Court of Appeal Upholds Release of Overtime Claims

Labor Code section 206.5 invalidates releases of wage claims. But when there is a bona fide dispute over whether wages are due, releases are valid. That's what the court of appeal held in Chindarah v. Pick Up Stix.

This was an overtime class action that went to mediation but did not settle. The employer did an "end run" and settled out about 200 employees with individual releases. Employees challenged the validity of the releases under Labor Code section 206.5. But the court of appeal, agreeing with the trial court, held:

The releases here settled a dispute over whether Stix had violated wage and hour laws in the past; they did not purport to exonerate it from future violations. Neither did the releases condition the payment of wages concededly due on their executions. The trial court correctly found the releases barred the Chindarah plaintiffs from proceeding with the lawsuit against Stix.

If this case is not taken up by the Supreme Court for review, it will clarify a longstanding unresolved issue in California law regarding when settlements of wage claims will be enforced.
Employers will be able to settle claims involving uncertain liability, such as for certain meal period claims, or misclassification issues when the factual issues are in dispute.

Read the opinion here.

California Supreme Court Addresses State Employees' Whistleblower Protections

Before a state employee can bring suit under the California Whistleblower law, he or she must seek relief before the State Personnel Board. When the SPB issues "findings," or even when the SPB fails to do so in the time allowed,the law says that the employee may sue in Superior Court. But the court of appeal held that when, as in the present case, an employee receives adverse findings from the SPB, the employee must seek to overturn those findings before going to court.

The Supreme Court reversed that decision, 7-0. The high court held that an employee may proceed to court when the SPB issues or fails to issue findings within the prescribed time, and the employee need not seek a writ or a hearing before an administrative law judge first.

The case is State Bd. of Chiropractic v. Superior Court and the opinion is here.

California Amends Alternative Workweek Law

As part of California's recent budget compromise, the Legislature made welcome revisions / clarifications to the law governing "alternative workweek arrangements." These arrangements are the authorized exemptions to "daily overtime" law.

The bill, AB 5, amends Labor Code section 511. Presumably, the DLSE will revise its manual and the IWC will issue revised wage orders.

First, the law defines what counts as a "work unit" for having the vote for the alternative workweek arrangement:

For purposes of this section, “work unit” includes a division, a department, a job classification, a shift, a separate physical location, or a recognized subdivision thereof. A work unit may consist of an individual employee as long as the criteria for an identifiable work unit in this section is met.

The new law also expressly allows employers to give employees the right to vote on a "menu of options" that includes not only "alternative workweek" schedules (such as 4/10 hour days) but also an eight hour per day option. That will likely result in a lot more votes for passage.

The law also permits employees to move from one option to another weekly. That will give employees the option of working 4/10 one week and then 5/8 the next week if the employer consents.

Here is the statute.

DGV

President Obama Issues Pro-Labor Executive Order No. 4

The President signed a new executive order authorizing "project labor agreements" in certain "large scale" federal construction contracts. The order, signed Feb. 6, 2009, takes effect immediately. Basically, the order authorizes contracting agencies to require private-sector contractors to sign on to a union contract for the life of the project:

The term "project labor agreement" as used in this order means a pre-hire
collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project and is an agreement described in 29 U.S.C. 158(f).

The order applies only to construction projects worth more than $25 million. You can view it here.

Did You Read the "Stimulus" Bill?

What employment law changes are included in the stimulus bill? Law firms are starting to pick over the new law, signed on February 17, 2009.

A number of employment law firms' newsletters report there is a big change to COBRA. To summarize, under the new law, certain employees fired / laid off employees from September 2008 until December 2009 will pay a discounted COBRA premium, which employers apparently will recover as a tax credit. The provision is available only to individuals earning less than $125,000 and married couples with incomes under $250,000. So, that will be easy for employers to administer. Not. I smell full employment for benefits administrators. See? Job creation!

What else is in the "American Recovery and Reinvestment Act" to stimulate employers? We'll find out in the coming days. If you can't wait, or you want to help your representative or Senator understand what s/he voted for, you can read the entire new law here. Just hit "control-F" and search for "COBRA" or "Title III," addressing the COBRA premium discount.

DGV

Ninth Circuit Withdraws "Flyover" Wage and Hour Case

We posted about Sullivan v. Oracle here, and blew a weekend on an article (you don't have to read) here. That's the case where the court of appeals held that an out of state resident is covered by California's wage and hour laws even when he or she works only briefly in California.

The Ninth Circuit decided to withdraw the opinion, here. Instead, the court certified three questions to the California Supreme Court:

First, does the California Labor Code apply to overtime work performed in California for a California-based employer by out-of-state plaintiffs in the circumstances of this case, such that overtime pay is required for work in excess of eight hours per day or in excess of forty hours per week?

Second, does § 17200 apply to the overtime work described in question one?

Third, does § 17200 apply to overtime work performed outside California for a California-based employer by out-of-state plaintiffs in the circumstances of this case if the employer failed to comply with the overtime provisions of the FLSA

So, the California Supreme Court, if it accepts the Ninth Circuit's invitation, will give its input and then the Ninth Circuit presumably will re-issue its opinion with the benefit of California's high court's analysis. Stay tuned.

Ninth Circuit Holds Type 2 Diabetic Was Qualified Individual

The Ninth Circuit avoided deciding whether the ADAAA amendments to the ADA are retroactive by holding that a type-2 diabetic had a disability and was a qualified individual under the original ADA.

Larry Rohr was a welder metallurgy specialist for Salt River Project Ag. Improvement and Power District, a political subdivision of the Arizona state government. He developed type-2 diabetes. His doctors imposed a number of restrictions on his diet and prescribed medication. The timing and management of his blood sugar testing, eating, and administration of medication resulted in a number of restrictions. Additionally, because of his medical condition, he was susceptible to a number of symptoms.

At times, Rohr was assigned to work in the field and out of town trips. His doctors, and the company's imposed a number of restrictions on his work, which included extended travel. Ultimately, the company concluded he could not perform his essential job functions and gave him the opportunity to transfer to another job or take early retirement. He sued for disability discrimination under the ADA. The district court granted summary judgment, holding he was not an individual with a "disability" and that he was not "qualified"

The Ninth Circuit disagreed. The opinion discusses at length the limitations on Rohr's ability to eat, including scheduling his meals, eating at certain times, and adjusting medication for food, testing and exercise. The court said not all diabetics are substantially limited, but that Rohr had a number of challenges that seem common to many with the condition. So, particularly under the new ADAAA amendments, it will be nearly impossible to argue diabetes is not a disability after this opinion.

The court then tackled whether Rohr was "qualified" in that he could perform his essential job functions with or without accommodation. Salt River argued Rohr could not pass a respirator test per OSHA standards. The court found a triable issue of fact because: the test was not required by OSHA, Salt River did not consider other testing methods, and the use of a respirator may not have been "necessary" to the job.

The court rather summarily found the parties' disputed whether aspects of Rohr's job were "essential" including the need to travel extensively.

The court also decided that the ADAAA amendments would have lent further support to the conclusion that summary judgment should be reversed. However, the court declined to rule that the amendments applied to Rohr's case, which was filed long before the president signed the 2008 amendments into law. The court's comments on the ADAAA, all dicta, portend tough sledding for employers seeking to challenge whether someone has a "disability" under the new framework.

The deicsion is Rohr v. Salt River Project and the opinion is here.