Avoiding a hostile work environment

The term “hostile work environment” has found its way into the vernacular in the past decade or so. These three words can make plaintiff’s lawyers rich, and leave employers on the hook for huge verdicts. Employers know they have a duty to prevent a hostile work environment. But what is an employer’s duty in regards to a hostile work environment caused by third parties? A California Court recently confirmed that an employer has a duty to take corrective measures to prevent a hostile work environment caused by third parties – even when this type of harassment or hostile work environment may be “inherently part of the job.”

In the case of Turman v. Tuning Point of Central California, the plaintiff Turman was a resident monitor at a halfway house for defendant Turning Point. Residents of the halfway house were almost exclusively male prisoners who were being transitioned back into society prior to their full release on parole. Turman alleged that while she was at work, male residents propositioned her for sex, made sexual gestures to her, and called her lewd names. When Turman complained to her supervisor, her supervisor simply suggested she issue fewer disciplinary citations for the residents’ rule violation, which he believed was the cause of their harassing conduct. The trial court found that, while Turman was subjected to severe harassment because of her gender and that such harassment created a hostile work environment, Turning Point did not “fail to take immediate and appropriate corrective action.”

However, the Appellate Court reversed the judgment, finding that since Turning Point’s response to the reported abuse – Turman’s supervisor telling her to issue fewer disciplinary citations to residents so they would be nicer to her – did not amount to corrective action to alleviate the abuse. The Court acknowledged that even though male residents living under restricted/penal conditions are likely to harass a female supervisor, and that enduring inappropriate behavior by prisoners may be “inherently” part of the job, that does not absolve an employer from its legal responsibility to take immediate and appropriate action to correct the situation.

This case puts California employers on notice of their duty to take immediate action to correct a hostile work environment, even when the problem is caused by third parties.

Avoiding waiting-time penalties

Labor Code section 201(a) requires that employers pay final wages "immediately" upon termination of an employee. Labor Code section 203 imposes a "waiting time" penalty that continues the unpaid wages for up to 30 days while they remain unpaid.

Employers – especially out-of-state employers doing business in California – sometimes enact policies that result in routine late payments of employees’ final wages. Often employers have policies where the discharged employee is paid during the next regular payday, or the final paycheck is issued by mail from a payroll location, meaning that the final paycheck may not be received until days or weeks after termination.

These frequent late payments may not result in a very large late penalty for any single employee, but the cumulative liability across an entire work force can be substantial. These late-payment policies often result in class action lawsuits, which can cost large companies hundreds of thousands of dollars.

Recently, in Pineda v. Bank America, the California Supreme Court gave a boost to such class actions by holding that late penalties under Section 203 can be collected for up to three years after the underlying final wages were paid. Prior case law applied only a one-year statute of limitations. Pineda triples the exposure of employers.

In light of Pineda, employers should give their procedures for generating final paychecks a second look. Make sure that employees are given their final paychecks immediately to avoid problems down the road.

What Might Have Been: Proposition 19 and California Employers

Anyone following the recent election in November saw that Proposition 19 was soundly defeated by California voters. The proposition asked voters to allow the state to “regulate, control and tax cannabis.” Employers may have asked themselves, “What effect would Proposition 19 have had on me as an employer in California had it passed?”

First, if Proposition 19 had passed, employers in California would have been allowed to discharge or otherwise discipline only those employees whose legal use of marijuana impaired “actual job performance.” As such, an employer smelling marijuana on a worker’s clothes would not have been sufficient to justify discipline of that employee. Likely, formal discipline of an employee, such as a write-up, suspension, etc. would only be permissible if it were based on problems with job performance, not merely the use of the marijuana.

It is not difficult to see how employees would react to such discipline, write-ups, or terminations. Chances are employees would argue that the discipline, even discipline based on poor performance, was merely a pretext for the employee’s legally protected use of marijuana. Employers levying such discipline could expect prompt discrimination lawsuits.

Also, Proposition 19 would not have only affected current employees. Denial of employment to a marijuana-using job applicant would also be prohibited, raising the issue of whether employers have a right to conduct pre-employment drug screening for use of marijuana.

Luckily for employers, this increase in litigation pertaining to employee marijuana use will have to wait for another day. California voters have spoken, and thus California employers can breathe a sigh of relief. At least for now.

Treading carefully around non-compete agreements

As outlined previously in this series, employee non-competition agreements in California are generally unenforceable and against public policy under Business and Professions Code section 16600. Nevertheless, employers (especially out-of-state employers) frequently include such provisions in employment contracts. Such employers usually apply the following rationale: “it can't hurt" to have them as a deterrent and a potential source of leverage.

The result of these provisions is usually a strongly-worded “cease and desist” letter from a previous employer to a new employer. What employers may not know is that such letters can carry certain risks for the employer seeking to enforce the non-compete provision, such as a claim for intentional interference with contract. However, a recent Court of Appeal decision, Silguero v. Creteguard, held that the new employer may be liable if it responds to the threat by terminating the employee.

