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MAY 2002 I. LEGISLATIVE/REGULATORY
UPDATE Federal Ergonomics Program Not Expected to Affect California Standard The Occupational Safety and Health Administration
recently announced a four point program for reducing repetitive motion
injuries. This program is an alternative to mandatory regulations which
were adopted by OSHA in November 2000, but repealed by Congress in March According to OSHA, the plan would combine industry and task-specific guidelines, federal compliance assistance, "tough" enforcement, and ergonomics research. The guidelines would be voluntary, and the enforcement approach would be based on compliance with the "general duty clause" in the federal Occupational Safety and Health Act rather than a specific regulation. Because it is not a regulation, OSHA's program is not expected to require any changes in California's ergonomic standard. Under federal law, states such as California that operate their own workplace safety and health programs must ensure that their regulations are at least as effective as OSHA's. States are not required, however, to follow non-regulatory federal initiatives. It should be noted that California legislation
has been Retroactive UI Bill Signed by Governor Davis A bill authorizing a retroactive unemployment
insurance (UI) benefit increase was recently signed by Governor Davis.
SBX3 2 (Alarcon) accelerates an employer UI tax increase by making the
latest UI benefit increase retroactive to September 11, 2001. The most
recent benefit increase is the result of the enactment of SB 40 (Alarcon).
Along with increasing benefits, the bill also increased employer UI taxes:
employers are now slated to pay an additional $800 million in UI taxes
in 2003 and $1.4 billion more in 2004. New California Rule Regarding Travel Time Compensation for Non-Exempt Employees Recently, the Division of Labor Standards Enforcement issued an opinion letter regarding whether time spent traveling on out-of-town business trips constitutes "hours worked," and must be compensated. The DLSE concluded that whenever an employer requires a non-exempt employee to travel out-of-town, all of the time spent traveling constitutes compensable "hours worked." The DLSE's letter was in response to an employee's question as to whether his company had violated California law by refusing to consider "time spent traveling as a passenger on a plane, train, bus, car or taxicab to a business destination outside normal business hours" as hours worked. The DLSE found that the company's travel time policy violated California law and noted that any time spent traveling out-of-town where attendance is "compelled" by the employer constitutes "hours worked." The DLSE then defined "compelled" travel time to include all of the following: (i) time spent driving, or as a passenger on an airplane, train, bus, taxi cab or car, or other mode of transport, in traveling to and from an out-of-town event; and (ii) time spent waiting to purchase a ticket, check baggage, or to get on board. Under federal law, an employer is not obligated to pay for hours spent traveling outside of normal working hours, which includes "normal working hours" on non-working days. However, according to the DLSE, California law does not make a distinction based on what time the travel occurs - if the employer requires it, the time must be paid. The DLSE did acknowledge that an employer may establish, in advance, a separate rate of pay for travel time, provided that it does not fall below the state minimum wage. Employers that require non-exempt employees to travel for out-of-town business should examine how they are compensating employees for travel time to insure that their policies do not violate California law. An employer can control travel costs by regulating when an employee travels and by establishing a separate rate of pay for travel time. II. JUDICIAL UPDATE Seniority Trumps Accommodation . . . Maybe The U.S. Supreme Court again limited the reach of the Americans with Disabilities Act in U.S. Airways v. Barnett. The ruling may have a significant effect on companies utilizing seniority systems. The case was brought by Robert Barnett, a U.S. Air employee (the "Employee"). The airline (the "Employer") had implemented a seniority system that determined employees' assignments, shifts, promotions, and transfers. After injuring his back, the Employee was moved from a cargo loading position to the mailroom. Two years later, when the mailroom position came up for bid under the seniority system, the Employee asked to stay in the position as a reasonable accommodation for his disability. The Employer refused, and the position was taken by a more senior employee, requiring the Employee to take a leave of absence. The Employee then sued under the ADA. The issue before the Court was: does a disabled employee's request for an accommodation trump an employer's seniority system? The Court held that the seniority system will prevail in most cases. The Court warned, however, that an employee may "present evidence of special circumstances that make 'reasonable' a seniority rule exception in the particular case." The lack of a clear rule from the high court will pose challenges for many employers. In most cases, an employer need not make exceptions to an established seniority system in order to accommodate a disabled employee. However, if the seniority system is new, the employer has made exceptions for others, or it appears that the employer changes the rules too frequently, the employer may be required to make exceptions for disabled employees as a reasonable accommodation. California employers should be aware that
it is uncertain how California courts will react to Barnett. Before the
Barnett decision, California interpreted the Fair Employment and Housing
Act to require preferential treatment in job assignments for disabled
employees. This interpretation was based on federal case law as it existed
before the Supreme Court's decision in Barnett. Only time will tell if
California will follow the Supreme Court's lead, or if - as it has done
