Blogs

By: @Gage Dungy, Partner, Liebert Cassidy Whitmore

CSDA Advocacy and External Affairs Officer Kyle Packham interview Liebert Cassidy Whitmore Partner Gage Dungy

The California Legislature was active again in this year’s legislative session and passed a number of labor and employment law bills that were signed into law by Governor Gavin Newsom. Among those bills that will impact special districts are SB 399, SB 1100, and AB 1870 – which will all go into effect on January 1, 2025. The California Supreme Court also recently clarified the limitations of the Labor Code to public agencies, including special districts.

Senate Bill 399 - Prohibits Employers from Requiring an Employee to Attend a Meeting that Promotes a Political or Religious Message

Senate Bill 399 (Wahab) (“SB 399)”, also known as the “California Worker Freedom from Employer Intimidation Act,” prohibits an employer from subjecting, or threatening to subject, an employee to an adverse employment action because the employee declines to attend an employer-sponsored meeting (or otherwise affirmatively declines to receive or listen to communications) designed to convey the employer’s opinion about religious or political matters, including the decision to join or support any labor organization. SB 399 provides that an employee who is working at the time of the meeting and elects not to attend shall continue to be paid while the meeting takes place.

The legislative history of SB 399 indicates that it is aimed at addressing “captive audience” type meetings in the workplace that advocate religious or political messages. Such meetings are more prevalent among private sector employers and are not as common among public sector employers based on existing legal restrictions. For example, special districts, as public sector employers, are already prohibited under the First Amendment of the United States Constitution from endorsing a specific religion. This is commonly referred to as the “Establishment Clause”. In addition, special districts are also currently prohibited from deterring or discouraging public employees from becoming or remaining members of represented labor organizations under California Government Code section 3550. Finally, many special districts have existing local policies authorized under California Government Code section 3207 that prohibit their officers and employees from engaging in political activities during work hours or on district premises. As a result, the application of SB 399’s prohibitions on such “captive audience” meetings to special districts should already be limited.

However, the application of this law to meetings in the workplace regarding a “political message” may appear to be tricky as applied to special districts, and other local agencies, that are tasked as public agencies to develop and implement governmental policies that may be political in nature. As a result, SB 399 notes that its restrictions do not apply to the following types of activities that may be construed to be of a political nature:

• Communications to employees of information that the employer is required by law to communicate, but only to the extent of that legal requirement.
• Communications to employees of information that is necessary for those employees to perform their job duties.
• Communications from public agency employers to their employees of any information related to a policy of the public agency or any law or regulation that the public agency is responsible for administering.
• Employer-required trainings for employees to comply with the employer’s legal obligations, including obligations under civil rights laws and occupational safety and health laws.
• Public agency employer new employee orientation meetings as defined in California Government Code section 3555.5.

The law authorizes the California Labor Commissioner to enforce its provisions, in addition to creating a private right of action for damages, including punitive damages. In addition to any other remedy, an employer who violates these provisions must pay a civil penalty of $500 per violation.

Special districts should review their existing practices regarding required employee meetings to ensure compliance with SB 399.

(SB 399 adds section 1137 to the California Labor Code.)

Senate Bill 1100 – Limits Employers From Requiring a Driver’s License for Applicants Unless Specific Conditions Are Satisfied

Senate Bill 1100 (Portantino) (“SB 1100”) amends the Fair Employment Housing Act (“FEHA”) to make it an unlawful employment practice for an employer to include statements in job advertisements, postings, applications, and other material that an applicant for employment be required to have a driver’s license, unless the following two conditions are satisfied:

1. The employer reasonably expects driving to be one of the job functions for the position, and 
2. The employer reasonably believes that satisfying those job functions using an “alternative form of transportation” would not be comparable in travel time or cost to the employer.

For purposes of this new law, an “alternative form of transportation” includes, but is not limited to, the following:

• Using a ride-hailing service (e.g., Uber, Lyft);
• Using a taxi; 
• Carpooling; 
• Bicycling; or, 
• Walking. 

The purpose behind SB 1100 is to expand employment opportunities for individuals who do not have a driver’s license where the need to drive in the workplace does not occur.  However, it is important to note that the express statutory language in SB 1100 only prohibits an employer from having such a driver’s license requirement in job advertisements, postings, applications, and other material for an applicant for employment unless one of the exceptions noted above applies.  As a result, it is not entirely clear whether this prohibition applies to existing employees who are already required to have a driver’s license as a condition of employment.

As a result, special districts should review any existing job requirements to have a driver’s license as applied to applicants for employment to confirm that they meet the requirements of SB 1100.  In addition, special districts, as public agency employers, may also have an argument to support requiring driver’s licenses for its applicants where all public employees are considered disaster service workers who may be called into service in the event of an emergency. However, it is not entirely clear how SB 1100 would impact such disaster service worker obligations.

Any violations of SB 1100 would be handled in a similar manner by the California Civil Rights Department (“CCRD”) to other FEHA employment discrimination complaints.

(SB 1100 amends section 12940 of the California Government Code.)

AB 1870 – Revisions to Workers’ Compensation Workplace Notice

Existing law requires that all California employers subject to the workers’ compensation law post a workplace notice summarizing an employee’s workers’ compensation rights and benefits.

