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Return to Work – Return to Litigation?

Robert is a partner with AALRR and a member of the firm’s Return to Work Task Force. He is a co-author of the AALRR Return to Work Tool Kit

Many of the waking hours of executives in the modes and their counsel have been filled with navigating the emergency rules and regulations that have been issued at the federal and state level arising from the Covid-19 Pandemic.

The new legal framework for remote work, economic benefits and relief, social distancing, testing and matters of testing and personal protective hygiene, returning to work poses challenges.  However, returning to normalcy brings its own irony for employers - a return to issues of traditional labor law, albeit in new ways. That is our topic here.



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Federal Regulatory Implications of Storing Crude Oil in Rail Tank Cars

The United States is awash in oil.  The Coronavirus Pandemic has collapsed global demand and at the same time recent increased oil production by Saudi Arabia and Russia has caused oil supply to surge.  Facing a potential need for storage, Bloomberg is reporting that oil companies are considering rail cars to store excess crude oil.  Railroads and shippers need to understand the regulatory implications of doing so.

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Covid 19 Protocols for Those Who Must Work in the Modes of Transportation (Updated 4/6/2020)

NOTE ON THIS UPDATE:

This update contains additional information related to site disinfection and mask and respirator usage and employee safety training and meetings. These are identified as Special Notes and set out in italics.  Contact Robert Fried with interim questions and to provide updates, insights and best practices that will amplify future updates.

Overview

While the serious impact of the COVID-19 pandemic is broadly understood, the role of industry leaders and their counsel is to identify the functional planning measures inherent in their industries as action steps. The protocols necessarily go beyond remote work, social distancing, testing and matters of personal protective hygiene.  This article approaches this subject in terms of the collected views of experts in the basic modes – ships, planes, trucking and trains, and transit hubs, incorporating all of them from the viewpoint of micro-protocols. 





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The Employee Exception to the California Consumer Privacy Act (CCPA), Employee Rights, Employer Policy and Understanding the Unique Role of the National Labor Relations Act

I. Introduction
When California enacted the CCPA it included a limited one year exception for employee data. There were complex reasons for the exception, of which full integration with employer access and privacy policies and handbooks were most important. As CCPA doctrine had yet to evolve and predictable policy modifications hard to draft, this article will look at these issues through the evolving doctrine of federal labor law, which affects those rights and complicate the adaption to the new CCPA environment. Just as the CCPA is a national model with international roots, the National Labor Relations Act and its defined rights and responsibilities are of similar scope for all entities with national policy planning responsibilities.

II. The CCPA in Brief
The California Consumer Privacy Act (CCPA) went into effect on January 1, 2020. There is a common misconception that companies need to be selling data in order for the CCPA to apply. But that is not correct. The CCPA regulates all for-profit companies doing business in California that collect consumers’ personal information and meet (just) one of the following three thresholds: has annual gross revenues in excess of twenty-five million dollars ($25,000,000); buys, receives, sells, or shares for commercial purposes the personal information of more than 50,000 consumers, households, or devices; or derive 50 percent or more of annual revenues from selling consumers’ personal information.

Significantly, the twenty-five million dollars ($25,000,000) revenue threshold is independent of any consideration whether the business collects any particular volume of consumer data.

In addition, the CCPA also applies to any entity that either: controls or is controlled by a covered business (for example, a subsidiary) or shares common branding with a covered business, like a shared name, service mark, or trademark.

A consumer is a California resident. The scope of information covered by the CCPA is very expansive, including 11 categories of information and subsets in those categories. Very broadly, the CCPA covers all personal information that identifies, relates to, describes, or capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.

The CCPA does not restrict a business’s ability to collect, use, retain, sell, or disclose consumer information that is de-identified or aggregated. The CCPA covers information that can be considered “unique” to a consumer, which can include identifiers such as an internet protocol (IP) address.

