Hess on Business Law

Kring & Chung February Newsletter

laurahess — Mon, 06 Feb 2012 20:30:41 +0000

The February newsletter is here, just in time for you to read to your sweetheart on Valentine’s Day. Just kidding. Articles on new penalties for misclassifying employees as independent contractors; steps to take after a divorce; and courts not enforcing employment arbitration agreements if they are one-sided.

Do You Google Your Employees?

laurahess — Mon, 30 Jan 2012 20:44:34 +0000

Do you ever Google your employees or prospective employees to find out what kinds of things they say on the web? If so, keep in mind that the law prohibits discrimination when making employment-related decisions. This includes discriminating against employees or job applicants on the basis of their religion, political affiliation, sexual orientation, age, qualified disability, marital status, pregnancy, cancer, etc.

The University of Kentucky ended up paying $125,000 to settle just such a lawsuit against it by a scientist it was considering for a director position. This particular scientist was the number one candidate being considered for the job. However, a review of the scientist’s personal website showed he held rather strong views in favor of the theory of creationism. The university was concerned that the scientist’s public stance questioning the scientific validity of the theory of evolution would not reflect well upon the university’s biology department. Thus, despite the scientist’s otherwise superb qualifications, the university passed him over for the position on the grounds of his creationist religious beliefs.

The moral of this story is that, if you do internet searches of your employees and prospective employees, make sure that you do not make any employment-related decisions with respect to that individual on a legally protected basis.

New Penalties for Misclassifying Employees as Independent Contractors

laurahess — Thu, 19 Jan 2012 17:40:30 +0000

SB 459, signed by Gov. Jerry Brown in October 2011, prohibits employers from willfully misclassifying an employee as an independent contractor. “Willful misclassification” means that the employer is trying to “avoid employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.” The new law also makes any non-lawyer who advises an employer to willfully misclassify employees jointly and severally liable along with the employer.

Penalties for violation include:

1. $5,000 to $15,000 civil penalty per violation.

2. $10,000 to $25,000 civil penalty for a “pattern and practice of violations.”

3. The court or California Labor and Workforce Development Agency (“CLWD”) can contact the California State Contractor’s Licensing Board and require it to initiate action.

4. Required notice posting, visible to all employees and the public, stating that the employer has committed a serious violation of the law by willfully misclassifying employers and independent contractors; that it has changed it business practice to avoid further violation; that any worker believing he or she is misclassified may contact the CLWD; and that the notice is being posted pursuant to a state order. This notice must be signed by a company officer and must remain posted for one year.

Delay in Requirement to Notify Employees of Right to Unionize

laurahess — Tue, 10 Jan 2012 18:08:04 +0000

The National Labor Relations Board (“NLRB”) has postponed the effective date of its controversial rule requiring all employers to post notices advising employees of their right to unionize or otherwise demonstrate against their employer. The effective date has been postponed from November 14, 2011 to January 31, 2012.

The NLRB claimed that the reason for the postponement is “to allow for enhanced education and outreach.” However, it is clear that the postponement is due to pressure from impending legal challenges in the United States District Court. Furthermore, the House of Representatives proposed a rider to the NLRB’s 2012 budget which would prohibit the NLRB from allocating any portion of its budget towards enforcing the rule.

The NLRB’s official press release can be viewed here.