Tag: California

California Jury Rejects Employee’s Discrimination Claims Against Chipotle

Proving it still is possible to obtain a favorable jury verdict in California (see contrary evidence), a federal jury sided with Chipotle Mexican Grill last Wednesday in a case involving disability discrimination claims by former assistant store manager, Lucia Cortez.

Cortez alleged she suffered a miscarriage at work after years of trying to get pregnant, fell into a depression, and then needed extended medical treatment as a result. In response to her request for leave, her manager gave her 12 weeks of unpaid family medical leave. When Cortez later asked for another month off to “sort out a final doctor’s appointment,” her manager granted her one additional “courtesy week” of leave. Cortez then went behind her manager’s back and got her leave extended by another month by calling the employee benefits center.

Cortez failed to provide any medical documentation when she asked for the additional time off, while at the same time claiming that she might not be medically approved to return to work. When Chipotle informed Cortez that they were about to fill her position, she immediately asked to be put back on the schedule. Her manager refused to put her back on the schedule until she produced a doctor’s note certifying that she was able to return to work.

Cortez never sent Chipotle the required medical documentation and was thereafter fired, but was also told she could reapply for her job without losing any of her tenure or benefits. Instead of simply reapplying once she was able to return to work, Cortez sued Chipotle for discrimination based on an alleged mental disability and failure to accommodate.

Fortunately, the jury sided with Chipotle, finding that Cortez’s leave of absence and her alleged disability were not motivating factors in her termination. The jury found that her failure to return to work was the motivating factor for her discharge and that Chipotle had not failed to reasonably accommodate her alleged disability.

An employer can indeed require an employee to submit documentation from a health care provider, certifying that the employee is able to resume work following a medical leave (Cal. Code Regs. tit. 2 § 11091(b)(2)(E)). This case demonstrates, however, how complicated even a simple leave of absence situation can be in California and how easy it is for disgruntled employees to sue their employer – and to try to get a jury to second-guess the employer. The employer in this case no doubt incurred hundreds of thousands of dollars in costs and attorney’s fees in successfully defending against this action – none of which can be recovered from the employee who justifiably lost the case.

 

© 2019 Proskauer Rose LLP.
This post was written by Anthony J Oncidi and Cole D. Lewis of Proskauer Rose LLP.

CCPA Part 2 – What Does Your Business Need to Know? Consumer Requests and Notice to Consumers of Personal Information Collected

This week we continue our series of articles on the California Consumer Privacy Act of 2018 (CCPA). We’ve been discussing the broad nature of this privacy law and answering some general questions, such as what is it? Who does it apply to? What protections are included for consumers? How does it affect businesses? What rights do consumers have regarding their personal information? What happens if there is a violation? This series is a follow up to our earlier post on the CCPA.

In Part 1 of this series, we discussed the purpose of the CCPA, the types of businesses impacted, and the rights of consumers regarding their personal information. This week we’ll review consumer requests and businesses obligations regarding data collection, the categories and specific pieces of personal information the business has collected, and how the categories of personal information shall be used.

We begin with two questions regarding data collection:

  • What notice does a business need to provide to the consumer to tell a consumer what personal information it collects?
  • What is a business required to do if that consumer makes a verified request to disclose the categories and specific pieces of personal information the business has collected?

First, the CCPA requires businesses to notify a consumer, at or before the point of collection, as to the categories of personal information to be collected and the purposes for which the categories of personal information shall be used. A business shall not collect additional categories of personal information or use personal information collected for additional purposes without providing the consumer with notice consistent with this section. Cal. Civ. Code §1798.100.

Second, under the CCPA, businesses shall, upon request of the consumer, be required to inform consumers as to the categories of personal information to be collected and the purposes for which the categories of personal information shall be used. The CCPA states that “a business that receives a verifiable consumer request from a consumer to access personal information shall promptly take steps to disclose and deliver, free of charge to the consumer, the personal information required by this section. The information may be delivered by mail or electronically, and if provided electronically, the information shall be in a portable and, to the extent technically feasible, in a readily useable format that allows the consumer to transmit this information to another entity without hindrance. A business may provide personal information to a consumer at any time, but shall not be required to provide personal information to a consumer more than twice in a 12-month period.” Section 1798.100 (d).

Section 1798.130 (a) states that to comply with the law, a business shall, in a form that is reasonably accessible to consumers, (1) make available to consumers two or more designated methods for submitting requests for information required to be disclosed, including, at a minimum, a toll-free telephone number, and if the business maintains an Internet web site, a web dite address; and (2) disclose and deliver the required information to a consumer free of charge within forty-five (45) days of receiving a verifiable request from the consumer.

Many have suggested during the rule-making process that there should be an easy to follow and standardized process for consumers to make their requests so that it’s clear for both consumers and businesses that a consumer has made the verified request. This would be welcome so that it would make this aspect of compliance simpler for the consumer as well as the business.

When businesses respond to consumers’ requests, having a clear website privacy policy that explains the types of information collected, a documented process for consumers to make a verified requests, a protocol for responding to consumer requests, audit logs of consumer requests and business responses, a dedicated website link, and clear and understandable language in  privacy notices, are all suggestions that will help businesses respond to consumers and provide documentation of the business’ response.

As we continue to explore the CCPA and its provisions, we strive to understand the law and translate the rights conferred by the law into business operations, processes and practices to ensure compliance with the law. In the coming weeks, we’ll focus on understanding more of these provisions and the challenges they present.

 

Copyright © 2019 Robinson & Cole LLP. All rights reserved.
This post was written by Deborah A. George of Robinson & Cole LLP.

#MeToo Movement Inspires Avalanche of New Laws Affecting California Employers

On September 30, 2018, Governor Jerry Brown signed several bills that will affect California employers. The following summarizes key aspects of these new laws. Unless otherwise noted, the new laws are effective January 1, 2019.

Major Changes to the Definition of “Hostile Work Environment” Harassment

Senate Bill (“SB”) 1300 significantly expands the circumstances in which hostile work environment harassment may be found to exist by rejecting the “severe or pervasive” standard developed and refined over several decades by California courts. Harassment is redefined to encompass a broad spectrum of conduct, specifically:

“Harassment creates a hostile, offensive, oppressive, or intimidating work environment and deprives victims of their statutory right to work in a place free of discrimination when the harassing conduct sufficiently offends, humiliates, distresses, or intrudes upon its victim, so as to disrupt the victim’s emotional tranquility in the workplace, affect the victim’s ability to perform the job as usual, or otherwise interfere with and undermine the victim’s personal sense of well-being.”