CCPA grants consumers: (i) the right to notice of what categories of personal data is being collected and the purpose for which it will be used; (ii) the right to access – to request information regarding the categories of personal information collected about them; (iii) the right to request deletion of personal information collected about them (with some exceptions); (iv) the right to opt-out of the sale of their data and personal information; and (v) the right to equal treatment/nondiscrimination so as to be free from discrimination if they exercise any of their rights.

Businesses have corresponding obligations to these rights. Some include providing privacy disclosures in advance of collecting any data, complying with any verifiable consumer requests identifying data within a 45-day time span, deleting certain data, and providing information free of charge, unless a request is manifestly unfounded or excessive.

The CCPA sets forth specific disclosures that businesses must include in their notices of collection. For example, under the CCPA, businesses must inform consumers at or before the point of collection what categories of personal information will be collected and the purpose for which these categories and information will be used. If a business was to collect additional categories, or collect personal information for a new purpose, they must also provide new notice of such collection and its purpose. This requires ongoing efforts to identify changes in collection or use of previously collected personal information.

An organization that does not collect information directly from consumers generally does not need to provide such a notice, but before it can sell a consumer’s personal information, it must inform the consumer that it is going to do so or verify with the source of the consumer information that notice was given. The right to know categories of third parties also applies - i.e., third parties must also give consumers explicit notice and an opportunity to opt-out before re-selling personal information that the third party acquired from another organization.

The CCPA also sets forth specific disclosures that businesses must include in their privacy policies, including descriptions of consumer rights and how to exercise them. A corollary to the right to notice is the right to access. Under the CCPA, consumers have the right to request that a business disclosure the categories of personal information collected, the categories of sources from which personal information is collected, the business or commercial purpose of the collection, the categories of third parties with whom the business shares personal information; and the specific pieces of personal information the business holds about a consumer. If a business sells personal information or discloses it for business purposes, consumers have the right to request the categories of information being sold or disclosed to other parties. In most instances, consumers are limited to two requests for data access information under the CCPA per year per organization and for a period of no more than the prior twelve months.

Businesses are also required to: (1) verify the identity of the consumer making the request, (2) not release information to other parties claiming to be a consumer, and (3) ensure that any information transmitted to the consumer is done in a reasonably secure way.

Consumers have the right to request deletion of personal information collected by a business, provided the consumer makes the request to the business that actually collected the information from the consumer. There are some limited exceptions to this right. For example, businesses do not need to delete information if the business needs the consumer’s personal information for a reason related to the business, such as providing goods or services to the consumer, complying with other legal requirements, detecting security incidents, conducting research, exercising free speech, protecting or defending against legal claims, or for internal operations the consumer might reasonably expect.

The parameters, limitations, and application of many of these exceptions are vague and fact specific to your business, including in particular with respect to a consumer’s reasonable expectation. For example, in determining whether a particular exception applies, businesses will have to determine the expectations of their particular consumers, how to handle the fact that personal information may be replicated many times and used for different purposes, and consider who and how the organization will make decisions regarding CCPA requests and whether any exceptions apply. Accordingly, businesses should consult legal counsel for assistance in determining whether a particular exception applies.

Businesses, in complying with the timing requirements noted in the access section above, must also inform the consumer in which manner the information is being deleted in response to the consumer’s request to delete collected personal information.

Consumers also have the right, at any time, to direct businesses that sell personal information about the consumer to third parties to stop the sale of their personal information. If a consumer is a minor, the CCPA conversely provides for a right to opt-in to the sale of data (exercised by the minor if the consumer is between 13 and 16 years of age, or by the minor’s parent or guardian if the consumer is under 13 years old). Businesses must wait at least 12 months before asking consumers to opt back in after a consumer has chosen to opt-out.

The CCPA prohibits businesses from discriminating against consumers by denying goods or services, charging a different price or rate for goods or services, providing a different level or quality of goods or services, or suggesting that they will do any of these things based upon a consumer’s exercise of any CCPA rights. Consumers that exercise their rights under the CCPA must be treated equally and have a right to equal services and prices.

However, the right to equal services and prices does not place any restrictions on an organization’s ability to collect information or deny service if a consumer does not want to participate in collection; it only applies once the consumer exercises specific CCPA rights.

III. The “Employee” Exception
The CCPA contains a limited exclusion for a period of one year for personal information of employees and job applicants collected by an organization. As long as employers are collecting the data of its employees and job applicants for purposes solely relating to their employment, the CCPA generally does not apply to the collection of that information. While the CCPA suspends employee rights related to access, deletion, and opting out of data collection, businesses must still provide privacy disclosures to employees regarding their data collection practices. This includes, for example, disclosure of the information that the employer collects and the purpose for the collection. Employees also still retain the right to commence a private right of action in the event affected by a data breach caused by a failure of the duty to maintain reasonable security safeguards.

IV. The Impact – Actual and Potential - of the National Labor Relations Act
We will focus on growing issues of privacy which emerged in workplace investigations under the National Labor Relations Act and are now reflected in state law.

National Labor Relations Board (NLRB) doctrine began to acquire a heightened role in employer policies in a set of decisions relating to employee handbooks and confidentiality in sexual harassment investigations.

The key concept is that under Section 7 of the National Labor Relations Act “protected concerted activity” issues were viewed as impacted by employer handling of data and decisions that might in other contexts be viewed as involving data privacy, but in the Board’s view were characterized as employee privacy.

In Hyundai America Shipping Agency v. N.L.R.B., No. 11-1351, slip op. (D.D.C. Nov. 6, 2015), the D.C. Circuit supported the Board’s position that the need for union and non-union employers to carefully review both oral and written workplace rules and policies, even if they do not on their face touch on union-organizing activity, constituted protectable information, and also as to access that information.

The Hyundai employee handbook included a rule limiting the use of company electronic communications systems, stating, "employees should only disclose information or messages from theses [sic] systems to authorized persons." The Court upheld the NLRB's determination that the rule is facially invalid, agreeing that a reasonable employee could read it as a restriction on employees' ability to share information about terms and conditions of employment. Moreover, it was not limited to protection of a narrow category of only confidential information.

Next, the Court upheld the Board in finding unlawful a provision sanctioning disciplinary action up to termination for "[p]erforming activities other than Company work during working hours." The Court agreed with the Board's assessment distinguishing between rules restricting union activity during working hours (including breaks), which are presumptively unlawful, and restrictions of activity during active working time, which are permissible. Because this rule fell into the former category, it was invalid.

It is useful to anticipate how this approach might relate to the access; non-discrimination and opt-out provision of the CCPA.

Although the Board has retrenched from that position in Apogee Retail LLC d/b/a Unique Thrift Store, 368 NLRB No. 144 (2019), which reverses a 2015 decision— Banner Estrella Medical Center, 362 NLRB 1108 (2015), enf. denied on other grounds 851 F.3d 35 (D.C. Cir. 2017) by declining to require employers prove, on a case-by-case basis, that the integrity of an investigation would be compromised without confidentiality.

However, if the burden on the employer to determine whether its interests in preserving the integrity of an investigation outweighed employee Section 7 rights, how will that balance tip when and if the CCPA exception expires?

Another aspect of the treatment of potentially protectable information arises in internal communications such as email and whether employees have a statutory right to use employer IT resources unless the employer’s email system furnishes the only reasonable means for employees to communicate with one another. In Caesars Entertainment d/b/a/ Rio All-Suites Hotel and Casino, 368 NLRB No. 143. the Section 7 issue derived from the Board’s earlier decision in Purple Communications, Inc., 361 NLRB 1050 (2014 which envision that section 7 rights included use of such data and the internal modalities for its communication. Previously the Board had held in Register Guard, 351 NLRB 1110 (2007) where the use of employer-provided email is the only reasonable means for employees to communicate with one another on non-working time during the workday.

