United States: Employment, Labor & Benefits Update - November 2016

Human Resources Professionals Beware - Antitrust Laws Don't Just Apply to Sales Terms

By Nancy Sasamoto

Your company has trained your sales force not to discuss prices with competitors or engage in anti-competitive conduct, so you have adequately managed the risk of exposing the company to an antitrust enforcement action, right? Not quite. On October 20, 2016, the Department of Justice (DOJ) and Federal Trade Commission (FTC) issued a guidance for human resources professionals that states that agreements among competing employers with respect to hiring, such as agreements limiting or fixing the terms of employment for potential hires or agreements not to "poach" each other's employees, may violate federal antitrust laws.

https://www.justice.gov/atr/file/903511/download

The DOJ has announced that it will criminally investigate "no-poaching" and wage-fixing agreements between competing employers because such agreements eliminate competition for employees. In the past few years, the DOJ and FTC have taken action against employers that entered into agreements not to hire or poach each other's employees. The DOJ has brought three civil enforcement actions against technology companies (eBay and Intuit, Lucasfilm and Pixar, and Adobe, Apple, Google, Intel, Intuit and Pixel) that agreed not to "cold call" each other's employees. All these cases resulted in consent judgments entered based on an agreement by the parties not to engage in certain employment practices. The DOJ also brought an action against the Arizona Hospital & Healthcare Association for acting on behalf of most Arizona hospitals to set uniform pay rates for temporary and per diem nurses.

The FTC has also started cracking down on agreements that reduce competition for employment. The FTC brought a claim against Debes Corp. for entering into agreements to boycott temporary nurses' registries in order to eliminate competition among nursing homes for the purchase of nursing services. The FTC also brought a case against the Council of Fashion Designers of America for trying to reduce fees and other compensation for models. Both cases ended in consent judgments.

Employers Beware: New California Legislation to Keep California Employment Disputes in State

By Masanari Katsumi

On September 25, 2016, Governor Jerry Brown of California signed Senate Bill 1241 ("SB 1241") into law. SB 1241, which becomes effective in January 1, 2017, has devastating effects for employers in California, as the new legislation now prohibits employers from requiring an employee who "primarily resides and works in California" to agree, as a condition of employment, to a forum selection clause that designates a non-California forum or a choice of law provision that would deprive the employee of the substantive protection of California law.

Employers have long made use of forum-selection clauses and choice of law provisions in employment agreements to adjudicate disputes with their employees outside of California and/or under the substantive law of a state other than California. Employers may have good reasons for wanting to handle an employment dispute outside of California. For example, an employer's principal place of business may be located in another state, and the employer therefore finds that it is more convenient to deal with any dispute in their home state. Or, in the case of a choice-of-law provision, an employer may simply want some predictability in terms of which state's substantive law would apply to its employees, especially if the employer has employees in multiple jurisdictions.

Enforcement of forum selection clauses that designate a non-California forum was always a difficult battle in California, even prior to SB 1241, as employers needed to prove that such enforcement would not diminish substantive rights accorded under California law. However, SB 1241 now makes the enforcement of these forum-selection clauses extremely unlikely, if not impossible. SB 1241 also generally forbids choice of law provisions that indicate the substantive law of a state other than California if such provisions would "deprive the employee of the substantive protection of California law with respect to a controversy arising in California. Moreover, any contract provision that violates SB 1241 is voidable by the employee, and a court may award the employee enforcing his or her rights under SB 1241 reasonable attorney's fees in addition to injunction relief and any other available remedies.

There is one exception to SB 1241's prohibitions. SB 1241 does not apply to contracts with employees who are "individually represented by legal counsel in negotiating the terms of an agreement to designate either the venue or forum in which a controversy arising from the employment contract may be adjudicated or the choice of law to be applied."

