In Scott v. Gino Morena Enterprises, the Ninth Circuit clarifies that the statute of limitations period for filing a Title VII suit commences after the EEOC issues a right-to-sue notice.

Plaintiff Scott sued her employer in federal court, alleging sexual harassment and retaliation at a barbershop at Camp Pendleton where she worked. She brought suit under Title VII of the Civil Rights Act of 1964. Under Title VII, a plaintiff must exhaust her administrative remedies by filing a charge with the Equal Employment Opportunity Commission (the “EEOC”) or a qualifying state agency (such as DFEH) and receiving a right-to-sue notice. After exhausting administrative remedies, a plaintiff has 90 days to file a civil action.

Scott’s employer contended that she became eligible to receive a right-to-sue notice from the EEOC 180 days after the filed her charge, and that the 90 day clock started ticking 180 days after Scott filed a charge with the EEOC. Scott contended the 90 day clock didn’t start ticking until she actually received her right-to-sue notice. The court had granted summary judgment for Scott’s employer on the basis that her claims were time-barred as she had waited more than 90 days after she became eligible to receive a right-to-sue notice from the EEOC. Scott appealed the ruling, and the Ninth Circuit reversed (in part) the summary judgment ruling, holding that the 90 day clock doesn’t begin until the right-to-sue notice is received.

One concern about starting the clock upon receipt of the EEOC notice (as opposed to 180 days after filing the charge) is that the employer shouldn’t have to wait years to find out if litigation will begin. Evidence can be lost as witnesses’ memories may fade or they may move away. While an employee can rely on this decision in waiting to sue, she can’t wait forever. If appropriate, an employer can still assert arguments about unreasonable delay (doctrine of laches).

The California Supreme Court’s ruling this morning in Alvarado v. Dart Containers may have many employers scrambling to verify their overtime pay calculations. The Court rejected Dart’s complicated overtime calculations, which utilized a multiplier of 0.5 instead of 1.5, and which, in calculating the “regular rate” of pay to determine overtime pay, used a divisor of the total hours worked, including overtime. According to the Supreme Court, to account for overtime premium associated with a flat sum bonus, the correct calculation is the amount of the bonus divided by the regular hours worked by the employee, multiplied by 1.5.

Thus, to correctly calculate the total overtime compensation due to the employee, the calculation is as follows:

(overtime hours x regular rate x 1.5) + (bonus/regular hours worked x overtime hours worked x 1.5) = total overtime compensation

Importantly, this rule applies retroactively, exposing any company that incorrectly calculated overtime rates to statutory penalties, whether or not the mistake was made in good faith.

Under the New Parent Leave Act, employees who work for a company with 20 or more employees within a 75-mile radius may take up to 12 weeks of job-protected leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement.  To qualify for leave,  employees must have worked for the employer for more than 12 months and worked at least 1,250 hours during the previous 12 months.  An employer employing both parents who are both entitled to leave for the same child does not have to give more than 12 weeks of leave total to the employees.  The employer may grant simultaneous leave to these parents if the employer chooses.  The law becomes effective January 1, 2018.

Please contact us if you need help updating your employee handbooks, or for assistance with your employee’s leave requests, including requests by employees to take baby bonding leave.

There was a time when a work day ended at 5:00.  When the little hand reached 5 and the big hand found its way to 12 two things happened – workers headed home and bosses stopped paying their hourly employees.  How times have changed.   In the age of smart phones and constant e-mail connection a new issue arises – if an hourly employee is performing work from their personal phone does an employer have to chip in on the bill?

A large number of small businesses in California do not have any sort of employee cell phone policy in place and are unaware that they may be required to reimburse their employees for at least a portion of their personal cell phone bills.  As illustrated below, this is quickly becoming yet another issue California small business owners need to start thinking about.

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In the recent decision¹, a California Court of Appeal held that when an employee uses their personal cell phone for work-related calls, Labor Code section 2802 requires the employer to reimburse them.  In reaching this conclusion, the Court of Appeal found that certain provisions of the Labor Code required reimbursement by employers for “all necessary expenditures or losses incurred by the employee in direct consequence” of their work, or in “obedience to the directions of the employer.”   This would be true despite the fact an employee is paying for an unlimited data package.  The Court held that despite the form of cell phone plan the employee selected or is paying for on their own, employers must pay some reasonable percentage of the employee’s cell phone bills – if not they would be receiving a windfall because it would pass on this business expense directly to the employee.

While the dust has yet to settle on the Cochran decision it appears that employers in California are required to compensate employees who use their personal phones for work purposes.  This is true even if they have unlimited data/minutes.

This decision creates the potential for new areas of litigation.  In an effort to avoid this, businesses should take a close look at their cell phone polices to ensure they are in compliance with the Labor Code (or, if you do not have a cell phone policy, prepare one!).  If an employee is expected to be accessible by phone or email outside of work – or if they are required to carry a cell phone as a part of the job – then it is necessary either to provide a work device or to pay a reasonable percentage of their bill.


¹Cochran v. Schwan’s Home Serv., Inc., 228 Cal. App. 4th 1137

California Labor Code § 925 went into effect on January 1, 2017, limiting an employer’s ability to require employees who “primarily reside and work in California” to enter into employment agreements that include out-of-state choice of law and/or forum selection clause.  The section effects employment contracts entered into on or after January 1, 2017.  This section, however, will not apply if the employee is represented by counsel in negotiating the terms of the employment contract.

image004Section 925 may have an immediate impact on employment contracts with covenants not to compete (“non-compete clauses”).  California Business & Professions Code § 16600 generally prohibits such clauses in employment contracts, favoring a public policy of a worker’s right to pursue any lawful trade or profession.  In the past, employers have utilized choice of law and/or forum clauses with selection of states that allow non-compete clauses to protect against competition by ex-employees based in California.

Labor Code section 925 will frustrate those efforts by employers to enforce choice of law and/or forum selection clauses by providing employees with the ability to preemptively challenge those clauses as unlawful.  There is some debate as to the enforceability of section 925 on a court in a different state, but Labor Code section 925 provides employees another tool to undermine an employer’s attempt to prevent competition by ex-employees.

The First Circuit Court of Appeals issued an opinion last week, overturning summary judgment for an employer in a wage and hour case, based on the absence of a comma in Maine’s overtime statute.  An exemption to Maine’s overtime law provides that overtime protections do not apply to employees engaged in the “canning, processing, freezing, drying, marketing, storing, packing for shipment or distribution of …  perishable foods.”   Some dairy delivery drivers, who do not engage in packing of any kind, sued their dairy employer for overtime, contending the exemption was inapplicable because they interpreted the clause “packing for shipment or distribution of” as one related phrase.  The employer successfully argued to the trial court that the clause at issue concerned two distinct activities: 1) packing for shipment; and 2) distribution.  According to the dairy, because delivery drivers engage in distribution, they were exempt from the overtime protections and were not paid overtime.  The Appellate Court found the statute to be ambiguous as it was unclear if distribution was the last in a series (distribution) or a modification of the clause that was last in the series (packing – for shipment or distribution).  Without the comma to make it clear that employees engaged in distribution were exempt, the judgment was reversed and the drivers are now permitted to proceed with their suit seeking millions in back overtime wages.

2000px-Virgola.svgIf you are a punctuation enthusiast, a link to the 29 page opinion with the Court’s analysis of grammar and punctuation is here:

http://media.ca1.uscourts.gov/pdf.opinions/16-1901P-01A.pdf