California Small Businesses Must Offer Retirement Savings Programs by June 30, 2022

Posted by on May 2, 2022 in Newsflash | 0 comments

Under California law, businesses with 5 to 50 California employees must offer retirement savings programs to their employees by June 30, 2022. The law allows employers to either offer their own retirement savings program, such as 401(k) or profit-sharing plan, or to enroll in the CalSavers Retirement Savings Program. Even if an employer already offers its own retirement savings program, it must still register as exempt with CalSavers to avoid being penalized. CalSavers was enacted in 2016 as a way to allow California employees to save for retirement by deducting money from their paychecks even if their employer did not offer a retirement savings program. CalSavers is an automatic enrollment individual retirement account (IRA) with no employer fees or fiduciary liability. Employers are not required to assist employees with CalSavers and are not responsible for answering questions about the program. Rather, the State Treasurer oversees the program and oversees private financial firms which are responsible for managing the invested funds. If an employer fails to either register as exempt or enroll in CalSavers, it faces potentially significant financial penalties. Employers who fail to register within 90 days of the June 30, 2022 deadline can be penalized at a rate of $250 per employee. If employers fail to register within 180 days, the penalty increases to $500 per employee. For purposes of this law, the number of employees is calculated using the average number of employees an employer had in the previous calendar year. While the upcoming deadline is for small businesses, larger employers were previously required to register. Employers with over 100 employees were required to register by September 30, 2020, while employers with over 50 employees had a deadline of June 30, 2021. Larger employers who have not previously registered should do so immediately, so as to avoid any additional...

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Board of Directors Diversity Requirement Declared Unconstitutional

Posted by on May 2, 2022 in Newsflash | 0 comments

In September 2020, California Assembly Bill 979 was signed by Governor Newsom. The bill required publicly-held corporations (those with publicly traded shares on a stock exchange) to diversify their boards of directors. Specifically, such corporations were required to appoint directors from “underrepresented” communities to their boards. The bill defined “underrepresented” communities as those self-identifying as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, Alaska Native, gay, lesbian, bisexual, or transgender. Had it been upheld, the bill would have required that a publicly-traded corporation with its principal executive offices in California, even if incorporated elsewhere, have at least one director from an underrepresented community on its board by the end of 2021. By the end of 2022, corporations with between four and nine directors would be required to have no less than two such directors on their boards while those with greater than nine directors would be required to have a minimum of three such directors. The bill was challenged not long after it was passed by three taxpayers who filed suit in Los Angeles Superior Court. The taxpayers sought to enjoin the California Secretary of State from “spending public funds on California’s race, ethnicity, sexual preference, and transgender quotas for boards of directors of publicly-traded corporations with their headquarters in California.” The lawsuit also sought a judgment declaring the bill unconstitutional under the California Constitution. The taxpayers challenged the bill as unconstitutional on the basis that requiring a corporation to appoint a specific number of directors based on their race, ethnicity, sexual orientation, or transgender status is a violation of the equal protection clause of the California Constitution. On April 1, 2022, the Superior Court issued a ruling in favor of the taxpayers. Although the ruling did not discuss the Court’s reasoning, the Court declared the bill unconstitutional and enjoined the State from using taxpayer funds to enforce the bill. Thus, the State may not enforce the bill unless the State successfully appeals the ruling. Even if the bill is declared constitutional, the State may still be enjoined from using taxpayer funds to enforce it pending further...

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Understanding the California Privacy Rights Act

