Author Archives: Mary Spadaro

California Supreme Court Issues Important Decision For Employers That Use Staffing Agencies

If you use a staffing agency for your workforce, the California Supreme Court just issued an important decision that may affect your rights.

In Grande v. Eisenhower Medical Center, the California Supreme Court held that a wage-hour class action settlement for $750,000 between an employee and the staffing company did not preclude the employee from suing the employer for whom she worked. The California Supreme Court rejected the argument that the employer was an “agent” of the staffing company and that all claims had therefore been released. This decision allows employees a potential double recovery, but there are easy fixes that come with smart lawyering when a case against either party settles.

Background

In 2012, Lynn Grande worked for about a week as a nurse at Eisenhower Medical Center in Rancho Mirage, California. She was placed there by her staffing agency-employer, FlexCare, LLC. Grande thereafter sued FlexCare in a class action for alleged Labor Code violations. The parties resolved their dispute through a court-approved settlement agreement. The settlement agreement released FlexCare’s “agents” without specifying who such agents were.

Less than a year later, Grande sued Eisenhower based on the same alleged Labor Code violations. FlexCare intervened in the second lawsuit, arguing that Grande had resolved and released such claims through her prior lawsuit against FlexCare. The trial court disagreed, and the parties appealed. The Court of Appeal also sided with Grande, reasoning that she could pursue her lawsuit against Eisenhower because one, Eisenhower was not in “privity” with FlexCare (a requirement for claim preclusion); and two, Eisenhower was not a releasee under the prior settlement agreement.

The California Supreme Court agreed with the Court of Appeal for basically the same reasons. As to the release of “agents” in FlexCare’s prior settlement agreement, the Supreme Court held that this was not enough, and it was not clear that, by virtue of their contractual relationship alone, that Eisenhower was an “agent” of FlexCare.

As for “privity,” although this can be a complex and esoteric legal issue, as the Supreme Court explained, it comes down to whether a defendant to a lawsuit can claim that the plaintiff suing it is barred from doing so by an earlier judgment where the same plaintiff was a party. In order to do this (to apply the doctrine of “claim preclusion”), the claim or claims need to be the same, and the parties to the earlier action either need to be the same, or, at least, the party asserting claim preclusion must be able to prove that the defendant in the earlier action was its “virtual representative” in the lawsuit.

Put another way, if the parties are not the same, there must be essentially no difference between the interests and posture of the “virtual representative” in the earlier lawsuit and the defendant that later asserts claim preclusion.

Here, the Court found that there was no “mutuality”: Eisenhower was trying to take the benefit of the earlier settlement, but there was no two-way street; that is, there was seemingly no basis to bind Eisenhower to the earlier judgment—either by requiring Eisenhower to pay part of the judgment against FlexCare, or if, say, it had been deemed unfavorable to FlexCare (and by extension, Eisenhower).

The defendants also argued that the hospital was contractually indemnified by FlexCare, but this did not move the Court: although there could be exceptions, a contractual obligation to indemnify doesn’t mean that the contracting parties are necessarily in “privity.” Ultimately, the Supreme Court held that Grande could make the same claims against Eisenhower as it had earlier made against FlexCare.

Takeaways

There are two critical points to be learned from this decision:

First, if the intent of a class settlement agreement between a staffing agency and a representative plaintiff is to also release the staffing agency’s clients (or vice versa), the agreement should state that clearly; do not rely on ambiguous terms, like “agent” and hope that saves the day.
Second, any time a staffing agency is involved, there is the potential for the agency and the end user to be liable as “joint employers” and both parties should be actively involved in resolving or litigating. Otherwise, paying twice is a real possibility.

Monte Grix is a partner in the San Francisco office of Hirschfeld Kraemer LLP. He can be reached at (415) 835-9016 or mgrix@hkemploymentlaw.com.

Million-Dollar PAGA Cases Can Be Avoided Under U.S. Supreme Court’s Viking River Decision

On June 15, 2022, the U.S. Supreme Court issued a bellwether decision that has the potential to dramatically decrease employers’ exposure under California’s Private Attorneys General Act of 2004 (PAGA).

