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California statutes prohibiting retaliation bar termination of (or other adverse employment action against) employees asserting their legally protected rights, exercising political affiliations, opposing unlawful discrimination at workplace, or seeking statutory redress (such as investigation of discrimination, harassment, etc.)

To show retaliation under California Fair Employment and Housing Act (FEHA), an employee must show that (1) he or she engaged in protected activity under FEHA; (2) he or she suffered an adverse employment action (such as demotion, transfer, suspension, termination or other action by the employer that materially affects the terms, conditions, or privileges of employment, and/or would tend to discourage a reasonable employee from complaining about the unlawful conduct at workplace); and (3) there is a causal connection between the protected activity and the adverse employment action.

FEHA specifically prohibits an employer from retaliating against employee for opposing any unlawful discriminatory practice prohibited by FEHA, and filing a complaint, testifying, or assisting in any proceeding under FEHA.

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The California Fair Employment and Housing Act (FEHA) provides a non-exhaustive list of possible accommodations that an employer may consider to accommodate a qualified disability or medical condition of an employee. These typical reasonable accommodations include, but are not limited to:

• Making facilities accessible to and usable by disabled individuals;

• Job restructuring (modifying daily duties of an employee);

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Under California law (Fair Employment and Housing Act or “FEHA”) an employer has an affirmative duty to engage in a timely, good-faith interactive process with an employee who is disabled or who the employer perceives to be disabled.

The interactive process is a discussion between an employer and employee that contemplates that the employee and employer will communicate directly with each other to exchange information about job skills and job openings to find a reasonable accommodations to the employee’s disability to the extent possible, without constituting undue hardship on the employer.

Communicating with the employee’s representatives, rather than with the employee personally, may suffice in some circumstances. In Hanson v. Lucky Stores, Inc., the court noted that it was appropriate for the employer to consult with employee’s doctors and vocational rehabilitation specialists in order to identify available and suitable positions and offer those to the disabled employee.

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The employer must engage in a “timely, good faith interactive process … in response to a request for reasonable accommodation by an employee or applicant with a known physical or mental disability or known medical condition. Although the law doesn’t specifically provide, the California court rulings make it clear that the employer must initiate the interactive process if the employee’s disability is known or apparent. An employer who knows of the disability of an employee has an affirmative duty to make known to the employee other suitable job opportunities. Prilliman v. United Air Lines, Inc. (1997) 53 CA4th 935, 950.

An employer “knows an employee has a disability when the employee tells the employer about his condition, or when the employer otherwise becomes aware of the condition, such as through a third party or by observation.” Faust v. California Portland Cement Co. (2007) 150 CA4th 864, 887. This means that if the employee’s medical condition is not apparent (such as diabetes, carpal tunnel syndrome, etc.), the employer cannot be under a legal obligation to engage in an interactive process with that employee if the employer doesn’t know and has no reason to know that the employee is suffering from disability or medical condition. However, if the employee’s condition is obvious (a woman with an obvious pregnancy, an employee with a cast on his hand or foot, etc…) then the employer has to initiate the interactive process of providing reasonable accommodations to that disabled employee.

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interactive-process-FEHA-disabilityAs I work and get in get in contact with more San Francisco area employers and employees, I can’t help but be amazed at the liability exposure that the companies-employers incur as a result of their human resources’ managers ignorance of the basic disability laws that lead do series of wrongful terminations, and retaliatory demotions, suspensions and transfers, many of which are unlawful under California law.

At first, I thought my experience was an exception, but after speaking with many of my fellow employment lawyers in the area, I realized that we all noticed that the vast majority of human resources managers do not even have a general idea about what “interactive process” of employees who are disabled or perceived to be disabled is. Many of them don’t even know that in most cases it is illegal to terminate employee because of his or her disability even if he or she is an at-will employee, because while at-will employment allows an employer to terminate employee for any reason, no reason or arbitrary reason, it does not permit terminating employees for unlawful discriminatory and retaliatory reasons. .

These seemingly technical violations often lead to mediation, arbitration and trial verdicts of hundreds of thousands of dollars or more, including punitive damages and attorneys fees against employers.

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Many employers include a “standard” arbitration provision in their employment contracts or employee handbooks, which provides that any and all disputes arising out of the employer-employee relationship must be referred to mandatory arbitration instead of being litigated in jury trial. Generally, a mandatory arbitration provision is in the employer’s interest. Please read about some of the reasons why employers may prefer arbitration of employment disputes over jury trial.