In reaching its decision, the court began with the theory that in California, "the interests of the employee in his own mobility and betterment are deemed paramount to the competitive business interests of the employers." Based on this strong public policy the Court determined that any explicit no-hire agreement between the two companies would have been illegal and unenforceable. The Court further concluded that terminating Silguero "out of respect for" the non-compete agreement with his prior employer was merely achieving the same result in an indirect manner. As a result, the Court found that if Silguero could prove his allegations, his new employer would be liable for the tort of Wrongful Termination in Violation of Public Policy.

What should you do if you receive an aggressive cease-and-desist letter from a prior employer seeking to enforce a non-competition agreement? Do not automatically terminate a new employee in such situations. First, the underlying agreement is almost certainly unenforceable anyway. Second, you could face a wrongful termination claim if you do.

A little tip on Tip Pooling

In certain industries and occupations, tips are incredibly important to employees. Some business incorporate tip pools, where employees are required to contribute a certain portion of their tips into a tip pool that is distributed among various employees. In a recent California Supreme Court case, Lu v. Hawaiian Gardens Casino, the plaintiff argued that the Casino’s tip pooling requirement violated Labor Code section 351, which states that the tips are the property of the employee for whom they are left.

The California Superior court held that Labor Code section 351 did not provide private litigants a direct right to sue for the alleged taking of their tips by their employer. The Court looked at the express language of the statute and the legislative history in reaching its decision. The Court noted that in certain circumstances, an employee could pursue a civil tort claim for conversion, and that the Legislature could change the Labor Code to allow a private right of action.

Finally, the Court was clear that its ruling was limited solely to the issue of whether a private right of action exists for employees under Labor Code section 351. The Court did not give an opinion on whether tip pooling itself is lawful, nor did it give any parameters for tip pooling plans. As such, the Lu opinion should not be construed as to eliminating the ability of employees to sue for violations of tip pooling plans. Employees could still bring a claim under California’s conversion or unfair competition laws. If your business incorporates tip pooling, be sure that the process is handled fairly and administered accurately. Also, be on the lookout for further clarification from the courts on tip pooling in the near future.

The Curse of the Blackberry

Blackberries and take-home laptops are all too common in the workplace today. Studies have shown that 50% of workplace email users check work-related email on the weekends; 34% say they check email on vacation. Many employers expect and even require their employees to read and respond to work-related emails when not at work. Problem arise when these policies are applied to hourly employees – salaried employees are generally expected work as long as the job requires.

There are of course two schools of thought on the issue. Employees feel like employers are getting a free ride by not paying for this off-hour activity. Employers respond by arguing that employees cannot be expected to be paid around-the-clock, 24 hours a day, simply because they have a cell phone.

Regardless of the viewpoint, the problem appears to be getting worse. In today’s job market, employers require fewer employees to do more, and attempt to squeeze maximum productivity from a minimum number of workers. Also, workers remain less likely to complain about after-hours work so they can keep their hard-to-come-by jobs.

That hasn’t stopped some workers from challenging the practice in the courts. Recent lawsuits against T-Mobile and CB Richard Ellis Group involve legal claims that hourly workers should be paid for time spent responding to work emails during off hours. The outcome of these cases will provide much needed guidance for employers and employees alike. This issue has shown that the wage and hour laws are getting behind the times – thus, it might be time for the Legislature to get involved to clarify the issue. Because, as we all know, the Blackberries aren’t going anywhere.

Getting Meal and Rest Breaks Right

Virtually all employers understand that their employees are entitled to breaks throughout the day. However, California’s regulations regarding meal and rest breaks are more involved than would appear. Penalties can be stiff for violations of these rules, so it behooves all employers to understand them.

Employers in California must provide non-exempt employees rest breaks of at least 10 minutes for each four hours worked. An employer must also provide a meal break of at least one half-hour for every work period more than five hours. During the meal break the employee must be relieved of duty and free to leave the premises. A second meal break is required if the employee’s work day is longer than 10 hours. Yet if an employee’s shift is six hours or less, the employee can choose to forego the meal break.

California Labor Code section 226.7 provides that if an employer fails to provide employees with these meal and rest breaks, the employee is owed “one hour of pay” for each missed break.

With respect to the penalty, rest breaks and meal breaks are different. With rest breaks, the employer is required to authorize and permit all employees to take the rest periods. An employer is not required to pay for the missed rest break if the employee, who was truly allowed and authorized to take the rest break, freely chooses to forgo it. Meal breaks are different, however. The employer has an affirmative obligation to ensure that workers are actually relieved of all duty during lunch breaks. Thus, it is the employer’s duty to allow employees to take rest breaks, and to ensure that employees take meal breaks.