Labor Employment Law Blog

By James Hays, Jonathan Sokolowski, Ashley Hirano, and Gregg Fisch

On April 25, 2012, the United States Equal Employment Opportunity Commission (“EEOC”) issued updated enforcement guidance on employers’ use of arrest and conviction records when making employment decisions under Title VII of the Civil Rights Act of 1964 (“Title VII”). The EEOC’s guidance (the “Guidance”) is intended to codify and build on its prior policies concerning employers’ use of criminal records. Nevertheless, the Guidance, which is effective immediately, supersedes the EEOC’s prior policies on this issue.

By Gregg Fisch, Rebecca Hirschklau, and James Hays

In what is reported to be a landmark decision, the United States Equal Employment Opportunity Commission (“EEOC”), in Macy v. Bureau of Alcohol, Tobacco, Firearms and Explosives, found for the first time that discrimination against transgender individuals constitutes sex discrimination in violation of Title VII. While not the first case to explore the notion that Title VII prohibits discrimination based upon gender identity and stereotypes, it is the first decision by the EEOC addressing the subject of transgender discrimination.

By Rebecca Hirschklau and James Hays

The job market appears to be on an upswing, and with this upswing, and the advent of new technology, comes new challenges for employers and applicants alike. Potential employees may have online identities that many employers deem useful when investigating a job applicant. However, privacy settings on many social media sites allow an applicant to hide his/her online persona from these potential employers. As a result, a new trend in applicant background investigating has surfaced: asking an applicant for his/her username and password to social media sites during the interview process.

By Jennifer Redmond, Morgan Forsey, and Bram Hanono 

Employers with sales teams in California need to get ready. California has a new commission contract law, AB 1396, which takes effect January 1, 2013. Under AB 1396, which amends California Labor Code section 2751, employers who pay commissions to their employees are required to enter into written commission contracts with employees. The contract must describe the method by which commissions are computed and paid. Employers must also provide a copy of the signed contract to each employee, and get a signed receipt from each employee. That's the easy part. Here's the tricky part. Going forward, when a contract governing commissions expires without being replaced but the employee continues work, the terms of the “expired” contract will apply to commissions until the parties sign a new agreement or until the employment is terminated. As a result, it will be important to get new commission contracts in place before or when the old ones expire.

By James Hays and Rebecca Hirschklau

All employers are familiar with race, gender, age, disability and many other protected classifications under the myriad of Federal and state fair employment practices acts. It now appears that there is a growing trend to add “unemployed” to that list. While unemployment rates appear to be on the decline, 8.3 percent of the population remains unemployed, up more than 3 percent from where it was less than four years ago. When unemployment rates are high, employers invariably become inundated with candidates for the limited openings that may become open and available. So much so that some employers have taken to disqualifying potential applicants by advertising that “the unemployed” need not apply. In light of this recent development in job advertisements, Congress and several state legislative bodies have started to amend their anti-discrimination laws to add “unemployed status” as a protected class.

By Michelle Sherman

Agatha Christie had a novel take on invention being the mother of necessity. She disagreed and said, “[I]nvention, in my opinion, arises directly from idleness, possibly also from laziness. To save oneself trouble.” She may have been onto something when you think about businesses that are turning to outside vendors to research employees and job candidates for them. Whether or not these outside vendors are the best solution, however, remains to be seen.

In order to protect your company from employee lawsuits and significant liability, you should take these simple steps when hiring or firing.

On January 21, 2011, the Ninth Circuit Court of Appeals in Collins v. Gee West Seattle LLC held that when an employee voluntarily leaves because the company is closing, the employee has not "voluntarily departed," but has instead suffered an "employment loss" under the Worker Adjustment and Retraining Notification ("WARN") Act, 29 U.S.C. § 2101 et seq.

On January 24, 2011, the United States Supreme Court held in Thompson v. North American Stainless, LP that an employee who claimed he was fired in retaliation for his fiancée’s discrimination complaint could pursue a claim against their mutual employer under Title VII of the Civil Rights Act.

We are the Google generation. We meet someone interesting, then search the Internet to learn more about them. There is nothing wrong with doing this in the context of networking, making new friends, or pitching for business. However, searching the Internet for information about someone who is trying to get a job with your company is another matter entirely. This is not to say you cannot Google them. In fact, it is estimated that 45% of companies research a job candidate on the Internet. In a December 2009 survey commissioned by Microsoft, 70 percent of the 275 U.S. recruiters, human resources professionals and hiring managers who responded said they have rejected candidates based on information found online. Thirty-five percent of those employers said they rejected applicants based on membership in certain groups.
 

In an effort to satisfy customers and maintain a desired company image, many employers have dress and grooming policies. As a general rule, employers are legally allowed to establish reasonable dress and grooming requirements that serve legitimate business interests. However, two recent cases remind employers that there are limits on what grooming standards employers can impose on employees.

The American Recovery and Reinvestment Act of 2009 (ARRA or the "Stimulus Bill") was enacted on February 17, 2009, and Section 1611 - the Employ American Workers Act (EAWA) - severely limits certain employers, namely banks and other financial institutions, who receive funding under the 2008 Trouble Assets Relief Program (TARP) from hiring H-1B foreign national employees.

The Second Circuit's ruling in Westrec Marina Management v. Arrowood Indemnity Co. is a warning to employers to report potential claims to their insurance carrier as soon as possible or face denial of coverage.  In Westrec, an employee filed a charge of discrimination against Westrec with the California Department of Fair Employment and Housing (DFEH) and requested an immediate right to sue letter.  Subsequently, her attorney sent a demand letter to Westrec asserting claims and seeking possible early settlement prior to filing a lawsuit.  At the time of the letter, Westrec failed to inform its insurer, Arrowood, of the claim.  The employee later filed a civil action, and when Westrec tendered the claim, Arrowood denied coverage.

In VL Systems, Inc. v. Unisen, Inc., a California Court of Appeal recently held that a broad "no-hire" provision in a consulting contract was unenforceable as an impermissible restraint on trade.  "No-hire" clauses are common in the consulting industry (and other similar industries such as the temporary services industry) in which the consulting companies provide specialized labor to their clients.  The reason for the "no-hire" provisions is that the consulting companies fear that the clients will hire their employees directly as employees and thereby eliminate the need for the consulting company.

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In September 2005, we reported on the California Court of Appeal's decision in Ross v. Ragingwire Telecommunications Inc., 132 Cal. App. 4th 590, finding that an employer may refuse to employ a person who is using marijuana in accordance with the Compassionate Use Act of 1996. (See, "Court Holds That A Company May Terminate A Medical Marijuana User," September 14, 2005.) However, on November 30, 2005, the California Supreme Court granted review of the case, rendering the prior decision invalid. As a result, employers are again left to question their rights and obligations under the State's disability accommodation laws versus the federal ban on marijuana use.

by Greg S. Labate

The purpose of this article is to show employers how to avoid liability when hiring, disciplining, and terminating employees.