Government Code Section 12923, which declares the Legislature’s intent in enacting the new law, will provide guidance about what types of evidence will be sufficient to establish a harassment claim. It states that employees are no longer required to prove that their productivity has declined as a result of harassment. Now, they only need to show that the harassment made it “more difficult” for them to do their job. Even a “single incident of harassing conduct” is now sufficient to create a triable issue of fact, allowing a case to go to a jury. Furthermore, a single remark made by someone unconnected to a termination decision can be circumstantial evidence of discrimination. Finally, the Legislature made it clear that harassment cases are “rarely” appropriate for dismissal at the summary judgment stage.

Employers can be held liable for all forms of harassment – not just sexual harassment – directed at employees by non-employees, such as clients or vendors. This includes harassment based on race, national origin, religion, and other protected characteristics.

Finally, if an employer wins a sexual harassment lawsuit, it cannot recover attorney’s fees and costs unless it can prove that the plaintiff’s action was “frivolous, unreasonable, or groundless” either when filed or after it clearly became so.

Restrictions on Releases and Non-Disparagement Agreements

SB 1300 also prohibits employers from requiring a release of harassment, discrimination, or retaliation claims or to sign a non-disparagement agreement that purports to prevent disclosure of information about unlawful acts in the workplace, if the release is required to get a job, stay employed, or receive a raise or bonus. This does not apply to a negotiated settlement to resolve a claim filed in court, with government agencies, in arbitration, or through an employer’s internal complaint process, provided that the employee has an attorney or an opportunity to retain one.

Extended Statute of Limitations for Sexual Assault

The California Legislature lengthened from three years to ten years the statute of limitations for sexual assault claims. Under Assembly Bill (“AB”) 1619, a plaintiff may now bring a civil action for sexual assault within the later of “[ten] years from the date of the last act, attempted act, or assault with the intent to commit an act, of sexual assault by the defendant against the plaintiff” or “[w]ithin three years from the date the plaintiff discovers or reasonably should have discovered that an injury or illness resulted” from the defendant’s act.

Restrictions on Confidentiality and Testimony Provisions in Settlement Agreements

SB 820 prohibits settlement agreements that restrict plaintiffs from disclosing factual information about harassment claims in judicial proceedings. The bill does not, however, prohibit settlement provisions restricting disclosure of settlement amounts. Furthermore, a provision that shields the identity of a claimant may be included in a settlement agreement at the request of the claimant, unless a government agency or public official is a party to the agreement.

AB 3109 voids settlements that waive the right to testify regarding criminal conduct or sexual harassment, when the party has been required or requested to attend a proceeding by court order, subpoena, or other government request.

Enhanced Protection from Defamation

AB 2770 enhances protections from defamation claims made against sexual harassment claimants and employers that investigate such complaints. Three types of statements are privileged: 1) employee complaints of sexual harassment made without malice and supported by credible evidence; 2) communications made without malice between an employer and other interested persons regarding a sexual harassment complaint; and 3) answers provided without malice by a current or former employer in response to questions from a prospective employer regarding whether the current or former employer would rehire an employee, and whether the decision not to rehire is based on a determination that the former employee engaged in sexual harassment.

Broadened Definition of Non-Employment Related Harassment

SB 224 significantly expands sexual harassment claims in business, service, and professional relationships under California Civil Code Section 51.9. Going beyond the prior definition, which applied to physicians, attorneys, trustees, landlords, and other similar relationships, the law now prohibits harassment by individuals who “hold themselves out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party.” Examples include investors, elected officials, lobbyists, directors, and producers.

The law also reduces the burden to establish a claim, removing the previous requirement that a plaintiff establish that he or she was “unable to easily terminate the relationship.” The law also allows the California Department of Fair Employment and Housing (“DFEH”) to prosecute non-employment based sexual harassment claims, and makes it unlawful to “deny or aid, incite, or conspire in the denial of rights of persons related to sexual harassment actions.”

Expanded Anti-Harassment Training

Under existing law, employers with fifty or more employees were required to provide two hours of anti-harassment training to supervisory employees every two years. Under SB 1343, any employer with five or more employees, including temporary and seasonal workers, must provide two hours of anti-harassment training to supervisors and one hour of training to non-supervisors by January 1, 2020, and then once every two years thereafter. The bill also requires the DFEH to develop these courses and to post them online.

Corporate Boards of Publicly Held Corporations Must Include Female Representatives

SB 826 requires all publicly-held domestic and foreign corporations with principal executive offices in California to have at least one female on their boards by the end of 2019. By the end of 2021, the minimum increases to one female for boards with four or fewer members, two females for boards with five members, and three females for boards with six or more members. “Female” refers to an individual’s gender identification, not designated sex at birth.

The bill directs the Secretary of State to publish online reports documenting compliance. In addition, the Secretary of State may issue fines of $100,000 for failure to file board member information, $100,000 for the first violation of the member requirement, and $300,000 for subsequent violations. Each position not appropriately filled constitutes a separate violation.

Salary History Ban and Pay Scale Disclosure Guidance

Labor Code Section 432.3, enacted in January 2018, requires employers to provide applicants, upon request, with the pay scale for a position. It also prohibits employers from asking about or relying on prior salary in hiring or compensation.

An amendment to this bill enacted in July 2018 provides some necessary clarifications. It defines “pay scale” as a “salary or hourly wage range,” and it clarifies that the salary history ban and pay scale requirement do not apply to current employees. It also explains that employers are not required to provide pay scale information until after the initial interview. Employers are also allowed to ask about salary expectations. Finally, it allows employers to make compensation decisions based on existing salaries, so long as any differential is justified by a bona-fide factor such as seniority or merit.

Limitations on Criminal History Inquiries

Existing law restricts employers from considering applicants’ and employees’ judicially dismissed or sealed convictions or participation in pretrial or post-trial diversion programs. SB 1412 narrows the scope of an exception to this general rule. The bill permits employers to seek information from the applicant or other sources only about an applicant’s “particular conviction,” rather than a “conviction” generally.

An employer may inquire about a “particular” conviction only if: 1) the employer is legally required to obtain information regarding the conviction; 2) the applicant would be required to possess or use a firearm; 3) an individual with that conviction is legally prohibited from holding the position; or 4) the employer is legally prohibited from hiring an applicant with that conviction.

The employer may inquire about the particular conviction under these circumstances even if it has been expunged, sealed, statutorily eradicated, or judicially dismissed. The law further states that it does not prohibit an employer from conducting criminal background checks or restricting employment based on criminal history when legally required to do so.

Paid Family Leave for Active Duty Families

SB 1123 extends California’s paid family leave program to families with members on active duty in the armed forces. Beginning on January 1, 2021, an individual may take up to six weeks of paid family leave a year when participating in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent.

