THE CONTINUING SAGA OF PAGA….
As has been widely reported in recent weeks, the Supreme Court of the United States (SCOTUS) issued a ruling which was very favorable for employers in relation to PAGA actions – Viking River Cruises, Inc., v. Moriana. In the Viking River Cruises decision, SCOTUS held that an employee who signed a properly drafted arbitration agreement can be required to arbitrate their PAGA claims. In addition, SCOTUS found that a plaintiff who submitted their “individual” portion of a PAGA claim to arbitration lacks standing under state law to pursue a PAGA claim on behalf of others in court.
Now, not unexpectedly, on July 20, 2022, the California Supreme Court granted review in Adolph v. Uber Technologies, Inc. where the plaintiff is (among other issues) asking the Court to decide whether a Plaintiff, who is forced into arbitration for their individual claim, can, under California law, also maintain “standing” to pursue the representative aspect of the employee’s PAGA claim in court – which is directly contrary to the Viking River Cruises case.
How can the California Supreme Court issue a decision that might be contrary to SCOTUS’ ruling you ask…because the California Supreme Court is the ultimate decision-maker on California law and PAGA is a California specific statute.
In deciding Adolph, the California Supreme Court could hold, as SCOTUS did, that an employee can no longer maintain the non-individual (representative) portion of a PAGA action in court when the employee is compelled to arbitrate their individual claims. So the employer only has to defend the individual PAGA action in arbitration.
On the other hand, if the California Supreme Court decides that a Plaintiff can be required to arbitrate their individual PAGA claim and can also proceed with the representative portion of the PAGA action in court, employers would be faced with having to defend two related claims: 1) the Plaintiff’s individual PAGA claim in arbitration, and 2) the non-individual (representative) PAGA action in court on behalf of other aggrieved employees. If this is the decision, a key benefit for employers of the holding in Viking River Cruises would be gone.
The California Supreme Court’s decision could come as soon as 2023. Until then, it is likely that employers will continue to file motions to compel matters into arbitration and dismiss the representative actions. How the trial courts will handle these motions is yet to be seen.
EMPLOYERS NOT REQUIRED TO PAY TIME & EXPENSE TO APPLICANT FOR PRE-HIRE DRUG TEST
On June 13, 2022, the Ninth Circuit Court of Appeals held in Johnson v. WinCo Foods Holdings, Inc, et al. that persons who had been presented a conditional offer of employment were not entitled to compensation for the time required to take a pre-employment drug test, nor was the employer required to cover the travel expenses associated with undergoing the test.
In this class action case, the Plaintiff, who was representing a class of other successful applicants for employment, asserted that he should be paid for his travel time and travel expenses incurred in having to undergo a mandatory post-offer/pre-hire drug test. The Company paid for the cost of the test but did not pay for time or travel expenses.
The Plaintiff argued that the successful applicants should be considered “employees” because the drug tests were administered under the control of the Company – the Company controlled where and when to have the drug test conducted.
The Ninth Circuit rejected Plaintiffs’ arguments and held that the control test “relates to control over the manner of performance of the work itself, not the manner of establishing qualifications to do the work.” So, while the company exercised control over the when and where of the drug test being taken, the applicants were not performing work to benefit the Company when undergoing the drug test and for this reason they were not employees.
The Court compared the act of the drug test to an interview or pre-employment physical examination, explaining that it was an activity to secure a position, not a requirement for those already employed.
This further confirms California law that employers do not have to compensate applicants for pre-employment activities, such as interviews (unless they are “working interviews”), drug tests, and physical examinations.
To ensure compliance with California law, and avoid any potential claims or liability, employers should make clear that any employment offer is conditional upon passing a post-offer/pre-hire drug test, along with any other pre-employment conditions such as a physical examination.
It is also important to not have the successful applicants actually start work and perform any job duties, until after an applicant successfully completes all pre-employment conditions; e.g. drug testing, a background check, or other pre-requisites to determine qualification for a position.
DFEH NOW THE CALIFORNIA CIVIL RIGHTS DEPARTMENT
As of July 1, 2022, the Department of Fair Employment and Housing (DFEH) was renamed to the Civil Rights Departments (CRD). According to CRD’s website, the renaming is to more fully capture the services that the department provides — and hopefully increase public access to its services. The new web address is https://calcivilrights.ca.gov (although the old DFEH web address currently re-routes to that).According to the CRD’s website, the CRD maintains all the same existing powers and authorities of the DFEH.
“The mission of the CRD is to protect the people of California from unlawful discrimination in employment, housing, and public accommodations (businesses) and from hate violence and human trafficking in accordance with the Fair Employment and Housing Act (FEHA), Unruh Civil Rights Act, Disabled Persons Act, and Ralph Civil Rights Act. The employment anti-discrimination provisions of the FEHA apply to public and private employers, labor organizations and employment agencies. “Housing providers” includes public and private owners, real estate agents and brokers, banks, mortgage companies, and financial institutions.”
Similarly, the Fair Employment and Housing Council (FEHC) has been renamed as the California Civil Rights Council (CRC). The Civil Rights Council promulgates regulations that implement California’s civil rights laws. It also conducts inquiries and holds hearings on civil rights issues confronting the state.
Employers should check with the CRD for updates on required posters, guides, and fact sheets, as the name, logo and version/date will likely be updated within the next six months. https://calcivilrights.ca.gov/Publications/#postersBody
This Newsletter is intended as a brief summary of employment law. While every effort has been made to ensure the accuracy of the information contained herein, it is not intended to serve as “legal advice,” or to establish an attorney-client relationship. If additional information is needed on any of the topics contained herein, please contact our office. All rights reserved. ©2022.