in the past - it will opt to set a higher standard than federal law. Saved by Sav-On? Wage-and-hour class actions, in which hordes of employees sue for unpaid overtime, have spread through California like wildfire over the past few years. For many employers, the damages have been in the tens of millions of dollars. But a recent appellate court ruling in Los Angeles has raised speculation that the popular suit may have run its course. According to the unanimous decision in Sav-On Drug Stores v. Superior Court, a trial court erred in granting class certification to some 1,400 employees of the retail chain. The decision marked the first time a state appellate court has weighed in on the appropriateness of the class action format in wage-and-hour claims. The Sav-On plaintiffs' lawyers argued that the company's standardized policies and regulations meant that any assistant manager or operating manager could automatically be grouped together into a class. The court of appeal maintained that such companywide policies are not enough to justify a class. According to the court, individual issues
like a store's size, location, physical layout, and sales volume have
more of an impact on each manager's specific job duties than generic companywide
job descriptions. Court Limits Worker's Compensation Claims for Psychiatric Injury Recovery for psychiatric injuries under worker's compensation law is limited to injuries which can be more than 50 percent attributable to a physical industrial injury, according to a recent decision by a California appellate court. In the case, the court of appeal reversed the Workers' Compensation Appeals Board's interpretation of Section 3208.3(b)(1) of the California Labor Code. The WCAB had ruled that the employee's psychiatric injury was a "compensable consequence" of an industrial physical injury, but did not establish that the physical injury had been the predominant cause. Because the court found no previous appellate court decision on the issue, the court relied on the legislative history. The court said that the legislature's 1993 amendments to the workers' compensation law were intended to curb abuses by imposing more stringent standards on claims for psychiatric injury. The court said that ". . . a 'compensable consequence psychiatric injury'. . . is compensable if and only if it is more than half attributable to a physical industrial injury." Lockheed Martin v. Workers' Compensation Appeals Board and Virginia McCullough (2002) 96 Cal.App.4th 1237. In order to minimize exposure to psychiatric
or stress-related claims, employers should: maintain consistent and non-discriminatory
employment practices; document job performance and behavior problems and
resolve them with appropriate corrective action; and insist on prompt
reporting of all industrial injuries and the collection of all facts relevant
to the incident and its consequences. Court Says Employee May Sue for Physical Injury Under FEHA A California appellate court has approved a lawsuit regarding a disabled employee's physical workplace injury under the California Fair Employment and Housing Act. The case involved a disabled employee ("the Employee") at the California Department of Rehabilitation ("the Employer") who was refused modifications to her job to accommodate her physical disability. The Employee claimed that she suffered an industrial injury and alleged that it resulted from a failure to accommodate for her disability. The trial court dismissed the Employee's complaint, ruling she failed to properly state a claim. The appellate court overruled this decision, drawing a distinction between the pleading requirements of the Americans with Disabilities Act and the more liberal FEHA. The appellate court also examined the Employer's argument that the workers' compensation statute precludes the FEHA claim for physical injury. The court of appeal stated that the Employee's physical injury claim arose from the Employer's failure to accommodate her disability. The appellate court further held that the Employee should be permitted an attempt to prove whether her injury resulted from that failure, which would be an unfair employment practice under FEHA. Bagatti v. Dept. of Rehabilitation (2002) 97 Cal.App.4th 344. In order to protect against potential liability,
employers should: familiarize managers and supervisors with FEHA provisions
regarding workplace accommodations for employees with disabilities; carefully
consider requests by employees who seek changes in working conditions
because of disabilities; and examine the work areas used by all employees,
particularly employees with disabilities, for hazards that may cause injury.
Court Denies Employee Request to Remove Personal Information from Company Computer A recent California appellate court case offers employers guidance regarding the creation of policies governing use of business computers, e-mail systems, and Internet access. In the case, TBG Insurance Services Corporation (the "Employer") requested a court order requiring a former employee (the "Employee") to turn over a computer provided by the company for home use. The Employer had terminated the Employee's job for accessing pornographic Web sites on his computer at work. The Employer sought to discover whether the Employee used the home computer for similar purposes. The Employee agreed to return the computer but wanted first to delete personal information he and family members had placed on the hard drive which he claimed was subject to the California Constitution's right of privacy. The court rejected the Employee's claim. The Employee had signed an agreement to be bound by the company's computer use policy, which stated computers were provided for business purposes and not for personal use unless expressly approved. Company policy also prohibited computer use for obscene purposes and included a consent to company monitoring as needed. The court said the Employee could not have had any reasonable expectation of privacy. TBG Insurance Services Corporation v. Superior Court (2002) 96 Cal.App.4th 443. The court described the contents of an effective policy on e-mail and Internet usage as follows:
If you would like to discuss these or any
other employment law matters, please do not hesitate to contact any member
of Klinedinst's Employment Law
Department.
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