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Press Release - Evans v McKendry
read moreCalifornia’s New “Workplace Violence Prevention Program” Law and Its Implications
California has long been at the forefront of enacting progressive legislation, especially when it comes to labor and workplace safety. One of the latest additions to this repertoire is Senate Bill 553 (SB553), aimed at preventing workplace violence. While the intentions behind this law are laudable, there are a number of potential drawbacks and costs associated with its implementation. SB553, recently signed into law by Governor Newsom, is designed to enhance workplace safety by requiring employers to establish comprehensive workplace violence prevention programs. The law mandates various training requirements, risk assessments, and reporting mechanisms to mitigate the risk of violence in the workplace. California employers must design and implement workplace violence prevention plans (“WVPP”) by July 1, 2024. On the surface, this seems like a commendable effort to protect employees. However, the legislation will undoubtedly prove to be a costly drag on businesses with uncertain, or at least unproven, benefits. 1. Compliance Burden One of the primary criticisms of SB553 is the substantial compliance burden it places on businesses, particularly smaller ones. Implementing comprehensive prevention programs, conducting risk assessments, and providing training can be costly and time-consuming. Smaller businesses with limited resources may find it challenging to meet these requirements, potentially diverting valuable time and money from other critical aspects of their operations. 2. One-Size-Fits-All Approach SB553 adopts a one-size-fits-all approach, which may not be suitable for all businesses. The law does not consider variations in industry, company size, or geographical location. What works for a large tech company in Silicon Valley may not be feasible for a small retail store in a rural area. This rigid approach could lead to inefficiencies and hinder businesses’ ability to tailor violence prevention measures to their specific needs. 3. Potential for Overreporting The law requires employers to report workplace violence incidents to the Division of Occupational Safety and Health (DOSH). While transparency is vital, the reporting requirements may lead to overreporting of minor incidents. This could overwhelm DOSH with unnecessary paperwork and distract from addressing more severe cases of workplace violence. 4. Ambiguity in Definitions The law’s definitions of workplace violence and appropriate preventive measures are somewhat vague. The lack of clear guidance could lead to confusion among employers, potentially resulting in misinterpretations and ineffective prevention strategies. Without clear and precise definitions, businesses may struggle to comply adequately with the law. While the intentions behind California’s SB553, the Workplace Violence Prevention Program law, are undoubtedly noble, there are legitimate concerns regarding its implementation. The compliance burden, one-size-fits-all approach, potential for overreporting, unintended consequences, and ambiguity in definitions all raise valid questions about the law’s effectiveness and impact on businesses. If you need any assistance with employment policies, the NavBat team is here to...
read moreMandatory Paid Sick Leave for Employees Set to Increase on January 1, 2024
Effective as of January 1, 2024, California employers will be required to provide their workers with additional paid sick leave on a statewide basis. Currently, state law requires that each employee be provided with a means of accruing at least 24 hours or 3 days of paid sick leave each year. This can be accomplished by frontloading the mandatory minimum number of hours in each employee’s sick leave bank on an annual basis, or allowing each employee to accrue sick leave at a rate of at least 1 hour for every 30 hours worked. The amount of unused paid sick leave that employees are able to accrue at any one time can be capped at 48 hours or 6 days. At the state level, employers are authorized to cap the usage of paid sick leave to 24 hours or 3 days per year. Local ordinances increased or altered these requirements in certain jurisdictions, but the statewide requirements set the floor for all paid sick leave requirements. At the beginning of 2024, on a statewide level the amount of annual paid sick leave to which each employee is entitled will increase to at least 40 hours or 5 days of paid sick leave. Likewise, the amount of total paid sick leave that an employee must be allowed to accrue will increase from 48 hours or 6 days to a minimum of 80 hours or 10 days. Employers can still cap the amount of paid sick leave used by an employee on a yearly basis, but the annual cap will increase from 24 hours or 3 days to 40 hours or 5 days. Employers who do not front load the minimum 40 hours of paid sick leave into each employee’s sick leave bank each year or use the “1 hour for every 30 hours worked” accrual method will be required to ensure that their method for providing the required paid sick leave provides each worker with at least 24 hours or 3 days of paid sick leave after 120 days of work and at least 40 hours or 5 days of paid sick leave after 200 days of work. Depending on the accrual method selected, accrued but unused sick leave may need to be carried over from year to year, but given that employers can cap the amount of accrued sick leave used by employees in one year there appears to be little practical value in restricting carry over from year to year. This is particularly so given that some local ordinances have different carry-over requirements, and that under both the current law and new amendments thereto employees do not have to be paid out any accrued but unused paid sick leave at termination of their employment. Employees who leave the job and then come back are still entitled to have their accrued but unused sick leave reinstated under certain conditions. Accrued sick leave will still need to be tracked on employee paystubs or separate writings distributed with paystubs. Paid sick leave that is utilized by employees will need to be paid to them no later than the payday for the pay period immediately following the pay period in which the paid sick leave was used. Many of the updated requirements which will be kicking in on January 1, 2024 mirror...