Employment Record Inspection Rights

SB 1252 provides guidance regarding requests to inspect employment records. Employees have a right to receive a copy of their records, not merely inspect or copy them. An employer must deliver a copy within 21 days, and may charge the cost of reproduction to the employee. An employer who fails to provide an employee with a copy of his or her employment records within the 21-day time period will be subject to a $750 fine.

Expanded Lactation Accommodation Requirements

AB 1976 expands the existing lactation accommodation standards to now require that employers create a permanent lactation location in an area other than a bathroom. Before this change, employers were required to provide only an area other than a toilet stall. Employers may create a temporary location if they can demonstrate: 1) an inability to provide a permanent location due to operational, financial, or spatial constraints; 2) the temporary location is private and free from intrusion when needed for lactation; 3) the temporary location is only for lactation purposes when needed for that purpose; and 4) the temporary location otherwise meets state law requirements. If the requirements would create an “undue hardship”, however, the employer must make “reasonable efforts” to provide the employee with an area other than a toilet stall that is in close proximity to the employee’s work area where the employee can express milk in private.

California Construction Employers Temporarily Protected from PAGA Suits

California construction workers will no longer be able to bring suit against their employers under the Private Attorneys General Act of 2004 (“PAGA”) if they work under a collective bargaining agreement that meets certain requirements provided in AB 1654. To qualify, the agreement must: 1) provide for the wages, hours of work, and working conditions of employees, premium wage rates for all overtime hours worked, and for employees to receive a regular hourly pay rate of not less than 30 percent more than the state minimum wage rate; 2) provide for a grievance and binding arbitration procedure to redress labor code violations; 3) expressly waive PAGA’s requirements in clear and unambiguous terms; and 4) authorize the arbitrator to award any and all remedies available under law. This exception expires on the earlier of the collective bargaining agreement’s expiration date or the statute’s repeal date of January 1, 2028.

Petroleum Industry Employee Rest Breaks May be Interrupted

Although California law prohibits employers from requiring employees to work during their meal, rest, or recovery periods, AB 2605 creates an exception for certain workers in the petroleum industry who are covered by a qualifying collective bargaining agreement. Under this provision, employers may interrupt rest breaks taken by employees who hold safety-sensitive positions at petroleum facilities from their duties, to the extent the employee is required to carry and monitor a communication device and respond to emergencies or is required to remain on employer premises to monitor the premises and respond to emergencies. If a rest break is interrupted, an employer must promptly provide an additional rest break. If a rest break cannot be provided, the employer must pay the employee an hour of pay. This bill became effective immediately when it was signed by Governor Brown on September 20, 2018, and it will remain effective until the section is repealed in January 1, 2021.

Suggested Actions

In light of these changes, California employers should consider taking the following actions:

  • Train managers, recruiters, human resource professionals, and other relevant staff regarding these new requirements and restrictions.
  • Educate all employees, especially supervisory employees, about laws prohibiting harassment, including SB 1300’s expanded definition of harassment, and train employees on how to appropriately respond to complaints of harassment.
  • Update policies, procedures, and agreements in light of SB 1300’s new restrictions on non-disparagement agreements and releases and SB 820’s and AB 3109’s restrictions on confidentiality provisions in settlement agreements.
  • Update training policies, procedures, and materials to comply with SB 1343’s expanded requirements for sexual harassment training for all employees.
  • Consider updating procedures and policies regarding employment references to third parties to permit disclosures regarding eligibility for rehire. Employers should designate a single person or a human resources professional to provide references in order to ensure that disclosures fall within AB 2770’s defamation privilege.
  • Begin planning for SB 826’s requirements for female representation on corporate boards.
  • Ensure that application forms, candidate questionnaires, interview outlines and scripts, and other screening and hiring materials omit inquiries regarding salary history and inquiries regarding criminal history, consistent with applicable law.
  • Prepare policies and procedures for complying with the salary history ban’s pay scale disclosure requirements. Such policies and procedures should comply with the requirements described above.
  • Consider asking applicants about their salary expectations, rather than salary history. If an employee voluntarily offers salary information, contemporaneously document that the employee introduced the information into the discussion.
  • Review criminal history screening policies, procedures, and forms to ensure compliance with the restrictions on criminal history inquiries. Prepare policies for dealing with criminal history to avoid ad hoc decision-making by managers and consider involving human resource professionals.
  • Contemporaneously document any individualized assessments regarding an applicant’s suitability for employment based on criminal history information.
  • Update written policies regarding qualifying exigencies related to military service.
  • Ensure policies for responding to employee requests for records; permit employees to obtain copies of such records.
  • Ensure that there is an available space for lactation in the workplace that complies with the new requirements.
  • Reach out to us if you have any questions, concerns, or need guidance with respect to these new laws or your company’s obligations to comply with them.
Copyright 2018 K&L Gates.
This post was written by Spencer Hamer and Catherine C. Smith of K&L Gates.

New Wave of Employment Bills Signed into Law by California Governor

On Sunday, September 30, 2018, Governor Jerry Brown signed into law a number of bills that will have a significant impact on litigation and legal counseling in the employment context. Many of the new laws are a response to the traction gained by the “me-too” movement and are summarized herein.

NEW LAWS

AB 3109 – Banning Waiver of Rights to Testify

This new law nullifies any term in a contract or settlement agreement that waives a party’s right to testify in an administrative, legislative or judicial proceeding concerning alleged criminal conduct or sexual harassment. This would apply where the party has been required or requested to attend a proceeding pursuant to a court order, subpoena, or written request from an administrative agency or the legislature.

SB 820 – Settlement Agreements: Confidentiality

The passage of SB 820 prohibits and makes void any provision that prevents the disclosure of information related to civil or administrative complaints of sexual assault, sexual harassment, and workplace harassment or discrimination based on sex. SB 820 authorizes settlement agreement provisions that (1) preclude the disclosure of the amount paid in settlement, and (2) protect the claimant’s identity and any fact that could reveal the identity, so long as the claimant has requested anonymity and the opposing party is not a government agency or public official. SB 820 only impacts settlement agreements entered into after January 1, 2019.

SB 1300 – Unlawful Employment Practices: Discrimination and Harassment

SB 1300 makes it unlawful “for an employer, in exchange for a raise or bonus, or as a condition of employment or continued employment” to “require an employee to sign a release of claim or right.”

The bill also prohibits non-disparagements or other agreements that would “deny the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment.”

Notably, under this bill, these restrictions would not apply to “a negotiated settlement agreement to resolve an underlying claim . . . that has been filed by an employee in court, before an administrative agency, alternative dispute resolution forum, or through an employer’s internal complaint process,” so long as such agreement is voluntary and involves valuable consideration.

The bill also provides that a prevailing defendant is prohibited from being awarded fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought or that the plaintiff continued to litigate after it clearly became so.

Significantly, this new law also expressly affirms or rejects specified judicial decisions, with the impact of making it increasingly difficult for employers to defeat harassment claims on summary judgment. The new law addresses the following judicial decisions:

  • Harris v. Forklift Systems, 510 U.S. 17 (1993): The Legislature affirms of the holding in Harris, which found that in a workplace harassment suit “the plaintiff need not prove that his or her tangible productivity has declined as a result of the harassment. It suffices to prove that a reasonable person subjected to the discriminatory conduct would find, as the plaintiff did, that the harassment so altered working conditions as to make it more difficult to do the job.”

  • Brooks v. City of San Mateo, 229 F.3d 917 (2000): The Legislature prohibits reliance on this opinion to determine what conduct is sufficiently severe or pervasive to constitute actionable harassment under the FEHA.

  • Reid v. Google, Inc., 50 Cal.4th 512 (2010): The Legislature affirmed reliance on the “stray remarks” standard articulated in Reid. Specifically, the California Supreme Court held that the existence of a hostile work environment depends upon the totality of the circumstances and a discriminatory remark, even if not made directly in the context of an employment decision or uttered by a nondecisionmaker, may be relevant, circumstantial evidence of discrimination.

  • Kelley v. Conco Cos., 196 Cal.App.4th 191 (2011): The Legislature explained that the legal standard for sexual harassment should not vary by type of workplace. Further, the Legislature found that it is irrelevant that an occupation may have been characterized by a greater frequency of sexually related commentary or conduct in the past. In determining whether or not a hostile environment existed, the Legislature holds that courts should only consider the nature of the workplace when engaging in or witnessing prurient conduct and commentary is integral to the performance of the job duties.  To that end, the Legislature prohibits reliance on any language in Kelley, which conflicts with these principles.

  • Nazir v. United Airlines, Inc., 178 Cal.App.4th 243 (2009): The Legislature affirmed the decision in Nazir, which observed that hostile working environment cases involve issues “not determinable on paper.” Specifically, SB 1300 states that “Harassment cases are rarely appropriate for disposition on summary judgment.”

SB 1412 – Applicants for Employment: Criminal History

Under existing law, employers, whether a public agency or private individual or corporation, are prohibited from (1) asking an applicant for employment to disclose, (2) seeking from any source, or (3) utilizing as a factor in determining employment, information concerning an applicant’s participation in a pretrial or posttrial diversion program or concerning a conviction that has been judicially dismissed or ordered sealed. It is a crime to intentionally violate these provisions. However, under existing laws, employers are not prohibited from asking an applicant about a criminal conviction or performing a background check regarding a criminal conviction to be considered in determining any condition of employment, so long as (1) the employer is required to obtain information regarding a conviction of an applicant, (2) the applicant would be required to possess or use a firearm in the course of his or her employment, (3) an individual who has been convicted of a crime is prohibited by law from holding the position sought, regardless of whether the conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation, or (4) the employer is prohibited by law from hiring an applicant who has been convicted of a crime.

Under the new law, employers can conduct background checks for employees under certain narrow exceptions. Specifically, under the new law, an employer, whether a public agency or private individual or corporation, cannot seek information regarding an applicant’s arrest or detention that did not result in conviction or occurred while the applicant was subject to the jurisdiction of the juvenile court. Nor can an employer seek information concerning a referral to, and participation in, any pretrial or posttrial diversion program, or concerning a conviction that has been judicially dismissed or ordered sealed pursuant to law. An employer may not consider such information when determining any condition of employment. However, under the new law, an employer may conduct a background check under narrow circumstances where: (1) the employer is a health facility as defined under Section 1250 of the Health and Safety Code; (2) an applicant’s juvenile arrest or detention resulted in a felony or misdemeanor conviction that occurred within five years preceding the application for employment; (3) the employer is required to obtain information regarding a conviction of an applicant; (4) the applicant would be required to possess or use a firearm in the course of his or her employment; (5) an individual who has been convicted of a crime is prohibited by law from holding the position sought, regardless of whether the conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation; or (6) the employer is prohibited by law from hiring an applicant who has been convicted of a crime.

AB 1976 – Lactation Accommodation

Existing law requires employers to provide a reasonable amount of break time to accommodate employees who are breastfeeding and requires an employer to make reasonable efforts to provide the employee with the use of a room or other location, other than a toilet stall, in close proximity to the employee’s work area, for the employee to breastfeed privately.

This new law clarifies what it means to make reasonable efforts to provide the employee with the use of a room or other location, other than a bathroom, in close proximity to the employee’s work area, for the employee to breastfeed privately. An employer is deemed to have complied with the law if it makes a temporary lactation location available to an employee, so long as: (1) the employer is unable to provide a permanent lactation location because of operational, financial, or space limitations; (2) the temporary lactation location is private and free from intrusion while an employee expresses milk; (3) the temporary lactation location is used only for lactation purposes while an employee expresses milk; (4) the temporary lactation location otherwise meets the requirements of state law concerning lactation accommodation. If the employer can demonstrate to the Department of Industrial Relations that this requirement would impose an undue hardship, the new law requires the employer to make reasonable efforts to provide a room or location for expressing milk that is not a toilet stall.

SB 1343 – Employers: Sexual Harassment Training Requirements

The new law requires employers with five or more employees, including temporary or seasonable employees, to provide at least 2 hours of sexual harassment training to all supervisors and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020, and one every 2 years thereafter.

AB 2079 – Janitorial Workers: Sexual Violence and Harassment Prevention Training

Introduced as the bill to empower janitors to prevent rape on the night shift, this new law bolsters existing sexual harassment and violence prevention training and prevention measures. The new law establishes the following requirements:

  • Effective January 1, 2020, all employers applying for new or renewed registration must demonstrate completion of sexual harassment violence prevention requirements and provide an attestation to the Labor Commissioner.

  • The Department of Industrial Relations (“DIR”) must convene an advisory committee by July 1, 2019 to develop requirements for qualified organizations and peer-trainers for employers to use in providing training. The DIR must maintain a list of qualified organizations and qualified peer-trainers.

  • Employers, upon request, must provide an employee a copy of all training materials.

AB 2079 would also prohibit the Labor Commissioner from approving a janitorial service employer’s request for registration or for renewal if the employer has not fully satisfied a final judgment to a current or former employee for a violation of the FEHA.

AB 3082 – Training for In-Home Supportive Services

The new law requires the In-Home Supportive Services (“IHSS”) program, administered by the State Department of Social Services and counties, to develop or otherwise identify standard educational material about sexual harassment and the prevention thereof to be made available to IHSS providers and recipients and a proposed method for uniform data collection to identify the prevalence of sexual harassment in the IHSS program. The bill requires the IHSS, on or before September 30, 2019, to provide a copy of the educational material and a description of the proposed method for uniform data collection to the relevant budget and policy committees of the Legislature.

AB 2338 – Talent Agencies: Education and Training

The law requires a talent agency to provide educational materials on sexual harassment prevention, retaliation, and reporting resources and nutrition and eating disorders to its artists. This law would require those educational materials to be in a language the artist understands, and would require the licensee, as part of the application for license renewal, to confirm with the commissioner that it has and will continue to provide the relevant educational materials.

Further, the new law requires that, prior to the issuance of a permit to employ a minor in the entertainment industry, that an age-eligible minor and the minor’s parent or legal guardian receive and complete training in sexual harassment prevention, retaliation, and reporting resources. The bill would further require a talent agency to request and retain a copy of the minor’s entertainment work permit prior to representing or sending a minor artist on an audition, meeting, or interview for engagement of the minor’s services.

To the extent these laws are violated, the commissioner is authorized to assess civil penalties of $100 for each violation, as prescribed.

SB 224 – Person Rights: Civil Liability and Enforcement

The new law provides additional examples of professional relationships where liability for claims of sexual harassment may arise.

VETOED BILLS

Several bills, which Governor Brown vetoed, are also notable because of the major impact they would have had on the employment context, had they been signed into law.

AB 1870 – Employment Discrimination: Limitation of Actions

Currently, under the existing laws, individuals have one year to file an administrative complaint with the Department of Fair Employment and Housing to enforce a FEHA claim. AB 1870 would have amended this deadline, extending it to three years to file a FEHA complaint from the date of the unlawful conduct. The bill would also add a 90-day extension to the filing deadline, which would apply if the aggrieved individual “first obtained knowledge of the facts of the alleged unlawful practice during the 90 days following the expiration of the applicable filing deadline.”

By vetoing this bill, the Governor has curbed the potential for frivolous FEHA lawsuits and the risk of lawsuits where memories of the circumstances giving rise to the claims have faded.

AB 3080 – Employment Discrimination: Enforcement

Governor Brown vetoed AB 3080, which would have prohibited employers from entering into arbitration agreements with employees. The passage of this bill would have directly conflicted with the U.S. Supreme Court’s May 2018 ruling in Epic Systems Corp., v. Lewis, 148 S. Ct. 1612 (2018), which affirmed employment arbitration agreements and class action waivers.

AB 3080 included four key provisions, including: (1) prohibiting arbitration agreements for wage and hour claims and discrimination, harassment and retaliation claims under the Fair Employment and Housing Act; (2) prohibiting employers from taking any employment action against employees who refuse to enter into arbitration agreements; (3) barring confidential agreements regarding harassment (possibly in the context of a settlement as well although the proposed text was not clear as to the scope of the prohibition); and (4) opening the possibility for individual liability for anyone that violates the provisions of the bill.

AB 3081 – Employment: Sexual Harassment

Governor Brown vetoed AB 3081, which broadly attempted to address workplace harassment by issuing three major prohibitions:

  • First, employers and labor contractors would be jointly liable for all civil liability for sexual harassment, including harassment on the basis of pregnancy, childbirth or related conditions. They would be forbidden from retaliating against employees who file claims.

  • Second, AB 3081 would have amended the California Labor Code to prohibit employers from discriminating or retaliating against an employee because of his/her status as a victim of sexual harassment.

  • Third, the bill would create a rebuttable presumption of unlawful retaliation if an employer “discharges, threatens to discharge, demotes, suspends, or in any manner discriminates against” an employee within 30 days after the employer has acquired actual knowledge of the employee’s status as a sexual harassment victim.

The fact that Governor Brown vetoed this bill is not particularly surprising given that he has expressed reluctance to expand concepts of joint liability in the past. However, this decision is still notable given the momentum of the #me-too movement.

TAKEAWAYS

California employers should consider these new laws when negotiating settlement agreements and engaging in litigation.  These laws serve as reminder of how important it is for all employers to review and revise where necessary their anti-harassment, discrimination, and retaliation policies on a more frequent and consistent basis. Importantly, employers may continue using arbitration agreements with class action waivers.

 

Copyright © 2018, Sheppard Mullin Richter & Hampton LLP.

California Supreme Court Holds That High Interest Rates on Payday Loans Can be Unconscionable

On August 13, 2018, the California Supreme Court in Eduardo De La Torre, et al. v. CashCall, Inc., held that interest rates on consumer loans of $2,500 or more could be found unconscionable under section 22302 of the California Financial Code, despite not being subject to certain statutory interest rate caps.  By its decision, the Court resolved a question that was certified to it by the Ninth Circuit Court of Appeals.  See Kremen v. Cohen, 325 F.3d 1035, 1037 (9th Cir. 2003) (certification procedure is used by the Ninth Circuit when there are questions presenting “significant issues, including those with important public policy ramifications, and that have not yet been resolved by the state courts”).

The California Supreme Court found that although California sets statutory caps on interest rates for consumer loans that are less than $2,500, courts still have a responsibility to “guard against consumer loan provisions with unduly oppressive terms.”  Citing Perdue v. Crocker Nat’l Bank (1985) 38 Cal.3d 913, 926.  However, the Court noted that this responsibility should be exercised with caution, since unsecured loans made to high-risk borrowers often justify their high rates.

Plaintiffs alleged in this class action that defendant CashCall, Inc. (“CashCall”) violated the “unlawful” prong of California’s Unfair Competition Law (“UCL”), when it charged interest rates of 90% or higher to borrowers who took out loans from CashCall of at least $2,500.  Bus. & Prof. Code § 17200.  Specifically, Plaintiffs alleged that CashCall’s lending practice was unlawful because it violated section 22302 of the Financial Code, which applies the Civil Code’s statutory unconscionability doctrine to consumer loans.  By way of background, the UCL’s “unlawful” prong “‘borrows’ violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable.”  Citing Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163, 180 (1999).

