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1. The Camp v. Home Depot Decision

On October 24, 2022, a California Court of Appeal decided a time-rounding decision that could be extremely troublesome. In Camp v. Home Depot USA, Inc., 84 Cal. App. 5th 638 (2022), the court opined that no provision in the Labor Code or Wage Orders expressly allows or prohibits time rounding. It observed that the California Supreme Court had not directly decided the precise rounding issues raised in the case before it and determined that the “total time” rounding practices in issue were not permissible.

The court did not stop there. After stating that the rounding of the plaintiff’s total time was inconsistent with public policy, it urged the Supreme Court to address both the narrow rounding issues raised in the Home Depot case and conduct a broader examination of rounding practices allowed in other decisions.

a. Earlier Cases Approved Specific Rounding Practices

The Home Depot decision is at odds with the 2012 decision in See’s Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889 (2012). In See’s the California Court of Appeal held that time rounding policies are lawful under California law if they are neutral on their face and as applied and meet other specified standards. Federal cases throughout the country have also recognized the validity of time rounding practices that meet these standards. Since 2012, numerous courts have followed the See’s Candy decision and applied it in other contexts to a variety of time rounding policies and practices.

The Home Depot court invited the Supreme Court to consider the validity of the rounding standard articulated in See’s Candy where an employer captured all the minutes an employee has worked before applying a quarter-hour rounding policy. It also invited the Supreme Court to address the legality of neutral time rounding by employers and provide guidance on the general propriety of time rounding in view of the “technological advances” that now “help employers to track time more precisely.”

b. The Supreme Court Will Review Rounding

The Supreme Court agreed in February to review the Home Depot decision because the Supreme Court may express views on rounding that reverberate beyond the Home Depot decision itself and touch upon principles established in other cases, including See’s Candy, the case may have broad-ranging significance to all California employers. Furthermore, because the Supreme Court’s decisions ordinarily apply retroactively, employers who utilize rounding practices would be prudent to examine them with their employment counsel as soon as possible.

It bears noting that Richard J. Simmons, Daniel McQueen and Tyler Johnson of Sheppard Mullin have been asked to file an amicus brief with the Supreme Court laying out the employer-side perspective for the California Employment Law Council (“CELC”) and the Employers Group.

2. Background

The plaintiffs, Delmer Camp and Adriana Correa, filed a proposed class action for unpaid wages against Home Depot USA, Inc. They alleged that Home Depot’s electronic time-keeping system captured each minute worked by employees; however, due to Home Depot’s quarter-hour rounding policy, some employees were paid for less time than reflected in the timekeeping system. In actuality, employees had different personal experiences. For example, Correa was overpaid under Home Depot’s practices while Camp was underpaid.

a. The Rounding System Resulted In Overpayment Of One Plaintiff And Underpayment Of The Other

One of the plaintiffs, Correa, agreed that Home Depot’s rounding system did not cause her to be underpaid. Rather, because it resulted in the overpayment of wages in her case, she dropped her claim. In contrast, according to Home Depot’s own evidence, the other plaintiff, Camp, lost a total of 470 minutes over approximately 4 1/2 years due to the rounding policy. Home Depot moved for summary judgment, arguing that its rounding policy was neutral on its face, neutral as applied, and otherwise lawful under the principles set out in See’s Candy. The trial court agreed and granted Home Depot’s summary judgment motion.

b. The Employee’s Appeal

On appeal, Camp contended that notwithstanding See’s Candy, neither the Labor Code nor the relevant Wage Order authorizes time rounding that results in an individual employee failing to receive compensation for all time worked. Based on the particular facts of the case and in view of the guidance provided by more recent Supreme Court opinions in Troester v. Starbucks Corp., 5 Cal. 5th 829 (2018), and Donohue v. AMN Services, LLC, 11 Cal. 5th 58 (2021), the court of appeal reversed the judgment and directed the trial court to enter a new order denying summary judgment. It concluded that, in relying on its quarter-hour rounding policy, Home Depot did not meet its burden by showing that there was no triable issue of material fact regarding Camp’s claims for unpaid wages where Home Depot tracked the exact time in minutes the employee worked each shift and its records showed that Camp was not paid for all the time he worked. Disregarding principles embraced in other cases, the court looked at Camp’s individual claim and disregarded the fact that his co-plaintiff, Correa, had been overpaid based on the same rounding policy.

c. The Court Limited Its Opinion

The court was careful to limit its analysis and holding to the specific facts before it. It made clear that it did not reach the issue of whether employer time rounding practices in other contexts comply with California law. For example, it did not address the application of See’s Candy and its progeny to other circumstances, such as when an employer uses a neutral rounding policy due to the inability to capture the actual minutes worked by an employee. The court emphasized that it did not reach the issue of whether an employer who has the actual ability to capture an employee’s minutes worked is required to do so.

In order to understand the scope of the court’s decision, it is important to consider the rounding practices that were in dispute, a practice where the employer recorded time to the minute and then rounded total time. Yet, despite the court’s attempt to underscore the limitations on its holding, it can be anticipated that the case will generate uncertainty in the area that will persist until the Supreme Court speaks on the topic.

3. Home Depot’s Rounding Policy

Home Depot presented evidence describing its time-keeping and rounding practices. It utilized an electronic software system, “Kronos,” to record hourly employees’ time punches. Hourly employees punched in and out at the beginning and end of their work shifts, as well as for meal breaks. The Kronos system then captured the punch time through the minute.

Unlike a rounding system that looked at each time punch individually, Home Depot rounded total shift time. Specifically, each employee’s total shift time was rounded to the nearest quarter-hour to calculate his or her pay for that period. When total shift time falls between the quarter hour, a time increment of seven minutes or less is rounded down to the nearest quarter hour, while a time increment of eight minutes or more is rounded up to the next quarter hour. For example, if the total shift time was recorded as six hours and three minutes, the time was rounded down to a total of 6.00 hours. If the total shift time was six hours and eight minutes, the shift time was rounded up to 6.25 hours, i.e., 6 1/4 hours.

Camp worked for Home Depot as a non-exempt employee since March 2015. His time and pay records showed that between March 30, 2015 and October 20, 2020, he worked 1,240 shifts. At various points in time, he gained minutes or lost minutes due to rounding. During the entire period, however, the evidence submitted by Home Depot with its summary judgment motion showed he personally suffered a total net loss of 470 minutes, or approximately 7.83 hours over the 4 1/2 year period, due to rounding.

4. The Court’s Description Of The 2012 See’s Candy Decision

In See’s Candy, the appellate court concluded that employer time rounding policies may be lawful in California. The employer’s timekeeping software system required employees to punch into the system at the beginning and end of their shifts, as well as for lunch breaks. The Kronos punch showed the actual time (to the minute) when the employee punched into the system. Pursuant to the time rounding policy, in and out punches were rounded (up or down) to the nearest 10th of an hour (every six minutes beginning with the hour mark). The time punches were thus rounded to the nearest three-minute mark.

The court of appeal observed that although California employers had long engaged in time rounding, there was no California statute or case law specifically authorizing or prohibiting the practice. It then examined the federal regulations promulgated under the federal Fair Labor Standards Act. Notably, the federal standards had been adopted by the California Division of Labor Standards Enforcement.

The See’s Candy court ultimately held that “the rule in California is that an employer is entitled to use the nearest-tenth rounding policy if the rounding policy is fair and neutral on its face” and “it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.” In the decade since the See’s Candy opinion was filed in 2012, numerous other courts have found time rounding lawful under California law. (It bears noting that the employer in See’s Candy rounded individual time punches. In contrast, Home Depot rounded total shift time.)

5. The Discussion Of Troester v. Starbucks Corp.

Troester was decided in 2018, six years after See’s. The Supreme Court considered an employee’s claim for unpaid wages where the employer required employees to work off the clock several minutes per shift. The Supreme Court held that the federal de minimis doctrine did not apply to state law claims for unpaid wages in the circumstances addressed. The de minimis doctrine may in some circumstances excuse the payment of wages for small amounts of otherwise compensable time upon a showing that the bits of time are administratively difficult to record. The Supreme Court referenced the See’s Candy case in Troester, but did not directly analyze the propriety of employer time rounding.

Even though Troester did not reject the principle of time rounding, the Home Depot court found it probative as to several points. For example, Troester did discuss the aggregate effect of failing to pay an employee for a few extra minutes of work each day because the time can add up. In Troester, for instance, the plaintiff sought payment for 12 hours and 50 minutes of compensable work over a 17-month period, which amounted to $102.67 at a wage of $8 per hour. The Supreme Court also commented that employers are in a better position than employees to devise means to track small amounts of regularly occurring worktime. Further, Starbucks had restructured the work so that employees would no longer have to work before or after clocking out. Finally, the Supreme Court observed that “technological advances” may help with tracking small amounts of time.

6. The Discussion Of Donohue v. AMN Services, LLC

In Donohue, the Supreme Court addressed the issue of time rounding in the specific context of meal periods. It explained that California’s meal period provisions are designed to prevent even minor infringements on meal period requirements, and rounding individual meal punches is incompatible with that objective. In fact, small rounding errors can amount to a significant infringement on an employee’s right to a 30-minute meal period. The court in Home Depot carefully selected passages in Donohue that it believed supported a new view on the permissibility of time rounding, even outside of the meal period context.

7. The Court’s Analysis

After reviewing the caselaw in the area, the Home Depot court began its analysis. It noted that Home Depot chose to pay nonexempt employees, such as Camp, by the hour. Where an employer has agreed to pay compensation, as measured by a unit of time, none of the authorities cited by Home Depot indicates that an employer may round captured work minutes where it results in the failure to pay an employee for all minutes worked. Under the guidance and direction of Troester and Donohue, “if an employer, as in this case, can capture and has captured the exact amount of time an employee has worked during a shift, the employer must pay the employee for “all the time” worked.” Because Home Depot did not show there was no triable issue of material fact regarding the claim for unpaid wages, it should not have been granted summary judgment.