V. Going Forward
Today’s policies are the seeds of tomorrow’s litigation. Counsel and their clients are wise to stay focusing on the developments in the coming year under the CCPA and its specific ramifications under related regulatory statutes that define employee rights.

The Impact of Collective Bargaining, Legislation and Recent Decisions on Independent Contractor Litigation

I. Introduction

The cutting edge in labor relations is the crafting of conditions in labor agreements that either preempt private class actions or shift their adjudication to grievance and arbitral forums; or alternatively, set different wage and working conditions. Related to this is the expansion to broad form of arbitration agreements outside the bargaining forum. Also noteworthy are judicial decisions that craft new uniform laws in the gig and independent workers economy.

The readers in our modes can expect to see new forms of labor agreements adapt to the new economic and legal environment given the foregoing. This article commences a discussion on this issue, certain to be the dominant one in traditional labor relations and litigation for the foreseeable future.

II. Unpaid Wage Claim Held Not Preempted By Union Contract (By Ronald W. Novotny)

In Melendez v. San Francisco Baseball Associates LLC (2019) S245607, the California Supreme Court recently held that a security guard’s state law claim for unpaid wages and “waiting time” penalties could proceed over his employer’s objection’s that they had to be resolved under his union’s agreement. Because the employee’s claim was founded on a right existing in state law, and not the agreement, he was permitted to proceed with his claim in court even though the agreement was relevant to the claim and would have to be “consulted” in determining it.

George Melendez worked as a security guard at AT&T Park in San Francisco, and filed a lawsuit when he was not paid his final wages immediately after the end of each San Francisco Giant’s home stand, concert, or other event at the stadium that he worked at. He primarily claimed that the Giants’ failure to pay him wages due at the time of termination entitled him to “waiting time” penalties of up to 30 days’ additional pay after the completion of each assignment. He principally relied on a 2006 Supreme Court case, Smith v. Superior Court (2006) 39 Cal.4th 77, which held that a hair dresser who was hired to work for only a single day was required to be paid at the end of that job.

The Giants argued that there were numerous provisions in its collective bargaining agreement with the Service Employees International Union, Melendez’s collective bargaining representative, which showed that security guards were employed on a continuous year-round basis and were not terminated after single job assignments. These included provisions that classified employees based on the number of hours worked per year, provided for probationary period of 500 hours of work, and required drug screening for new hires. Because of these provisions, the Giants argued that Melendez’s claim was preempted by Section 301 of the Labor Management Relations Act, because it required “interpretation and application” of the union agreement.

Relying on past cases, including the Ninth Circuit Court of Appeal’s 2000 decision in Balcorta v. Twentieth Century-Fox Film Corp. (9th Cir. 2000) 208 F.3d 1102, the California Supreme Court rejected the Giants’ federal preemption defense. The Court stated that not every claim that requires resort to the language in a labor-management agreement is necessarily preempted, and that this is particularly the case when the meaning of the contract is not in dispute. The case at hand did not involve a dispute over the terms of the agreement that required a court to interpret them, and preemption could not be found based only on the fact that interpretation of the contract terms was required to determine the validity of the employer’s defense. Instead, because the legal character of the claim relied on a state law right that was not substantially dependent on the contract’s terms, the employee was permitted to proceed in court with his unpaid wages and waiting time penalty claim.

The Melendez case confirms the important principle that unless a claim under a statutory law is expressly made the subject of an agreement to arbitrate under a union agreement, or is clearly and unmistakably provided for in the arbitration clause of the agreement, such a claim may proceed even though the employer’s factual and legal defenses to the claim are based on the provisions of the agreement.

III. Preemption and the Federal Arbitration Act

(1) WSTA Litigation Update

California’s Attorney General issued the following press release:

California Attorney General Xavier Becerra today issued the following statement after U.S. District Judge Morrison C. England, Jr. dismissed a federal lawsuit filed by the Western States Trucking Association (WSTA) seeking to undermine state regulations that protect the welfare of workers. The ruling in Western States Trucking Association v. Schoorl [No. 2:2018cv01989 - Document 34 (E.D. Cal. March 28, 2019)] upholds California’s framework of laws and regulations determining the status and classification of workers as employees.

