California at Work: New Labor Laws for 2018

*Originally published by CalCPA in the January/February 2018 issue of California CPA — the original article can be found here.

You may not have expected that the California Legislature in 2017 designated an official state dinosaur (Augustynolophus morrisi) and four state nuts (almond, pecan, walnut and pistachio), which are technically seeds, but that’s a separate article. Less surprising is that employer regulation and employee rights continue to expand in our state, the sixth-largest economy of the world. The rate of expansion, however, seems to have taken another pendulum swing: 304 bills introduced in 2017 mention “employer,” compared to 569 bills in 2016 and 224 in 2015. Most of those bills did not pass, and of the ones that did, most were not signed into law by Gov. Brown. Essential elements of several bills that became law affecting private employers, effective Jan. 1, 2018, unless noted otherwise, follow.

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Confidentiality and Nondisclosure Agreements (CA)

Mark Terman and Sujata Wiese authored a practice note for Practical Law titled “Confidentiality and Nondisclosure Agreements (CA).” In their note, Mark and Sujata discuss how companies can protect their information, including the use of confidentiality agreements, under California law.

Mark and Sujata address considerations involved in safeguarding a company’s confidential information, and substantive provisions and issues common to many commercial confidentiality agreements. They state that “having effective confidentiality agreements in place with other parties is necessary but not sufficient to protect an organization’s confidential information and data. Comprehensive protection requires the participation and coordination of management and staff at all levels across all functions, from finance and administration to marketing and sales. It often falls to the legal department, working closely with the information technology (IT) function and with the support of senior executives, to lead the company-wide information management and protection program.”

Topics addressed in the note include: company-wide information and data security policies; compliance with contractual obligations governing others’ confidential information; trade secrets; privacy and data security laws and regulations; and form, structure and key provisions of confidentiality agreements.

Read “Confidentiality and Nondisclosure Agreements (CA).”

Yes, Your March Madness Office Bracket is Technically Illegal

March Madness has arrived!  The 2017 NCAA Basketball Tournaments tip-off tonight (March 15) and continue through the Women’s and Men’s National Championship Games on April 2 and 3 respectively.  With this, comes the American tradition of companies and their employees betting on tournament outcomes through office bracket pools.      

As lawyers, we have to point out that your company’s March Madness pool is very likely illegal under at least three federal gambling laws (the Professional and Amateur Sports Protection Act, the Interstate Wire Act of 1961, and the Uniform Internet Gambling Enforcement Act) and many state laws.  And we would be remiss to not mention that there is a parade of horribles that could happen from permitting such workplace wagering. 

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Laboring Under New Laws

*Originally published by CalCPA in the January/February 2017 issue of California CPA — the original article can be found here.

Few things in this world can be certain, except that the California Legislature will expand regulation of employers each year and the sun will come up tomorrow. In an apparent pendulum swing, 569 bills introduced in 2016 mention “employer,” compared to 224 in 2015 and 574 in 2014. Most of those bills did not pass, and of the ones that did, most were not signed into law by Gov. Brown. Essential elements of selected bills that became law affecting private employers, effective Jan. 1, 2017, unless otherwise mentioned and organized by Senate and Assembly bill number, follow.

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National Preliminary Injunction Blocks New FLSA Salary Test from Taking Effect on December 1, 2016

A federal court issued a national preliminary injunction prohibiting the Department of Labor’s new salary rule for Executive, Administrative, Professional, Outside Sales and Computer Employees from taking effect. The final rule, published on May 23, 2016 would have gone into effect on Dec. 1, 2016. We wrote about this previously and at this time, recommend that employers suspend, but not cancel their implementation plans.

The rule mandated that employees falling under the executive, administrative or professional exemptions must earn at least $913 per week ($47,476 annually), which would more than double the currently existing minimum salary level of $455 per week. In State of Nevada v. U.S. Dep’t of Labor, No. 4:16-cv-731 (E.D. Tex. filed November 22, 2016) District Court Judge Amos L. Mazzant III (appointed by President Obama) ruled that the Department of Labor cannot impose the new salary requirement as a condition of exempt status of executive, administrative or professional (“EAP”) employees because the plain language of the Fair Labor Standards Act focuses on the duties of exempt EAP employees, and not their level of pay.

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Ruling Postponed on Whether the DOL Exemption Rules will be Enjoined Before December 1, 2016

Since our November 10 Post, Will the DOL Exemption Rules Be Enjoined Before December 1, 2016?, federal District Court Judge Amos L. Mazzant, III heard nearly 3.5 hours of argument today on the Emergency Motion for Preliminary Injunction to stop nationwide implementation of the Department of Labor’s May 16, 2016 Final Rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees.  If not enjoined, this Final Rule will require that, by December 1, 2016, employees be paid a weekly salary of at least $913 (annually, $47,476) to maintain “white collar” exemption from overtime and other federal Fair Labor Standards Act requirements, as long as the employees’ duties satisfy the exemption rules too.

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