The court observed that it had been well settled for nearly a decade that neutral time rounding is lawful under California law. However, it noted that the Supreme Court has never decided the validity of the rounding standard articulated in See’s Candy. It thus reasoned that the application of See’s Candy should be re-examined in circumstances “where employee worktime in minutes can be captured and has been captured by the employer and, as a result of a quarter-hour rounding system, the employee is not compensated for all actual worktime.

8. Additional Resources

The Supreme Court has agreed to review the Home Depot decision and the question: “Under California law, are employers permitted to use neutral time-rounding practices to calculate employees’ work time for payroll purposes?” It is not yet clear whether it will confine its review to the narrow issues resolved in Home Depot or whether it will examine rounding principles on a broader basis.

Employers that use rounding practices should understand and discuss the significance of the Home Depot decision with their employment attorneys. For more information regarding state and federal laws relating to timekeeping and rounding practices, readers can consult Section 7.18 of the Wage and Hour Manual for California Employers (26th Edition) by Richard J. Simmons of Sheppard Mullin. The new edition of the publication is available from Castle Publications, LLC.

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About The Author

Richard J. Simmons is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in Los Angeles. He represents employers in various employment law matters involving litigation throughout the country and general advice regarding state and federal wage and hour laws, employment discrimination, wrongful discharge, employee discipline and termination, employee benefits, affirmative action, union representation proceedings, and arbitrations. Mr. Simmons received his B.A., summa cum laude, from the University of Massachusetts, where he was a Commonwealth Scholar and graduated in the Phi Kappa Phi Honor Society. He received his J.D. from Berkeley Law at the University of California at Berkeley where he was the Editor-in-Chief of the Industrial Relations Law Journal, now the Berkeley Journal of Employment and Labor Law.

Mr. Simmons argued the only case before the California Supreme Court that produced a victory for employers and business in 2018. He was recently recognized as the Labor and Employment Attorney of the Year by the Los Angeles Business Journal and was inducted into the Employment Lawyers Hall of Fame. He has lectured nationally on wage and hour, employment discrimination, wrongful termination, and other employment and labor relations matters. He is a member of the National Advisory Board to the Berkeley Journal of Employment and Labor Law, published by Berkeley Law at the University of California at Berkeley. He was also appointed by the California Industrial Welfare Commission as a member of three Minimum Wage Boards for the State of California.

Over the past ten years, several jurisdictions have enacted “fair work week” ordinances, including Chicago, San Francisco, and New York City. Not to be outdone, the City of Los Angeles recently passed the Los Angeles Fair Work Week Ordinance (the “Ordinance”), which imposes several requirements on retail employers related to scheduling and hiring employees. The Ordinance will go into effect on April 1, 2023 with an initial grace period of 180 days. Full enforcement of the ordinance, including fines and penalties, will begin on September 28, 2023.

1. Who Is Covered By The Ordinance?

The Ordinance applies to employers with 300 or more employees globally, and identified as a retail business in the North American Industry Classification System (NAICS). The NAICS is the standard used by Federal statistical agencies in classifying business establishments. The Ordinance is expressly limited to businesses within the retail trade categories and subcategories 44 through 45. The NAICS website (naics.com) includes a detailed breakdown of these categories.

In addition, for the Ordinance to apply, the employer must exercise control over the wages, hours or working conditions of the employee. Workers employed through temporary services, staffing agencies, subsidiaries and certain franchises count toward the 300 global employee threshold.

An employee is covered by the Ordinance in any particular work week when they perform at least two hours of work within the geographic boundaries of the City of Los Angeles for a covered employer and is entitled to earn the state minimum wage. Thus, the Ordinance covered employers based outside of the City of Los Angeles would need to meet the requirements of the Ordinance for employees that perform at least two hours of work within the city in a particular work week.

2. Employer Requirements

The Ordinance imposes several requirements on covered employers. The key requirements are summarized below.

a. Good Faith Work Schedule Estimates

Under the Ordinance, covered employers are required to provide all employees with a good faith estimate of their future work schedules. For new employees, the estimate must be provided before hiring. For current employees, the estimate must be provided within ten days of an employee’s request. If an employee’s actual work hours substantially deviate from the estimate, employers must have a documented, legitimate, business reason that was unknown at the time of the estimate, to substantiate the deviation.

b. Right To Request Changes To Work Schedules

Covered employers must engage with employees on their preferences for certain times, hours, or locations for their work schedule. Employers may accept or decline requests, but the reason for a denial must be provided to employees in writing.

c. Right To Request Changes To Work Schedules

Covered employers must provide employees advance notice of their work schedules at least 14 days before the start of a work period, by posting the schedule in an accessible location or by electronically sending the schedule. If the employer makes changes to an employee’s work schedule with less than 14 days’ notice, the employer must provide the employee with written notice of those changes. Employees have the right to decline certain changes to their work schedule that are made with less than 14 days’ notice. If an employee voluntarily consents to the changes, the consent must be in writing.

d. Offer Additional Work Hours To Current Employees

Covered employers must offer work to current employees before hiring a new employee or using a contractor, temporary service or staffing agency to perform the work if at least one employee is qualified to do the work and additional work hours would not result in the payment of overtime. The employer needs to make the offer for additional work hours to each employee either in writing or by posting the offer in in the workplace. Employers must make the offer 72 hours prior to hiring any new employee unless all employees provide written confirmation that they are not interested. Employees have 48 hours to accept the offer of additional hours in writing.

e. Provide Predictability Pay

The Ordinance calls for the payment of “Predictability Pay” for certain employer-initiated changes to work schedules made with less than 14 days’ notice from the start of the work period, as set forth in the chart below.

Employer-initiated Change	Predictability Pay
Increase in hours that exceeds 15 minutes	One hour at the employee’s regular rate of pay
Change to the date, time, or location (but no change in hours)	One hour at the employee’s regular rate of pay for each change
Reduction of hours by at least 15 minutes	Hours not worked at one-half the employee’s regular rate of pay
On-call shift, when the employer does not call the employee to perform work	Hours not worked at one-half the employee’s regular rate of pay

 

Certain conditions may exempt employers from having to provide Predictability Pay, including employee initiated schedule changes, employee acceptance of a schedule change due to an absence of another scheduled employee, reduced hours as a result of an employee’s violation of law or an employer’s policies and procedures, and the additional hours requiring the payment of overtime.

f. Rest Between Shifts

Employers must obtain an employee’s written consent before scheduling any shift that starts less than ten hours after the employee’s last shift and must pay employees time and a half for the shift following the insufficient time period.

g. Retention Of Documents

Employers must retain all records required by the Ordinance for at least three years. These records include:

• Work schedules

• Copies of written offers and responses for additional work hours

• Written correspondence about work schedule changes

• Good faith estimates of work schedules, and

• Any other records that may be required to comply with the ordinance

h. Poster

Covered employers must post the Office of Wage Standard notice regarding the Ordinance. As of the date of publication for this article, the Office of Wage Standard website (wagesla.lacity.org) states that posters will be made available soon.

3. Administrative Penalties And Fines For Violations

Employers who violate the Ordinance may have to pay restitution and penalties to each employee whose rights have been violated. Employers may also be liable to the City for a penalty of up to $50 per day that Predictability Pay is unlawfully withheld and additional administrative fines for other violations of the ordinance.

Each and every day that a violation exists constitutes a separate and distinct violation. Any subsequent violation of the same provision by the same employer within three years may result in a 50 percent increase in the maximum administrative fine allowed.

4. Civil Enforcement

Employees may be entitled to restitution and additional penalties for any violations of the Ordinance. An employee may file a complaint with the Office of Wage Standards so long as the following takes place:

(1) The employee provides written notice to the employer of the Ordinance violations. The notice should name the provisions of the Ordinance alleged to have been violated and provide facts to support the alleged violations; and

(2) The employer does not take action to cure the named violations within 15 calendar days from receipt of the written notice

5. Takeaway

The Los Angeles Fair Work Week Ordinance is a complicated and onerous regulation. The above is only a summary of the Ordinance’s requirements. Employers that may be subject to the Ordinance are advised to consult with qualified counsel to determine whether they are covered and how to comply with the new regulation. Additionally employers in other industries (and those outside of Los Angeles) that are not subject to the Ordinance are advised to pay attention as it is increasingly likely that similar scheduling requirements may impact employers in other cities and industries.

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About The Author

Ryan J. Krueger is a Partner with Sheppard, Mullin, Richter & Hampton LLP in the firm’s Los Angeles office. He specializes in labor and employment matters on behalf of employers, including wage and hour violations, employment discrimination, wrongful termination and sexual harassment. Mr. Krueger has experience in all aspects of employment litigation, including brief writing and oral argument, taking and defending depositions, and negotiating settlements. He has also second chaired multiple trials and arbitrations, and argued before the California Court of Appeal. Mr. Krueger also regularly counsels employers regarding California and federal employment law issues.

Ryan is a co-author of the California’s Private Attorneys General Act (PAGA) Litigation and Compliance Manual, a contributing author to the Employer’s Guide to COVID-19 and Emerging Workplace Issues and the ALERT Newsletter. He is a co-speaker at the Castle Publications’ Seminars as well as the Labor Law Update for Sheppard Mullin.

He received his J.D. from the University of California, Los Angeles and his B.A. from the University of Wisconsin, with distinction. During law school, Mr. Krueger served as extern to the Honorable Morton Denlow, U.S. District Court for the Northern District of Illinois. He is admitted to practice in all California state courts, along with the United States District Court for the Central District of California and the Ninth Circuit Court of Appeals.

Employee handbooks often play a significant role in a variety of cases filed against employers. This includes wage-hour cases (such as meal and rest period, reporting time pay, vacation, and sick pay claims) as well as employment discrimination, wrongful termination and retaliation cases. Experience teaches that employee handbooks can either help employers defend such lawsuits or provide harmful evidence if policies are not properly drafted.