The Court agreed, and found that an interest rate is just a term, like any other term in an agreement, that is governed by California’s unconscionability standards.  The unconscionability doctrine is meant to ensure that “in circumstances indicating an absence of meaningful choice, contracts do not specify terms that are ‘overly harsh,’ ‘unduly oppressive,’ or ‘so one-sided as to shock the conscience.”  Citing Sanchez v. Valencia Holding Co., LLC, 61 Cal.4th 899, 910-911 (2015).  Unconscionability requires both “oppression or surprise,” hallmarks of procedural unconscionability, along with the “overly harsh or one-sided results that epitomize substantive unconscionability.”  By enacting Civil Code section 1670.5, California made unconscionability a doctrine that is applicable to all contracts, and courts may refuse enforcement of “any clause of the contract” on the basis that it is unconscionable.  The Court also noted that unconscionability is a flexible standard by which courts not only look at the complained-of term, but also the process by which the contracting parties arrived at the agreement and the “larger context surrounding the contract.”  By incorporating Civil Code section 1670.5 into section 22302 of the Financial Code, the unconscionability doctrine was specifically meant to apply to terms in a consumer loan agreement, regardless of the amount of the loan.  The Court further reasoned that “guarding against unconscionable contracts has long been within the province of the courts.”

Plaintiffs sought the UCL remedies of restitution and injunctive relief, which are “cumulative” of any other remedies.  Bus. & Prof. Code §§ 17203, 17205.  The question posed to the California Supreme Court stemmed from an appeal to the Ninth Circuit of the district court’s ruling granting the defendant’s motion for summary judgment.  The California Supreme Court did not resolve the question of whether the loans were actually unconscionable.

 

Copyright © 2018 Womble Bond Dickinson (US) LLP All Rights Reserved.
For more litigation news, check out the National Law Review’s Litigation Type of Law page.

Federal Judge Determines that California’s Immigration Law Goes Too Far

A federal district judge in California issued a preliminary injunction preventing the State of California from enforcing certain provisions of Assembly Bill (AB) 450, a state statute that, among other things, prohibits private employers from cooperating with federal immigration enforcement agencies in the absence of a judicial warrant or a subpoena. The law, which is also known as the Immigrant Worker Protection Act, went into effect on January 1, 2018. The U.S. Department of Justice (DOJ) filed a lawsuit in March 2018, alleging that AB 450, and two other California immigration statutes, preempt federal law and interfere with the government’s ability to carry out its duties.

In his July 4, 2018 order, Judge John A. Mendez discussed the difficult position of the court in balancing the federal government’s power to determine immigration law against state powers. Judge Mendez determined that three key parts of AB 450 “impermissibly infringed on the sovereignty of the United States” and discriminate against employers that voluntarily choose to work with the federal government. As a result, the judge granted the DOJ’s motion for a preliminary injunction enjoining the enforcement of the three offending provisions. The judge did, however, uphold the law’s notice requirements, finding that the rule did not interfere with the federal government’s ability to enforce immigration laws.

Impact on Employers

Until further notice, private employers in California will not be in violation of state law in the following circumstances:

  • If theemployer voluntarily consents and allows an immigration enforcement agent to enter nonpublic areas of a place of business, even if the agent does not have a warrant.
  • If the employer voluntarily provides an immigration enforcement agent with access to employee records without a subpoena or court order.
  • If the employer reverifies an employee’s eligibility to work even when not strictly required by federal statutory law.

It is important to note that the notice requirements under AB 450 were upheld and are still in effect. The law’s notice requirements are as follows.

Prior to Inspection

  • The law requires employers to notify each current employee, within 72 hours of receiving notice of an inspection, that an immigration agency will be inspecting I-9 Employment Eligibility Verification forms or other records.
  • The law requires employers to post the notice “in the language the employer normally uses to communicate employment-related information to the employee.”
  • The notice must include the following information:
  1. “The name of the immigration agency conducting the inspections of I-9 Employment Eligibility Verification forms or other employment records.
  2. The date that the employer received notice of the inspection.
  3. The nature of the inspection to the extent known.
  4. A copy of the Notice of Inspection of I-9 Employment Eligibility Verification forms for the inspection to be conducted.”
  • The California Labor Commissioner’s Office released a template notice form to help employers comply with the posting requirements.

After Inspection

  • “Except as otherwise required by federal law, an employer shall provide to each current affected employee, and to the employee’s authorized representative, if any, a copy of the written immigration agency notice that provides the results of the inspection of I-9 Employment Eligibility Verification forms or other employment records within 72 hours of receipt of the notice.”
  • Employers must also provide “each affected employee, and to the affected employee’s authorized representative, if any, written notice of the obligations of the employer and the affected employee arising from the results of the inspection of I-9 Employment Eligibility Verification forms or other employment records.
  • This notice is required to be hand delivered directly to the affected employee at the workplace, if possible. If hand delivery is not possible, the notice must be delivered by mail and email to the employee’s email address, if known, and to the employee’s authorized representative.
  • “The notice shall contain the following information:
  1. A description of any and all deficiencies or other items identified in the written immigration inspection results notice related to the affected employee.
  2. The time period for correcting any potential deficiencies identified by the immigration agency.
  3. The time and date of any meeting with the employer to correct any identified deficiencies.
  4. Notice that the employee has the right to representation during any meeting scheduled with the employer.”

Employers that fail to provide the required notices are subject to penalties of $2,000–5,000 for a first violation and $5,000–10,000 for each subsequent violation. AB 450 does not assess penalties against employers that fail to provide notice to employees at the express request of the federal government.

 

© 2018, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
More immigration news is available on the National Law Review’s Immigration Page.

Some California “Sanctuary State” Employer Obligations Are Struck Down

On July 4th, U.S. District Judge John. A. Mendez issued an order enjoining California from enforcing parts of the California Immigration Workers Protection Act (Assembly Bill 450), a new state law that restricted private employers from cooperating with federal immigration enforcement.

Among other things, the law imposed fines on private employers of up to $10,000 per violation if they “voluntarily consent” to giving federal immigration authorities access to nonpublic areas of a “place of labor” and/or to employee records, and it mandated that the employer insist that the authorities obtain a judicial warrant or subpoena before such information would be turned over. Cal. Gov’t Code §§ 7285.1 and 7285.2. The court sided with the U.S. Department of Justice in finding that several provisions of AB 450 discriminate against private employers who cooperate with the federal government.

In his Order, Judge Mendez stated that “these fines inflict a burden on those employers who acquiesce in a federal investigation but not on those who do not.” Thus, the court found that “a law which imposes monetary penalties on an employer solely because the employer voluntarily consents to federal immigration enforcement’s entry into nonpublic areas of their place of business or access to their employment records impermissibly discriminates against those who choose to deal with the federal government.”

The court also struck down a provision of the law limiting an employer’s ability to re-verify an employee’s employment eligibility unless otherwise required by federal law on the ground that it “frustrates the system of accountability that Congress designed.” Cal. Lab. Code § 1019.2. The court left standing an employer obligation to warn employees in writing of an imminent inspection of I-9 forms by federal immigration authorities. Cal. Lab. Code § 90.2(a)(1).