PAGA has bedeviled California employers for nearly two decades now, leaving employers responsible for billions of dollars in Labor Code penalties and attorney’s fees. The U.S. Supreme Court may have finally put an end to that.

What Is PAGA?

PAGA is similar, but not identical to a class action for Labor Code (wage and hour) violations. It is similar because it allows an “aggrieved employee” to bring claims for penalties for himself and for other “aggrieved employees” that the State could have assessed against an employer for Labor Code violations. It is different because the claims are for penalties, not damages, and as a result any PAGA claim is brought by an “aggrieved employee” on behalf of other “aggrieved employees” for penalties that the State could impose. Because PAGA allows employees to seek penalties on behalf of all “aggrieved employees,” the damages can be astronomical.

That is where things get tricky. The U.S. Supreme Court has previously found that an employer can enforce an arbitration agreement with an employee that contains a class action waiver, since large class actions are incompatible with arbitration, supposedly a quicker and more informal process. In 2014, however, the California Supreme Court found that the differences between PAGA claims and class actions were significant enough that waivers of “non-individual” PAGA claims in arbitration agreements could not be imposed on employees. This past year, the U.S. Supreme Court was asked to reconsider that decision in Viking River Cruises, Inc. v. Moriana.

Supreme Court Allows Arbitration Agreements That Waive “Non-Individual” PAGA Claims

Under the U.S. Supreme Court’s decision in Viking River, employers can now enforce arbitration agreements that contain a waiver of non-individual or representative PAGA claims. However, the Court’s reasoning differs from its view of class action waivers. The Court explained that PAGA comprises individual and non-individual claims. In other words, a plaintiff, like Moriana, can seek a claim for PAGA penalties individually on behalf of herself, and on a non-individual basis, as a representative of other alleged aggrieved employees.

Moriana entered into a bilateral arbitration agreement that contained a waiver of representative action PAGA claims. The Court found that Moriana was bound by her agreement to arbitrate her individual PAGA claims. But it left open the question of what happens to the non-individual claims on behalf of the other non-party, aggrieved, employees. Because PAGA provides a plaintiff standing to maintain non-individual or representative claims only if they also maintain individual claims in that action, the Court reasoned that Moriana lacked standing to pursue her non-individual claims in state court. Thus, the Court directed the lower court to dismiss Moriana’s representative action and compel her individual PAGA claims to arbitration.

Justice Sonia Sotomayor’s concurring opinion suggests that the Court left an “out” for the California legislature to modify the scope of PAGA’s standing requirement as a workaround to this issue. Nonetheless, at the end of the day, Viking River holds that arbitration agreements requiring only individual PAGA claims to be litigated in arbitration are enforceable.

Key Takeaways

This is a major win for California employers, who have paid billions of dollars to resolve PAGA claims since the statute was enacted. With a well-crafted arbitration agreement, employers should now be able to escape these high-value cases and force employees to litigate them individually, not as a group.

Many California employers, however, do not have waivers of “non-individual” PAGA claims in their arbitration agreements since the 2014 decision of the California Supreme Court shut the door to them and will now want to add them. Other employers do have PAGA waivers, but frequently those waivers use language that the U.S. Supreme Court found to be imprecise.

Either way, a well-crafted PAGA waiver may be the key to avoiding millions of dollars in potential PAGA liability, a very powerful tool. California courts, in the past, have bent over backwards to limit arbitration, so it is in employers’ interest to have an airtight agreement with a well-drafted PAGA waiver in it. We encourage all employers to contact counsel right away so they can take advantage of this ruling.

For more information, reach out to Dan Handman, dhandman@hkemploymentlaw.com, (310) 255-1820 or Ferry Lopez, flopez@hkemploymentlaw.com, (310) 255-1826. Both are in the Los Angeles office of Hirschfeld Kraemer LLP.

Juneteenth as a Holiday: What Employers Need To Know

This coming Monday, June 20, 2022, will be the second Juneteenth officially recognized as a federal holiday in the U.S. All federal government offices, federal courts, banks, post offices, schools, and the U.S. financial markets will be closed. Many private employers are following suit, although they are not legally required to give employees time off. Also, although Juneteenth is not yet an official state holiday in California, employers should treat Juneteenth in the same manner as all other federal holidays.

