When making a conditional job offer based upon an applicant’s ability to pass a medical examination, employers must ensure that no other contingency is unresolved prior to the applicant submitting to a medical examination. Based upon a recent 9th Circuit decision interpreting the ADA and FEHA, a medical examination or inquiry may only occur after the employer has made a “real” job offer to applicant. “A job offer is real if the employer has evaluated all relevant non-medical information which it reasonably could have obtained and analyzed prior to giving the offer.” Equal Employment Opportunity Commission, ADA Enforcement Guidance: Pre-Employment Disability-Related Questions and Medical Examinations, 17 (1995). Accordingly, for a job offer to be “real”, an employer must complete all non-medical portions of its application process first, or be able to demonstrate that it could not have reasonably done so, before issuing a conditional job offer.

In Leonel v. American Airlines, Inc. 400 F. 3d. 702 (9th Circuit 2005), 3 HIV positive applicants applied for flight attendant positions. Each applicant was given a conditional offer of employment, contingent upon passing both a background check and a medical examination. During the medical examination, applicants were required to provide a medical history and blood samples. None of the applicants disclosed their HIV positive status nor the fact that each applicant was taking medication for such condition. The applicants were required to submit to the medical examination prior to the time that American Airlines determined whether the applicants had passed the background checks. When the applicants’ blood tests revealed elevated levels, American Airline’s requested further explanation from the applicant, at which time each applicant disclosed their HIV condition. The Airline then advised applicants that their conditional job offers of employment were being withdrawn based upon applicants’ failure to disclose their HIV status as requested on the medical questionnaires. Applicants then filed suit, alleging violations of the ADA and FEHA, as well as other state law claims. The District Court granted summary judgment in favor of the airline on all claims.

The 9th Circuit reversed the District Court, concluding that FEHA and the ADA bar not only intentional discrimination but also “regulate the sequence of employer’s hiring processes.” Following the EEOC’s ADA Enforcement Guidance, the Court concluded that the airline should have completed all non-medical portions of its application process prior to applicants submitting to medical examinations. The Court concluded that the Airline had failed to demonstrate that it could not reasonably have completed the background checks before initiating the medical process. Accordingly, the Airline should not have required the applicants to disclose private medical information, and then penalize the applicants for not doing so, before determining that each applicant had passed a background check.

The Airline argued that it had not violated the ADA or FEHA because it evaluated the applicants’ background check information prior to receiving the medical information. The Court rejected this argument, concluding that the ADA and FEHA specifically regulate the sequence in which employers collect information, not the order in which the information is evaluated. The Court stated:

“The focus on the collection rather than the evaluation of medical information is important to the statutes’ purposes. Both the ADA and FEHA deliberately allow job applicants to shield their private medical information until they know, that absent an inability to meet the medical requirements, they will be hired, and that if they are not hired, the true reason for the employer’s decision will be transparent. American’s attempt to focus on the evaluation rather than on the collection squares with neither the text nor the purposes of these statutes. Whether or not it looked at the medical information it obtained from the Appellants, American was not entitled to get the information at all until it had completed the background checks, unless it can demonstrate it could not reasonably have done so before initiating the medical examination process.” Leonel v. American Airlines, Inc. 400 F. 3d. at 711.

In light of this recent 9th Circuit case, employers must follow a two-step process when making conditional job offers based upon multiple contingencies, including a medical examination. First, the employer must determine, based upon completion of all non-medical components of the job application process that the applicant qualifies for the position. Only then may the employer move to the second step by requiring applicant to submit to a medical examination. The Leonel court specifically noted that an employer is not foreclosed from refusing to hire an applicant who lies during the application process so long at the proper sequence is followed. “We do not suggest that, when a medical examination is conducted at the proper time and in the proper manner, an applicant has an option to lie, or that an employer is foreclosed from refusing to hire an applicant who does.” Leonel v. American Airlines, Inc. 400 F. 3d. at 709, FN 13.

