Trader Joe’s Can’t Trade Liability

 By: Rebecca Schach

This week the California Labor Commissioner’s Office hit Trader Joe’s and Grocery Outlet with fines in excess of $825,000 each for minimum wage and overtime violations. Both Trader Joe’s and Grocery Outlet obtain labor from an Anaheim-based subcontractor Inventory Professional Inc. Through agency investigation, the Labor Commissioner’s Office found unpaid wages for approximately 65 hours during a three-year period and violations of child labor laws. The Labor Commissioner’s Office held the companies responsible per California’s client-employer statute, Labor Code §2810.3, in effect since 2015. In total, the Labor Commissioner’s Office issued citations for wage theft violations totaling $1.6 million. The Labor Commissioner's Office continues to use the client-employer statute to hold employers responsible for violations by labor contractors.

DOL & OFCCP Hit Grand Slams

By: Adrian Hoppes

Coming off of an exciting World Series game Wednesday, there are a couple other players in town you should be looking into for next season. This week the Department of Labor’s Wage and Hour Division (“DOL”) announced it had a record year in collecting from business owners who allegedly shorted employees on overtime, minimum wages and other compensation. A separate agency, the Office of Federal Contract Compliance Programs (“OFCCP”), is also doing a lap around the bases as it reported its own grand slam this year, breaking its own record for settling job discrimination suits involving race, gender and pay bias for government contractors.

Both agencies have come under fire for being accused of suing companies rather than helping them understand the complex and ever-changing rules and regulations. Both agencies have increased outreach events to educate employers about their obligations. As technology advances, and more data is available, agencies are better able to identify where to focus their time and energy. Employers should consider being as proactive as possible in evaluating their workforce policies and practices to ensure they do not strike out if the DOL or OFCCP want to play ball.

In the late hours of Wednesday evening, a fast-moving wildfire tore across northeastern Sonoma County. The “Kincade” Fire has consumed more than 16,000 acres and is not yet contained. Evacuation has been ordered for the city of Geyserville and surrounding communities. An interactive Incident Map is available here.

As our nearby communities grapple with displacement and disruption, we remind employers that high temperatures trigger the obligation to comply with California Heat Illness Prevention and Wildfire Smoke Protection for those in close proximity to an active wildfire.

SB 707 passed into law this week and employers will need to check the calendar carefully or risk being fined or unable to enforce their binding arbitration agreements. Employers are responsible for paying certain fees unique to arbitration. SB 707 provides that an employer who, at the start of an arbitration, fails to pay certain initiation fees within 30 days after the due date, or fails to pay required fees and cost during the arbitration will: 1) be in material breach of the arbitration agreement, 2) be in default of the arbitration, and 3) waive its right to compel arbitration. In response, an employee otherwise subject to arbitration will have the following options: 1) withdraw from arbitration and proceed with his or her claims in an appropriate court, or 2) continue with the arbitration and require the employer to pay for reasonable attorneys’ fees and costs for the arbitration.  If the employee opts to proceed in court, rather than remain in arbitration, then the time spent in arbitration will not affect the statute of limitations on the employee’s underlying claims.  

On October 10, 2019, Governor Gavin Newsom signed a law increasing the time employees/former employees have to file claims with the California Department of Fair Employment and Housing (the “DFEH”) from 1 year to 3 years. (Former Governor Jerry Brown vetoed a similar bill last year saying the proposed change in the law would unnecessarily drag out the process of resolving issues in the workplace.)  Prior to the enactment of AB 9, employees/former employees had 1 year from the date of an alleged unlawful act to file a claim with the DFEH for purported violations of the California Government Code.  The employees/former employees then had an additional 1 year from the DFEH’s issuance of a “Right to Sue” letter to pursue a civil lawsuit.  While AB 9 does not change the time period for bringing a court action after a “Right to Sue” letter has been received, it does give employees/former employees an additional 2 years to initiate the administrative complaint process.  As a result, employers can now be forced to defend against civil claims for discrimination, harassment, and retaliation that are not filed until 4 (or sometimes more) years after the alleged unlawful activity took place.  While the change in the law will not revive claims that are already time barred, it will impact claims based on purported events which took place within the 12 month period prior to the effective date of the new law.  The California Chamber of Commerce previously included AB 9 on its list of “job killer” bills that will likely deter business in California and increase litigation and related costs for employers.

    Going into the weekend, the Governor’s desk is stacked with bills, bills, bills. Employers have seen some important victories this week but not all bills passed and presented to the Governor for signature have been favorable and employers are (money) smart to revisit our E-Blast postings again next week for more updates.

Bills Stacked for Review

 By: Adrian Hoppes

Governor Newsom has until Sunday October 13, 2019 to take action on several pending bills on his desk. Below are just a few that ideally will be vetoed:

  • AB 589: Creates new requirements for employers to provide a Worker’s Bill of Rights document, in relation to passports or other immigration documents, to all employees, have them sign it, provide a copy of the signed document to the employee, and post the document.
  • AB 1478: Rather than requiring employees to first file a complaint with the Labor Commissioner, this bill would allow employees to immediately file a lawsuit involving claims by employees who take time off for jury duty and for legal proceedings relating to domestic violence and other crimes.
  • SB 142: Amends current law significantly regarding lactation accommodations and would deem denial or inability to provide a lactation break or appropriate lactation space the same as a failure to provide a rest period and a $100 civil penalty per violation. A similar bill was vetoed in 2018.

Bills Stamped with Approval

By: Mark Kruthers and Manuel Ignacio

  • SB 688: Empowers the Labor Commissioner to cite an employer who pays a wage that is less than the amount set by contract, even if that amount is higher than the legal minimum wage, and to recover the underpaid amount owed to the employee. Employers are encouraged to contact the experts at Dowling Aaron Incorporated for wage and hour compliance questions.
  • AB 9: Extends the filing period for claims with the California Department of Fair Employment and Housing (the “DFEH”) from the current 1 year deadline to 3 years following the alleged unlawful conduct. While the change in the law will not revive claims that are already time barred, employers now face the daunting future to defend against civil claims for discrimination, harassment, and retaliation that are not filed until years after the alleged unlawful activity took place. Employers are encouraged to revisit their document retention policies.

Bills Sent to the Shredder

  • SB 1: This bill would have rolled-back negotiated progress in the areas of California’s water supply and wildlife management.

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