarily resigned in November 2004. Combs's resumé, which he prepared after he left Skyriver, indicated that as Skyriver's director of network operations, he was responsible for (among other things) "project management, budgeting, vendor management, purchasing, forecasting, [and] employee management"; management of "overseas deployment of wireless data network"; management of "the integration and standardization of three networks into the Skyriver architecture"; and the overseeing of "day to day Network Operations." At trial, Combs acknowledged his resumé was accurate. He testified that his "core" responsibility at Skyriver was "maintaining the well-being of the network," and he spent 60 percent to 70 percent of his time carrying out that responsibility. Combs called a number of witnesses who also confirmed that Combs's resumé was accurate. Specifically, Scott Akrie, who as Skyriver's chief technical officer supervised Combs from 2001 to about mid-2003, and Edward West, Skyriver's former vice president of operations, who supervised Combs from late 2003 until Combs left Skyriver, both testified that Combs's description of his duties in his resumé was accurate, as did Michael Williams, Skyriver's director of field operations. Combs's own testimony and the documentary exhibits (including Combs's resumé and some of his e-mails) showed that he was responsible for maintaining, developing and improving Skyriver's network, and his duties involved high-level problem solving and "troubleshooting"; preparing reports for Skyriver's board of directors; capacity and expansion planning;
planning to integrate acquired networks into Skyriver's network; lease negotiations; and equipment sourcing and purchasing.

The Court of Appeal decided the employee was exempt under the administrative test. Of note, the Court decided that the trial court was not required to analyze the case under the "administrative/production" dichotomy that has become important in recent cases. Acknowledging the importance of federal FLSA regulations in the analysis of the exempt duties under California law, the court had no trouble upholding the trial court's determination that Combs spent over 50% of his time on exempt, administrative duties, and that he had the
requisite discretion and independent judgment.

The case is Combs v. Skyriver Communications and the opinion is here.

California Supreme Court Takes Up "Stray Remarks"

In a discrimination case, the plaintiff may attempt to introduce allegedly biased comments by a person unrelated to the negative decision that is the subject of the lawsuit. A number of courts, including in California, have characterized these as 'stray remarks' that have no bearing on the plaintiff's case, and which do not defeat motions for summary judgment.

In last year's decision in Reid v. Google (opinion here), the Court of Appeal expressed disdain for the "stray remarks" doctrine, saying the trial court should have let a jury decide their importance. The California Supreme Court accepted review and will consider whether such evidence defeats a motion for summary judgment.

The Cal. Supreme Court appeared to leave untouched a number of other issues the Court of Appeal addressed, such as whether the "shifting burdens" analysis is mandatory, the use of statistics in individual discrimination cases, and other bedrock employment law issues.

The Supreme Court also will resolve once and for all - must the trial court specifically rule on objections to evidence submitted in support or opposition to a summary judgment motion? The Reid court decided trial courts need not do so, contrary to a recent spate of appellate decisions holding that they must.

Oh, and I, for one, welcome our new Google overlords. They do host this blog after all.

FMLA Amendments Signed - Leave for Relatives of Military

Congress passed FMLA amendments expanding FMLA protection leave taken under certain circumstances by relatives of soldiers. We covered the amendments here. The president initially vetoed the law in which the FMLA amendments were contained. Now he has signed them. They are included within HR 4986, as section 585. (It's a big bill, concerning a number of issues related to defense; so, please scroll to that section). We will be writing an article regarding compliance with this new law over the next couple of weeks.

Greg

Court of Appeal: Stock Options OK Form of Payment

The Court of Appeal upheld a stock option plan against a claim that it worked illegal forfeitures under the California Labor Code. The Court held that Citigroup's stock option plan was valid because, in a "two-step" transaction, it gave employees cash with the right to buy options at a heavily discounted price. The catch was they forfeited it if they did not remain employed.
The Court held this plan, as drafted, was not an illegal forfeiture.

The Court also noted even if the options were granted directly, the forfeiture would be valid because it was express and clear.
Of significance to wage and hour wonks, like me, the court also addressed whether payment in stock options was a violation of the Labor Code's requirement of the form of payment. I once posited that issue to a DLSE official and received a chilling answer. But no. The court said Section 212 does not apply when payment is made in stock options. That should give everyone a sigh of relief. ::Sigh::: The case is Schachter v. Citigroup and the opinion is here.

Ninth Circuit: Cab Operators Were Employees, Not Independent Contractors

When a union organizes an employer's workers, the National Labor Relations Act governs the union election. Independent contractors cannot be organized because they are not considered "employees." When an employer claims that workers are independent contractors as a defense to union organizing, the NLRB (and a reviewing court) will apply federal law. In NLRB v. Friendly Cab Co., opinion here, the Ninth Circuit held that Friendly's cab drivers were employees, not independent contractors, and therefore were properly organized by the union. The opinion thoroughly discusses the criteria federal courts apply to independent contractor analysis in the labor law context.

February 1 Is OSHA Log Day!

February 1 is when all good employers' thoughts turn to their OSHA 300 logs.
Here is a helpful reminder from our friends at the California Chamber of Commerce.

Greg