This decision means that private sector employers may not be prosecuted for: (i) consenting to a federal immigration enforcement agent’s request to enter nonpublic areas in the workplace; (ii) granting federal immigration enforcement agents access to employee records; or (iii) re-verifying an employee’s eligibility to work in the United States. The decision will likely be appealed, which means there may be more twists in store.

 

© 2018 Proskauer Rose LLP.
This post was written by Anthony J Oncidi and Tracey L Silver of Proskauer Rose LLP.

California’s Turn: California Consumer Privacy Act of 2018 Enhances Privacy Protections and Control for Consumers

On Friday, June 29, 2018, California passed comprehensive privacy legislation, the California Consumer Privacy Act of 2018.  The legislation is some of the most progressive privacy legislation in the United States, with comparisons drawn to the European Union’s General Data Protection Regulation, or GDPR, which went into effect on May 25, 2018.  Karen Schuler, leader of BDO’s National Data and Information Governance and a former forensic investigator for the SEC, provides some insight into this legislation, how it compares to the EU’s GDPR, and how businesses can navigate the complexities of today’s privacy regulatory landscape.

California Consumer Privacy Act 2018

The California Consumer Privacy Act of 2018 was passed by both the California Senate and Assembly, and quickly signed into law by Governor Brown, hours before a deadline to withdraw a voter-led initiative that could potentially put into place even stricter privacy regulations for businesses.  This legislation will have a tremendous impact on the privacy landscape in the United States and beyond, as the legislation provides consumers with much more control of their information, as well as an expanded definition of personal information and the ability of consumers to control whether companies sell or share their data.  This law goes into effect on January 1, 2020. You can read more about the California Privacy Act of 2018 here.

California Privacy Legislation v. GDPR

In many ways, the California law has some similarities to GDPR, however, there are notable differences, and ways that the California legislation goes even further.

Karen Schuler, leader of BDO’s National Data & Information Governance practice and former forensic investigator for the SEC, points out:

“the theme that resonates throughout both GDPR and the California Consumer Privacy Act is to limit or prevent harm to its residents. . . both seem to be keenly focused on lawful processing of data, as well as knowing where your personal information goes and ensuring that companies protect data accordingly.”

One way California goes a bit further is in the ability of consumers to prevent a company from selling or otherwise sharing consumer information.  Schuler says, “California has proposed that if a consumer chooses not to have their information sold, then the company must respect that.” While GDPR was data protections for consumers, and allows consumers rights as far as modifying, deleting and accessing their information, there is no precedent where GDPR can stop a company from selling consumer data if the company has a legal basis to do so.

In terms of a compliance burden, Schuler hypothesizes that companies who are in good shape as far as GDPR goes might have a bit of a head start in terms of compliance with the California legislation, however, there is still a lot of work to do before the law goes into effect on January 1, 2020.  Schuler says, “There are also different descriptions of personal data between regulations like HIPAA, PCI, GDPR and others that may require – under this law – companies to look at their categorizations of data. For some organizations this is an extremely large undertaking.”

Compliance with Privacy Regulations: No Short-Cuts

With these stricter regulations coming into play, companies are in a place where understanding data flows is of primary importance. In many ways, GDPR compliance was a wake-up call to the complexities of data privacy issues in companies.  Schuler says, “Ultimately, we have found that companies are making good strides against becoming GDPR compliant, but that they may have waited too long and underestimated the level of effort it takes to institute a strong privacy or GDPR governance program.”  When talking about how companies institute compliance to whatever regulation they are trying to understand and implement, Schuler says, “It is critical companies understand where data exists, who stores it, who has access to it, how its categorized and protected.” Additionally, across industries companies are moving to a culture of mindfulness around privacy and data security issues, a lengthy process that can require a lot of training and requires buy-in from all levels of the company.

While the United States still has a patchwork of privacy regulations, including breach notification statutes, this California legislation could be a game-changer.  What is clear is that companies will need to contend with privacy legislation and consumer protections. Understanding the data flows in an organization is crucial to compliance, and it turns out GDPR may have just been the beginning.

This post was written by Eilene Spear.

Copyright ©2018 National Law Forum, LLC.

California May Be Headed Towards Sweeping Consumer Privacy Protections

On June 21st, California legislature Democrats reached a tentative agreement with a group of consumer privacy activists spearheading a ballot initiative for heightened consumer privacy protections, in which the activists would withdraw the the existing ballot initiative in exchange for the California legislature passing, and Governor Jerry Brown signing into law, a similar piece of legislation, with some concessions, by June 28th, the final deadline to withdraw ballot initiatives.  If enacted, the Act would take effect January 1, 2020.

In the “compromise bill”, Assemblyman Ed Chau (D-Arcadia) amended the California Consumer Privacy Act of 2018, (AB 375) to ensure the consumer privacy activists, and conversely ballot initiative opponents, would be comfortable with its terms.

Some of the key consumer rights allotted for in AB 375 include:

  • A consumer’s right to request deletion of personal information which would require the business to delete information upon receipt of a verified request;

  • A consumer’s right to request that a business that sells the consumer’s personal information, or discloses it for a business purpose, disclose the categories of information that it collects and categories of information and the identity of any 3rd parties to which the information was sold or disclosed;

  • A consumer’s right to opt-out of the sale of personal information by a business prohibiting the business from discriminating against the consumer for exercising this right, including a prohibition on charging the consumer who opts-out a different price or providing the consumer a different quality of goods or services, except if the difference is reasonably related to value provided by the consumer’s data.

Covered entities under AB 375 would include, any entity that does business in the State of California and satisfies one or more of the following: (i) annual gross revenue in excess of $25 million, (ii) alone or in combination, annually buys, receives for the business’ commercial purposes, sells, or shares for commercial purposes, alone or in combination, the personal information of 50,000 or more consumers, households, or devices, OR (iii) Derives 50 percent or more of its annual revenues from selling consumers’ personal information.

Though far reaching, the amended AB 375 limits legal damages and provides significant concessions to business opponents of the bill. For example, the bill allows a business 30 days to “cure” any alleged violations prior to the California attorney general initiating legal action. Similarly, while a private action is permissible, a consumer is required to provide a business 30 days written notice before instituting an action, during which time the business has the same 30 days to “cure” any alleged violations.  Specifically, the bill provides: “In the event a cure is possible, if within the 30 days the business actually cures the noticed violation and provides the consumer an express written statement that the violations have been cured and that no further violations shall occur, no action for individual statutory damages or class-wide statutory damages may be initiated against the business.”  Civil penalties for actions brought by the Attorney General are capped at $7,500 for each intentional violation.  The damages in any private action brought by a consumer are not less than one hundred dollars ($100) and not greater than seven hundred and fifty ($750) per consumer per incident or actual damages, whichever is greater.

