Insights

On June 29, 2023, the Supreme Court held that it is unconstitutional (under the Constitution’s Equal Protection Clause, as to public institutions) and a violation of Title VI of the Civil Rights Act of 1964 (as applicable to private institutions accepting federal financial assistance) for colleges and universities to consider race as a factor in the admissions process. See Students for Fair Admissions, Inc. v. President & Fellows of Harvard Coll., No. 20-1199, 2023 WL 4239254 (U.S. June 29, 2023) (“Harvard”), a summary of which can be found here. This decision upended decades of precedent and has caused employers in the private sector to ask how the decision will impact diversity, equity, and inclusion (“DE&I”) initiatives and employment decisions. This article addresses the impact of Harvard, eight months later.

On January 18, 2024 in Estrada v. Royalty Carpet Mills, Inc. (Cal., Jan. 18, 2024, No. S274340) 2024 WL 188863, the California Supreme Court resolved a split in authority among the California Courts of Appeal regarding whether or not trial courts have the inherent authority to dismiss Private Attorneys General Act (“PAGA”) claims due to unmanageability. The Supreme Court held that trial courts do not have this authority, and instead must address manageability concerns by using the variety of “tools” at their disposal, such as placing limitations on testimony and types of evidence and using representative testimony and surveys.

Effective January 1, 2024, California employees will be entitled to accrue and use more paid sick leave per year.  On October 4, 2023, California Governor Gavin Newsom signed SB 616 into law, which amends the Healthy Workplaces, Healthy Families Act of 2014 (“HWHFA”) and significantly expands paid sick leave requirements for employers in California.  Further, non-construction industry employees covered by a collective bargaining agreement (“CBA”), previously excluded from coverage, will now be entitled to certain benefits and protections under the HWHFA.  The amendment also preempts local ordinances that are contrary to the HWHFA with respect to certain issues, for example, rate and timing of pay, and advance leave and notice.

On October 8, 2023, Governor Gavin Newsom signed Senate Bill (SB) No. 497 into law. SB No. 497, also referred to as the Equal Pay and Anti-Retaliation Protection Act, amends California Labor Code Sections 98.6, 1102.5, and 1197.5 to lessen the burden for employees attempting to establish a prima facie case of retaliation. This new law, effective on January 1, 2024, also comes with a civil penalty for each violation.

On October 2, 2023, the Equal Employment Opportunity Commission (“EEOC”) published proposed guidance that clarifies and updates the legal standards and employer liability applicable to harassment claims under federal law, including Title VII, the Age Discrimination in Employment Act, the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act. The guidance remains open for public comment until November 1, 2023. If the guidance is finalized, it will be the first guidance on harassment claims that the EEOC has issued since 1999.

A U.S. federal government shutdown creates a number of direct and indirect consequences that impact U.S. companies, individuals and virtually every aspect of the U.S. economy.  Although the federal government has experienced previous lapses in funding that have led to shutdowns of all or part of the federal government, the current funding impasse and impending shutdown raise a number of unique and unprecedented questions for government workers, government contractors and businesses, and the public at large.

On August 23, 2023, the U.S. Department of Labor (“DOL”) issued a final rule updating regulations governing federally funded construction projects subject to the Davis-Bacon Act and Related Acts (“DBA”). The final rule is the first significant regulatory update to the DBA since 1982.  Among other things, the final rule changes how DOL will calculate the applicable prevailing wage for any given classification of workers on a DBA-covered contract when the default “majority” prevailing wage calculation is not possible; in particular it supplants the current “weighted average” calculation approach with the “30-percent rule.” The revised rule will go into effect on October 23, 2023 – 60 days after it was published in the Federal Register.

On Friday, April 28, 2023, the Fifth Circuit in Rest. Law Center v. United States Department of Labor, No. 22-50145, 2023 WL 3139900 (5th Cir. Apr. 28, 2023), reversed a decision from the Northern District of Texas (the “District Court”) that refused to enjoin the Department of Labor’s tip credit regulations amendment in effect since December 28, 2021. The amendment requires employers to pay tipped employees the full minimum wage for nontipped work directly supporting tipped work if it: 1) amounts to more than 20% of the employee’s total weekly time paid at the tipped minimum wage rate, or 2) exceeds 30 continuous minutes. The Fifth Circuit concluded in a 2-1 panel decision that the plaintiffs demonstrated that the ongoing management costs imposed on employers by the new “continuous 30-minute rule” in the form of additional timekeeping requirements results in irreparable harm.

