Welcome to my latest Monday Morning Briefing, which admittedly, is not coming out anywhere close to morning today. But in my defense, today is a holiday (for my office, anyway). And I promised my daughter I would take her to breakfast (which I did). And I used the day off to make some overdue doctor’s appointments, and I am still bombarded with work (apparently many of you are working today), and oh yes, I am also being stalked by the father of a client’s employee. He has sent me over 75 pretty nasty emails in the span of four days. Oh, don’t you want to be an employment lawyer, too?
But despite all that, we have some good things happening in the world of employment law this week, so let’s get to it!
NINTH CIRCUIT STRIKES DOWN AB 51 – ARBITRATION IS HERE TO STAY IN CALIFORNIA
Okay, I can hear my team wincing now, because the outcome isn’t quite as simple as the title implies, but we do like click bait. And the first part is true – the Ninth Circuit did find that as we have been predicting now since this law was signed back in 2019, significant parts of AB 51 are inconsistent with the Federal Arbitration Act. It’s been a long and circuitous path here, as you may all remember, because this very same Ninth Circuit panel actually reached the opposite conclusion. Then it looked at itself in the mirror and said “what were we thinking?” and in a rare move, actually ordered itself to reconsider its own opinion. Oh, but there was also this little decision called Moriana v Viking River Cruises that had been issued by the United States Supreme Court in the interim. Most likely that had something to do with the reconsideration.
Which gets to my next point. Technically, this Ninth Circuit decision is not the final play. The State of California COULD take another shot by trying to appeal this decision up to our friends in DC. But like I just said, it was most likely their fist landing on the previous California Supreme Court decision of CLS v Iskanian that sent the usual ballsy Ninth Circuit back into chambers to do a rethink. So I doubt that the State has the chutzpah to try to ask the Big Supremes to overturn this one. Yet, nothing surprises me about California anymore. All I can tell you is that the likelihood that SCOTUS would touch this opinion has to be closer to none than slim.
So what does that mean? It means that you keep doing the same thing we have been telling you to do since AB 51 has been enjoined at the end of 2019. This law never took effect for a reason – it was never a good law. It was never going to get past the FAA, and we knew, from day one, that even if it took going all the way up to the US Supreme Court to tell us that, eventually, this law would be struck down. Thankfully, the federal courts here in California saw it right all the way, issued injunctions and kept this law from ever becoming law, and you have always been able to enforce your arbitration agreements in the employment setting.
Now keep in mind a few things. First, the Biden administration and Congress came in almost a year ago now and carved out sexual harassment and sexual assault cases from being included in mandatory arbitration. So those cases which arise after March 2022 will now have to proceed to court. Second, arbitration agreements are always held to a strict level of scrutiny by our opposing counsel. They need to be written properly and signed by the employee – and these signatures are often carefully examined in court. Then, once IN arbitration, we have to promptly and timely pay our arbitration fees, which are NOT cheap, or we lose the right to remain in arbitration. Those opposing counsel will hold us accountable.
I already hear you all asking – what does this have to do with Viking River Cruises and the state of play with PAGA? Well, AB 51 was the law that challenged the employers’ right to require arbitration in the workplace to start. Viking River Cruises addresses the breadth of the class action waiver that is contained IN the arbitration agreement or provision, and how does it affect PAGA lawsuits. If we had not been able to require arbitration, we would lose our right to require the class action waiver that is contained in it. So this was an important piece to lock in place.
But yes, now we turn our attention back to the Viking River Cruises saga, which really remains back with the STATE Supreme Court and the Adolph v Uber decision, where we await the hearing date to be announced. And then there will be oral arguments. And then we will all await a decision. And so, again, we wait.
PLEASE DON’T ROUND YOUR TIMERECORDS
I cannot say this any more plainly than this. If you have rounding in your practice, stop. Now.
I officially started on this mantra back in 2018, when the California Court of Appeal first really started to call into question what had long been the state of the law in California under the seminal case of See’s Candy v Superior Court. There, the court held that a policy of rounding to the nearest tenth of an hour was lawful, so long as the employer’s policy was “facially neutral.” But in 2018, in AHMC Healthcare v Superior Court, for the first time, the court opined a different standard. There, the court said that not only did the policy have to be neutral, but in practice, the employees could lose no time.
In other words, it wasn’t good enough that the policy was neutral on its face. The employer would have to go through and measure the rounding against the actual amount of time the employees lost or gained, on average. And if the employees LOST TIME, on average, the policy was not lawful. So that meant an employer would constantly have to be checking the validity of its own policy!
What good is a rounding policy, then? None. Zero.
Here was the issue, and it all came from a case called Troester v Starbucks, which I clearly do not like and have blasted before. Troester was handed down from our friends at the Cal Supreme Court right around the same time as AHMC Healthcare was decided, the summer of 2018. (By the way, this was the same time frame as the Supreme Court was issuing Dynamex and killing the gig economy, too. What was happening in Sac in 2018?)
Mr. Troester claimed that he was not paid for “de minimis” time that occurred before and after he clocked out of Starbuck’s POS system, for things like locking the door and turning on the alarm. This time would only amount to maybe a few seconds a day – less than a minute, but over the course of 15 months, it added up to maybe a few hours. And the Supreme Court opined that Starbucks SHOULD have the ability to track every minute and indeed, second that the employee works. In this ruling, the Court killed the previous concept of “de minimis” time that is still found in federal law.
Why am I ranting about Troester (again) and rounding policies now? Because on February 1, 2023, the California Supreme Court agreed to hear a Court of Appeal case called Camp v Home Depot USA. The issue seems to come down to the question of whether an employer can use a rounding policy at all IF the employer is using an electronic time clock and has the ABILITY to pay to the minute, which was the case with the plaintiffs at Home Depot. The Supreme Court may limit its holding to that fact pattern, or it may overturn See’s Candy altogether. I have my suspicions. Those folks up in Sacramento don’t hide their proclivities very well.
In the meantime, given the legal climate about rounding that we have seen since 2018 and before, please stop rounding. We took this option out of our handbook template even before that, but in talking with some of you, apparently, some of you did not get the memo. This is where this Briefing comes in handy and I get to give these sweeping bits of advice to you all. So I am not mincing words here. STOP ROUNDING! I’ve got enough work to do. And you all have better things to do than to get yourselves sued.
Okay, you all wanted a nice, long content filled Monday Morning Briefing. It was bit late, but I gave you something meaty to read. I needed a holiday to roll up my sleeves and write it.
By the way, if 2022 was the year of “quiet quitting,” I am labelling 2023 as the year of the wild ride. NO ONE is quitting; everyone is still coming to work and powering through, but I am not sure what state of mind they are all in. It feels like everyone is BACK, because we all have figured out we actually do need to work, but oh my god, we are a bit of a hot mess. You all feeling this a bit?
It’s okay, I just think that once again, we all have to see this for what it is. I tell all my clients and friends in the wellness space, we need you more than ever. I am doubling down on my yoga, hiking, spin, and other self-care (by the way, OUR office provides weekly yoga and meditation, and of course, the best spin class ever!) Just be mindful of your what your employees might be handling, as well as the others in your life. And if you are litigators, like us, watch out for especially high strung opposing counsel.
The good news is, in spite of everything, my blood pressure was DOWN this morning. I thank my wellness providers and my daughter – for the lovely breakfast. Priorities, everyone.
Happy President’s Day.
And as my daughter reminded me at breakfast this morning, we are coming up on the one year anniversary of the Ukraine invasion. I always want to honor my Ukrainian ancestors, but especially now.
#StandWithUkraine
Beth