California’s new Cal-OSHA statute, formerly AB2774, makes major changes to the definition of what constitutes a ‘serious violati
The Goldstein Law Firm
March 2011 Newsletter
By: Charles H. Goldstein, Esq.
“California’s new Cal-OSHA statute, formerly AB2774, makes major changes to the definition of what constitutes a ‘serious violation of OSHA’”; The Statute of Limitations for Filing Unlawful Discrimination, Harassment, and Retaliation Claims and the “Continuing Violation Doctrine; and “Can I Pay Employees Who Are Non-Exempt from the California and Federal Wage and Hour Laws, A Salary that Includes Payment for Overtime?”
I. California’s New Law, formerly AB2774, makes major changes in defining what constitutes a “Serious Violation of OSHA”
Effective January 1, 2011, a new California law, formerly AB 2774, dramatically altered the definition of what constitutes a “serious violation of OSHA” in California. Under the prior law, in order to establish a serious violation Cal OSHA, Cal OSHA agents had to prove that there was “a substantial probability that death or serious physical harm could result from a violation” and the Cal/OSHA Appeals Board did not accept the testimony of OSHA inspectors on whether or not a particular violation had the “substantial probability” of death or serious physical harm. The Cal OSHA Appeals Board found that such opinion evidence could only be given by qualified expert witnesses and not OSHA inspectors. Knowing that the Cal OSHA Appeals Board would not sustain many of the citations that were issued by OSHA inspectors, Cal OSHA was willing to significantly reduce penalties issued by inspectors for serious violations. I believe that the changes made by the new law will reduce the incentive for OSHA to take this action to ameliorate penalties that have been issued by overly zealous inspectors.
A. What changes were made in existing California law by AB 2774?
AB 2774 reduced Cal OSHA’s burden of proving serious violations in a number of ways. First, the new law changes the “substantial probability” standard to “a realistic possibility” standard, a much lower standard that requires proof of less than 51%. This means there will be more serious violation citations issued against employers. Second, the term “serious physical harm” has been greatly expanded to include two important changes that diluted the definition: (1) the new definition drops the requirement that the injured person must be an in-patient in a hospital for more than 24 hours and therefore any time a person is injured and taken to a hospital for treatment, the violation can now be characterized as “serious”; and (2) the new law includes a separate category of injury now called “impairment sufficient to cause a part of the body or the function of an organ to become permanently and significantly reduced in efficiency on or off the job, such as second degree or worse burns, crushing injuries.” What constitutes “significantly reduced in efficiency” will have to be determined through lengthy litigation before Cal OSHA and potentially the courts.
Third, rather than requiring expert testimony, Cal OSHA inspectors now will be able to provide opinion evidence on what constitutes a “realistic possibility” that death or serious physical injury could result and the custom and practice of injury and illness prevention in the workplace.
Fourth, the new law also creates a rebuttable presumption that a serious violation exists after making “a reasonable attempt to determine and consider various factors before issuing the citation such as: (1) whether there was training for employees and supervisors to prevent exposure to the hazard or similar hazards; (2) the employer’s procedures for discovering, controlling access to, and correcting the hazard or similar hazards; (3) the adequacy of supervision of employees exposed to the hazard; (4) the employer’s procedures for communicating health and safety rules and programs to employees; and (5) any information the employer wishes to provide to Cal OSHA that the alleged condition was not a serious violation and that its existence could not have been known without the exercise of reasonable diligence. Cal OSHA will be able to satisfy this new requirement by delivering 15 days in advance, a standardized form containing the description of the alleged violation it intends to cite as serious, and soliciting the employer’s position based on the above criteria.
B. What Should Employers Do to Deal with AB 2774?
1. Make certain that your Injury and Illness Prevention Program materials, safety procedures, and health policies are up to date and that all employees have acknowledged receiving these materials.
2. Update your health and safety materials, rules and policies, if warranted.
3. There will be more serious violation citations issued under AB2774 by Cal OSHA inspectors than prior to the enactment of this law. These citations carry with them costly fines and other legal consequences. Therefore, have your employment lawyers involved at the earliest stages in the OSHA inspection process. Do not wait until the fines and penalties have already been issued.
II. The Statute of Limitations for Filing Unlawful Discrimination, Harassment, and Retaliation Claims is Really One Year Unless There is Evidence of a “Continuing Violation”
I am often asked by clients about the statute of limitations for bringing an unlawful discrimination, harassment, and retaliation claim when an employer learns that a former employee is intending to sue them for harassment and/or discrimination under the California Fair Employment and Housing Act (“FEHA”). The answer is one (1) year from the last act of harassment and/or discrimination, unless there is evidence of “continuing harassment” and/or discrimination to support a finding of a continuing violation of the law.