Overall, consumer privacy advocates are pleased with the amended legislation which is “substantially similar to our initiative”, said Alastair Mactaggart, a San Francisco real estate developer leading the ballot initiative. “It gives more privacy protection in some areas, and less in others.”

The consumer rights allotted for in the amended version of the California Consumer Privacy Act of 2018, are reminiscent of those found in the European Union’s sweeping privacy regulations, the General Data Protection Regulation (“GDPR”) (See Does the GDPR Apply to Your U.S. Based Company?), that took effect May 25th. Moreover, California is not the only United States locality considering far reaching privacy protections. Recently, the Chicago City Council introduced the Personal Data Collection and Protection Ordinance, which, inter alia, would require opt-in consent from Chicago residents to use, disclose or sell their personal information. On the federal level, several legislative proposals are being considered to heighten consumer privacy protection, including the Consumer Privacy Protection Act, and the Data Security and Breach Notification Act.

 

Jackson Lewis P.C. © 2018
This post was written by Joseph J. Lazzarotti of Jackson Lewis P.C.

State Investments in Electric Vehicle Charging Infrastructure

Various studies indicate that an overall lack of charging infrastructure serves as an impediment to the widespread adoption of electric vehicles (EVs). However, the road to transportation electrification is officially under construction following several major state investments.

At the end of May, in the largest single state-level investment in EV charging infrastructure, the California Public Utilities Commission (CPUC) approved more than $760 million worth of transportation electrification projects by the State’s three investor-owned utilities. The CPUC’s Decision, See A.17-01-020, Proposed Decision of ALJs Goldberg and Cook (May 31, 2018),  authorized Pacific Gas and Electric Company (PG&E) and Southern California Edison (SCE) to install vehicle chargers at more than 1,500 sites supporting 15,000 medium or heavy-duty vehicles. The FD also approved rebates to San Diego Gas & Electric (SDG&E) residential customers for installing up to 60,000 240-volt charging stations at their homes. Moreover, PG&E was authorized to build 234 DC fast-charging stations.

Besides the total spend and resulting emissions reductions represented by the Commission’s action, the Proposed Decision is also notable for the policy priorities it advances.  For instance, it clearly prioritizes the creation of electrification-related benefits for California’s disadvantaged communities (DACs).  (The authorizing legislation, SB 350, found that “[w]idespread transportation electrification requires increased access for disadvantaged communities . . . and increased use of [EVs] in those communities . . . to enhance air quality, lower greenhouse gases emissions, and promote overall benefits to those communities” § 740.12(a)(1)(C) (De Leon)).  Accordingly, the CPUC focused on promoting construction of charging infrastructure in DACs.   For example, the PG&E fast charging program will target construction in DACs by providing up to $25,000 per DC fast charger in rebates to cover a portion of the charger cost for sites located in DACs.

The CPUC also prioritizes the survival of non-utility charging competition.  For example, the Proposed Decision eliminates utility ownership of the charging infrastructure on the customer side of the meter in the SDG&E residential charging program. Additionally, for the PG&E and SCE’s medium and heavy-duty programs, the utilities will own make-ready infrastructure, but not the Electric Vehicle Supply Equipment (EVSE). Instead, the utilities will allow customers to choose their own EVSE models, EVSE installation vendors, and any network services providers.

The CPUC noted several benefits of allowing the utility to own electrification infrastructure only up to the point of the EVSE stub.  First, the Commission found that “[u]tility ownership of the charging infrastructure dramatically drives up costs, in comparison to alternative ownership models.” Instead, restricting utility ownership of charging equipment will allow more charging infrastructure to be built at the same (or lower) cost to ratepayers. Second, it allows private parties to compete and innovate, which will improve charging technology and lower costs. Lastly, non-utility competition addresses “stranded cost” fears, since private parties will bear the risks of nascent charging technologies.

While California has made the largest commitment, other states have also joined the effort to pave a national road toward the widespread adoption of EVs.

In New Jersey, utility company PSE&G recently proposed spending $300 million to set up a network of up to 50,000 charging stations. This investment would constitute a massive upgrade to New Jersey’s charging infrastructure, which currently consists of less than 600 charging stations according to U.S. Department of Energy data. The proposed investment is part of a larger $5.4 billion expansion in PSE&G’s five-year infrastructure plan, and represents the first major proposal of New Jersey’s largest utility to invest in EV infrastructure.

In New York, Governor Andrew Cuomo announced a $40 million commitment (that could grow to $250 million by 2025) by the New York Power Authority for its EVolve NY initiative. The new funding will be used to build fast chargers and to support EV model communities. EVolve NY is a part of the broader Charge NY 2.0 initiative, which advances electric car adoption by increasing the number of charging stations statewide. The new funding will aid New York as it aims to meet its particularly ambitious goal of 800,000 electric vehicles on the road by 2025.

Late last year, the Massachusetts Department of Public Utilities approved a $45 million charging station program by local utility, Eversource. The program includes investments to support the deployment of almost 4,000 “Level 2 Stations” and 72 DC Fast Charging stations. Even more investment could be on its way to Massachusetts as utility company National Grid has also proposed investing in charging station infrastructure.

And in Maryland, utility companies have proposed spending $104 million to build a network of 24,000 residential, workplace and public charging stations. The program, currently before the state’s Public Service Commission, would be a major part of Maryland’s effort to reach 300,000 electric vehicles on the road by 2025.

On the federal level, energy-related projects could be eligible for the $20 billion “Transformative Projects Program” announced by the Trump administration in February.  However, President Trump recently remarked that his infrastructure plan will likely have to wait until after this year’s midterm elections.  In the meantime, states have shown that they are more than willing to take the lead in investing in transportation electrification infrastructure.  (In related news this week, Colorado’s decision to move toward adopting California’s greenhouse gas emissions standards for light-duty vehicles represents a parallel and noteworthy development, further indicating leadership and action from states focused on developing advanced vehicle technology.)  It’s also notable that in addition to utility commission activity, states are also expressing support for advanced vehicle technology While the states have certainly taken a lead, their investments also complement significant action in the private sector, including the recent effort to stand up the Transportation Electrification Accord.  See our recent post on that subject, and continue to follow Inside Energy and Environment for continued updates on this subject.

© 2018 Covington & Burling LLP

This post also includes contributions from Michael Rebuck, a summer associate.

This post was written by Jake Levine Covington & Burling LLP.