Background

Last year, in the midst of the Black Lives Matter movement, President Biden signed the Juneteenth National Independence Day Act, recognizing June 19th as a federal public holiday.

Although President Abraham Lincoln’s January 1863 Emancipation Proclamation officially abolished slavery, it would be over two years before the Civil War ended in April 1865, and even longer before the news spread to all parts of the U.S. Juneteenth marks June 19, 1865, the day that U.S. Brigadier General Gordon Granger and his troops landed at Galveston, Texas, bringing the news that the Civil War had ended and that enslaved African Americans were now free.

Juneteenth is the first new federal holiday approved since Martin Luther King Jr. Day in 1983.

This year, the Juneteenth federal holiday will be observed in the U.S. on Monday, June 20, 2022.

California State Holiday?

While California has not yet designated Juneteenth as a state holiday, a proposal to make Juneteenth a paid holiday for California state employees recently passed unanimously in the Assembly and moved to the Senate. When introduced in May 2022, Assembly Bill 1655, sponsored by Assemblyman Reggie Jones-Sawyer, D-Los Angeles, would have made June 19 a paid holiday for civil service employees along with those who work for California State University and California Community Colleges. Currently, state employees may use their one annual “personal holiday” to take the day off on June 19th; state employees receive one personal holiday per year in addition to 11 paid holidays.

Next Steps

Employers are taking notice and using the new federal holiday as a way to advance their diversity, equity, and inclusion goals and commitments by closing or operating with skeleton crews on June 19th or 20th. For those employers unable to shut down their operations, they can consider holiday pay premiums for working employees or letting employees use PTO or floating holidays on or around Juneteenth.

Employers should also update their employee handbooks if they are observing Juneteenth as a holiday, paid or otherwise.

For more information, contact Kirstin Muller, a partner in the Los Angeles office of Hirschfeld Kraemer LLP. She can be reached at kmuller@hkemploymentlaw.com or (310) 255-0705.

California Courts Strike Down Corporate Board Diversity Requirements

In two recent cases, judges have struck down recently enacted California statutes requiring diversity for underrepresented communities and for women on the boards of directors of publicly held corporations based in California. Those statutes require that publicly held corporations with principal executive offices in California have a specified number of such directors—depending on the size of their board—by certain specified dates.

Both lawsuits were brought on behalf of California taxpayers by Judicial Watch, Inc., which describes itself as a conservative, non-partisan educational foundation. To date, the California Secretary of State has announced that she will appeal the decision regarding women on the board of directors, but has not announced whether she will appeal the other decision.

On April 1, 2022, Los Angeles Superior Court Judge Terry Green granted plaintiffs’ motion for summary judgment in Crest et al. v. Padilla (Crest II), C.A. No. 20STCV37513 Cal. Super. Ct., which challenged California’s board diversity statute for underrepresented communities, defined as a director who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or as gay, lesbian, bisexual, or transgender.

Judge Green found that the plaintiffs had standing as taxpayers, and that the statute violates the equal protection clause of the California Constitution because it “treats similarly situated individuals differently based on race, sexual orientation, and gender identity, because that use of suspect categories is not justified by any compelling interest, and because the statute is not narrowly tailored to serve the interests offered…” Judge Green concluded that no race-neutral alternatives had been considered by the Legislature. He enjoined the use of taxpayer funds to implement the statute.

On May 13, 2022, Los Angeles Superior Court Judge Maureen Duffy-Lewis issued a decision in Crest et al. v. Padilla, C.A. No. 19STCV27561 Cal. Super. Ct. (Crest I), which challenged California’s board diversity statute for women.

Similar to Judge Green’s decision, Judge Duffy-Lewis found that the plaintiffs had standing as taxpayers, and that the statute violates the equal protection clause of the California Constitution because it treats “similarly situated groups” in an unequal manner, does not serve a compelling state interest, and is not narrowly tailored, concluding that the Legislature did not consider gender-neutral alternatives. She enjoined enforcement of the statute.

For more information, please reach out to William Ross in the Los Angeles office of Hirschfeld Kraemer LLP, wross@hkemploymentlaw.com, or (310) 255-1828.