In Trovato v. Beckman Coulter, Inc., the Third District California Court of Appeal sustained the granting of a summary judgment motion against a former employee, Trovato, on the grounds that she failed to file her administrative complaint with the California Department of Fair Employment and Housing (“DFEH”) within one (1) year of the violation.
Trovato began working for the employer, Beckman, as a sales representative in January 2006. Allyn was Trovato’s direct supervisor for part of her employment at Beckman. Trovato submitted her resignation on May 14, 2007, with an effective date of May 25, 2007. On May 8, 2008 she filed an administrative complaint with the DFEH and sued Beckman and Allyn on May 22, 2008 for sexual harassment and retaliation.
It was undisputed that the last act of retaliation by Beckman and Allyn occurred when Trovato received a poor performance review on January 31, 2007 for her performance in 2006. It was also undisputed that although Trovato continued to be supervised by Allyn there were no subsequent incidents of sexual harassment after January 31, 2007 and Trovato could not recall any incidents of retaliation after that date. The Court of Appeal concluded that there was no admissible evidence that after January 31, 2007 Allyn harassed Trovato or that she suffered any adverse employment actions much less that such conduct that was casually linked to her report of Allyn’s sexual harassment in the summer of 2006.
Trovato next tried to avoid the one (1) year statute of limitations by arguing the “continuing violation” doctrine. The “continuing violation” doctrine allows liability for unlawful employer conduct occurring outside of the statute of limitations if the conduct is sufficiently connected to unlawful conduct within the limitations period. However, the only conduct that Trovato could point to that was within the limitations period, the one year period prior to her filing her complaint with the DFEH on May 8, 2008, was that she still had to report to Allyn the supervisor who she had accused of sexual harassment and who had given her a poor performance review on January 31, 2007. The Court concluded that this fact alone was insufficient to constitute harassment and/or discrimination and rejected Trovato’s continuing violation claim.
To be timely, Trovato should have filed her complaint with the DFEH by no later than January 30, 2008, instead of May 8, 2008.
III. Can Employers Pay Employees Who Are Non-Exempt from the California and Federal Wage and Hour Laws, A Salary that Includes Payment for Overtime?
I have been asked the following question on a number of occasions: “Can’t I just pay someone a straight salary that takes into consideration overtime that an employee may work because employees like to know the wages they can count on receiving every week.” Usually I have said that this is a recipe for a wage and hour lawsuit unless the employee is legally exempt from the wage and hours provisions of federal and California law, as an executive, administrative, outside sales employee, or other recognized professional employee. These exemptions have come under strict scrutiny in recent years by plaintiffs’ lawyers hoping to make millions of dollars in legal fees by filing successful class actions against employers and now will be fertile ground for revenue starved federal and state governments.
However, the Second District California Court of Appeal recently issued a decision in Arechiga v. Dolores Press Inc, and held that an employer could enter into an explicit agreement in which the employee agreed to work a predetermined number of hours each day and a predetermined number of overtime hours and be paid in essence a fixed salary for all straight time hours worked and for all overtime hours worked. In Arechiga, the employee and employer at first made an oral agreement in which the employee, who was a janitor, agreed that he would work eleven (11) hours a day, six (6) days a week for a total of 66 hours per week. Because Arechiga was a non-exempt employee, his work schedule meant that he would earn 26 hours of overtime pay each week. Later in the employment relationship, Arechiga and his employer entered into a written agreement which included the same prior terms.
Three years later, Arechiga was terminated and sued his employer for unpaid overtime based on California Labor Code Section 515. He claimed in his lawsuit that the he had only been compensated for his straight time hours and not for his overtime. Arechiga contended that Labor Code Section 515 made explicit wage agreements unlawful and against public policy and that he could not waive his rights under the law. The Court stated that there was no case law supporting Arechiga’s position and that the only legal pronouncements since the Legislature’s enactment of Labor Code section 515 in 2000, supported the legality of explicit mutual wage agreements.
Tips for Employers Who Want to Use Explicit Mutual Wage Agreements
1. Before entering into an explicit mutual wage agreement, consult your employment lawyer to determine whether your business can successfully use these agreements and still comply with the California Wage Order and federal law.
2. The agreement must be entered into before the work is performed.
3. The agreement must specify the days that would be worked each week.
4. The agreement must specify the number of hours the employee would work each day.
5. The agreement must specify that the employee would be paid a guaranteed salary of a specific amount.
6. The agreement must specify that the employee was told the salary covered both his regular and overtime hours.
7. The employee must still be paid for overtime above the overtime provided for in the mutual explicit salary agreement.
8. You must still keep actual records of the employee’s hours of work to comply with state and federal wage and hour laws.
9. The employee is still entitled to all of the protections afforded under the California Wage Orders.
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