This court ruling is a victory for truck drivers and for all California workers who put in the time and labor at the behest of their employer,” said Attorney General Becerra. “The courts have once again demonstrated that it is well within a state’s right to establish standards for the welfare of those working within its borders. To all those in California who work hard to make an honest living: we’ve got your back. “This is another victory in our fight to protect truck drivers from misclassification,” said California Labor Secretary Julie A. Su. “When drivers' rights to basic workplace standards are violated, this case makes clear that the state has the right and responsibility to protect them according to California law.

In the decision, Judge England ruled that WSTA failed to demonstrate a viable claim in its challenge to the ABC test, which determines if a worker should be deemed an employee or an independent contractor. The test stems from the California Supreme Court’s 2018 decision in Dynamex Operation West, Inc. v. Superior Court and provides guidance on interpreting California’s wage orders, which are regulations issued by the California Department of Industrial Relations. The purpose of wage orders is to provide for both minimum wages and the general welfare of employees across a wide range of industries.

The favorable ruling in this court case builds on Attorney General Becerra’s efforts to protect the rights of workers across California. In February, Attorney General Becerra and the California Labor Commissioner’s Office filed a petition before the U.S. Court of Appeals for the Ninth Circuit to defend California meal and rest break rules. In January, the California Department of Justice joined a multistate comment letter opposing a National Labor Relations Board proposal that would diminish protections for millions of workers. Last year, Attorney General Becerra filed an amicus brief supporting the rights of truck drivers to receive reimbursement for certain expenses incurred in relation to their employment. Attorney General Becerra also co-led a coalition of 17 attorneys general opposing a Trump Administration rule to allow employers to pocket the tips of certain employees, threatening the loss of up to $5.8 billion of workers’ earned tips. In November 2017, Attorney General Becerra filed a lawsuit against One Source, a janitorial subcontracting company based in Orange County, to protect janitorial workers in retail establishments all over California from wage theft.

(2) Interstate Trucking and Arbitration

In Muller v. Roy Miller Freight (California Ct App 05/01/2019) the Court concluded that the Federal Arbitration Act (FAA) applied to Muller as a transportation worker employed by a licensed motor carrier engaged in interstate commerce because the near totality of the goods transported were transported in interstate commerce under 9 USC section 1 and thus exempt from FAA coverage. The Court recognized that California Labor Code Section 229 bars arbitration of claims for unpaid wages despite clear inclusive language in the arbitration agreement. For now, however, the private claim was stayed pending the arbitration of the trucker’s other claims.

(3) Dynamex and Retroactivity

In a decision that is certain to increase the volume of Prong B litigation against transportation industry companies, Vazquez v. Jan-Pro Franchising International, (https://cdn.ca9.uscourts.gov/datastore/opinions/2019/05/02/17-16096.pdf, the Ninth Circuit concluded that implementation of the so-called “ABC” test by the California Supreme Court was declarative of California law and thus potentially applicable retroactively to other pending cases. In this case, the Court concluded that the unique aspects of franchise arrangements were not an exception.

It is possible that transportation sub-industries, such as brokerage transport, will have a chance to be treated differently, especially if a court recognizes the highly regulated licensure and ownership relationships of drivers to their industry not present in the Dynamex case. The future is more uncertain for other mode related sub-industries, such as air related industries like fixed base operators and shuttle services, along with gig drivers, as well as the drivers engaged in port services.

IV. CONCLUSION

In so far as California is, on occasion, the tipping point in the litigation universe, the California legislature may be, with the consideration of current legislation on independent contractors https://www.billtrack50.com/BillDetail/996562, the most crucial predictor of what the law nationally will be. Robert Fried handles legislative affairs as a part of his policy practice and was amicus counsel at the California Supreme Court in Dynamex. He can be contacted for the latest details.