In the recent decision in Noumoff v. Checkers Drive-In Restaurants Inc., ___ F. Supp.2d ___, Case No. 1:20-cv-395 (S.D. Ohio Jan. 31, 2023), a federal district court in Ohio granted an employer summary judgment on a former employee’s gender discrimination and retaliation claims under Title VII of the Civil Rights Act of 1964 and Ohio law. The court cited the employer’s honest belief that the employee had committed multiple violations of its employee handbook provisions as a basis to deny the employee’s discrimination and retaliation claims.

1. Background

The action raised the question of whether the defendant, Checkers Drive-In Restaurants, discriminated against and mistreated the plaintiff, Patra Noumoff, during her employment and subsequent termination. The employer operated 265 restaurants across the country and owned the Rally’s Restaurant in Spring Grove, Ohio. The plaintiff was the general manager of the restaurant.

The employer had an employee handbook for all its locations. Multiple sections of the handbook were relevant to the litigation, including provisions titled “what we can expect from you,” “employee conduct and work rules” that provide examples of infractions that can result in discipline or termination, progressive discipline, “time keeping and pay,” and employee benefits provisions relating to taking vacation.

The plaintiff was terminated for several reasons, including making inappropriate adjustments to the time records of two lower employees, insubordination for taking vacation without proper approval, and other alleged misconduct. The plaintiff then filed a discrimination complaint with the Equal Employment Opportunity Commission, alleging gender discrimination and retaliation in violation of federal and Ohio law. She later filed a lawsuit asserting these claims.

2. The Employer’s Summary Judgment Motion

The employer moved for summary judgment, arguing that no genuine issue of material fact existed and that it was entitled to summary judgment on each claim as a matter of law. The federal district court in Ohio agreed that the employer was entitled to summary judgment on the employee’s gender discrimination claim as a matter of law. It began the analysis by stating that Title VII makes it unlawful for an employer to discriminate against any individual because of such individual’s, race, color, religion, sex, or national origin. So does Ohio law.

a. The McDonnell Douglas Analysis

The employee attempted to prove her gender discrimination claim with indirect evidence. Because she relied on indirect evidence, the court was required to apply the McDonnell Douglas Corp. v. Green, 411 U.S. 792 (2007) burden-shifting framework to her claim. Under this framework, the plaintiff has the initial burden to prove a prima facie case of gender discrimination. If the plaintiff satisfies her initial burden, the burden shifts to the defendant to articulate some legitimate, nondiscriminatory reason for the adverse employment action. Lastly, if the defendant satisfies its burden, the plaintiff must prove by a preponderance of the evidence that the stated reasons were pretext for discrimination.

To establish a prima facie case of gender discrimination, the plaintiff has the burden of showing: (1) she was a member of a protected class, (2) she was subject to an adverse employment action, (3) she was qualified for the position, and (4) others, similarly situated and outside the protected class were treated differently.

b. The Employee Handbook

After assuming the plaintiff established a prima facie case for gender discrimination, the court recognized that the burden shifted to the defendant. That burden is one of production, not persuasion. The court found that the employer met its burden. It provided evidence of multiple employee handbook violations committed by the plaintiff, who was a general manager. She received a written warning for her alleged failure to be courteous, a final warning for insubordination for taking vacation that was not previously approved, and allegedly violated the handbook by manipulating two employees’ time and thus their pay. “All alleged Handbook violations are grounds for termination.” Because the employer’s burden is only one of production, it satisfied its burden to establish that it had legitimate, nondiscriminatory reasons to terminate the employee.

That resulted in the transition of the burden to the plaintiff to establish that such reasons are pretext. She failed to do so. As the court pointed out, “the Defendant honestly believed that Plaintiff violated the Handbook on numerous occasions thereby warranting termination, and Plaintiff did not produce evidence to the contrary other than her own testimony and opinions.” Thus, she failed to establish any genuine issue of material fact as to whether the employer’s proffered reasons for the adverse employment actions were pretextual. The employer was therefore entitled to summary judgment on the gender discrimination and retaliation claims.

3. Practical Observations

Ultimately, the court concluded that the employer prevailed on the employee’s gender discrimination and retaliation claims. On a practical level, the employer’s good faith, honest reliance on multiple provisions of its employee handbook that cited examples of inappropriate conduct and rules for taking vacation proved extremely helpful to the employer. It demonstrates that drafting and administrating employee handbooks in a fair and logical manner can be invaluable.

To read more articles like this one, subscribe to the ALERT Newsletter today!

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About The Author

Richard J. Simmons is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in Los Angeles. He represents employers in various employment law matters involving litigation throughout the country and general advice regarding state and federal wage and hour laws, employment discrimination, wrongful discharge, employee discipline and termination, employee benefits, affirmative action, union representation proceedings, and arbitrations. Mr. Simmons received his B.A., summa cum laude, from the University of Massachusetts, where he was a Commonwealth Scholar and graduated in the Phi Kappa Phi Honor Society. He received his J.D. from Berkeley Law at the University of California at Berkeley where he was the Editor-in-Chief of the Industrial Relations Law Journal, now the Berkeley Journal of Employment and Labor Law.

Mr. Simmons argued the only case before the California Supreme Court that produced a victory for employers and business in 2018. He was recently recognized as the Labor and Employment Attorney of the Year by the Los Angeles Business Journal and was inducted into the Employment Lawyers Hall of Fame. He has lectured nationally on wage and hour, employment discrimination, wrongful termination, and other employment and labor relations matters. He is a member of the National Advisory Board to the Berkeley Journal of Employment and Labor Law, published by Berkeley Law at the University of California at Berkeley. He was also appointed by the California Industrial Welfare Commission as a member of three Minimum Wage Boards for the State of California.

On January 10, 2023, the U.S. Equal Employment Opportunity Commission (“EEOC”) released a draft of its Strategic Enforcement Plan (“SEP”) for the years 2023 through 2027. The final SEP is meant to establish the EEOC’s enforcement priorities and goals for the years to come and the final plan is subject to approval by a vote of the EEOC. However, before the SEP is finalized, the public can submit comments on the draft through February 9, 2023 at the website regulations.gov. Thus, employers might benefit from reviewing the topics the EEOC intends to focus on to determine if providing any public comments may serve their interests.

In its current form, the draft SEP indicates that the EEOC will focus on the following topics or “subject matter priorities” over the next four years:

1. Recruitment And Hiring, Including The Use Of Artificial Intelligence

The EEOC intends to focus on recruitment and hiring practices and policies that discriminate against racial, ethnic, and religious groups, older workers, women, pregnant workers and those with pregnancy-related medical conditions, LGBTQI+ individuals, and people with disabilities.

The SEP notes that this will include a focus on the use of artificial intelligence or machine learning to target job advertisements, recruit applicants, or make or assist in hiring decisions. Similarly, this focus would include reviewing screening tools or requirements that disproportionately impact workers based on their protected status. The EEOC also intends to review job advertisements that might exclude or discourage certain demographic groups from applying.

Relatedly, the EEOC intends to focus on policies or practices that limit access to on-the-job training, pre-apprenticeship or apprenticeship programs or other job training opportunities based on a protected status.

The SEP also explains that the EEOC is particularly concerned with the lack of diversity in certain industries such as “construction and high tech” and industries that benefit from substantial federal investments, indicating the EEOC may focus on recruitment and hiring in these particular industries.

2. Protecting Vulnerable Workers

The EEOC also noted that it intends to focus on certain vulnerable workers and persons from underserved communities who may be impacted by employment discrimination or harassment, including the following categories of individuals: immigrant and migrant workers; people with developmental or intellectual disabilities; individuals with arrest or conviction records; LGBTQI+ individuals; temporary workers; older workers; individuals employed in low wage jobs, particularly teen-aged workers employed in such jobs; Native Americans/Alaska Natives; and persons with limited literacy or English proficiency.

3. Protecting Individuals Affected By Pregnancy

The EEOC will also prioritize “emerging and developing issues,” which includes protecting individuals affected by pregnancy, childbirth, and related medical conditions under the Pregnancy Discrimination Act. The EEOC also intends to focus on enforcing the newly enacted Pregnant Workers Fairness Act, which requires employers to make reasonable accommodations for those affected by pregnancy, childbirth, and related medical conditions.

4. Discriminatory Acts In Response To Global Events

The EEOC also flagged discrimination influenced by or in response to local, national or global events as another “emerging and developing issue.” The SEP notes that this category currently includes African Americans, individuals of Arab, Middle Eastern, or Asian descent, Jews, Muslims, and Sikhs. However, the EEOC acknowledged that these designations may change based upon current events.

The EEOC also explained that it will continue to focus on discriminatory acts associated with the COVID-19 pandemic and other threats to public health. The SEP takes note of the significant pandemic-related stereotyping and discrimination targeting certain groups, including persons of Asian descent, older workers, and persons with disabilities.

5. Equal Pay

The EEOC will continue to focus on combatting pay discrimination in all its forms, including on the basis of sex under the Equal Pay Act and on other protected bases covered by federal anti-discrimination laws. The EEOC stated that it will continue to use directed investigations and Commissioner Charges to facilitate enforcement of equal pay laws.

6. Employer Agreements

The EEOC also announced its intention to focus on policies and practices that purportedly limit substantive rights, discourage or prohibit individuals from exercising their rights under employment discrimination statutes, or impede the EEOC’s efforts. To that end, the EEOC intends to target the following types of agreements: settlement agreements and releases, non-disclosure agreements, non-disparagement agreements, and arbitration provisions.

7. Systemic Harassment

The EEOC noted that over 34% of its recent charges include harassment allegations. Accordingly, the EEOC stated that it will continue to focus on combatting systemic harassment in all forms. This priority focuses on widespread patterns or practices of harassment, even if a claim is brought by an individual, if there is some relation to a widespread pattern. The EEOC states that it will accomplish this goal by focusing on strong enforcement with appropriate monetary relief and targeted equitable relief to prevent future harassment.