read moreEmployees Maintain PAGA Standing Even After Individual Claims are Submitted to Arbitration
In the latest development in what seems like a never-ending battle between employers’ efforts to limit their employees’ potential legal claims to individual claims only and employees’ efforts to ensure that they can bring representative or class claims against their employers, the California Supreme Court has determined that employees continue to maintain standing to have representative (or group wide) Private Attorneys General Act (“PAGA”) claims heard in court even where the employee’s individual claims are subject to valid arbitration provisions. Larger employers (or those more likely to be subject to class actions by employees) have long sought to curb employees’ ability to bring class action lawsuits (e.g., claims for failure to pay overtime, failure to provide meal and rest breaks) through the use of arbitration provisions with their employees which limit or eliminate the employee’s ability to raise such claims as class action lawsuits, thus requiring employees to bring these claims on an individual basis in arbitration rather than in court. While unpleasant to deal with on an individual basis, such claims are far less likely to cause financial ruin for an employer and can be dealt with one-by-one. Plaintiffs’ lawyers have sidestepped this strategy by asserting claims under PAGA in addition to individual claims in their lawsuits, as California courts have ruled fairly consistently that PAGA claims are not subject to arbitration even if an employee’s individual claims are required to go to arbitration on an individual basis. The United States Supreme Court made a 2022 ruling which seemed to indicate that a properly-worded arbitration agreement could eliminate this plaintiff-side strategy, stating in its Viking River Cruises v. Moriana decision that an employee’s individual PAGA claims could indeed be sent to arbitration along with other employment-based claims, and that once such individual PAGA claims were sent to arbitration the employee would have no standing to pursue representative PAGA claims in court. However, the California Supreme Court determined in Adolph v. Uber Technologies, Inc. that the US Supreme Court’s second point- that an individual employee loses standing to assert representative PAGA claims in court where their individual PAGA claims are subject to valid arbitration provisions- was not binding in California and was not the law of the land for California employers. Rather, the Court ruled that employees do maintain standing to have their representative PAGA claims heard even if their individual claims are sent to arbitration. This puts California employers on precarious footing with respect to arbitration agreements with employees in general, and with respect to legal strategies available to avoid and settle employment claims asserted by their employers. In the cat-and-mouse game being played between employers and employees, the California Supreme Court seems to have closed a door on what was otherwise a promising strategy for employers backed by a US Supreme Court ruling. Please contact NavBat to address issues with employment contracts with employees, and to talk over strategies for avoiding or limiting exposure to representative actions by employees or...
