November 12, 2019
CONSUMER LEGISLATION AND CASE DEVELOPMENTS
CALIFORNIA EXPANDS DATA-BREACH NOTIFICATION LAW: California’s security breach notification law requires businesses that incur data breaches involving “personal information” to notify the individuals affected and, where more than 500 California residents are notified, the California Attorney General. Assembly Bill 1130, signed into law by Governor Newsom on October 11, 2019, expands the definition of “personal information” to include tax identification numbers, passport numbers, military identification numbers, and other unique identification numbers issued on government documents commonly used for authentication purposes, as well as unique biometric data such as fingerprints, retinas, and iris images. Businesses that face biometric data breaches are permitted to include instructions in their security breach notifications on how affected individuals can notify other entities that use the same type of data to no longer rely on such data for authentication purposes.
RETAILERS NATIONWIDE HIT WITH GIFT CARD ACCESSIBILITY SUITS: Businesses that sell gift cards should be alert to a new wave of first-of-their-kind class action lawsuits brought under the Americans with Disabilities Act (ADA). Visually impaired individuals have brought suit against major retailers and fast food restaurants alleging the businesses discriminate against them by failing to sell gift cards embossed with braille. An example of this type of lawsuit can be found here.
MEAL PRICING STILL A SOURCE OF DECEPTIVE ADVERTISING SUITS: Quick-service restaurants nationwide continue to be hit with class action suits by plaintiffs alleging deceptive advertising of menu item prices. The nature of the quick-service restaurant industry is generally a bar to such claims. Courts often dismiss deceptive advertising claims because plaintiffs fail to present evidence they were misled by restaurants that prominently feature menu item prices in-store and provide customers order totals before preparing their meals. Businesses should be aware, however, that issues may arise when less transparent pricing practices are employed. Examples of these lawsuits can be found here and here.
EMPLOYMENT LEGISLATION AND CASE DEVELOPMENTS
MEAL PERIOD VIOLATIONS DO NOT SUPPORT DERIVATIVE WAGE STATEMENT OR WAITING TIME PENALTY CLAIMS: A California appellate court, in Naranjo, et al. v. Spectrum Security Services, Inc., recently issued a decision that may significantly decrease employers’ exposure when rest and meal period claims are involved. The court held that premiums for meal break violations are not “wages,” and as a result employees are not entitled to pursue derivative claims for inaccurate wage statements or waiting time penalties. The court also determined that prejudgment interest for unpaid premiums accrues at seven percent, not ten percent, as plaintiffs had asserted. In the employee-friendly portion of the decision, the court confirmed the necessity of written agreements with a revocation clause for on-duty meal periods (where permitted).
WIDE-RANGING CHANGES TO ILLINOIS’ WORKPLACE HARASSMENT LAWS IMMINENT: Illinois Governor Pritzker signed the Workplace Transparency Act (WTA) into law on August 9, 2019. Although parts of the new law took immediate effect, the most far-reaching changes to Illinois’ workplaces become effective January 1, 2020, and apply to all employment, separation, and settlement agreements entered, extended, or modified after this date. Broadly, the WTA: (1) prohibits employers from restricting past, present, and prospective employees from reporting unlawful conduct; (2) restricts non-disclosure, non-disparagement, mandatory arbitration, and waiver clauses that cover claims of discrimination and harassment unless mutually agreed to; (3) requires all employers to provide annual sexual harassment training, and bars and restaurant to provide, in both English and Spanish, a written sexual harassment policy in the first calendar week of employment, as well as supplemental training; and (4) beginning July 1, 2020, directs employers to report adverse discrimination and harassment-related judgments to the Illinois Department of Human Rights annually. In light of these changes, Illinois employers are encouraged to review and revise their standard arbitration, confidentiality, termination, and other employment agreements to ensure compliance with their new obligations by 2020.
NEW YORK EXPANDS WORKPLACE DISCRIMINATION PROTECTIONS: A number of amendments to New York State’s discrimination laws took effect on October 11, 2019, including: (1) a prohibition on non-disclosure provisions in agreements settling discrimination claims; (2) a prohibition on mandatory arbitration of discrimination claims; and (3) an expansion of the New York State Human Rights Law to cover contractors, subcontractors, vendors, and other persons providing services under contract. New York City also enacted Int. 136-A on October 13, 2019. The law, effective January 11, 2020, extends the employment protections of the New York City Human Rights Law to freelancers and independent contractors. This includes the right to be free from, and file suit for, discrimination, harassment, and retaliation with New York City’s courts and Commission on Human Rights. Companies that engage independent contractors should also realize that the law may be interpreted to provide independent contractors with additional protections, granted pursuant to various other laws, such as New York’s mandated sexual harassment prevention training and restrictions on pre-job criminal background and credit checks, and pre-hire salary history inquiries.
REMINDER OF MINIMUM WAGE INCREASES IN 2020: Arizona, California, Florida, Illinois, Massachusetts, Nevada, New York, and Washington are among the states increasing their minimum wage effective January 1, 2020. Many major cities also have their own minimum wage laws which may be increasing in the New Year.