Employers need not worry about revising their current agreements with their California employees for now, as SB 1241 does not apply to employment agreements already in effect. The language of SB 1241 states that the legislation "shall apply to a contract entered into, modified, or extended on or after January 1, 2017." However, California employers should begin thinking about whether their standard employment agreements have forum selection clauses and/or choice of law provisions that violate SB 1241 and if these agreements need to be modified for use after January 1, 2017.

California Employers, Are Your Pay Stubs Compliant?

By Asa W. Markel

Many employers rely on their payroll providers to print out proper paychecks and paystubs for employees. Although this most oftentimes gets the job done, California employers are advised to exercise caution to ensure that each employee's paystubs in California report the information required for that type of employee. This is because, in many wage and hour disputes, lawyers representing employees usually make their presence known with a written demand for the employee's payroll records and personnel file. After the lawyer gets copies of these documents and judges that the employee's pay stubs are not compliant with California Labor Code Section 226, the lawyer will inevitably issue a demand letter, which usually will include some sort of allegation of a paystub violation.

Section 226 of California's Labor Code requires that the following items must appear on every pay stub: (i) gross wages; (ii) total hours worked (for non-exempt employees); (iii) the number of piece-rate units earned and any applicable piece rate (if applicable); (iv) deductions; (v) net wages; (vi) the inclusive dates of the period for which the employee is paid; (vii) the employee's name and the last four digits of his or her social security number (or employee identification number); (viii) name and address of the employer; and (ix) the employee's hourly rate(s) and the hours worked at each rate (or, if employer is a temporary services employer, the rate of pay and the total hours worked for each temporary services assignment). Employers also have to report the employee's accrued paid sick leave time on paystubs (or an alternative document), under another provision of the Labor Code. If an employee is misclassified, or there is some other misunderstanding between the employer and the payroll company, the paystubs can be out of compliance. This can lead to claims against the employer by the employee for both statutory penalties for the noncomplying paystubs and attorneys' fees for all claims brought against the employer. While the statutory penalties will be a fixed amount, the fact that the employee can potentially collect his or her attorneys' fees for the entirety of a lawsuit, even if the lawsuit contains other claims not related to pay stub compliance, will often be a significant burden on an employer considering whether to defend or settle a case.

Though Section 226 seems relatively straightforward on paper, complying with the section has been trickier in reality. A problem with pay stub compliance in California has been uncertainty in the interpretation of Section 226, which, in turn, has led to often dubious allegations of non-compliance. Thankfully, both the California Legislature and Court of Appeals have recently provided some clarifications on pay stub compliance. Pursuant to AB 2535, signed into law in July 2016, the Labor Code will now specify that exempt employees are not entitled to have the total number of hours worked reported in their paystubs. This legislative clarification comes on the heels of AB 1506, adopted in the last months of 2015, which provides that an employer must be given 33 days to correct paystubs before an employee can commence a Private Attorneys General Act ("PAGA") suit against the employer on behalf of all similarly-situated employees. The 33-day cure period will be quite helpful for employers in avoiding expensive PAGA suits, although no such cure period is provided for individual claims by employees.

Most recently, California's Court of Appeal provided further clarification of Section 226 when it dispensed with a dubious paystub claim. In Soto v. Motel 6 Operating, LP, No. D069403 (Cal. App. Oct. 20, 2016), an employee had tried to argue that the absence of PTO or vacation balances in paystubs constituted a violation of the Labor Code. The Soto Court looked at the text of Section 226 and determined that the list of items stated in the statute was exhaustive and did not require employers to provide an employee's vacation or PTO balance in paystubs. The overarching significance of Soto for California employers is that employees should not be able to claim paystub violations for missing information unless that information is specifically listed in Section 226 (or similar sections) of the Labor Code. On the more specific question of whether PTO or vacation balances should be stated on paystubs, employers should still be mindful that if they utilize PTO in lieu of paid sick leave, they are still likely required to provide the balance of that accrued time on employees' paystubs. Nevertheless, the clarifications of the past 12 months will no doubt reduce the kinds of paystub claims that hold California employers hostage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions