SESSION 805 California Calling: 10 Tips for Counseling California Employers Bonita D. Moore Faegre Baker Daniels LLP Los Angeles, California Daniel G. Prokott Faegre Baker Daniels LLP Minneapolis Employment Law Institute – May 2017 Minnesota CLE’s Copyright Policy Minnesota Continuing Legal Education wants practitioners to make the best use of these written materials but must also protect its copyright. If you wish to copy and use our CLE materials, you must first obtain permission from Minnesota CLE. Call us at 800-759-8840 or 651-227-8266 for more information. If you have any questions about our policy or want permission to make copies, do not hesitate to contact Minnesota CLE. All authorized copies must reflect Minnesota CLE’s notice of copyright. MINNESOTA CLE is Self-Supporting A not for profit 501(c)3 corporation, Minnesota CLE is entirely self-supporting. It receives no subsidy from State Bar dues or from any other source. 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CALIFORNIA CALLING: 10 TIPS FOR COUNSELING CALIFORNIA EMPLOYERS BONNIE MOORE DAN PROKOTT FAEGRE BAKER DANIELS LLP TABLE OF CONTENTS Page A. Introduction .........................................................................................................1 B. Ten Tips ..................................................................................................................1 1. Effectively Handle Hiring ............................................................................1 2. Classify Workers Correctly ..........................................................................6 3. Avoid the Real Lawsuits of California (Wage / Hour Issues) .....................8 4. Don’t Take a Break From Staying on Top of Leave Laws ........................14 5. Yes, There is Another Local Ordinance ....................................................20 6. Understand the Do’s and Don’ts of Employee Conduct Management. .....21 7. Don’t Fall Into a Termination Trap ...........................................................22 8. Resolve to Understand Dispute Resolution Nuances .................................26 9. Navigate Non-Compete Agreements .........................................................27 10. Know Everything Else Unique to California, Or Do Your Best… ............28 A. INTRODUCTION California has many wonderful attributes, and is home to the world’s sixth-largest economy, but it is also one of the most challenging places for an employer to do business because of its many and ever-growing employee-friendly laws, usually accompanied by penalties and/or attorneys’ fee provisions that make ignorance or errors very costly. The ten tips below provide useful road signs for employers navigating in California. B. TEN TIPS 1. EFFECTIVELY HANDLE HIRING. a. Protected Classifications i. California’s Fair Employment and Housing Act (FEHA) prohibits discrimination in employment based on any of the following characteristics: race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex (including pregnancy, childbirth, breastfeeding and medical conditions related to pregnancy, childbirth, breastfeeding), gender, gender identity, gender expression, age, military and veteran status, and sexual orientation. ii. Prohibiting discrimination based on these characteristics should be included in an employee handbook and employers must distribute the Department of Fair Employment and Housing’s (DFEH) Brochure 185 on Sexual Harassment to all employees. Cal. Gov. Code §§ 12900 - 12996 b. Arrests and Convictions i. Employers cannot ask about, or base hiring or other employment decisions on, arrests that have not resulted in convictions (unless they are pending trial), arrests involving successful completion of a diversion program, legally expunged convictions, prior convictions judicially dismissed, or misdemeanor convictions for which probation has been completed. Cal. Lab. Code §§ 432.7 - .8, 433 ii. Employers cannot ask about, or base hiring or other employment decisions on, certain marijuana convictions that are more than two years old. These include convictions for possession of marijuana or paraphernalia, operating a business that displays or sells marijuana, or being under the influence of marijuana. 1 Cal. Lab. Code § 432.8 iii. The Los Angeles “Fair Chance” Ordinance, which became effective January 1, 2017, prohibits employers with at least 10 employees who work two or more hours each week within the City of Los Angeles from asking or requiring disclosure of a job applicant’s criminal history prior to a conditional offer of employment. Los Angeles Municipal Code § 189.000 et seq. (Ordinance No. 184652) a) This includes a prohibition on asking any question that seeks the disclosure of a job applicant’s criminal history, such as including a criminal history “check the box” question on a job application or a question during an initial job interview. b) Los Angeles employers covered by the ordinance also must engage in a “Fair Chance Process” before withdrawing a conditional offer of employment based on the applicant’s criminal history, which includes: (1) a notification and “written assessment” process; (2) providing the applicant five business days to respond; (3) a “written reassessment” if the applicant provides any documentation or information in response; and (4) retaining records of job applications, including the written assessments and reassessments, for three years. c) The Fair Chance Ordinance also prohibits retaliation against an employee or applicant for reporting any alleged violation of the Ordinance or for participating in the Fair Chance Process. d) In addition, covered employers must: (1) state in every advertisement seeking applicants for employment that they will consider qualified applicants with criminal histories; (2) prepare and post a notice informing applicants of the Fair Chance Ordinance’s provisions in a conspicuous place at any location job applicants may visit; and (3) send copies of the posted notice to every labor union with which they have a collective bargaining agreement. e) Generally, there are no exceptions to the ordinance, unless the employer is required by law to inquire about criminal history or prohibited by law from hiring individuals who 2 have committed certain criminal offenses, or the position requires use of a firearm. c. Juvenile Criminal History Subject to certain limited exceptions (e.g., health care facilities may ask an applicant about certain juvenile offense history), employers may not ask applicants to disclose, or utilize as a factor in determining any condition of employment, “juvenile offense history:” information concerning or related to an arrest, detention, process, diversion, supervision, adjudication or court disposition that occurred while the applicant or employee was subject to the process and jurisdiction of a juvenile court. Cal. Lab. Code § 432.7 d. Background Checks i. California law is more stringent than the Fair Credit Reporting Act on information that can be obtained in a Consumer Report. ii. A consumer credit reporting agency shall not report records of arrest, indictment, information, misdemeanor complaint, or conviction of a crime that, from the date of disposition, release, or parole, antedates the report by seven years. Cal. Civil Code § 1786 et seq. iii. In addition to the arrests and convictions limits, as well as anti- discrimination prohibitions, state law prohibits employers from using consumer credit reports unless the applicant is sought for a managerial position or for any position involving access to bank/credit card information, social security numbers, or date of birth. Cal. Lab. Code § 1024.5; Cal. Code Regs. tit. 2 § 11016 iv. California law prohibits the state from releasing certain criminal records to employers not explicitly authorized by statute to receive such records, and prohibits those employers from receiving the records. Cal. Lab. Code § 432.7; Cal. Penal Code § 11105 e. E-Verify i. Employers are prohibited from using the E-Verify system to check the employment authorization status of existing employees or applicants who have not received an offer of employment, except 3 as required by federal law or as a condition of receiving federal funds. ii. Employers have the right to utilize E-Verify, in accordance with federal law, to check the employment authorization status of a person who has been offered employment. iii. If the employer receives any notification issued by the SSA or the DHS containing information specific to the employee’s E-Verify case or any tentative non-confirmation notice, which indicates the information entered in E-Verify did not