Posted by on Apr 1, 2022 in Newsflash | 0 comments

The California Privacy Rights Act (“CPRA”) took effect in December 2020, but the major provisions will formally take effect on January 1, 2023. The CPRA may be confused with the CCPA, the California Consumer Privacy Act, because both acts create consumer privacy rights regarding the collection and sale of personal information. While the two acts serve a similar purpose, the CPRA significantly amends and expands the CCPA. When the CPRA was enacted in December 2020, it included exemptions for human resources information and business to business (“B2B”) contact information. B2B information includes things such as the telephone number or address of another business. The major provisions of the CPRA which take effect in January end these two exemptions. When the CPRA takes further effect in January, it will include a 12-month lookback period. As a result, on January 1, businesses must declare in their privacy policies whether they have been selling or sharing employee information or B2B information. If a business has been selling or sharing such information, it must offer the ability to employees and businesses to opt out of the sharing of their information. Beginning in January, businesses must update service provider agreements to include such privacy information as required by the CPRA and offer broad access to both employees and B2B contacts. Businesses must also employ the ability to delete private information which is protected by the CPRA and the CCPA. The right to have personal information deleted is not absolute under the CPRA, as it allows employers to retain information which is reasonably necessary to maintain and manage current and past employee relationships. Further, the CPRA states that a business shall not retain a consumer’s personal information for longer than it is reasonably necessary to do so. The CPRA also provides two new “right to know” rights to employees. Currently, the “right to know” applies to consumers. First, employees have the right to a disclosure which explains how employers collect and handle employee information. Second, employees have the right to copies of specific pieces of personal information. All businesses and employers in California should be aware of the CPRA and what changes it will entail before the new provisions go into effect. This is especially true due to the 12-month lookback period. Businesses and employers should be prepared to update or enact privacy policies and compliance programs before the new provisions of the CPRA take effect so that they are not overwhelmed come January 1. In addition, businesses and employers should keep accurate records of how they use consumer, employee, and B2B information so that they are able to respond to inquiries regarding the use of such...

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California Court of Appeal Rules there is No Right to a Jury Trial for PAGA Claims

Posted by on Apr 1, 2022 in Newsflash | 0 comments

The California Labor Code Private Attorneys General Act (“PAGA”) allows aggrieved employees to sue their employer to recover civil penalties on behalf of themselves, other employees, and the State of California for various Labor Code violations. PAGA allows claims to be brought for violations of the Labor Code specifically listed in the PAGA statute, as well as any other violation of the Labor Code. PAGA was enacted because California state agencies were having difficulty enforcing violations of the Labor Code. In a recent case[1], the California Court of Appeal ruled that plaintiffs in PAGA cases do not have the right to a jury trial with respect to their PAGA-based claims. In California, the right to a jury trial is derived from either the statute under which a claim is brought or the state constitution. PAGA does not provide a right to a jury trial, so the court considered whether the state constitution provided plaintiffs with such right. The Court of Appeal determined that the constitution did not provide the right to a jury trial for PAGA claims for two main reasons. First, by allowing a plaintiff to bring claims on behalf of the State of California, PAGA acts as an administrative regulatory enforcement action. Enforcement actions which are brought by the State do not provide for a jury trial because they are administrative in nature. Per the Court’s decision, a PAGA plaintiff does not have the right to a jury trial because such right was unavailable to other state agencies. Thus, despite PAGA claims being brought by employees rather than state agencies, the Court found that there was no right to a jury trial. Second, PAGA grants courts broad discretion to determine the amount of penalties for violations of labor law. The courts’ discretion in determining these penalties is equitable in nature and the weighing of equitable factors is traditionally up to the court, rather than a jury. Due to the equitable nature of the court’s analysis, combined with the fact that the harm suffered by the plaintiff is not an issue, only the court has the right to determine such penalties. Employers should be aware of the Court’s decision, as well as PAGA as a whole, because the potential penalties employers face for violations of the Labor Code in California can be severe. PAGA provides employees with a great deal of power to assert claims against employers, including claims asserting violations of labor laws suffered by others.  However, the Court’s recent ruling makes clear that such claims will be heard by the Court rather than a jury, which is at least a small consolation for most employers. [1] LaFace v. Ralphs Grocery Co., 2022 WL 498847 (Cal. Ct. App. Feb. 18,...

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Fifth Circuit Rules Evidence from Wayback Machine is Inappropriate for Judicial Notice

Posted by on Mar 1, 2022 in Newsflash | 0 comments

Many people may not be aware of the Internet Archive or its nostalgic digital library, the “Wayback Machine.” The Wayback Machine is a service provided by the Internet Archive which allows users to visit and view archived versions of websites by simply entering the desired URL and selecting a date range. Internet Archive’s proclaimed mission to preserve the web’s electronic history may be noble, but there are also significant legal consequences for website owners and litigants seeking to authenticate a webpage containing facts necessary to support or defend a claim. For example, intellectual property owners can use the Wayback Machine to monitor potential infringers’ websites and potentially enforce their intellectual property rights. Website owners have limited options available to them for excluding their sites’ content from the Wayback Machine. The main evidentiary issues that arise when submitting archived screen shots into evidence relate to hearsay and authentication. Thus, to be admissible, such evidence must fall within a hearsay exception and must be authenticated. To satisfy the requirement of authentication, the proponent of any proffered evidence “must produce evidence sufficient to support a finding that the item is what the proponent claims it to be.” (Fed. R. Evidence 901(a).)             In a recent case[1] involving a dispute over terms of an online auction, the Fifth Circuit contemplated whether documents and/or other information obtained from the Wayback Machine are admissible as evidence and whether the district court abused its discretion by improperly taking judicial notice of the terms contained in such archived pages. The plaintiff in this case brought a breach of contract action in which there was a dispute relating to the terms of an online auction. The plaintiff contracted with an auction company to auction off a large housing module. The auction company hosted the auction on its website, but when auction participants clicked on the link to bid they were directed to Proxibid, a third-party website, where they could view the auction’s terms and conditions and place their bids. Among these terms was a declaration that bidders would be liable for only 20% of the bid price in the event of a breach of contract. Instead of using the website, defendant Davie Shoring, Inc. placed the winning bid of $177,500 via a telephone call with an employee of the auction company. After the auction concluded, Shoring refused to pay for the module when it proved difficult to remove from storage. Plaintiff sought recovery of the full winning bid, while Shoring argued that the auction’s terms and conditions limited available damages to 20% of the winning bid price. Defendant introduced the auction terms and conditions in two forms: (1) as an internet printout labeled “Exhibit 41;” and (2) as an archived webpage from the Wayback Machine. The district court granted Shoring’s request for judicial notice of the archived webpage under Fed. R. Evidence 201 and limited the damages to 20%. Plaintiff appealed, arguing that the district court’s granting of judicial notice was improper. The Fifth Circuit concluded that the district court erred in taking judicial notice of the auction’s terms and conditions because a private internet archive falls short of being a source whose accuracy cannot reasonably be questioned, as required by Fed. R. Evidence 201. The Court further explained that sister circuits have allowed district courts to rely...

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Employers Must Remember to Post Form 300A Beginning February 1

Posted by on Mar 1, 2022 in Newsflash | 0 comments

Cal/OSHA, in a recent news release, reminded employers of their obligation to post their 2021 annual summary of work-related injuries and illnesses. Beginning February 1, 2022, employers that are covered by Cal/OSHA’s record-keeping rule must post their Form 300A – Annual Summary of Work-Related Injuries and Illnesses in a visible and easily accessible area at every worksite. Form 300A must remain posted through April 30, 2022. Employers with more than 10 employees are subject to Cal/OSHA’s record-keeping rule and must keep a record of serious work-related injuries and illnesses throughout the year, including COVID-19 related illnesses.[1] If a work-related COVID-19 case meets one of the below criteria, covered employers must record the case on their 300, 300A, and 301 or equivalent forms. To be recordable, an illness must be work-related and result in one of the following: Death Days away from work Restricted work or transfer to another job Medical treatment beyond first aid Loss of consciousness A significant injury or illness diagnosed by a physician or other licensed health care professional Companies with no recordable work-related injuries or illnesses in 2021 must still complete and post the summary (Form 300A) with zeros on the total line. Form 300A must be certified by a company executive. Remember, employers are only required to post Form 300A, not the entire Form 300 log.  According to Cal/OSHA, posting the summary “helps ensure workers are aware of work-related injuries and illnesses that occurred the previous year. Current and former employees are entitled to a copy of the summary or the log upon request.” In addition to the mandated posting of Form 300A, certain employers are required to submit additional electronic reports, due by March 2, 2022. The following employers have this additional requirement: Employers with 250 or more employees, unless exempt under Cal. Code of Regulations Title 8, Section 14300.2. Employers with 20-249 employees in the specific industries listed in Appendix H of Cal/OSHA’s regulations regarding occupational injury and illness records. For more detailed guidance, Cal/Osha provides instructions and form templates for employers to complete both the log (Form 300) and annual summary (Form 300A) of work-related injuries and illnesses here: Brief Guide to Recordkeeping Requirements (ca.gov). [1] If your company had more than 10 employees at any time during the last calendar year, you must keep Cal/OSHA injury and illness records unless your establishment is classified as a partially exempt industry under Cal. Code of Regulations Title 8, Section 14300.2. (Cal. Code of Regulations Title 8, Section...

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Navigato & Battin Welcomes Sean Doucet

Posted by on Feb 2, 2022 in Newsflash | 0 comments

Navigato & Battin is pleased to announce the hiring of Sean Doucet as an associate attorney.  Sean is a native of Massachusetts.  He attended college at the University of New Hampshire where he earned a Bachelor of Science degree in business administration.  Sean attended law school at Northeastern University School Law.  While at Northeastern, Sean was a staff member, editor, and then senior staff member on the prestigious Northeastern Law Review.  In 2019, Sean received his Juris Doctor degree with a concentration in business and commercial law.  Sean is licensed to practice law in California and New York.  “We are excited and honored that Sean is joining the firm,” relayed founding partner Dan Navigato.  “We believe his undergraduate degree in business administration and focus on business law will make Sean a great fit at NavBat and an asset to our business clients.” In related news, Sunny Randhawa will be reducing his footprint at Navigato & Battin.  Sunny’s thriving family business requires more of his time and attention.  Sunny will be travelling internationally for much of February but will be available to continue to assist NavBat clients when needed.  “Sunny has some tremendous business opportunities on the horizon which we know will flourish with his increased involvement,” said partner Mike Battin.  “Even though Sunny will not be in the trenches full time moving forward, we are hopeful he will continue to be an integral part of the NavBat...

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New Requirement for Filing Statement of Information with the Secretary of State

Posted by on Feb 2, 2022 in Newsflash | 0 comments

Assembly Bill 3075 (“AB 3075”) was signed into law by Governor Newsom on September 30, 2020, to allow employees to enforce wage and hour judgments against not only the judgment debtor but also against any successor to the judgment debtor that takes over operations of an employer that failed to pay the judgment debts. The legislative history shows that one purpose of AB 3075 was to prevent business owner who violated the Labor Code form escaping liability by selling the business or dissolving the businesses only to form a new one. Consistent with this purpose, beginning on January 1, 2022, AB 3075 requires businesses to disclose on their statement of information filing with the Secretary of State whether any officer or any director, or, in the case of a limited liability company, any member or any manager, has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the violation of any wage order or provision of the Labor Code. The Secretary of State has implemented the appropriate form changes to the statement of information to include a question on labor judgments. All corporations and LLCs are now required to file a complete statement of information to answer the labor judgment question and therefore the “No Change” filings will be removed from the online options. According to the Secretary of State, once a complete statement is filed, the No Change option will be made available in their new system launching in March 2022. Businesses are not required to file a statement of information if the statement of information is not otherwise...

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CAL/OSHA Revises COVID-19 Prevention Emergency Temporary Standards