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For the last several years, one of the most frustrating areas of labor and employment law for California employers has been the requirement to provide employees with statutory meal and rest periods. In October 2000, with the institution of monetary penalties for failure to comply with the meal and rest period obligations, employers have been grappling with appropriate scheduling issues. The ambiguity in this area has created a substantial number of complaints and litigation from individual employees, labor organizations and class action lawyers regarding California employers’ failure to meet the requirement of the law.

Within the last year, the California Division of Labor Standards Enforcement has commenced the preparation of clarifying administrative regulations. Although promising, the awaited regulations are still in the proposal stages. While we wait, employers are left with few answers to their questions about how to comply with a mandate that remains confusing and, in many ways, simply unworkable.

Hoping to avoid additional confusion, we provide a brief update on the status of meal and rest period regulations in California.

Second 15-Day Comment Period Ended May 25, 2005.

In May 2005 a second 15-day comment period on the proposed meal and rest period regulations ended. Comments regarding the proposed regulations were due to the Chief Deputy Labor Commissioner in San Francisco no later than May 25, 2005. Comments received by this date will be reviewed and responses to the comments will become part of the rulemaking file. At the time of printing, no specific date has been announced for completion of the final regulations.

Federal Court of Appeals Determines that Meal and Rest Periods are Non-negotiable Right under California Law.

The Ninth Circuit Court of Appeals, a federal appellate court in California, interpreted state law regarding the provision of meal and rest periods. The court was faced with a dispute between employees, who were subject to the terms of a valid collective bargaining agreement, and their employer. The employees claimed they had not been granted meal and rest periods consistent with state law. The employer argued that the employees’ claims were preempted by federal labor law because there was a valid collective bargaining agreement that specifically addressed the issue of employee meal and rest periods and provided the complaining employees with a contractual remedy. In fact, the collective bargaining agreement addressed meal periods, but was silent on the issue of rest periods.

Ultimately, the court determined that California law regarding meal and rest periods was not negotiable, even between employers and labor organizations through the collective bargaining process. Also, the court decided that the state law applied to all employers, even signatories to a valid collective bargaining agreement. So, unless state law specifically exempts an employer from the meal and rest period obligations of state law, the state law requiring meal and rest periods applies to all employers and the terms of a collective bargaining agreement to the contrary do not control.

In its analysis, the court acknowledged the significant confusion created by the various legislative and administrative provisions involved in this area. Nevertheless, the court held that the employees could pursue their state law claims in state court in spite of the collective bargaining agreement provisions. As a consequence, employees covered by such agreements have two opportunities to seek redress for meal and rest period violations. Such employees may seek the remedies available under state law or seek remedies available under the collective bargaining agreement. Neither remedy precludes the other.

Once again, employers are left with confusion about which rules apply to its workforce.

2005 began with a flurry of new legislation affecting employers in California. The following article summarizes some of the most important new legislation. These laws became effective January 1, 2005 unless otherwise noted:

By now, most of you have heard of the new Labor Code Private Attorney General Act. The law authorizes employees to bring private lawsuits to enforce a host of wage and hour laws. It permits employees to obtain civil fines and penalties and recover attorney’s fees. Where the Labor Code does not expressly provide for a penalty, this bill expressly provides one.

Almost immediately after it was signed by then-Governor Davis, California employers rallied the legislature with cries that the law was being abused by attorneys and employees. This was in response to numerous lawsuits brought against employers for minor violations of the Labor Code, such as failing to comply with posting requirements. In response, the legislature passed urgency legislation to take effect immediately, S.B. 1809. S.B. 1809 prohibits employees from suing under the new law for technical violations of the Labor Code, including posting requirements. S.B. 1809 also establishes new procedures that an aggrieved employee must follow prior to bringing a civil action under the new law, including overtime and wage, meal and rest period, and child labor violations. The law requires the employee to first provide written notice to California’s Labor and Workforce Development Agency and the employer of the violation to give the agency an opportunity to investigate the complaint. In some cases, the employer has the opportunity to cure the violation before a lawsuit can be filed.

The amendments in S.B. 1809 also permit a court to award a lesser amount than the maximum civil penalty allowed, if the statutory penalty would result in an award that is “unjust, arbitrary and oppressive, or confiscatory.” Also, courts are required to approve any proposed settlements under the new law.