California law, like federal law, favors enforcement of of valid arbitration agreements. Broughton v. Cigna Healthplans (1999). However, a court may strike down an employer-employee arbitration agreement and find it to be invalid and unenforceable, referring the wrongful termination, discrimination, retaliation, or other employment related dispute for jury trial. One of the most common reasons that courts find certain arbitration agreements to be unenforceable is because these agreements are unconscionable.

arbitration agreements between employer and employeeThe California Supreme Court has a very informative and detailed discussion regarding the enforceability of arbitration agreements in Armendariz v. Foundation Health Psychcare Services, Inc. 24 Cal.4th 83 (2000). In that case, the Court reiterated the holding in Gilmer v. Interstate/Johnson Lane Corp. (1991) 500 U.S. 20, noting that an arbitration agreement is lawful if is (1) provides for a neutral arbitrators, (2) provides for more than minimal discovery, (3) requires a written award, (4) provides for all of the types of relief that would otherwise be available in court; and (5) does not require employees to pay either unreasonable costs or any arbitrator’s fees or expenses as a condition of access to the arbitration forum.

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Under FLSA an employee will be considered to be paid on a “salary basis” and thus exempt for the purposes of overtime compensation, if the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all of part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed. 29 C.F.R. section 541.602(b)(1)(2004). Employees must also be paid a specified minimum salary in order to qualify as exempt.

exempt salaried employee under FLSA

The effect and the reason behind those provisions is to prevent employers from docking the pay of an employee for an absence of less than a day (partial day absence). In other words, the employer should only deduct pay for one day absences or longer. Thus, if an exempt employee takes a few hours off, that should not be deducted from pay. If an employee takes one day and a half off, the employer, with a small number of exceptions, can only deduct one day from that pay period. If the employer makes partial day deductions, then the employees subject to those deductions do not meet the salary basis test, and are non-exempt for the purposes of overtime pay.

Thus, an employer should be very careful with partial day deductions against exempt employees’ pay, as classifying employees as “salaried exempt” while docking their pay for partial day absences will likely subject an employer to liability for failure to pay overtime compensation for at least the entire time that the policy of partial day deductions has been in place.

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One of the most important provisions under the Bankruptcy Code that affects employment discrimination, retaliation and wrongful termination claims asserted against the employer that files bankruptcy is the “automatic stay” under the Bankruptcy Code section 362. Immediately upon filing by the employer of a bankruptcy petition, the automatic stay takes effect and prevents the plaintiff employee / former employee from proceeding with his employment claim against the debtor. Any action taken by such an employee after filing of the bankruptcy petition contrary to the automatic stay will be void even if the employee is not aware of the employer’s bankruptcy filing. With certain exceptions, the automatic stay applies to all creditors, including plaintiff-employees with discrimination, harassment, and other claims.

If the employer files bankruptcy before the employee files the employment lawsuit, and the statute of limitations on the employment discrimination claim otherwise expires while the automatic stay is in effect, the employee will have until 30 days after the automatic stay is terminated to file the employment discrimination lawsuit, assuming that the claim is not discharged, otherwise extinguished, or resolved in the bankruptcy.

This 30-day period my be extended if the employee was not notified and didn’t have a reason to know that the stay was terminated.

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An employer who loses or is about to lose an employment or wrongful termination case will usually argue at trial/arbitration/mediation that the plaintiff employee failed to mitigate his damages. In other words, the employer will try to convince the decision makes that the plaintiff who has been unemployed or underemployed since being terminated, could have and should have found a job long time ago and could have minimized his losses by actually working during the time that he or she was unemployed.

It is therefore very important to know that in employment and wrongful termination cases in California, the burden is on the employer to show that comparable or substantially similar employment was available to the plaintiff employee who was unlawfully terminated and was unemployed for a period of time while his wrongful termination lawsuit was pending. Substantially equivalent employment affords virtually identical promotional opportunities, compensation, job responsibilities, working conditions and status as the position from which plaintiff has been terminated. Sellers v. Delgado College (1990)

This means that the unemployed or underemployment claimant need not go into another line of work, accept a demotion, or take a demeaning position. Ford Motor Co. v. EEOC (1982). Plaintiff may also properly refuse employment that is inconveniently located or unreasonably distant. Cunningham v. Retail Clerks Union (1983) Although, geographical considerations may be less of a factor for executives and professionals whose employer routinely relocate their top employees. In such cases, a wrongfully terminated employee’s failure to accept a job offer solely because it requires moving to a different location may be held to be a failure to mitigate damages. Hopkins v. Price Waterhouse (1990).

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Once the employer knows or should know about sexual or other harassment, it has a duty to take immediate and appropriate corrective actions to end it. The employer’s response to harassment complaints against a particular employee or a supervisor must be reasonable calculated to end the harassment. This of course doesn’t mean that an employer has to terminate the alleged harasser’s employment upon receiving a complaint of harassment. A warning, reprimand, mandatory harassment training, suspension or administrative leave are some of the remedies available to an employer which may prevent further harassment and remind the harasser of the consequences of his actions.

However, conducting an investigation of harassment but taking no steps to protect employee from further harassment will not insulate an employer from liability. And if earlier discipline did not end the harassment, a more severe discipline is required. In Intlekofer v. Turnage (9th Cir. 1992) an employer was held liable when harasser, who had been verbally counseled once, repeated his harassing conduct, but employer did not take sufficient additional steps to prevent and/or remedy harassment.

Although the necessary response varies with each case, typically, an employer should:

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