“#UsToo”: Congress Bans Forced Arbitration of Sexual Harassment and Assault Claims

**NEW – Feb. 25, 2022** You can hear a 13-minute Employment Law Alliance podcast about this new legislation, featuring Hirschfeld Kraemer’s Dan Handman, by clicking HERE.

What Happened

In a bipartisan testament to the sustained momentum of the #MeToo movement, on February 10, 2022, the U.S. Senate joined with the House of Representatives’ earlier passage of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the Act). Recognizing the continued outcry for more transparency related to workplace sexual misconduct, the House Committee on the Judiciary declared the Act’s purpose is to “allow[] survivors to bring their stories out of the shadows and pursue justice in our courts”, and “use their voice however they see fit.”

What It Means

Now awaiting President Biden’s expected signature, the Act will amend the Federal Arbitration Act (FAA) in three meaningful ways:

Invalidates employment pre-dispute agreements and class action waivers that require claims related to sexual assault or sexual harassment to be arbitrated on an individual basis;
Ensures that the employee who signs an arbitration agreement has complete autonomy in deciding whether to arbitrate sexual harassment or sexual assault claims or choose to pursue such claims, either individually or on a collective basis, in court; and
Provides that regardless of the contractual terms of the arbitration agreement, the enforceability of the agreement must be decided by a court, not an arbitrator.

Impact On California Employers

California employers have faced a conundrum since the passage of AB51, which effectively banned imposition on employees and applicants of mandatory arbitration agreements covering all types of employment disputes as well as class action and jury waivers. Although many questioned whether AB51 would survive legal challenge based on the preemptive scope of the FAA, the Ninth Circuit has upheld the key portions of the law. Even though the scope of FAA preemption is pending before the U.S. Supreme Court in Viking River Cruises v. Moriana, and could permit enforcement of mandatory arbitration and class action waivers relating to wage and hour claims such as California’s infamous PAGA claims, the Act has now clarified for all employers that mandatory arbitration agreements and class action waivers covering sexual assault and sexual harassment claims are invalid.

What Remains

Covering claims alleging nonconsensual sexual contact and a broad range of actions constituting hostile environment sexual harassment, the Act applies to federal Title VII claims, state, and tribunal law claims. The Act does not, however, address arbitration of other forms of discrimination; accordingly, questions remain whether an employee alleging a sexual harassment claim along with other employment claims that potentially stem from the same parties or incident will be allowed to litigate the entire dispute in court. The Act also leaves in place existing law regarding the enforceability of class action waivers and mandatory arbitration of wage and hour claims as we await the Supreme Court’s decision in Viking River Cruises.

What You Should Do

With increased transparency comes increasing challenges to the perceptions and reputations of your organizations. While some employees will still opt for the privacy of arbitration, plaintiffs’ lawyers will be aggressively pushing their clients to elect a public forum and a jury. While the #MeToo movement has motivated employers to become more attuned to their anti-harassment policies and training, the passage of the Act should inspire you to take a further look at your anti-harassment/anti-discrimination and diversity, equity, and inclusion policies and training programs to ensure they are effective in educating your workforce while meeting the challenges of increased public scrutiny.

For more information, please reach out to any of the following Hirschfeld Kraemer lawyers:
Anna Pham – apham@hkemploymentlaw.com, or (415) 835-9012
Glen Kraemer – gkraemer@hkemploymentlaw.com, or (310) 255-1800
Keith Grossman – kgrossman@hkemploymentlaw.com, or (310) 255-1821

International Student-Athletes and NCAA NIL Rules, Explained

OVERVIEW
As we blogged previously, now that the NCAA allows student-athletes to benefit financially from their name, image, and likeness (NIL), new issues are emerging for campuses and their student-athletes, and particularly visa issues for international student-athletes. I recommend that each NCAA college develop a policy for NIL and student-athletes, in consultation with the diverse stakeholders involved on campus, including those responsible for athletics, international student visa compliance, and campus exclusivity contracts.

COMPANIES SHOULD CONFIRM EACH INTERNATIONAL STUDENT-ATHLETE’S VISA CATEGORY
There are different visa categories with different rules. Most international student-athletes are in F-1 international student status, sponsored by their college or university. That means the school is responsible for the student-athlete’s immigration compliance and has discretion to cancel the international student’s F-1 visa status if the student-athlete does anything that violates F-1 rules. Working outside of permitted parameters is a status violation that requires the school’s Designated School Officials (DSOs) to terminate the student’s F-1 visa status. The school’s DSOs have significant discretion in determining whether a student in F-1 visa status violated status by working without proper authorization.

Many visa categories do not offer work authorization, so only passive income is allowed. Some international students on campus are in other visa status categories, typically as dependents of parents or guardians living in the U.S. with work visas. Examples include children of diplomats, professionals, or business executives. Some international students are in the U.S. with their own work visas or as spouses of individuals with work visas. As a general rule, international students in visa status categories other than F-1 have no work authorization at all, so they have to restrict any NIL activities to passive income that doesn’t qualify as work (the only exception is that some spouses may be eligible for work authorization, depending on their visa status category). Their college or university has no responsibility or role in their immigration compliance.

Be sure to confirm an international student-athlete’s visa category at the outset. So for NIL deals, the first crucial point is to verify the specific visa status category of an international student-athlete. For individuals who are not in F-1 student status and don’t have work authorization as a spouse in their visa category, maintaining compliance by limiting activities to only passive income is a matter between the student, the company, and government (Internal Revenue Service and Social Security Administration). Accountants can help these international student-athletes maintain compliance. They may obtain an Individual Taxpayer Identification Number, form a corporation or limited liability corporation (LLC), file LLC or corporate tax returns, and benefit from passive income from NIL activities.

Don’t assume! International student-athletes may have other scenarios, subject to different rules. Student-athletes also may be permanent residents with green cards, Deferred Action for Childhood Arrivals (DACA) beneficiaries, or undocumented. Lawful permanent residents with green cards are U.S. nationals and have unrestricted work authorization. Applicants for lawful permanent resident status who don’t have green cards yet may have work authorization, depending on the progress of their permanent residency applications. Individuals with DACA protection have unrestricted work authorization. Undocumented individuals have no work authorization. So again, it’s important to confirm the status of each international student-athlete before negotiating NIL arrangements with them.

SPECIAL RULES FOR INTERNATIONAL STUDENT-ATHLETES IN F-1 STATUS SPONSORED BY THEIR SCHOOLS
Schools enforce F-1 student visa employment rules, as required by the U.S. Department of Homeland Security (DHS). Schools may be authorized by DHS to sponsor international students in F-1 visa status, which affords college and university students some limited work authorization. But international students in F-1 status are subject to discretionary compliance decisions of their school, and of Immigration and Customs Enforcement (ICE), the division of DHS which regulates the Student and Exchange Visitor program (SEVP). ICE delegates authority to F-1 sponsoring schools to monitor and enforce F-1 visa compliance and requires schools to enforce the rules strictly or lose the right to sponsor F-1 visas for international students.

F-1 students have limited work authorization, on and off campus, and violating the employment rules can have devastating consequences. F-1 international students are allowed to work on campus, but there are restrictions as to the hours per week; they may work off-campus, but only for optional practical training in their field or curricular practical training as part of their education. All off-campus work requires specific authorization by a Designated School Official (DSO) at their school, and also may require specific approval of the U.S. Citizenship and Immigration Services (USCIS). Any work on campus beyond permitted parameters and any off-campus employment without the required DSO and/or USCIS approval is a violation of status requiring the DSO to terminate the international student’s F-1 visa status, often with drastic consequences for the international student. Determining what activities qualify as “work” is important; volunteering in work that usually is paid is prohibited under both immigration laws and employment laws.

The schools decide whether an F-1 student violated status by working outside approved parameters, and the DSOs have to be very strict about this. For F-1 international students, the school’s DSOs have discretion to decide if the student violated status through employment. If a DSO decides the F- international student violated status, the DSO is required by law to terminate the student’s F-1 visa status. DSOs tend to take a conservative approach to immigration compliance for international students and they are required to take their responsibilities for ICE very seriously, to protect their school’s F-1 international student program. So it’s vital for F-1 international students to work closely with their school’s DSOs, to avoid any employment that a DSO would view as unauthorized. Without a campus policy, DSOs have to follow DHS guidance about what type of NIL activities DHS believes is allowed.

NIL ACTIVITIES ON CAMPUS – WHAT ABOUT EXCLUSIVITY CONTRACTS?
Campuses enter into exclusivity contracts with vendors, so campus policy should clarify whether NIL activities on campus for other brands or companies violate these agreements. In addition to questions about work authorization, NIL activities on campus may implicate campus exclusivity contracts. Colleges and universities may have exclusivity contracts with major brands such as Adidas, Nike, Under Armour, Coca Cola, Pepsi, Dr. Pepper, Snapple, or Starbucks that yield financial benefits for the institution. Student-athletes may not consider their school’s exclusivity contracts when planning their NIL activities. International student-athletes may prefer to engage in NIL work on-campus to comply with F-1 visa rules, without considering whether the products or services conflict with campus exclusivity contracts. A screening and approval policy for NIL activities on campus could avoid issues with respect to the institution’s exclusivity contracts.

INSTITUTIONS SHOULD ADOPT POLICIES REGARDING NIL
Campus policies on NIL are crucial for campus constituencies, companies engaging with student-athletes, and particularly international student-athletes. All NCAA institutions should adopt NIL policies, in consultation with the diverse stakeholders on campus who have roles and responsibilities with regard to compliance and international students. This includes athletics (coaches and compliance), risk management, enrollment management, international office (or wherever DSOs work), academic and administrative leadership, and the business office. Questions to be considered include what types of NIL activities will be allowed on campus and the appropriate contact for student-athletes to seek approval for NIL activities, whether domestic students or international student athletes. For example, F-1 international students may want to engage in NIL activities on campus where they are allowed to work, but their NIL activity could violate exclusivity contracts on campus or could exceed their allowable hours to work on campus. Schools may want to prohibit NIL activities on campus, but this would restrict NIL opportunities for F-1 international students in particular. A policy could meet institutional objectives with equal application to all student-athletes, regardless of citizenship, or could address international student-athletes separately. A policy could allow exceptions, but it should specify which institutional authority is authorized to consider and approve exceptions.

COMPANIES SHOULD CONFIRM INSTITUTIONAL POLICIES
Companies engaging with student-athletes in NIL activities want them to benefit, and these efforts could backfire if the student-athlete violates their visa status, campus exclusivity contracts, or campus rules regulating commercial activities on campus. So companies should confirm in advance both the immigration status of international student-athletes and any applicable campus policies. Schools should commit their campus policy to writing, and make the policy available to student-athletes so they can share with interested companies up front. Most importantly, the campus policy should identify who on campus is the appropriate contact for student-athletes and companies to rely on for confirmation of campus policy, and to review any special circumstances that may not be expressly addressed in the policy. This could be a contact in athletics, or the international office, or the business office, whoever is informed about the institutional policy and considerations that led to the policy.

For more information, please reach out to Leigh Cole, lcole@hkemploymentlaw.com, immigration counsel for Hirschfeld Kraemer LLP.

California Reinstates Indoor Masking For All During the Holidays

Citing a spike in new COVID cases following the Thanksgiving holiday, the California Department of Public Health (CDPH) has issued an indoor mask mandate that will remain in place through January 15, 2022.

Starting December 15, 2021, all persons, regardless of vaccination status, must wear a mask in all indoor public settings.

California employers located in counties that do not currently have a mask mandate should immediately review their policies and practices to ensure all employees are masking up indoors, even if vaccinated.

For more information, please reach out to Michelle Freeman in Hirschfeld Kraemer’s San Francisco office, mfreeman@hkemploymentlaw.com, (415) 835-9003.

OSHA Orders Employers to Adopt Mandatory COVID-19 Vaccination or Testing Policies

On November 4, 2021, the federal Occupational Safety and Health Administration (OSHA) issued a new Emergency Temporary Standard (ETS), requiring employers with over 100 employees to implement a mandatory COVID vaccination policy, or alternatively a policy requiring employees either to be vaccinated or be tested weekly and be masked in the workplace.

Employers must comply by December 5, 2021. We summarize the ETS requirements below.

Who Is Covered
The ETS applies to all private employers with 100 or more employees, regardless of whether the employees are full- or part-time, temporary, or seasonal, unionized, or non-unionized. Employees employed by a staffing agency do not count toward the 100 employee threshold. However, staffing agencies are themselves covered when they have over 100 employees, regardless of location.