Employers are now required to provide sexual harassment training to supervisors in certain circumstances under the new Sexual Harassment Training law, now codified as Section 12950.1 of California’s Government Code. The law is more complicated than it seems because many of its requirements are either undefined or untested. Pared to its essentials, the law requires:

1) any employer that regularly employs 50 or more employees or other workers who provide services by contract;

2) to provide 2 hours of sexual harassment training to supervisory employees;

3) by no later than January 1, 2006 (there are some exceptions to this requirement if training was provided after January 1, 2003);

4) and every 2 years thereafter;

5) and to provide training to any new supervisor within 6 months of his or her appointment to a supervisory position.

The law also requires the training be “effective and interactive” and provided by “trainers or educators with knowledge and expertise in the prevention of harassment, discrimination, and retaliation.” PKH’s compliance and training programs are designed to comply with the statute’s requirements.

This bill amends Family Code Section 5290 and prevents an employer from using an assignment order as grounds for refusing to hire a person, or for discharging, taking disciplinary action against, denying a promotion to, or for taking any other action adversely affecting the terms and conditions of employment of an employee. Assignment orders are issued by family law courts and require an employer to pay to the obligee a portion of the obligor’s/employee’s earnings. The preexisting law prohibited an employer from refusing to hire, discharging, or taking disciplinary action against an employee because of an assignment order. This bill extends those protections to the denial of a promotion, or any action adversely affecting the terms and conditions of employment. An employer who violates the law may be assessed a civil penalty of five hundred dollars ($500).

This bill entitles registered domestic partners to virtually all of the rights, benefits and responsibilities granted to married persons under state law. A Senate Rules Committee analysis of the final version of the bill explained that the law was intended to grant registered domestic partners the right to “benefits, such as family care and medical leave, medical, dental, life and disability insurance, pension and death benefits for surviving partners of firefighters and police officers,” together with protection from discrimination in “housing and employment” and the “right to receive government provided or government regulated benefits, such as workers’ compensation, public assistance, transfer of licenses upon death of a domestic partner.”

Although a number of judicial challenges to the bill were filed, several of the lawsuits were recently dismissed on summary judgment. On September 8, 2004, Sacramento Superior Court Judge Loren McMaster upheld the new law. Judge McMaster determined that the law did not conflict with Proposition 22, which provides that only “marriage between a man and a woman is valid or recognized in California.” As a result, some groups are attempting to have Judge McMaster recalled from the bench.

This bill amends the provisions of various laws that prohibit discrimination in employment based upon several protected classifications, such as race, gender, sex, religion and marital status. The new law amends the protected classifications listed in those laws to the protected classifications listed in California’s Fair Employment and Housing Act, specifically Government Code Section 12940, and the definitions set forth in Government Code Sections 12926 and 12926.1.

This bill increases the level of insurance that companies and health care plans are required to offer. Preexisting law required health care service plans and health insurers to offer coverage for the domestic partner of an employee, subscriber, insured, or policyholder to the same extent and subject to the same terms and conditions as provided to a dependent of those persons. This bill instead requires a health care service plan and a health insurer to provide coverage to the registered domestic partner of an employee, subscriber, insured, or policyholder that is equal to the coverage it provides to the spouse of those persons. The bill also extends this requirement to all other forms of insurance regulated by the Department of Insurance and deems that all of those policies as well as health care service plans and health insurance policies issued, amended, delivered, or renewed in this state on or after January 1, 2005, or January 2, 2005, as specified, provide registered domestic partner coverage equal to that provided to spouses.

Preexisting law required every employer to, at the time of each payment of wages, furnish each employee with an accurate, itemized statement showing, among other things, the name of the employee and his or her social security number, but exempted the state or a city, county, district, or other governmental entity from its provisions. Preexisting law also provided that a knowing and intentional violation of this provision was a misdemeanor.

This bill requires employers, including public employers, by January 1, 2008, to furnish each employee with an itemized statement showing no more than the last 4 digits of the employee’s social security number or an existing employee identification number other than a social security number.