Assembly Bill 1870 (Ortega) (“AB 1870”) will now require this workplace notice to include information concerning an injured employee’s ability to consult a licensed attorney to advise them of their rights under workers’ compensations laws, and that in most instances, attorney’s fees will be paid from an injured employee’s recovery.

Special districts should therefore ensure that they use this updated workers’ compensation workplace notice going forward.

(AB 1870 amends section 3550 of the California Labor Code.)

Recent California Supreme Court Case Clarifies the Application of the Labor Code to Public Agencies

On August 15, 2024, the California Supreme Court issued its decision in the case of Stone v. Alameda Health System (2024) 16 Cal. 5th 1040 (“Stone”). The Court’s decision in Stone is significant for special districts in that it confirmed their inclusion along with other public agencies in existing exclusions from provisions in the Labor Code, along with confirming the general premise that Labor Code sections do not apply to public agencies unless they are expressly included in the statute.  This includes the holding that California’s Private Attorneys General Act (“PAGA”), which is included in the Labor Code, does not apply to public agencies.

Alameda Health System (“AHS”) is a public agency established by the County of Alameda to provide health services to the people of Alameda County. AHS was established under California Health and Safety Code section 101850, as a “hospital authority” – a government entity separate and apart from the County.

In 2021, a group of AHS employees filed a class action PAGA lawsuit against AHS asserting violations of the Labor Code related to (1) failure to provide off-duty meal periods, (2) failure to provide off-duty rest periods, (3) failure to keep accurate payroll records, (4) failure to provide accurate itemized wage statements, (5) failure to pay wages, (6) failure to timely pay wages, and (7) civil penalties under PAGA.

AHS initially moved to dismiss the lawsuit by arguing it was a public agency that was exempt from the Labor Code provisions that were allegedly violated and that they were not considered an “employer” subject to PAGA under the Labor Code. AHS relied on the rule established in Johnson v. Arvin-Edison Water Storage District (2009) 174 Cal.App.4th 729, 736, that absent express words to the contrary, public agencies are excluded from coverage under Labor Code provisions. The Alameda County Superior Court agreed with AHS and dismissed the complaint’s wage and hour claims, concluding that as a public agency, AHS was not subject to the state law wage and hour claims pled in the lawsuit and that they were also not an employer subject to PAGA.

The plaintiff group of employees appealed that decision to the First District Court of Appeal, which reversed the Superior Court’s decision and concluded that most of the cited Labor Code provisions did apply to public sector agencies. In addition, the Court of Appeal noted that AHS was not a “municipal corporation” referenced in Labor Code section 220(b), which then precluded the application of exemptions on its obligation to pay final wages immediately upon the termination of employees. The only dismissed claim that the Court of Appeal did uphold related to the failure to provide accurate itemized wage statements.

AHS appealed to the California Supreme Court, who granted review and ultimately reversed the Court of Appeal’s decision. In doing so, the Court held in Stone that plaintiffs’ meal/rest break, PAGA, and other Labor Code claims were inapplicable to AHS and other public agencies. 

The Stone decision clarifies that California meal and rest break laws do not apply to public agencies, unless they specifically state they apply to public agencies, because the statutory language, context and history show that the Legislature intended to exclude public employers from those obligations. For example, the Court noted that California Labor Code section 512.1 has expressly applied meal and rest periods to public employees who provide direct patient care or support direct patient care in a general acute care hospital, clinic, or public health setting. California Labor Code section 512.5 also has expressly applied meal and rest periods to public employees who are commercial drivers covered by Wage Order 9.

The Court also held that AHS is a “municipal corporation” under Labor Code section 220(b), and clarified that the definition in that section applied to all public employers. 

Overall, the Stone decision reinforces the principle that public agencies, including special districts, are not subject to Labor Code provisions unless they are expressly included. The decision also confirmed that public employers are also not subject to liability for civil penalties imposed by PAGA cases.

Communication is provided for general information only and is not offered or intended as legal advice. Readers should seek the advice of an attorney when confronted with legal issues and attorneys should perform an independent evaluation of the issues raised in these communications.

Take a look back at previous parts of the 2025 New Laws Series in CSDA eNews for more in-depth overviews of new laws affecting special districts:

Missed Part 8? Read it now: Three Significant Public Retirement Laws Going into Effect

Missed Part 7? Read it now: Three Bills Revise California’s Paid Leave Laws: What Employers Should Know

Missed Part 6? Read it now: Increasing Bid Thresholds Through CUPCCAA (AB 2192)

Missed Part 5? Read it now: Development Related Fees: Changes to Preliminary Estimate and Collection Provisions

Missed Part 4? Read it now: New Laws Impacting Proposition 218

Missed Part 3? Read it now: The Brown Act: Clarification of the Standards for Remote Meetings and an Expanded Ground for Closed Session; New Attorney General Guidances

Missed Part 2? Read it now:  Assembly Bill 2561 (McKinnor): All Local Agencies Must Present Status of Job Vacancies at a Public Hearing

Missed Part 1? Read it now:  Public Officials May Not Block Commenters from Official Social Media Accounts and Posts