To read more articles like this one, subscribe to the ALERT Newsletter today!

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About The Author

Rachel Patta Howard is an associate in Sheppard Mullin’s Labor and Employment Practice Group in the firm’s Century City office. Ms. Howard represents employers in a variety of industries including financial services, banking, retail, healthcare, manufacturing, and entertainment. She has successfully litigated and favorably resolved cases involving allegations of discrimination, retaliation, harassment, failure to accommodate, wrongful termination, trade secret misappropriation, and defamation, as well as wage and hour cases, including representative and class actions. Additionally, Rachel advises and counsels clients on day-to-day employment issues including internal investigations, discipline and terminations, leaves of absence, the interactive process, reasonable accommodations, personnel policies, and other wage and hour compliance issues.

She has written a number of articles for the Sheppard Mullin Labor and Employment Blog and is a contributing author of the ALERT Newsletter.

Ms. Howard received her law degree, as well as her undergraduate degree, from the University of California, Los Angeles.

Throughout the COVID-19 pandemic, the California government has required employers to follow the most robust COVID-19-related laws and regulations in the country. However, California’s COVID-19 state of emergency officially ended on February 28, 2023. Shortly thereafter, the California Department of Public Health (“CDPH”) announced its vaccination and masking requirements for healthcare workers will expire on April 3, 2023. Despite these changes, Cal/OSHA’s COVID-19 prevention non-emergency regulations (the “Permanent Standard”) and other COVID-19 related laws remain in effect.

1. Cal/OSHA’s Permanent Standard

As detailed in the January 2023 edition of the ALERT, the Permanent Standard replaced Cal/OSHA’s COVID-19 Emergency Temporary Standards (“ETS”). The Permanent Standard eliminated multiple protocols required under the ETS, including employee screening (such as temperature and symptom checks) and exclusion pay. The Permanent Standard also limits the requirement for employers to make testing available to close contacts in the workplace and as required under outbreak protocols. But, employers still must notify close contacts of potential exposure “as soon as possible” and follow the worksite notification requirements under Labor Code Section 6409.6 (which remains in effect until January 1, 2024). Employers also must treat COVID-19 as a workplace hazard under Cal/OSHA’s IIPP regulations and therefore must address COVID-19 in their written IIPP (or a separate document), perform a COVID-19 hazard assessment, provide COVID-19 training, and investigate and respond to workplace exposures. The Permanent Standard became effective on February 3, 2023, and will remain in effect through February 3, 2025.

2. COVID-19 Leave Laws

As many employers know, California’s supplemental paid sick leave law expired at the end of 2022. Although multiple local supplemental paid leave ordinances initially remained in effect at the start of year, the majority have either ended or will end soon.

• Los Angeles: The City of Los Angeles rescinded its local emergency on February 1, 2023, which caused its supplemental paid sick leave requirement to sunset on February 15, 2023.

• Long Beach: The City of Long Beach voted to sunset its local supplemental paid sick leave effective February 21, 2023.

• Unincorporated Los Angeles County: On February 28, 2023, the Los Angeles County Board of Supervisors voted to end its COVID-19 emergency effective March 31, 2023, which means its supplemental paid sick leave and paid vaccine leave will expire April 14, 2023.

• Oakland: The City of Oakland has yet to announce the end of its local COVID-19 emergency and therefore its local supplemental paid sick leave obligations remain in effect.

• San Francisco: Employers with 100 or more employees worldwide must provide Public Health Emergency Leave (“PHEL”) of up to 80 hours to their San Francisco-based employees. Currently, COVID-19 still qualifies as a “public health emergency.”

3. New CDPH Orders And Guidance

On March 3, 2023, the CDPH issued orders modifying the state’s vaccination and masking requirements for healthcare workers and the state’s isolation guidance.

• Rescinding Of Vaccination Requirement: Effective April 3, 2023, California will no longer require COVID-19 vaccination for healthcare workers, including those in adult care, direct care, correctional facilities, and detention centers. Federal rules will continue to ensure that most health care workers remain vaccinated for COVID-19. Additionally, the EEOC’s guidance remains unchanged and contemplates an employer’s ability to have a generally applicable vaccination requirement, which appropriately accommodates medical conditions and sincerely held religious beliefs.

• Rescinding Of Masking Requirement: Effective April 3, 2023, California will no longer require masks in indoor high-risk and health care settings, including hospitals, long-term care, and correctional facilities. The CDPH explained that the reason for the delay is to allow local health departments and individual health care facilities to develop and implement plans customized to their needs and local conditions. Thus, healthcare employers still may continue to mandate masking based on individual factors such as their facility, patient demographics and community transmission rates.

• Updated Isolation Guidance: Effective March 13, 2023, an employee who tested positive for COVID-19 may end isolation after five days if symptoms are not present, or are mild and improving, and the employee is fever-free for 24 hours. Under the previous guidance, employees could return before ten days only if they tested negative on the fifth day or later. Because the Permanent Standard follows the CDPH’s isolation guidance, employers should modify their IIPP/COVID-19 prevention plan to incorporate the new guidance.

4. Conclusion

Although the COVID-19 state of emergency in California has ended, compliance with the state’s COVID-19 regulations and laws that remain in effect is still a concern for many California employers. Thus, employers should continue to monitor developments and modify their practices and procedures accordingly.

To read more articles like this one, subscribe to the ALERT Newsletter today!

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About The Author

Robert K. Foster is an Associate with Sheppard, Mullin, Richter & Hampton LLP in the firm’s San Diego (Del Mar) Office. Mr. Foster represents employers in various types of employment litigation, including class action wage and hour claims; PAGA claims; and discrimination, wrongful termination, harassment and retaliation lawsuits. In addition, he also provides strategic advice to employers on a wide range of employment issues, including wage and hour compliance, employee classification, and OSHA matters. He is a frequent contributor to the California Labor and Employment ALERT Newsletter and several other articles and is a contributing author to the Employer’s Guide to COVID-19 and Emerging Workplace Issues.

Robert litigates actions involving trade secret claims, unfair competition and enforcement of restrictive covenants and non-competes. He also handles various commercial litigation disputes, including breach of contract, breach of fiduciary duty, fraud, tortious interference with contract, unfair competition and shareholder derivative claims.

California has a proud history of supporting free speech rights, even unpopular and arguably defamatory speech, on the grounds that people should not be punished for speaking on topics that are in the public interest or relate to ongoing litigation. In 1992, California became the first state to enact an anti-SLAPP statute (the acronym SLAPP stands for “Strategic Lawsuit Against Public Participation”). California’s anti-SLAPP laws provide a mechanism for a defendant to file a special motion to strike a complaint where the allegations arise from the defendant’s protected speech. The issue of whether certain speech is protected under the anti-SLAPP statute or rises to the level of defamation, often comes up in the context of employment disputes, where one or both parties make serious accusations against the other. Drawing the line between what speech is and is not protected by the anti-SLAPP statute can become especially complicated. In Lawler v. Guillon Enterprises, __ Cal.App.5th __ (2022), the California Court of Appeal issued an unpublished decision further clarifying when an employer has crossed that line.

1. Jury Verdict And Judgment Against The Employer

The three plaintiffs in Lawler were former employees of Crush Steakhouse in Ukiah, California (“Crush”). After leaving Crush, they filed lawsuits against the restaurant and its parent company for gender and pregnancy discrimination, sexual harassment, and various wage and hour claims. In March of 2020, the court entered a judgment in favor of the plaintiffs for $305,000 against Crush, $125,000 against a Crush manager who was found to have sexually harassed two of the plaintiffs, and $135,000 in attorney’s fees and costs.

2. Letter Defaming The Plaintiffs Sent To Crush Employees

After the court finalized the judgment one of Crush’s co-owners wrote a letter, which was later distributed to 80 Crush employees, stating that due to the judgment, the restaurant would be permanently closing. The co-owner wrote that the three plaintiffs “conspired” to sue Crush and were awarded by the jury “for lying on the stand” and doing a “great acting job.” The co-owner then referred to the plaintiffs’ attorney as being “crooked” whose “only accomplishment” was to “teach witness[es] how to lie in court.” The letter ended by referring to the plaintiffs as “criminals.”

3. The Plaintiffs Defamation Lawsuit And The Trial Court’s Denial Of The Anti-SLAPP Motion

A few months after the restaurant’s co-owner distributed the letter, and after the restaurant filed for bankruptcy, the three plaintiffs filed a defamation lawsuit against various entities owned and controlled by the author of the letter. In response to the defamation lawsuit, the defendants filed an anti-SLAPP motion. Defendants argued that the letter contained protected speech under two separate provisions: first that it constitutes “litigation activity” (Cal. Code of Civil Procedure Section 425.16(e)(2)); and second that it was written in connection with a “public issue” (Cal. Code of Civil Procedure Section 425.16(e)(3) and (e)(4)). Defendants argued that the “public issue” involved the question of whether unlawful activities occurred at Crush and whether the restaurant would close as a result of the lawsuit.

The trial court denied the defendants’ anti-SLAPP motion. The court found that the challenged statements did not fall under either section. First, the court concluded that the letter was published to Crush employees only, not to the general public, and that it concerned “details of Plaintiffs’ experiences” that were not of public significance. The court noted that while the circumstances of the restaurant’s closing may have been a legitimate public concern, that did not insulate the allegedly defamatory statements. And second, the court concluded that the letter was not written in connection with a judicial proceeding because there was no case involving Crush pending at the time the letter was published. Moreover, if the letter was intended to inform employees about the closure and pending bankruptcy, referring to the plaintiffs as liars and criminals, was unnecessary in the court’s view.

The defendants appealed the order allowing the defamation claims to proceed past the pleading stage. The Court of Appeal affirmed the order denying the defendants’ anti-SLAPP motion.

4. The California Supreme Court’s FilmOn.com Test

The Court of Appeal took issue with the defendants’ characterization of the letter as being made to address concerns in the “public interest.” The court reasoned that it is not sufficient that the challenged speech in some manner relates to the public interest. Rather, to prevail on an anti-SLAPP motion, defendants must show that the statements “contribute to” the public debate about those issues. In reaching this conclusion, the court relied heavily on the California Supreme Court’s decision in FilmOn.com Inc. v. DoubleVerify Inc., 7 Cal.5th 133 (2019).

In FilmOn.com, the defendant, DoubleVerify, provided clients with paid confidential reports including information from websites that its clients may want to advertise on. These confidential client reports note if, according to DoubleVerify, a website contains “Adult Content” or “Copyright Infringement.” FilmOn.com filed suit claiming that these labels discouraged potential advertisers. The defendant responded to the lawsuit with an anti-SLAPP motion, which the trial court granted, and the appellate court affirmed.

The California Supreme Court reversed the appellate court’s ruling, finding that the confidential client reports were not in the public interest as contemplated by the statute. According to the Supreme Court, when analyzing whether a communication is in the “public interest” courts must “not only [analyze] its content, but also [] its location, its audience, and its timing.” The Court recognized that while the “Adult Content” label on a website is important, in order to be protected speech, the statement must actually contribute to public debate. And because DoubleVerify’s confidential reports were solely for business purposes, they were “too remotely connected to the public conversation [regarding adult content and copyright infringement] to merit protection under the [anti-SLAPP law’s] catchall provision.” FilmOn.com, supra, at 140.

The Court in FilmOn.com went on to establish a two-party test to determine whether alleged wrongful conduct by the defendant falls under the anti-SLAPP’s statutes “catchall provision.” First, as to the challenged speech, trial courts must determine whether the statement implicates a public issue or is of an issue of public interest. This may include any of the following categories that constitute a “public interest”: (1) a person or entity in the public eye; (2) conduct that could directly affect a large number of people beyond the direct participants; or (3) a topic of widespread public interest. And second, assuming the alleged conduct is sufficiently in the public interest, in determining whether to apply anti-SLAPP protections, a court must then consider the “functional relationship” between the challenged speech and the public conversation about the matter. Id. at 149-150. The “functional relationship” is determined by considering context (including the identity of the speaker), the audience, and the apparent purpose of the speech. Id. at 142-144, 152.

5. The Co-Owner’s Letter Does Not Constitute Protected Speech

Turning back to the letter authored by Crush’s co-owner, the court in Lawler applied the FilmOn.com standard and agreed with the trial court that the author of the letter, and his companies, could be sued for defamation by the three plaintiffs. First, the court questioned whether the challenged statements in the letter actually implicated a public issue. In addition to the fact that the three plaintiffs were not public figures, whether or not they were liars or criminals (the allegations made in the letter) was not a topic of widespread public interest. Second, the co-owner published the letter to the restaurant’s employees, not to the general public. Third, the audience who received the letter (i.e., other employees) had no role or authority to weigh in on the restaurant’s closing—the purported public interest according to the defendants—as they had no ownership interest in the restaurant. And finally, despite calling the plaintiffs “criminals” and accusing them of perjury, the court noted that nothing in the challenged letter suggested that the author intended to involve the criminal justice system.

Turning to the defendants’ argument that the letter was protected because it was made in the context of ongoing legal enforcement proceeding and review by a “judicial body,” the court stated that in order to fall under the litigation exception, the “challenged speech must be aimed at achieving the objects of the litigation.” Lawler at 16. Here, the statements in the letter were not directed to anyone with an interest in the “enforcement proceedings” but instead to the restaurant’s employees.

6. Conclusion

The Lawler case offers an important reminder to employers who want to publicly call out an ex-employee/plaintiff for bringing what the employer considers to be baseless claims against the employer. While the anti-SLAPP statute certainly allows an employer to make a variety of statements, including statements which in other contexts may be considered defamatory, the line on what is and is not acceptable is not always clear. For that reason, before hitting “send” on an email which could end before a court, it is important to consult with an attorney to help navigate the line between protected speech and defamation.

To read more articles like this one, subscribe to the ALERT Newsletter today!

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About The Author

Adam R. Rosenthal is a Partner in Sheppard Mullin’s Labor and Employment Practice Group in the firm’s San Diego (Del Mar) and Los Angeles offices. Mr. Rosenthal represents a broad spectrum of employers in all areas of employment law before federal and state courts, the American Arbitration Association and JAMS. He has significant trial and arbitration experience in single plaintiff and class action cases involving wage and hour disputes such as allegations of missed meal and rest breaks, unpaid overtime, off-the-clock work and time shaving, wrongful termination, sexual harassment and disability discrimination, defamation, misclassification of manager “exempt” employees, and non-compete agreements and trade secrets.

Adam frequently lectures on employment law issues to in-house legal departments, trade associations and business and HR groups. He has written a number of articles and is also the co-author of the Employer’s Guide to COVID-19 and Emerging Workplace Issues.

Mr. Rosenthal represents national and international clients in retail, transportation, high-tech, manufacturing, healthcare, biotech, financial services, food services and non-profit organizations. He received his law degree from the University of California, Davis in 2006 and his undergraduate degree from the University of California, Los Angeles, cum laude.

The ALERT has published articles over the years stressing the importance of employees’ time records in wage-hour litigation. While time records are basic documents that every employer must keep, few employers understand how critical a role they play in defending wage-hour practices. It is repeatedly said that time records can be your ally or your enemy. Here is why.

1. Time Records Will Be Used By Employers Or Plaintiffs’ Attorneys To Tell Your Story

It has always been obvious that time records can be used in wage-hour litigation to tell an important story that can lead to liability or refute a claimed violation. For example, employees can seek to use time records to show unauthorized overtime work, the failure to pay for off-the-clock work, or challenge time rounding and meal period practices.

Employers can use properly kept time records effectively to tell a much different story. Employers who train supervisors and employees about the need to keep accurate time records can benefit immensely from such efforts. Compliant records and policies can help demonstrate that employees are directed to record all work time, to never work off the clock, to follow permissible time-rounding practices (if rounding occurs), and to show all work was accurately recorded and compensated.

Maintaining pristine time-keeping, meal period and rest period policies is essential. Because the law imposes the obligation on employers to keep time records that accurately show all work time, when employees begin and end work each shift, and when employees begin and end each meal period, the failure to maintain and produce such records can have serious consequences, particularly if employers are forced to defend their practices in court.

2. The Role Of Accurate Time Records In Meal Period Litigation

The importance of maintaining accurate time records showing legal compliance has never been greater. Dozens of wage-hour actions are filed under the Private Attorneys General Act of 2004 (“PAGA”) every day and class action lawsuits remain extremely common. Employees allege meal and rest period violations in thousands of cases filed every year. While time records need not record rest periods, they must record the times meal periods begin and end unless an exception to that obligation exists, e.g., if an employer’s operations cease entirely during meal periods.

It is imperative that employers understand that such records play a key role in any meal period litigation, regardless of whether it is a PAGA, class action or single plaintiff case. As explained below, plaintiffs’ attorneys prey on employers who are unprepared to protect themselves.

a. Plaintiffs’ Attorneys Use Time Records To Build Their Case

Employers should anticipate that attorneys challenging their meal period practices will closely examine their written policies and time records for potential violations. They may turn the records over to a “data analyst” who, in turn, looks at each employee’s time records and tries to identify every possible instance in which a record indicates a “late, short, or missed meal period.” Under the law, a “late” meal period is one that begins after the end of the fifth hour of work and a “short” meal period is one that is less than 30 minutes long. If an employee works over 10 hours in a day, a second meal period is “late” if it begins after the end of the tenth hour of work.

b. Records Can Create A Presumption Of Violations

The California Supreme Court’s 2021 decision in Donohue v. AMN Services indicates that a time record creates a rebuttable presumption of a violation if it shows a late, short or missed meal period. Even though an employer may have a good explanation and legal justification for the fact that an employee missed a meal period or took a late or short meal period, the plaintiff’s attorney will not care.

For example, the plaintiffs’ data analyst will claim that the time records show “violation rates,” even if the employer argues there is no violation at all because the employee lawfully waived the meal period or voluntarily chose to delay or shorten it. Employers must understand the rules and be prepared to defend themselves with the facts. Sound time-keeping practices and employee training can aid employers to overcome a false picture painted by a plaintiff’s attorney. As a pure legal matter, time records can provide evidence of violations, but do not dispositively prove they occurred. Similarly, they can provide evidence of compliance just as they can offer evidence of violations. Plaintiffs’ attorneys use the pejorative references to a “violation rate,” like a reference to alleged “wage theft,” in an effort to stigmatize and denigrate the employer before the court.

c. Lax Practices Lead To Problems

Employers often allow themselves to be vulnerable to meal period claims by having lax practices or allowing employees to control if and when to take meal periods and when to clock back in after they begin. For instance, even if an employer directs employees to take 30 minute meal periods before the fifth hour of work and provides employees the opportunity to take them, problems are likely to surface if employees are allowed to begin them late or clock back in when they wish.

Imagine a company with 100 employees that fails to monitor employee time-keeping each shift and allows employees flexibility. Assume the company has lawful policies, but allows employees to take and record meal periods as they wish. It would not be surprising if 75 of the 100 employees either choose to start their meal periods late, clock back in before taking 30 minutes, forget to record meal periods they took or just did not eat because they were not hungry or wished to leave early because of child care issues.

In this case, while the employer believes it did nothing wrong, the records show a 75% “violation rate.” Astonishingly, this is not unusual. Yet, employers who do not carefully and routinely monitor their records have no clue what story the records will tell until it is too late. Once the records are completed, they cannot be unwritten.

d. Employers Can Rebut The Presumption Of A Meal Period Violation

It can be anticipated that plaintiff’s attorneys will argue to the court that time records demonstrate actual violations of the law, even though an employer may be able to rebut the presumption of a non-compliant meal period by demonstrating facts showing that no actual violation occurred. For example, an employer may identify an affirmative defense, such as the fact that the employee signed a meal period waiver, was paid a premium for the late, short, or missed meal period, or was provided a timely, compliant meal period, but voluntarily chose to delay, shorten, or skip it. If the employer establishes a defense, the employee will not be entitled to a missed-break premium according to the rationale articulated by the Supreme Court in the Brinker Restaurant and Donohue decisions.

Nonetheless, the plaintiff’s attorneys will vigorously argue that these are violations and where there is smoke, there is fire. The employer will then be put on the defensive and be forced to operate from a credibility deficit. Even if it can overcome the presumption of violations and resulting problems, it will incur substantial expenses in its effort to do so. Are there steps employers can take?

3. Best Practices Require Planning And Policing

Employers often become embroiled in disputes because they fail to give sufficient attention to the impact of time records that tell the wrong story and come back to haunt them. As noted earlier, this is illustrated by situations where employers have lax policies or attempt to provide employees flexibility to structure their own schedules or meal periods. In such cases, employers or their supervisors do not insist that employees take and record their meal periods in a manner that directly shows strict meal period compliance.

If an employer or its supervisors allow employees to take meal periods when they choose, delay them past the fifth hour of work, or return early if they are done eating, their time records create a distorted picture. Such “employee friendly” practices can result in harmful time records that indicate serious compliance problems.

a. Train, Coach And Direct Supervisors To Comply With The Law

Because the ability to demonstrate compliance is key, the best practice requires that employees be directed to take and record meal periods of at least 30 minutes that begin before the end of the fifth hour of work. Employees who work more than 10 hours in a day should be directed to take and record a second meal period that begins before the end of the tenth hour of work. Supervisors should be trained and directed to enforce the law and the employer’s policies so the time records support the story the employer wants told – the employer’s policies, practices and time records comport fully with California law.

b. Didn’t The Supreme Court Say That Employers Need Not “Police” Meal And Rest Periods?

A popular notion exists that the Supreme Court announced in the landmark Brinker Restaurant decision that employers technically need not “police” meal and rest periods. Even though the statement appears in Brinker, as a practical matter, that pronouncement is a fiction. If an employer fails to take control over meal and rest period compliance and time records, it will invite problems and likely face adverse consequences. Worse yet, it may face enormous liability if time records suggest there are high “violation rates” and attorneys use those records against the employer.

c. The Naranjo Decision Provides Additional Guidance

The California Supreme Court’s 2022 decision in Naranjo v. Spectrum Security Services offers helpful insights that can further assist employers. The opinion stated unambiguously that the payment of premiums for late, short or missed meal periods “chops off” liability under the Labor Code for PAGA and waiting time penalties as well as missed-break premiums under Labor Code Section 226.7. When such premiums are earned and owed, they should be timely paid and listed on pay stubs.

4. Additional Best Practices

The best practice requires that time records be accurate and tell a story that helps the employer defend any claims. They should show widespread compliance by demonstrating meal periods were provided and taken in a timely manner and are at least 30 minutes long. There are a number of proactive strategies employers can implement to achieve this goal. They begin with training supervisors and managers to enforce the law and the employer’s rules. While it is often said that employers are not obligated to “police” employees, the reality emphasizes the importance of directly monitoring, overseeing, and policing employees so that time records demonstrate strict compliance with the law. Thus, they can indeed become an employer’s strong ally or enemy. If they suggest widespread violations, even when contrary evidence can be introduced, an employer may operate from a credibility deficit that can be extraordinarily costly and difficult to overcome.

5. Valuable Resources

The importance of wage-hour litigation is underscored by the number of cases filed every day and the enormous costs employers pay to defend and settle lawsuits. Lawsuits alleging meal and rest period violations are among the most common cases employers are forced to defend. Yet, while employers spend huge sums defending such cases, most expend far less energy and resources structuring policies and practices that maximize their ability to wage a successful defense.

Because of the importance of the topic, Castle Publications has prepared several publications that examine this topic in detail and provide an in-depth legal analysis as well as suggestions for implementing compliant policies and practices. Two of those publications written by Sheppard Mullin attorney and partner Richard J. Simmons are the Wage And Hour Manual For California Employers and the specialized publication, California’s Meal And Rest Period Rules: Proactive Strategies For Compliance, which devotes over 190 pages to the topic of meal and rest periods and contains helpful appendices that include sample forms and policies.

To read more articles like this one, subscribe to the ALERT Newsletter today!

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About The Author

Richard J. Simmons is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in Los Angeles. He represents employers in various employment law matters involving litigation throughout the country and general advice regarding state and federal wage and hour laws, employment discrimination, wrongful discharge, employee discipline and termination, employee benefits, affirmative action, union representation proceedings, and arbitrations. Mr. Simmons received his B.A., summa cum laude, from the University of Massachusetts, where he was a Commonwealth Scholar and graduated in the Phi Kappa Phi Honor Society. He received his J.D. from Berkeley Law at the University of California at Berkeley where he was the Editor-in-Chief of the Industrial Relations Law Journal, now the Berkeley Journal of Employment and Labor Law.

Mr. Simmons argued the only case before the California Supreme Court that produced a victory for employers and business in 2018. He was recently recognized as the Labor and Employment Attorney of the Year by the Los Angeles Business Journal and was inducted into the Employment Lawyers Hall of Fame. He has lectured nationally on wage and hour, employment discrimination, wrongful termination, and other employment and labor relations matters. He is a member of the National Advisory Board to the Berkeley Journal of Employment and Labor Law, published by Berkeley Law at the University of California at Berkeley. He was also appointed by the California Industrial Welfare Commission as a member of three Minimum Wage Boards for the State of California.

On June 15, 2022, the U.S. Supreme Court published its game-changing decision in Viking River Cruises, Inc. v. Moriana, 142 S.Ct. 1906, 2022 WL 2135491 (2022). The Supreme Court concluded in its 8 to 1 decision that the Federal Arbitration Act (“FAA”) aids employers with arbitration agreements to prevent representative claims based on the Private Attorneys General Act of 2004 (“PAGA”). The decision prevents plaintiffs’ attorneys from sidestepping employees’ agreements to arbitrate employment disputes by pursuing representative PAGA actions in court. It does allow an employee’s individual PAGA claim to be arbitrated.

The decision is expected to increase interest in the use of arbitration agreements as a means to prevent “shakedown” lawsuits, such as the cookie-cutter PAGA actions alleging identical claims against hundreds of employers. It accomplishes this outcome by invaliding a California decision that had allowed representative actions to proceed in court despite an employee’s agreement to arbitrate all disputes on an individual basis.

1. The California Supreme Court’s Iskanian Decision Is Preempted

By disagreeing with a 2014 decision of the California Supreme Court, Viking River Cruises shields employers from representative PAGA claims if they have well-drafted arbitration agreements containing class action waivers. The U.S. Supreme Court confirmed that an employee’s “individual PAGA claims” can be arbitrated if the employee either initiates arbitration that includes such claims or is directed by a court to arbitrate such claims on an individual basis. Thus, the Supreme Court determined that the plaintiff (Moriana) who brought a PAGA action against Viking River Cruises in court could be ordered to arbitrate her individual Labor Code claims, including her individual PAGA claim. It further determined that the pending enforcement action filed on behalf of other employees under PAGA should be dismissed.

a. PAGA Claims Are Not Indivisible

This holding rejected the conclusion of the California Supreme Court announced in its famous 2014 decision in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014). Iskanian held that employers cannot rely on class and representative action waivers to compel arbitration of PAGA claims on an individual basis because PAGA plaintiffs litigate as proxies on behalf of the state. Iskanian also viewed PAGA claims as indivisible claims that cannot be split so that an employee can arbitrate an individual PAGA claim while litigating the non-individual (“representative”) PAGA claim in court.

b. Individual vs. Representative Claims

The U.S. Supreme Court disagreed with the California Supreme Court over this key issue. It concluded that the FAA preempts Iskanian’s rule insofar as it precludes division of PAGA actions into individual and non-individual claims and thus prevents employees from pursuing their individual PAGA claims in arbitration. In other words, the Iskanian rule prohibiting the splitting of PAGA claims is preempted by federal law to the extent a plaintiff’s “individual PAGA claim” arising from a violation she alleges she personally suffered cannot be split off from the non-individual (“representative”) PAGA claims arising out of events involving other employees. Because that rule in Iskanian is preempted, Viking River Cruises was entitled to compel arbitration of Moriana’s individual PAGA claim. Further, because it determined the plaintiff lacked statutory standing to continue to maintain her non-individual claims in court, the Supreme Court reversed the judgment of the California Court of Appeal and concluded the correct course is to dismiss her remaining claims.

2. Background

a. Viking’s Class Action Waiver And Severability Clause

Viking River Cruises, Inc. (“Viking”) is a company that offers ocean and river cruises around the world. When she was hired as a sales representative by Viking, Angie Moriana signed an agreement to arbitrate any dispute arising from her employment. The agreement contained a “Class Action Waiver” providing that in any arbitral proceeding, the parties could not bring any dispute as a class, collective or representative PAGA action. Significantly, it also contained a severability clause specifying if the waiver was found invalid, any class, collective or representative PAGA action would presumptively be litigated in court. But under the severability clause, if any “portion” of the waiver remained valid, it would be “enforced in arbitration.”

b. The PAGA Action

Despite the agreement, Moriana filed a PAGA action in state court after leaving her position. She alleged she was an aggrieved employee under PAGA because Viking failed to pay her final wages in a timely manner under the Labor Code. She also asserted an array of other Labor Code violations allegedly sustained by other employees, including minimum wage, overtime, meal period, rest period, pay stub and other claims. Notably, she did not claim she personally suffered each of these other violations.

Viking moved to compel arbitration of Moriana’s “individual PAGA claim” meaning the claim that arose from the violation she allegedly suffered. It also moved to dismiss her other PAGA claims. After the trial court denied the motion, the California Court of Appeal affirmed, holding that categorical waivers of PAGA standing are contrary to state policy. Critically, it also held that PAGA claims cannot be split into arbitrable individual claims and nonarbitrable “representative” claims.

3. Individual Claims Include Violations Sustained By The Plaintiff

In evaluating the preemption question before it, the U.S. Supreme Court found it important to distinguish “individual PAGA claims,” which are premised on Labor Code violations “actually sustained by the plaintiff,” from “representative” PAGA claims arising out of events involving other employees. The Supreme Court used the term “individual PAGA claim” to refer to claims based on Labor Code violations “suffered by the plaintiff.”

a. Iskanian Adopted Two Relevant Rules

The Supreme Court addressed two separate rules found in the Iskanian decision. It found that Iskanian’s “principal rule” prohibits waivers of “representative” PAGA claims. This rule prevents parties from waiving representative standing to bring PAGA claims in either a judicial or arbitral forum. But Iskanian also adopted a “secondary rule” that invalidates agreements to separately arbitrate or litigate “individual PAGA claims for Labor Code violations that an employee suffered,” on the theory that resolving victim-specific claims in separate arbitrations does not serve the deterrent purpose of PAGA.

b. Moriana Could Not Sidestep The Obligation To Arbitrate

The Supreme Court held that Iskanian’s prohibition against wholesale waivers of PAGA claims is not preempted by the FAA. The FAA thus did not preempt the “principal rule” prohibiting a waiver of PAGA standing. But Iskanian’s rule that PAGA actions cannot be divided into individual PAGA claims and non-individual (representative) claims is preempted, so Viking was entitled to compel arbitration of Moriana’s individual claim. After deciding that Moriana could not sidestep her obligation to arbitrate her individual PAGA claim concerning the payment of her final wages, the Court addressed what should occur with respect to Viking’s efforts to dismiss the non-individual (representative) claims she initiated based on alleged violations suffered by other employees.

4. Key Features Of The Supreme Court’s Decision

The Supreme Court summarized several features of its decision in its conclusion. They include the following rulings:

1. The FAA preempts the rule in Iskanian insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate. That holding compelled reversal of the California Court of Appeal’s decision.

2. Viking’s agreement purported to waive “representative” PAGA claims. Under Iskanian, this provision was invalid if construed as a wholesale waiver of PAGA claims. Because that aspect of Iskanian is not preempted by the FAA, the agreement remains invalid if it is interpreted in that manner.

3. But the severability clause in the agreement provides that if the waiver provision is invalid in some respect, any “portion” of the waiver that remains valid must still be enforced “in arbitration.” Based on this clause, Viking was entitled to enforce the agreement insofar as it mandated arbitration of Moriana’s individual PAGA claim – the claim based on Labor Code violations she allegedly suffered herself.

4. The lower California courts refused to enforce the agreement based on the Iskanian rule that PAGA actions cannot be divided into individual and non-individual claims. Because that rule is preempted, Viking is entitled to compel arbitration of Moriana’s individual PAGA claim.

5. The Supreme Court framed the remaining question by asking what the lower courts should have done with Moriana’s non-individual claims, which may not be dismissed simply because they are “representative.” The Supreme Court found that PAGA provides no mechanism enabling a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate arbitration proceeding.

6. Under PAGA’s standing requirement a plaintiff can maintain non-individual (representative) PAGA claims in an action only by virtue of also maintaining an individual claim in that action. Consequently, when an employee’s own dispute is pared away from a PAGA action, the employee is no different from a member of the general public, and PAGA does not allow such persons to maintain suit.

7. Finally, because Moriana lacks statutory standing to continue to maintain her non-individual claims in court, the correct course is to dismiss her remaining claims.

5. The California Legislature And Courts May Get Involved

Many practitioners forecast future involvement of the California Legislature and courts. Justice Sotomayor’s concurring opinion in Viking River Cruises signaled the possibility of future developments. Her opinion observed that the “Court faithfully applies precedent to hold that California’s anti-waiver rule for claims under [PAGA] is pre-empted only ‘insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate.’” However, she remarked that California is not powerless to address its sovereign concerns. While the FAA poses no bar to the adjudication of Moriana’s “non-individual” PAGA claims, PAGA itself “provides no mechanism to enable a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate proceeding.” Thus, Moriana lacks “statutory standing” under PAGA to litigate her “non-individual claims separately in state court.

However, the concurring opinion explained that is not necessarily the end of the story. Rather, California courts will have the last word in an appropriate case if the Supreme Court’s understanding of state law is wrong. Alternatively, even if the Supreme Court’s understanding is right, the California Legislature is free to modify the scope of statutory standing under PAGA within state and federal constitutional limits. Such a legislative change would probably apply prospectively, so it would only affect future cases.

6. Lessons Learned

Until that time occurs, employers with properly drafted arbitration agreements should be able to rely on Viking River Cruises to compel arbitration of an employee’s individual claims, including an individual PAGA claim arising from alleged Labor Code violations against that employee. They can also seek to dismiss or stay any non-individual claims asserted for different employees in court. It is predictable that the plaintiffs’ bar, which has a substantial financial interest in lobbying for PAGA actions, will seek legislative reform.

Employers with arbitration agreements should review those agreements, including their features regarding severability and the arbitration of individual PAGA claims, to make certain they reflect the teachings of Viking River Cruises. Likewise, employers who do not have such arbitration agreements may wish to discuss their potential value with experienced employment lawyers.

Employers should also monitor other activity in this area, such as the Ninth Circuit Court of Appeal’s rehearing in Chamber of Commerce v. Bonta, a case examining the validity of AB 51, anti-arbitration legislation enacted by the California Legislature in 2019. The federal district court concluded that AB 51 was likely preempted by the FAA. In a 2-to-1 decision, the Ninth Circuit disagreed and determined that some portions of AB 51 are not preempted, prompting the Chamber of Commerce to request a rehearing en banc. The Ninth Circuit issued an order in February 2022 noting that a majority of the panel agreed that consideration of the Chamber’s petition for rehearing en banc should be deferred until the Supreme Court decided Viking River Cruises. Further activity in the case is now anticipated.

7. PAGA Reform Initiative

In 2021, a proposed ballot initiative was drafted to replace PAGA with a new system that would discourage excessive litigation and provide a different and improved method for claim resolution that would allow employees to receive 100% of penalties recovered. The initiative, called the “California Fair Pay And Employer Accountability Act of 2022,” described its objective of eliminating shakedown lawsuits, producing quicker resolutions, avoiding prolonged and costly court cases, and providing penalties to workers, not lawyers or the state.

If approved, the initiative would amend Labor Code Sections 2698 – 2699 and several other statues, in order to replace current private attorney actions with employment enforcement exclusively in the hands of independent state regulators. The California Labor Commissioner’s office would handle violations, award penalties directly to employees, and eliminate PAGA’s litigation incentives that allocate 75% of penalties to the State of California while enabling plaintiffs’ attorneys to profit at the expense of employees and employers. It would not allow “stacking” penalties under separate Labor Code provisions.

Efforts to allow a vote on the ballot initiative in 2022 were delayed because of a timing issue relating to the ability of election officials to verify the collection of over 600,000 valid signatures. Those backing the measure reportedly will now seek to qualify the measure for the 2024 general election.

The Supreme Court described the primary issues in the case as whether the “premium” of an extra hour of pay for missed breaks constitutes “wages” that must be (1) reported on statutorily required pay stubs (called “wage statements”) during employment and (2) paid within statutory deadlines when an employee leaves the job. The court definitively concluded that the answer is yes. In fact, earned premiums must be reported even if they have not been paid. Although the extra pay is designed to compensate for the unlawful deprivation of a guaranteed break, “it also compensates for the work the employee performed during the break period.” The court determined that the extra pay thus serves the dual purpose of providing a remedy for the deprivation of breaks while simultaneously constituting wages subject to the same timing and reporting rules as other forms of compensation for work. It is anticipated that many employers will react to the decision by evaluating “auto-pay” systems that flag and trigger the payment and reporting of missed-break premiums in specific situations.

To read more articles like this one, subscribe to the ALERT Newsletter today!

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About The Author

Richard J. Simmons is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in Los Angeles. He represents employers in various employment law matters involving litigation throughout the country and general advice regarding state and federal wage and hour laws, employment discrimination, wrongful discharge, employee discipline and termination, employee benefits, affirmative action, union representation proceedings, and arbitrations. Mr. Simmons received his B.A., summa cum laude, from the University of Massachusetts, where he was a Commonwealth Scholar and graduated in the Phi Kappa Phi Honor Society. He received his J.D. from Berkeley Law at the University of California at Berkeley where he was the Editor-in-Chief of the Industrial Relations Law Journal, now the Berkeley Journal of Employment and Labor Law.

Mr. Simmons argued the only case before the California Supreme Court that produced a victory for employers and business in 2018. He was recently recognized as the Labor and Employment Attorney of the Year by the Los Angeles Business Journal and was inducted into the Employment Lawyers Hall of Fame. He has lectured nationally on wage and hour, employment discrimination, wrongful termination, and other employment and labor relations matters. He is a member of the National Advisory Board to the Berkeley Journal of Employment and Labor Law, published by Berkeley Law at the University of California at Berkeley. He was also appointed by the California Industrial Welfare Commission as a member of three Minimum Wage Boards for the State of California.

On June 24, 2022, the U.S. Supreme Court issued its decision in Dobbs v. Jackson Women’s Health Organization, No. 19-1392 (June 24, 2022) holding that access to an abortion is not a right protected by the U.S. Constitution. The decision gave individual states the authority to regulate abortions. This decision has many practical implications for employers across the U.S., especially since state laws governing abortions now differ considerably across the country.

1. Travel Benefits For Employees Seeking Out-of-State Abortions

Many employers have implemented policies that reimburse employees who travel out-of-state for abortion services, when those employees live in states where access to abortions are prohibited or highly restricted. Employers should discuss these policies with counsel to ensure compliance with state and federal law. One option employers are considering is to provide travel benefits under an existing group health plan. Another option is provide benefits under a Health Reimbursement Arrangement (“HRA”) or through an Employee Assistance Program (“EAP”). Employers could also consider providing the benefits as general taxable reimbursements or as a separate policy outside of an existing health plan. Again, because such programs are so new and the law is evolving, employers should discuss these options (or any others) with counsel prior to implementation. There may be potential tax concerns, ERISA concerns, and ACA issues, among other things. Employers may also want to discuss their options with insurance brokers or their human resources professionals to determine the options available under their current plans.

On a related note, employers may want to review their fully-insured healthcare plans to see if any changes have been made to their policies that might limit coverage for reproductive healthcare services. On the other hand, employers who provide healthcare to their employees through self-insured plans may have the ability to revise their plans to include coverage for additional services in this regard.

2. Aiding And Abetting Laws In Some States

In this post-Dobbs world, some states have enacted “aiding and abetting” laws, with some laws stating that providing reimbursement for abortion expenses is considered “aiding and abetting” an illegal abortion.

For example, Texas has enacted laws that allow individuals to file civil actions against entities that “knowingly engage in conduct that aids or abets the performance or inducement of an abortion, including paying for or reimbursing the cost of an abortion through insurance or otherwise.” In fact, Texas lawmakers have already warned several high profile employers (including a law firm) who have publicized their support for travel reimbursements that they would be violating Texas law if they move forward with such reimbursements. The lawmakers further warned that the employers could be subject to civil and criminal prosecution under the laws.

These laws will certainly be challenged and so much is unknown at this point. Thus, it will be important to stay abreast of the various state “aiding and abetting” laws and continue to consult with counsel in this regard.

3. Employees’ Medical Information

If an employer receives information about an employee’s need or request for an abortion (or any information about the employee’s health), the employer must ensure that it keeps such information confidential and separate from any personnel file.

In the current landscape, some employers are attempting to avoid such confidentiality issues by requiring employees to only provide travel receipts, not documentation of the underlying procedure, to qualify for any abortion-related benefits.

4. Federal Anti-Discrimination Laws May Be Triggered

The Pregnancy Discrimination Act (“PDA”) prohibits employment discrimination based on pregnancy, childbirth, or related medical conditions. Federal courts around the country have held that the PDA prevents employers from taking adverse employment actions against employees because of an employee’s decision to have an abortion, decision not to have an abortion, or the contemplation of an abortion. Similarly, courts have also held that Title VII of the Civil Rights Act of 1964 protects employees from being fired for having an abortion or contemplating an abortion. This means that an employer could be found to violate the PDA and/or Title VII if it pressured an employee to have, or not to have, an abortion in order to keep her job.

5. Employers Could Infringe On “Protected Activity”

In this politically-charged environment, employers should also be mindful of certain laws that protect specific types of expression in the workplace. For example, the National Labor Relations Act (“NLRA”) prohibits retaliation against employees who discuss the terms and conditions of employment, commonly referred to as “protected concerted activity.” It is possible that employees who discuss or advocate for their employer to provide benefits to women seeking abortion-related services, advocate for their employer to take a certain public stance on the issue, or protest their employer’s position on the issue, may be considered to be engaging in “protected activity” under the NLRA.

6. The Future Is Still Uncertain

These are only a few issues that may come up in the employment context in the post-Dobbs world, but there are certain to be other issues in the future, as the laws in various states continue to evolve. Further, federal and state agencies will likely provide guidance on how Dobbs impacts various employment laws. Moreover, it is inevitable that plaintiffs (whether employees, state governments, or someone else) will file lawsuits relating to employers’ Dobbs-related decisions. Employers across the country will have to wait to see how such lawsuits turn out.

To read more articles like this one, subscribe to the ALERT Newsletter today!

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About The Author

Rachel Patta Howard is an associate in Sheppard Mullin’s Labor and Employment Practice Group in the firm’s Century City office. Ms. Howard represents employers in a variety of industries including financial services, banking, retail, healthcare, manufacturing, and entertainment. She has successfully litigated and favorably resolved cases involving allegations of discrimination, retaliation, harassment, failure to accommodate, wrongful termination, trade secret misappropriation, and defamation, as well as wage and hour cases, including representative and class actions. Additionally, Rachel advises and counsels clients on day-to-day employment issues including internal investigations, discipline and terminations, leaves of absence, the interactive process, reasonable accommodations, personnel policies, and other wage and hour compliance issues.

She has written a number of articles for the Sheppard Mullin Labor and Employment Blog and is a contributing author of the ALERT Newsletter.

Ms. Howard received her law degree, as well as her undergraduate degree, from the University of California, Los Angeles.

On August 11, 2022, the Centers for Disease Control and Prevention (“CDC”) issued new guidelines for individuals to follow to minimize the impact of COVID-19. The CDC stated that it modified its previous guidelines because there is now significantly less risk of severe illness, hospitalization and death from COVID-19 compared to earlier in the pandemic. The CDC’s guidelines now focus more on individual responsibility. This may help employers by allowing them to relax some of their COVID-19 workplace protocols and policies. That said, the CDC has no enforcement authority and its guidance is only advisory. Therefore, employers in states like California that still have COVID-19 emergency regulations and orders in place must continue to follow any protocols required by state and local governments.

1. Main Components Of The Updated Guidelines

The CDC’s updated guidelines focus on the following:

• COVID-19 Vaccination And Boosters: The CDC’s guidelines no longer differentiate any protocols based on vaccination status. Nonetheless, the CDC continues to promote the importance of individuals getting vaccinated and staying up to date with COVID-19 boosters because protection against severe disease diminishes over time, especially against current and evolving variants.

• Quarantining: Previously, the CDC instructed that close contacts who are not current with boosters should quarantine for five days and self-monitor for symptoms as a precaution. However, the CDC no longer recommends quarantining following COVID-19 exposure, regardless of vaccination status. Instead, the CDC now recommends that close contacts should (1) wear a mask for 10 days and (2) get tested on day 5.

• Isolation: The CDC recommends that individuals who have tested positive for COVID-19, or who are symptomatic and suspect they have COVID-19, should isolate from others for at least 5 days (note: day 1 is the first full day after symptom onset or after specimen collection for asymptomatic individuals). The recommended duration of isolation depends on the following:

o Asymptomatic Or No Fever And Improving Symptoms: After 5 days, if asymptomatic or if the individual is fever-free for 24 hours without the use of medication and symptoms are improving, the individual can end isolation and return to work (but should continue to wear a mask until day 10, as detailed below).

o Fever Remains Or Symptoms Not Improving: After 5 days, if the individual still has a fever or other symptoms have not improved, the individual should continue to isolate until those symptoms improve.

o Individuals With Moderate Or Severe Illness: If the individual has a (1) “moderate illness” (shortness of breath or difficulty breathing), (2) “severe illness” (hospitalization), or (3) weakened immune system, the individual should isolate through day 10. The CDC also advises that individuals with a severe illness or weakened immune system consult with a doctor before ending isolation.

• Masking: Individuals who have isolated because they are symptomatic or who have tested positive for COVID-19 should wear a mask around others for 10 days. As noted above, close contacts also should wear a mask for 10 days.

• Employee Screening: The CDC no longer recommends that employers in most community settings use testing to screen asymptomatic employees without known exposures. Therefore, employers who still utilize testing as part of their overall COVID-19 safety protocols or as an accommodation for employees who are exempt from a mandatory vaccination policy may consider revising their policies.

• Physical Distancing: The CDC’s updated guidelines state that physical distancing is now just one component of how individuals may protect themselves and others. To that end, the CDC recommends physical distancing should be considered for particular settings where the risk of exposure is higher due to local COVID-19 Community Levels and where there is a lack of ventilation.

2. The Impact Of The CDC’S Guidelines On California Employers

As discussed in the May 2022 edition of the ALERT (Volume 40 – Number 6), the California Division of Occupational Safety and Health’s (“Cal/OSHA”) COVID-19 Emergency Temporary Standards (“ETS”) outlines COVID-19 protocols that cover most California employees. Although the ETS historically has been based on CDC guidance, the current iteration of the ETS is effective through December 31, 2022. Therefore, it seems unlikely that Cal/OSHA will revise its ETS to align with the updated CDC guidelines and California employers should continue to follow the requirements of the ETS.

3. Conclusion

Presumably, state and local governments in the vast majority of states will follow the CDC’s updated guidelines for any state and local regulations and orders governing COVID-19 protocols that employers must follow. It also seems likely that federal OSHA will consider the updated guidelines when assessing an employer’s COVID-19 infection control efforts. Employers who wish to modify their protocols based on the updated guidelines should ensure that they check any applicable federal, state and local regulations and guidance that governs the workplace before implementing any modifications.

To read more articles like this one, subscribe to the ALERT Newsletter today!

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About The Author

Robert K. Foster is an Associate with Sheppard, Mullin, Richter & Hampton LLP in the firm’s San Diego (Del Mar) Office. Mr. Foster represents employers in various types of employment litigation, including class action wage and hour claims; PAGA claims; and discrimination, wrongful termination, harassment and retaliation lawsuits. In addition, he also provides strategic advice to employers on a wide range of employment issues, including wage and hour compliance, employee classification, and OSHA matters. He is a frequent contributor to the California Labor and Employment ALERT Newsletter and several other articles and is a contributing author to the Employer’s Guide to COVID-19 and Emerging Workplace Issues.

Robert litigates actions involving trade secret claims, unfair competition and enforcement of restrictive covenants and non-competes. He also handles various commercial litigation disputes, including breach of contract, breach of fiduciary duty, fraud, tortious interference with contract, unfair competition and shareholder derivative claims.