Excluded from ETS coverage are:

federal contractor workplaces covered by Executive Order 14042;
health care workplaces covered by the Healthcare ETS (29 C.F.R. § 1910.502); and
public employers in states without OSHA-approved State Plans.

Although all employees are counted for purposes of ETS coverage, not all employees are required to comply with a covered employer’s written policy. The ETS does not apply to:

Employees who do not report to a workplace where other individuals (such as coworkers or customers) are present;
Employees who work from home; or
Employees who work exclusively outdoors.

Vaccination Policy Requirement
No later than December 5, 2021, covered employers are required to develop and implement a mandatory COVID-19 vaccination policy. Under such a policy, employees must be fully vaccinated no later than January 4, 2022, meaning that at least two weeks have passed since the employee received the second dose of a two-dose vaccine (Moderna or Pfizer) or a dose of a single-dose vaccine (Johnson & Johnson). Prior infection does not count as being fully vaccinated. In addition, employers must make reasonable accommodations for employees who cannot obtain the vaccine due to medical reasons or sincerely held religious beliefs.

Employers may, as an alternative to a mandatory vaccination policy, choose to implement and enforce a policy allowing employees to choose to either get vaccinated or to submit to weekly testing and wear face covering while at work. For employers adopting such an “employee choice” policy, employees who are not fully vaccinated (including who have not completed the vaccination process at least two weeks earlier) will need to start undergoing testing (and masking) as of January 4, 2022.

Documentation and Recordkeeping
Employers are required to determine the vaccination status of employees and to obtain appropriate proof as to employee’s vaccination status. Permissible forms of proof of vaccination are:

A record of immunization from a health care provider or pharmacy;
A copy of the U.S. COVID-19 Vaccination Record Card;
A copy of medical records documenting the vaccination;
A copy of immunization records from a public health, state, or tribal immunization information system; or
A copy of any other official documentation that contains the type of vaccine administered, date(s) of administration, and the name of the health care professional(s) or clinic site(s) administering the vaccine(s).

Employees who are not able to provide one of these forms of proof of vaccination may submit a sworn, written statement attesting to their vaccination status. Employers must keep a roster of each employee’s vaccination status, and as with all medical information, the information must be kept confidential and separate from an employee’s personnel file.

Vaccination Paid Leave
As part of its policy, employers must provide employees reasonable time, including up to four hours of paid time, to receive each dose of vaccination. This time is in addition to any paid sick or other leave available to the employer. In addition, employees must be permitted to use sick leave, paid time off, or other qualifying leave to recover from reactions associated with obtaining the vaccine. To the extent an employee does not have available sick leave or time off to recover from their vaccination, the employer must provide up to two days of paid leave for this purpose.

Removing Employees Infected with COVID-19
To prevent the spread of COVID-19, employers must remove from the workplace any employee who either tests positive for COVID-19 or is diagnosed as having COVID-19 by a licensed healthcare provider, regardless of vaccination status. Employees are required to report such test results or diagnoses to the employer. Employees may return to the workplace if they have tested negative for COVID-19, are informed by a licensed healthcare provider that they may return to work, or meet the CDC’s criteria for release for isolation.

Notices to Employees
Employers must provide employees with the written policy required by the ETS in a language and at a literacy level that employees can understand. Employers must also provide employees with copies of two OSHA publications, “Key Things to Know About COVID-19 Vaccines” (click here), and a notice about the penalties for falsifying records, available here.

Federal Preemption and Legal Challenges
The ETS preempts state laws that ban or limit an employer’s ability to require vaccination, face covering, or testing. Although effective as of November 4, 2021, the ETS is a proposed rule under Section 6(b) of the OSH Act. Thus, the ETS could change in the future.

On November 6, 2021, the Fifth Circuit Court of Appeals temporarily stayed the ETS in the face of legal challenges to its constitutionality. The stay is pending further briefing and is not a decision one way or the other as to the legality of the ETS. Employers should begin preparing to comply with the ETS, as we anticipate it will become effective in some fashion.

For more information, please reach out to Felicia Reid, freid@hkemploymentlaw.com, (415) 835-9024, or Jesse Sutz, jsutz@hkemploymentlaw.com, (415) 835-9017.

9th Circuit Reinstates California Law That Employers Can’t Mandate Employment Arbitrations

On October 10, 2019, Governor Newsom signed into law AB 51, prohibiting employers from requiring, as a condition of employment, continued employment, or the receipt of any employment-related benefit, that any applicant for employment or employee waive “any right, forum, or procedure” for a violation of California’s Fair Employment and Housing Act or the Labor Code. Civil sanctions and criminal penalties could be imposed for violations of the law, including as a misdemeanor punishable by imprisonment and/or a fine.

In effect, the new law was designed to prevent employers from requiring employees to arbitrate most employment-related claims instead of being able to bring such claims in court.

On January 31, 2020, in response to a challenge to the law brought by certain business groups and the U.S. Chamber of Commerce, U.S. District Court Judge Kimberly J. Mueller issued a preliminary injunction against enforcement of the new law on the grounds that it was likely preempted by the Federal Arbitration Act (FAA).

On September 15, 2021, in Chamber of Commerce of the United States of America, et al. v. Rob Bonta, in his official capacity as Attorney General of the State of California, et al. (case number 20-15291) a divided three-judge panel of the Ninth Circuit Court of Appeals largely lifted the injunction, finding that most provisions of the California law were not preempted by the FAA or inconsistent with U.S. Supreme Court precedent. In so concluding, the panel found that Congress, in adopting the FAA, and the U.S. Supreme Court, in construing the FAA, were focused on voluntary and consensual executed written agreements to arbitrate and did not intend to preempt state laws requiring that arbitration agreements be voluntary. Writing for the court, Judge Lucero states: “We are asked by plaintiffs to hold that the FAA requires parties to arbitrate when but one party desires to do so. Our research leads to nothing in the statutory text of the FAA or Supreme Court precedent that authorizes or justifies such a departure from established jurisprudence, and we decline to so rule.”

The panel agreed with the district court that the civil and criminal penalties associated with AB 51 for the act of executing an arbitration agreement conflicted with the FAA and thus were preempted to the extent they applied to executed arbitration agreements covered by the FAA.

The dissenting judge was of the view that AB 51 was an impermissible attempt to evade the FAA and recent Supreme Court decisions favoring the enforcement of arbitration agreements.

Given that some other courts of appeal have invalidated various state laws that worked to either prevent the formation of arbitration agreements or to block enforcement of them, as well as the fact that the U.S. Supreme Court in recent years has been active in construing the scope of the FAA, it would not be surprising if the U.S. Supreme Court took up this case.

For more information, please contact William Ross at wross@hkemploymentlaw.com, or (310) 255-1828.

White House Mandates Vaccines for Millions of Americans

On Thursday, September 9, 2021, President Joseph R. Biden, Jr. signed two Executive Orders mandating COVID-19 vaccines for federal employees and for employees of federal contractors, and also signaled that the Department of Labor (DOL) would be issuing an Emergency Rule requiring vaccines for employers with 100 or more employees.

These sweeping mandates should have a dramatic effect on vaccine-resistant employees and on employers frustrated with them.

As to employees of the federal government, President Biden ordered them to be vaccinated, “subject to such exceptions as required by law,” which, generally speaking, involves religious or health-based exemptions. The second Executive Order specifically extended the mandate to employees of federal contractors, who now must comply with the Safer Federal Workforce Task Force.

Certain government contracts – especially, grants or contracts with certain “Indian Tribes” – are exempted from the Order. This second Executive Order does not automatically apply to existing federal contracts, but rather to “new contracts; new contract-like instruments; new solicitations for contracts or contract-like instruments; extensions or renewals of existing contracts or contract-like instruments; and exercises on existing contracts or contract-like instruments” entered into, or extended on or after October 15, 2021.

President Biden also announced that the Department of Labor would imminently issue an Emergency Rule mandating vaccines for employees of employers with over 100 employees.

More information on the contours of that Emergency Rule should be forthcoming soon. We will keep you informed, once we know more.

For more, please reach out to Dan Handman in the Los Angeles office of Hirschfeld Kraemer LLP, dhandman@hkemploymentlaw.com, (310) 255-1820.