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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Intentional Wage Theft Can Subject Employers to Criminal Penalties

Posted by on Nov 3, 2021 in Newsflash | 0 comments

California has adopted a host of new labor and employment laws that will become effective on January 1, 2022. One such new employment law can be found in the California Penal Code. Assembly Bill (“AB”) 1003 adds section 487(m) to the California Penal Code where “grand theft” will be defined to include intentional theft of wages, including gratuities, in excess of $950 from any single employee, or $2,350 in the aggregate from two or more employees. According to the California Department of Industrial Relations, wage theft is a form of fraud and occurs when employers do no pay workers according to the law. Examples of wage theft include paying less than minimum wage, not paying workers overtime, not allowing workers to take meal and rest breaks, requiring off-the clock work, or taking workers’ tips. The new law defines “theft of wages” as the intentional deprivation of wages, gratuities, benefits, or other compensation by unlawful means and with knowledge that the wages, gratuities, benefits, or other compensation are due to the employee. The term “employee” includes an independent contractor and the term “employer” includes the hiring entity of an independent contractor. Further, AB 1003 provides that the wages, gratuities, benefits, or other compensation may be recovered as restitution, but the new provision of law does not prohibit the employee or the Labor Commissioner from commencing a civil action to seek remedies provided for under the Labor Code. Lastly, the bill states that this new section of the Penal Code does not constitute a change in, and does not expand or limit the scope of conduct prohibited by, section 487. Employers and all hiring entities of independent contractors should ensure their compensation policies and procedures are compliant with the...

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Court of Appeal Provides First Published Opinion Addressing PAGA Manageability

Posted by on Nov 3, 2021 in Newsflash | 0 comments

In Wesson[1], the Second District Court of Appeal held that trial court judges have inherent authority to limit and even strike unmanageable Private Attorney General Act (“PAGA”) claims. The Court of Appeal held that: “(1) courts have inherent authority to ensure that Private Attorney General Act (PAGA) claims can be fairly and efficiently tried and, if necessary, may strike claims that cannot be rendered manageable; and (2) as a matter of due process, defendants are entitled to a fair opportunity to litigate available affirmative defenses, and a court’s manageability assessment should account for them.” The Wesson decision is the first time a California Court of Appeals addressed PAGA manageability and confirmed a trial court’s inherent authority to strike unmanageable PAGA claims. This case sets an important precedent for California employers by expressly subjecting PAGA claims to a manageability analysis. PAGA is simply a procedural statute allowing an aggrieved employee to recover civil penalties for Labor Code violations, such as overtime and rest and meal period violations, that otherwise would be sought by state labor law enforcement agencies. The plaintiff in this action was a former general manager (“GM”) of Staples who filed suit against his former employer, asserting representative claims under PAGA on behalf of himself and 345 other current and former GMs for Labor Code violations based on allegations that the employer misclassified its GMs as executives exempt from overtime pay and meal and rest periods. Staples argued that the Plaintiff and the other GMs represented in the PAGA action were properly classified as exempt pursuant to the executive exemption – meaning that Plaintiff and the other GMs were not entitled to overtime, meal breaks, or rest breaks. If an employer claims that an employee is exempt from overtime and rest and meal period requirements, the burden is on the employer to prove the exemption defenses applies. To validly assert the affirmative defense of exemption, Staples would have to prove, among other things, that each GM spent most of their time on managerial tasks, performing exempt job duties. Staples moved to strike the PAGA claims, arguing that it would be unmanageable to litigate its affirmative defense of exemption, which requires individual proof and not merely common proof. In other words, Staples would need establish the exemption as to each GM individually. The trial court found that Plaintiff’s trial plan did not address how the parties might litigate Staples’ affirmative defense – specifically how Staples’ GMs performed their jobs and the extent to which they performed non-managerial tasks. Noting the parties’ eight-year estimate of the time they would need to litigate the exemption defense, the trial court stated that “even cutting those estimates in half would result in trial lasting more than four years. A four-year trial involving witnesses and documents individually pertaining to each of the 346 GMs does not meet any definition of manageability.” The trial court concluded that the PAGA claim was unmanageable and granted Staples’ motion to strike the PAGA claim. While the Court of Appeal affirmed the trial court’s decision in this case, the Court of Appeal explained that “we do not hold that a PAGA misclassification case can never be managed through common-proof methods. However, Wesson’s lack of cooperation with the trial court’s inquiry in this regard stymied the court’s efforts to devise...

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OFAC Issues Updated Ransomware Advisory

Posted by on Oct 1, 2021 in Newsflash | 0 comments

On September 21, 2021, the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) issued an Updated Advisory “to highlight the sanctions risks associated with ransomware payments in connection with malicious cyber-enabled activities and the proactive steps companies can take to mitigate such risks.” The Updated Advisory notes that in enforcement actions, it would consider those proactive steps to be “mitigating factors” against potential sanctions. This Updated Advisory follows on OFAC’s October 1, 2020 Advisory on Potential Sanctions Risks for Facilitating Ransomware Payments and provides additional guidance for companies that may make or facilitate ransomware payment. Ransomware is a form of malicious software or more aptly “malware,” designed to block access to a computer system to extort ransom payments from victims in exchange for restoring the victim’s access to its systems.  The Updated Advisory explains how ransomware attacks continue to increase in the U.S. with greater focus and sophistication. According to the FBI, there was a nearly 21% increase in reported ransomware cases and a 225% increase in associated losses from 2019 to 2020. Cyber actors have not only targeted private businesses but also governmental entities. The Updated Advisory emphasizes that the U.S. government “strongly discourages” victims from making ransom payments or paying extortion demands and recommends focusing on strengthening defensive measures to prevent and protect against ransomware attacks. The Updated Advisory stated that the reason the U.S. government continues to strongly discourage anyone from paying a ransom demand in a cyber-attack is because making a ransom payment does not guarantee that a malicious actor will reprovision a company’s access to data or refrain from further attacks against the company. OFAC further states that the availability of payments not only enrich malicious actors but also incentivize other malicious actors to perpetuate additional attacks. OFAC goes on to explain that ransom payments can be used to fund activities adverse to the national security and foreign policy objectives of the United States.  Importantly, OFAC highlights that U.S. law prohibits anyone from engaging in transactions, directly or indirectly, with individuals or entities on OFAC’s Specially Designated Nationals and Blocked Persons List (“SDN List”), or other blocked lists. Related to this point, the Updated Advisory reminds of OFAC’s authority to impose civil penalties for sanctions violations which is based on strict liability; meaning that a person subject to U.S. jurisdiction may be held civilly liable even if such person did not know or have reason to know that it was engaging in a transaction that was prohibited under U.S. law. While OFAC states that individuals or companies who pay ransom payments to blocked individuals or groups risk breaking the law, the Updated Advisory provides new guidance to those finding themselves in a position of making or facilitating payments. In the Updated Advisory, OFAC describes certain “mitigating factors” a company can take which OFAC may consider when determining an appropriate enforcement response to an apparent violation of U.S. sanctions laws or regulations. One of the mitigating factors OFAC will consider is whether a company implemented a risk-based compliance program to mitigate exposure to ransom demands by malicious actors on the SDN or another block list. The Updated Advisory recommends adopting guidelines contained in the Cybersecurity and Infrastructure Security Agency’s (CISA) September 2020 Ransomware Guide.  This resource provides guidance on the “meaningful steps” companies can...

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