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Four Key Employment Law Developments for California Employers

As part of our commitment to keeping our clients informed and prepared, we wish to highlight four significant developments in employment law that are particularly relevant for California employers. Understanding and adapting to these updates is crucial for maintaining compliance and protecting your business interests. Here’s what you need to know:

1. Changes to the Private Attorneys General Act (PAGA):

Amendment Details: On June 18, 2024, Governor Newsom joined with California legislative leaders and business and labor groups to reach an agreement to reform PAGA. The deal came about in response to voter initiative that qualified for the November ballot and which would have repealed PAGA. Once legislation reflecting the new agreement is passed and signed by the Governor, supporters of the PAGA ballot initiative have agreed to withdraw the measure.

Good News and Bad News: The deal brings some good news for employers, including: (a) an improved right-to-cure process and a cap on penalties for employers who proactively ensure wage/hour compliance and/or who act quickly to rectify problems after receiving a PAGA notice; (b) limitations on the scope of claims presented at trial, and (c) a requirement that employees must personally experience alleged violations to bring a claim. On the other hand, the PAGA reforms fall short in that there will still be no limitation on attorneys’ fees for plaintiffs’ attorneys, which is the primary driver of PAGA claims. Thus PAGA claims are likely to continue to be filed.

Next Steps: Review your wage and hour compliance strategies with our attorneys to minimize exposure to PAGA claims. Stay tuned as more details of the PAGA reform deal become available.

2. Non-Competes:

New Restrictions: While the federal landscape has shifted against non-compete clauses, California continues to enforce limitations on the use of non-competes. Employers should be cautious in restricting, or attempting to restrict, employees’ rights to work in their industry beyond their term of employment.

Legal Implications: Any non-compete clause deemed overly restrictive may be considered void. It’s crucial to review your current contracts with legal counsel to ensure they meet state guidelines. Under California law, if an employer tries to enforce an illegal non-compete, an employee may pursue injunctive relief and can recover attorney’s fees. (Cal. Bus. & Prof. Code § 16600.5)

Action Steps: Consult with our team to revise existing agreements and draft compliant policies that protect your proprietary information without overstepping legal bounds. Additionally, Cal. Bus. & Prof. Code § 16600.1 required that employers provide written notice voiding the restrictive covenant to any current or former employees employed after January 1, 2022 who were subject to a noncompete clause. If you missed the February 14, 2024 notice deadline, take steps now to provide the required notice.

3. Pregnancy Accommodation and Leave:

Expanded Rights: Recent amendments have broadened the scope of pregnancy-related protections, including accommodations and extended leave provisions. Federal regulations require employers to make reasonable accommodations to a worker’s known limitations related to pregnancy, childbirth, or related medical conditions, such as flexible breaks, flexible hours, changing equipment or workstations, and leave for healthcare appointments and/or recovery from childbirth or related pregnancy conditions. Additionally, California law requires that employers provide five (5) days of bereavement leave to employees who experience reproductive loss, including a failed adoption, failed surrogacy, miscarriage, stillbirth, or unsuccessful assisted reproduction. The new bereavement leave is unpaid but allows employees to use any accrued vacation, sick, or other leave as compensation.

Employer Requirements: Ensure your HR policies are updated to reflect these changes and that managers are trained on how to implement them effectively. Importantly, California law also requires that the employer maintain employee confidentiality relating to any use of reproductive loss leave.

Proactive Compliance: We recommend conducting an audit of your current practices with our guidance to avoid potential discrimination claims and penalties.

4. Workplace Violence Prevention Plan (WVPP):

Labor Code Section 6401.9: Outlines the elements of a workplace violence prevention plan, which include establishing procedures to identify and evaluate workplace violence hazards, procedures to correct workplace violence hazards, emergency response protocols, and training provisions,

July 1, 2024 Deadline: All California employers with 10 or more employees must implement a WVPP by July 1, 2024.

Cal/OSHA Guidance: Cal/OSHA provides guidance and resources on the WVPP including this fact sheet for employers, located here.

Action Steps: Develop and implement a violence prevention program in compliance with WVPP by the July 1 deadline.

As always, Meyers Nave is committed to partnering with you to navigate these changes. Our deep understanding of California law, combined with a proactive approach to client service, ensures that you can focus on your business with confidence that your legal matters are in expert hands.

For a detailed consultation on how these developments affect your specific circumstances, please contact us.