Posted by on Jan 6, 2022 in Newsflash | 0 comments

Effective January 14, 2022, the revised Cal/Osha COVID-19 Prevention Emergency Temporary Standards (“ETS”) will be updated to include important revisions to workplace rules related to an employee’s return to work after close contact with a COVID-19 positive individual. In addition to these revised requirements, employers must continue to follow public health orders on COVID-19. On December 13, 2021, the California Department of Public Health (“CDHP”) issued new guidelines requiring the use of face coverings by all employees when indoors, regardless of vaccination status. Employees who are exempted from wearing a face covering due to a medical or mental health condition or disability must physically distance themselves at least six feet from others and either be fully vaccinated or tested at least weekly for COVID-19. Revisions to the Return-to-Work Criteria The period of time before an employee can return to work after “close contact” or COVID-19 infection has been revised to be consistent with the current CDPH guidelines. The time frames will automatically update if CDPH updates its guidelines pursuant to the Governor’s executive order. Both vaccinated and unvaccinated employees must be excluded from the workplace for 14 days if they come in “close contact” with someone infected with COVID-19, even if they test negative. An exception is provided for fully vaccinated employees who do not develop COVID-19 symptoms if they do all of the following: (a) wear a face covering at the workplace for 14 days following the last date of close contact; (b) maintain six feet of distance from others at the workplace for 14 days following the last date of close contact; and (c) get a COVID-19 test three to five days after the close contact.  Close contact is defined as being within six feet of a COVID-19 positive case for a total of 15 minutes or greater in any 24-hour period. The revised temporary rules indicate that persons who had a close contact may return to work as follows: Employees who had a close contact but never developed any COVID-19 symptoms may return to work after 14 days have passed since the last know close contact unless one of the exceptions below applies: 10 days have passed since the last known close contact and the person wears a face covering and maintain six feet of distance from others while at the workplace, for 14 days following the last date of close contact; or 7 days have passed since the last known close contact; the person tested negative for COVID-19 using a polymerase change reactions (PCR) COVID-19 test with the specimen taken day 5 or later after the last known close contact; and the person wears a face covering and maintains six feet of distance from others while at the workplace for 14 days following the last date of close contact. Employees who had a close contact and developed any COVID-19 symptoms cannot return to work until all of the following conditions are met: At least 24 hours have passed since a fever of 100.4 degrees Fahrenheit or higher has resolved without the use of fever-reducing medications; and COVID-19 symptoms have improved; and At least 10 days have passed since COVID-19 symptoms first appeared. Employers are now required to make COVID-19 testing available at no cost and during paid time to employees who had close contact with...

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California Employers Should Update Their Form Agreements in Light of SB 331

Posted by on Jan 6, 2022 in Newsflash | 0 comments

SB 331, also known as the “Silenced No More Act,” went into effect on January 1, 2022, and broadens California Code of Civil Procedure section 1001. Prior to the enactment of SB 331, section 1001 prohibited confidentiality provisions in settlement agreements or non-disparagement agreements in civil actions and administrative complaints which included allegations of sexual assault, sexual harassment, or workplace harassment or discrimination based on sex. Now, with the enactment of SB 331, the prohibited confidentiality provisions apply to any workplace harassment or discrimination claims, not just those based on sex. This includes matters alleging discriminatory acts based on race, religion, national origin, gender, age and other protected characteristics as provided in California Government Code sections 12940 and 12955. The practical effect of this new law is that employers cannot prevent employees from discussing factual information surrounding unlawful acts of harassment or discrimination in the workplace alleged in a civil lawsuit or administrative charge. Employers may, however, still include provisions to maintain the confidentiality of the amount paid in settlement of the claim, and the parties may still agree to confidentiality in settlements of threated claims that have not been filed in court or with an administrative agency. SB 331 further prohibits non-disparagement agreements or other similar agreements that an employer may require an employee to sign as a condition of employment or continued employment that restrict an employee’s right to disclose factual information about unlawful acts in the workplace. SB 331 also applies to any agreement related to a current or former employee’s separation from employment. Any such separation agreement which is not made to resolve previously filed civil claims or administrative complaints must include provisions that: (a) inform the employee of his or her right to consult an attorney; and (b) provide a reasonable time period of at least 5 business days for an employee to consult with an attorney. An employee may sign such an agreement prior to the end of the reasonable time period only if the employee’s decision to do so is “knowing and voluntary” and is not induced by the employer through fraud, misrepresentation, or a threat to withdraw or alter the offer prior to the expiration of the reasonable time period, and so long as the employer does not provide different terms to employees who sign such an agreement prior to the expiration of such time period. A non-disparagement agreement or other agreement that restricts an employee’s ability to disclose information related to conditions in the workplace must include the following language: “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.” NavBat encourages employers to update their form agreements to ensure compliance with SB 331 and to reach out to NavBat to review and/or revise any form agreements containing provisions that may run afoul of the newly-enacted...

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