Recently, in Johnson v. Arvin Edison Water Storage Dist. (2009) 174 Cal.App.4th 729, the 5th District Court of Appeal in California held that a water district, which is a municipal corporation organized as a sort of quasi-governmental entity for the purpose of storing and delivering water to its community, is in fact exempt from the more stringent State overtime and meal period regulations contained in the California labor code.

The plaintiff argued that the water district was  not only subject to the Fair Labor Standards Act (FLSA – 29 U.S.C. Section 201, et seq.), but also to the more stringent wage and hour regulations contained in the California Labor Code, unless expressly exempted in the code itself.  According to the Plaintiff, under statutory construction rules, the Legislature intended that water storage districts provide their employees with overtime and meal periods in conformance with Labor Code Sections 510 (OT provision) and 512 (meal period provision), and the relevant IWC Wage Order. Plaintiff argued that these Labor Code requirements do not infringe on the execution of the District’s sovereign powers.

The plaintiff also stated that the District was not exempt as a “municipal corporation” under Section 220 of the Labor Code, which would have required the district to immediately pay wages due upon an employee’s termination or resignation under sections 201 and 202 and for penalties for failure to do so under section 203.

In affirming the judgment that dismissed the plaintiff’s complaint, the Court held that unless the Labor Code provisions are specifically made applicable to public employers, they only apply to employers in the private sector. Pointing out that because sections 510 and 512 of the Labor Code do not expressly apply to public entities, they are not applicable to water districts.

Additionally, the Court noted that applying sections 510 and 512 of the Labor Code to the District would infringe on its sovereign power to regulate its workforce and would violate the established rule recognized by the Legislature, that public entities are not subject to a general statute unless expressly included.  Finally, the court clarified that a Water District is a “municipal corporation” as that term is used in the Labor Code and, therefore, exempt from Sections 201, 202 and 203.

Although not as stringent as California wage and hour requirements, the water district employees are not without some protection, such districts should still comply with wage and hour laws set forth in the FLSA.

Federal contractors and subcontractors with Federal Acquisition Regulation verification (FAR) clauses in their contracts are reminded that they must use the E-Verification system for I-9 compliance effective September 8, 2009 (the US Citzenship and Immigration posting is here).

E-Verify compares information from the Employment Eligibility Verification Form (I-9) against federal government databases to verify workers’ employment eligibility. The system facilitates compliance with federal immigration laws and helps to deter unauthorized individuals from attempting to work and also helps employers avoid employing unauthorized aliens.

All U.S. employers must complete and retain a Form I-9 for each individual they hire for employment in the United States. This includes citizens and non-citizens. On the form, the employer must examine the employment eligibility and identity document(s) an employee presents to determine whether the document(s) reasonably appear to be genuine and relate to the individual and record the document information on the Form I-9. The list of acceptable documents can be found on the last page of the form.

The Form and Instructions are here, and in Spanish here.

Glenn Spencer, Executive Director, Workforce Freedom Initiative, of the US Chamber of Commerce, was interviewed here – giving his thoughts on whether the Employee Free Choice Act (EFCA) (sometimes referred to as Card Check) was going to pass this year.

In response to stories that card check was dead Mr. Spencer states: A story was floated before the Congressional recess in  The New York Times that suggested that this group of senators had agreed to get rid of the secret ballot provisions of EFCA. However, that story was quickly shot down, most notably by the Service Employees International Union (SEIU). The AFL-CIO also said that they wouldn’t be supportive of a bill that did not allow them to bypass secret ballot elections. Therefore, I’m not sure that there actually is an alternate bill that’s even close to being ready to go, but obviously we will monitor that very closely.  Even if The New York Times story were right and the card-check provision was definitively eliminated there are other elements in the so-called compromise which would make the bill unacceptable to business.

He goes on to discuss the ongoing conflict and debate between businesses in general and the Service Employees Union as it relates to the passage of EFCA and what form the future bill may take.

In Spielbauer v. County of Santa Clara, 45 Cal.4th 704, cert. denied (June 22, 2009), the California Supreme Court reversed the lower court and affirmed the general rule that public employers have the right to compel employees to participate in interviews during investigations, and the employers may use a threat of discipline to compel the interview by the employee, so long as the employee has not been required to waive his Fifth Amendment privilege against self-incrimination. The Court of Appeal had held that an employer must secure a formal grant of criminal immunity from the local prosecuting agency before requiring an employee to answer questions about work-related misconduct. But the Supreme Court of California disagreed, and instead held that, in the public employment context, an employee may be compelled under threat of discipline to answer questions about the performance of his or her duties, so long as the employee is not required to waive any right against self-incrimination.

In such a circumstance, the employee’s statement cannot be used against him in a criminal proceeding and will be excluded from evidence. This rule of excluding such evidence is based in part on a public policy that believes public employees owe unique duties of loyalty and trust to their employers and the public at large and public entities must be able to promptly investigate and remedy breaches of such trust. The Supreme Court found this exclusionary rule sufficient to protect the interest of the employees without overburdening the employers. Therefore, public employees should be careful about refusing to answer questions about performance of their official duties when they are given assurances by their employer that such statements will not be used against them in future criminal proceedings. Refusing to participate in such investigation or interviews may result in discipline or termination.