California wrap-up: The top five employment and labor developments for California employers in January 2021

This past month President Biden was inaugurated, and he promptly took steps that will have an immediate impact on California employers. New COVID-related laws took effect — some expired (but may be re-enacted) — and a federal appeals court eased the meal/rest break burden on the transportation industry. Read below for our brief summary of these and other developments for January 2021.

1. Shakeup at National Labor Relations Board should have immediate impact

President Biden wasted little time in delivering on his promise to be a union-friendly president. On his first day in office, Biden fired Peter Robb, the General Counsel for the National Labor Relations Board, after Robb refused to resign. Robb had been confirmed to a four-year term ending in November 2021. His termination was unusual and may be subject to legal challenge. Robb had been a lightning rod for criticism from the labor movement, as he issued public guidance and filed complaints that many union advocates saw as undercutting union power and the right to organize under federal labor law.

We expect the new General Counsel to rethink and likely withdraw complaints in pending unfair labor practice cases affecting the hospitality and construction industries. First, under Robb, the General Counsel had argued that certain employer-union neutrality agreements (which unions often seek when organizing hotel employees) went too far in terms of granting organizing advantages to unions. The new GC will almost certainly have a different perspective. Second, in Lippert Construction, Robb's office invited the Board to reverse an Obama-era precedent regarding the use of an inflatable rat at construction sites and retail establishments. In California, unions' use of inflatables such as "Scabby the Rat" and the "Grim Reaper" (among others) has become commonplace outside construction projects and businesses that unions claim are being unfair, and now will likely remain so in the new Administration.

2. Assembly Bill 685 notice of potential COVID-19 exposure takes effect  

On January 1, 2021, Assembly Bill 685 took effect. This new law, codified at California Labor Code section 6409.6 and which we have previously written about, requires employers to provide a written notice of a potential COVID-19 exposure to employees (and their union, if any) as well as subcontractors who were present at the "worksite" within one business day of learning of the exposure. The employer must maintain a record of all such notifications for three years. An employer also must notify the Department of Public Health within 48 hours of three COVID-19 cases in a 14-day period.

3. The sun sets on state COVID-19 Supplemental Sick Leave

California enacted COVID-19 Supplemental Sick Leave (AB 1867) last September to extend COVID-19 sick leave to workers that were excluded under the Emergency Paid Sick Leave component of the federal Families First Coronavirus Response Act (FFCRA). Under AB 1867, California employers with 500 or more employees anywhere in the US were required to provide paid sick leave to employees who were unable to work because of COVID-19. The requirement to provide COVID-19 supplemental paid sick leave under AB 1867 was set to expire on December 31, 2020, or upon the expiration of the FFCRA, whichever was later. As Congress did not extend the FFCRA beyond December 31, so AB 1867 also has expired. Any employee taking COVID-19 supplemental paid sick leave as of December 31, however, shall be permitted to take the full amount of COVID-19 supplemental paid sick leave to which that employee otherwise would have been entitled.

It is quite possible that Congress and the California legislature will reboot these supplemental paid sick leave requirements. In addition, California employers should be aware that many local ordinances requiring COVID-19 paid sick leave (such as those in Oakland and San Francisco) have been extended and remain in effect.

4. The Dynamex test for independent contractors applies retroactively

On January 14, 2021, the California Supreme Court held in Vazquez v. Jan-Pro Franchising International, Inc. that its "ABC test" for determining whether a worker is an independent contractor under California law, first announced in its landmark decision, Dynamex Operations West v. Superior Court (2018) 4 Cal.5th 903, should apply retroactively to pending cases. This ruling will no doubt increase the price tag for settling pending cases, including class actions alleging employee misclassification, because the limitations period (three years under the Labor Code and four years for unfair business practice claims) will now extend back further than the date of the Dynamex decision.

5. California's meal and rest break rules are preempted for certain commercial drivers, for now at least

On January 15, 2021, the United States Court of Appeals for the Ninth Circuit upheld the decision of the Federal Motor Carrier Safety Administration that California's onerous meal and rest break rules are preempted by the FMCSA's rest break regulations for drivers of property-carrying commercial motor vehicles. This is a welcome decision for the transportation industry, but it may be short-lived. The Ninth Circuit's decision is based on the court's deference to an agency's reasonable interpretation of ambiguous statutory language. Conceivably, the agency under the Biden Administration could, with a reasoned explanation, come to a different, and equally permissible, reading of the federal law and conclude that California's meal and rest break rules are not preempted.

That's a wrap. See you next month for another Top Five E&L Developments for California Employers.