read moreEmployers Have a Duty to Protect Their Employees From Cybertheft
Everything these days is online, it seems. So it is not too surprising that a court recently ruled that an employer has a duty to protect its employees from cybertheft. That is precisely what the U.S. Court of Appeals for the Eleventh Circuit ruled in Ramirez v. The Paradies Shops, LLC. In that case, a Carlos Ramirez, on behalf of himself and a class of similarly-situated current and former employees, sued his former employer (a large company operating hundreds of retail shops in airports, hotels, and other locations), claiming that the employer was negligent in failing to protect employees’ personally identifiable information (“PII”) from a ransomware attack. In particular, the former employee argued that the company did not sufficiently protect the PII from cyber-attack and breached its duty to the employees by maintaining employee PII, including Social Security numbers, on an unencrypted, internet-accessible drive. While the court applied Georgia law, the legal principles applied are similar to other states, including California. The Eleventh Circuit found that the company required its employees to provide PII as a condition of employment and “employers are typically expected to protect their employees from foreseeable dangers related to their employment.” Given the company’s size and sophistication as well as the amount of data at risk (“extensive database of prior employees’ PII”), it was foreseeable that it would be the target of a cyber-attack and that it had a duty to take reasonable steps to protect its employees’ PII. For employers in California (where employment laws are even more stringent), the message is clear: take appropriate measures to protect employees’ PII. The level of protection and the amount of concomitant investment depends on a number of factors including the size of the company and the nature of the operations. Still, being proactive is key. If you are a California employer and have questions, contact the attorneys at Navigato & Battin, LLP for...
read moreSupreme Court Ruling Is All Bite, No Bark for Prospective Infringers
In a highly publicized case, the Supreme Court of the United States ruled in favor of Jack Daniels and against a company that marketed and sold a spoof dog chew toy. The toy was shaped like a Jack Daniels’ whiskey bottle. It used similar coloring and stylized labeling as the Jack Daniels’ bottle. Finally, it contained other similarities to the well-known Jack Daniels’ whiskey bottle, including the following labeling: “Bad Spaniels,” “The Old No. 2,” and “on your Tennessee Carpet.” Anyone who has enjoyed a few Jack and Cokes, knows these are plays on words, mimicking the phrases found on a Jack Daniels’ bottle. Jack Daniels asked the company – VIP Products LLC (“VIP”) – to stop selling the dog toys, claiming that the toys unfairly infringed on their famous trademarked whiskey bottle. VIP refused and filed a preemptive lawsuit attempting to establish that its dog toy did not infringe Jack Daniel’s trademark. The Ninth Circuit Court of Appeal agreed with VIP and ruled in its favor. The Supreme Court of the United States, however, reversed the decision. In reaching this conclusion, the Supreme Court rejected VIP’s argument that the dog toy was protected by the First Amendment because the toy represented an expressive work or parody. Because the dog toy did not qualify for First Amendment protection, the issue of whether the dog toy infringed on Jack Daniel’s trademark must be analyzed under the standard likelihood-of-confusion analysis that applies to typical trademark infringement claims. The Supreme Court’s ruling is welcome news for trademark owners. It will make it easier for brand owners to successfully “sic” or “unleash” their lawyers on infringers. If you need to register, maintain or protect your brand, contact the attorneys at Navigato &...
read more“I’m Afraid I Can’t Do That, Dave” and Other Lessons from Mata v. Avianca Airlines
The chatbots are coming! The chatbots are coming! And, apparently, they want to practice law. A New York attorney recently discovered the significant risk of relying on ChatGPT to do one’s legal research. In the case, the plaintiff, Robert Mata, claimed his knee was injured when it was struck by a serving cart during a flight, and he sued the airline, Avianca Airlines. Avianca’s attorneys filed a motion to throw out the case, arguing the statute of limitations had expired. In response, Mata’s attorney, Steven Schwartz, submitted a 10-page brief, chock full of legal citations as to why the airlines’ motion should be denied. Unfortunately, at least six of the cases were bogus – completely fabricated. When Avianca’s lawyers pointed out that they could not find any of those cases, Schwartz admitted that he had used ChatGPT to perform his legal research. Introduced in November 2022, ChatGPT is an artificial intelligence chatbot that uses natural language processing to create humanlike conversational dialogue. In response to a user’s queries, the program can answer questions and compose various written content, including articles, essays, and – at least Schwartz thought – legal briefs. In a recent hearing on possible sanctions against Schwartz and another lawyer, Schwartz apologized to the court, conceding he had “failed miserably” at vetting the authorities which the bot provided. He told an angry U.S. District Judge P. Kevin Castel that he was “operating under a misconception … that this website was obtaining these cases from some source I did not have access to.” At the very least, can you trust ChatGPT to tell you if it is making stuff up? Apparently not. In a copy of the exchange submitted to the judge, Schwartz asked ChatGPT: ‘Is varghese a real case’ and ‘Are the other cases you provided fake.’ The bot replied: ‘No, the other cases I provided are real and can be found in reputable legal databases.’ The takeaway for lawyers is clear: do not rely on ChatGPT for your legal research. More broadly, the case underscores the fact that the ChatGPT platform is still limited and unreliable. Thus, anyone doing online research which they intend to use in business or academics should not blindly quote from or rely on the results of a chatbot query – or a Google search for that matter. Verify your sources! The judge has not yet ruled on whether Schwartz will be sanctioned. “I’m Afraid I Can’t Do That...
read moreEmployers: Where’s Your Email Monitoring Policy?!?
A recent California appellate court case reinforces the need for employers to have a clear and enforceable policy regarding the ability to review employees’ work emails. In Militello v. VFARM 1509 [1], the plaintiff, Shauneen Militello, sued several fellow co-owners of a cannabis manufacturing and distribution company. One of the defendants, Ann Lawrence, asked the court to “disqualify” (remove from the case) Militello’s attorney, arguing that Militello had improperly obtained private emails between Lawrence and her husband that were sent on the company’s email network, which Militello then provided to her attorney. Her attorney, in turn, attempted to use the “private” emails in the litigation in violation of the spousal communications privilege (the privilege against disclosure of private communications between spouses). The trial court disqualified Militello’s attorney and the Court of Appeal agreed. The Court of Appeal ruled that private emails sent on a company computer network could not be used against the user where the user had a “reasonable expectation of privacy” with respect to personal emails sent over the company network. Importantly, the court noted that there was “no evidence [the company] had a policy of monitoring individual email accounts—there was no [] company handbook with a policy prohibiting [employee] from using her [company] email account for personal communications or indicating her account would be monitored to ensure compliance with that restriction—let alone that [employee] had agreed to such a policy.” This latest case underscores the need for employers to have a clear, written policy, countersigned or otherwise acknowledged by the employees, concerning electronic asset usage. At a minimum, the policy should state that the employer can monitor employees’ email communications and all activity on work computers or devices. The policy should also indicate that the employees have no reasonable expectation of privacy in their email communications or other digital/online activities while using company email, computers or other devices. This is yet another cautionary tale for California employers but one which is fairly easy to address. Employers who have questions about this recent decision or employment laws in general should contact Navigato & Battin. [1] Militello v. VFARM 1509 (2023) 89 Cal.App.5th 602 [306 Cal.Rptr.3d...
read moreCommercial Lease Force Majeure Decisions Continue to Disappoint Tenants
Force majeure provisions in commercial leases generally allow one or both parties to the lease to delay or wholly excuse their performance of certain lease obligations in the event of unforeseen circumstances (often defined to include “acts of God,” fires, natural disasters, war, and governmental action, among other things). Prior to March 2020, these provisions were often overlooked in lease reviews and negotiations as more-or-less boilerplate and unimportant. Since COVID-19 and the slew of government shutdowns, occupancy restrictions, lockdowns, and masking requirements that came along with it, force majeure provisions have been a major point of contention between tenants seeking to avoid paying rent during shutdown periods and landlords seeking to collect it. For the most part, courts have been relatively unsympathetic to tenants who have attempted to utilize their commercial leases’ force majeure provisions to avoid paying rent otherwise due to their landlords. A recent case, West Pueblo Partners, LLC v. Stone Brewing Co., LLC, is no exception. In West Pueblo, Stone Brewing entered into a long-term lease for a space which was to be operated as a restaurant and brewery, taking possession of the space in January 2018. From March 2020 through March 2021, Stone Brewing was required to comply with government shutdown orders and other rules, which virtually eliminated its ability to serve dine-in patrons. This was devastating to the location’s revenue, and Stone withheld rent from its landlord from December 2020 through March 2021. As you probably guessed from the title of the article, Stone Brewing relied on its lease’s force majeure provision to excuse its failure to pay. The force majeure clause in question read: “If either party is delayed, interrupted or prevented from performing any of its obligations under this Lease, and such delay, interruption or prevention is due to fire, act of God, governmental act or failure to act…or any cause outside the reasonable control of that Party, then the time for performance of the affected obligations of the Party shall be extended for a period equivalent to the period of such delay, interruption or prevention.” COVID-19 and the associated governmental shutdown orders seem to fit perfectly into this definition of a force majeure event excusing Stone Brewing’s payment of rent, but the Court read the provision narrowly in ruling against Stone Brewing’s arguments. Per the Court, Stone Brewing was not actually delayed, interrupted, or prevented from paying rent to its landlord. True, it may have been prevented from serving customers or generating revenue during some or all of the government shutdown period, but this did not literally prevent Stone Brewing from paying rent. Rather, it simply made the payment of rent and continuing operations more expensive. The Court also noted that Stone Brewing did in fact have the money to pay rent on the location even though revenue took a major hit due to COVID restrictions. Courts have relied on these narrow interpretations in ruling against similar arguments made by tenants suffering from COVID-19-related hardships, driving home the point that the express language chosen for these lease terms matters a great deal. Commercial leases are most often presented as extraordinarily landlord-friendly documents, but reasonable concessions are not impossible to attain. Your commercial space may be one of the most significant investments made in your business, and it is not uncommon for...
read moreGood Faith Defense for Wage Claims
As many employers are aware, California has some of the most employee-friendly laws in the country. Two such employee-friendly laws are Labor Code sections 203 and 226. Section 203 imposes a waiting time penalty on an employer who willfully fails to pay wages owed to a terminated employee on the date of termination. The penalty for violating Section 203 is the payment of daily wages to the employee for up to thirty days following the date of termination, unless the wages owed to the now ex-employee are paid sooner. Section 226 imposes a penalty on an employer who knowingly and intentionally fails to provide accurate wage statements to an employee. The penalty for violating Section 226 is the greater of all actual damages or $50 for the initial pay period in which a violation occurs and $100 per employee for each violation in a subsequent pay period. The penalty is not to exceed an aggregate penalty of $4,000. A recent California Court of Appeal decision[1] considered whether an employer’s good faith belief that no wages were owed would preclude a finding that the employer “willfully” or “knowingly and intentionally” failed to comply with the statutory requirements of Labor Code Sections 203 and 226. The Court of Appeal ruled that an employer’s good faith belief that no wages were owed to an employee prevented the employer from being penalized under Sections 203 and 226. The plaintiff in Naranjo argued that the good faith defense applied only in labor commissioner hearings and not in lawsuits. The Court disagreed with the plaintiff’s argument and explained that even though the defendant’s defenses to the wage claims ultimately failed, such defenses were reasonable and were not made in bad faith. The Court of Appeal explained that the “knowing and intentional” requirement cannot be satisfied by merely showing the employer’s inadequate wage statement was not an inadvertent error or a clerical mistake. Rather, the Court held that the “knowing and intentional” standard is similar to the “willful” standard under Section 203 and requires that the plaintiff show something more than an inadvertent error or mistake. The Naranjo decision is a win for employers and provides an avenue for employers to avoid additional penalties under Labor Code Sections 203 and 226 if they are found to have violated other wage laws. While this decision is helpful, employers should still be careful to ensure that they are not violating other wage laws by failing to pay minimum wage or overtime wages, among other things. Employers who have questions about this recent decision or employment laws in general should contact Navigato & Battin. [1] Naranjo v. Spectrum Security Services, Inc. (Feb. 27, 2023 Second District, Div. Four No....
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