On February 15, 2023, the Ninth Circuit held that AB 51 is preempted by the Federal Arbitration Act (“FAA”) and consequently California employers are free to require employees to sign arbitration agreements as a condition of employment. See Chamber of Com. of the United States of Am. v. Bonta, No. 20-15291, 2023 WL 2013326 (9th Cir. Feb. 15, 2023). AB 51 made it a criminal offense for an employer to do so, whether for applicants or existing employees.

On January 10, 2023 New Jersey Governor Phil Murphy signed into law a new version of New Jersey’s “mini-WARN Act,” or the Worker Adjustment and Retraining Notification Act (“NJ WARN Act”). The amendment makes the NJ WARN Act in some ways the most expansive WARN Act in the country: it increases the scope of covered employers, counts employee layoffs statewide (rather than by worksite) to meet the notice threshold, requires 90 days’ notice (rather than 60), and mandates severance payments even when proper notice is given. These changes will take effect on April 10, 2023.

On February 10, 2022, Congress passed H.R. 4445, titled the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” The legislation would amend the Federal Arbitration Act (FAA) to render pre-dispute employment arbitration agreements voidable at the election of the employee for all sexual harassment and sexual assault claims. Employees will still be permitted to choose to arbitrate these claims. The legislation would also render pre-dispute employee waivers of the right to bring such claims jointly or on a class basis voidable.

California Governor Gavin Newsom signed into law a new bill, SB 311, also known as the “Silenced No More Act,” which broadly prohibits non-disclosure provisions in settlement agreements involving workplace harassment or discrimination based on any protected status under the Fair Employment and Housing Act (FEHA), not just based on sex. The statute also substantially limits the use of non-disparagement provisions in other types of employment agreements, including separation agreements, requiring employers to both provide at least five business days for consideration of a separation agreement and to notify employees of their right to consult an attorney regarding the agreement. The law goes into effect on January 1, 2022.

President Biden yesterday afternoon announced a comprehensive, six-part strategy to combat COVID-19, aimed largely at vaccinating the 25% of the eligible population who remain unvaccinated. The first part of his plan has numerous implications for private sector employers across all industries. 

On April 16, 2021, California Governor Gavin Newsom signed SB 93 into law. This statute establishes a statewide requirement that employers in the hospitality and business services industries, including hotels, airports, building service providers, and large event centers, provide written offers to rehire workers laid off by the COVID-19 pandemic within five business days of job openings becoming available for which they are qualified. The law, to be codified as Section 2810.8 of the California Labor Code, became effective immediately and will remain in effect until December 31, 2024. Section 2810.8 will be exclusively enforced by the California Division of Labor Standards Enforcement (“DLSE”).  There is no private right of action, although employees can file a complaint with the DLSE and recover damages through a DLSE enforcement action.

California Governor Newsom signed into law a new bill, SB 95, that provides for up to 80 new hours of COVID-19 supplemental paid sick leave to covered employees. The law applies to all businesses with more than 25 employees, and goes into effect on March 29 through September 30, 2021. SB 95 retroactively applies to qualifying leave taken on or after January 1, 2021. Employers are not required to review sick leaves granted since January 1 to determine whether they qualify for retroactive supplemental leave payment, and instead can assess requests for such retroactive payment as employees make them.

On Tuesday, March 2, 2021, the U.S. Department of Labor (DOL) postponed the effective date for a new regulation establishing a five-factor test for determining independent contractor classification. The rule, promulgated by the Trump Administration and previously scheduled to go into effect on March 8, and titled “Independent Contractor Status under the Fair Labor Standards Act” (Rule), is now slated to go into effect on May 7. The DOL announced that it will take this additional time to consider the legal, policy, and enforcement implications of the Rule, potentially calling into question whether the Rule will take effect at all, or if it does, how it might be modified. 

On Friday, April 3, 2020, the Centers for Disease Control and Prevention (CDC) issued guidance recommending that individuals wear cloth face coverings, or masks, to help prevent the spread of COVID-19. The guidance “recommends wearing cloth face coverings in public settings where other social distancing measures are difficult to maintain (e.g., grocery stores and pharmacies) especially in areas of significant community-based transmission.” The CDC noted that it does not recommend the use of surgical masks or N-95 respirators, which must continue to be reserved for healthcare workers and other medical first responders. Instead, it encourages the use of simple cloth face coverings, including those fashioned from household items.

Yesterday, U.S. District Court Judge Dolly Gee of the Central District of California denied Uber and Postmates’ motion for a preliminary injunction to enjoin California Assembly Bill 5—the new California statute that broadly restricts the ability of California employers to classify workers as independent contractors. In Olson, et al. v. State of California, et al., Uber and Postmates, along with two individual drivers, requested a preliminary injunction when they filed their suit against the State on December 30, 2019, alleging violations of the U.S. and California Constitutions. 

In this issue:

In this issue: