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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.

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

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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.

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.