Emerging Issues for Employers

1. Emerging Issues for Employers January 29, 2014 Orange County, California Sponsored by Panelists: Jonathan A. Siegel, Esq. Michael A. Hood, Esq. Jackson Lewis P.C. Siegelj@jacksonlewis.com Michael.Hood@jacksonlewis.com Moderator: Monica A. Johnson Assistant General Counsel Ventura Foods, LLC

2. Bring Your Own Device (BYOD) – Any Issues? Your CEO declares, “2014 is about embracing technology .” The Company immediately sends out a policy requiring all employees, including non-exempt employees, to use their own smart phone on the job. No word on who pays for the device. Kevin West, the VP of Sales, works with IT so it is easier for the sales people in 50 states and Canada to access the Company's CRM system with critical information about each client. With the technology changes, Kitty Kardashian, a sales person, declares, “I can access everything from anywhere. I also save money by using free Wi-Fi when I can and I use my neighbor’s Wi-Fi since their signal is so strong. I don’t think my neighbor can see the customer information but it is OK anyway – she is my sister, Kloe” Kitty Kardashian gets an offer from a competitor and leaves. The competitor also raids the Company for other employees. Mr. West instructs IT to “wipe clean” Kardashian’s personal phone. He also wants to search some other employee’s personal devices. A corporate raiding lawsuit is threatened. You just got your cup of Green Tea and now ponder the potential issues .

3. The “BYOD” Movement • Bring Your Own Device • Rapid increase in the use of mobile devices by employees • iPhones, iPads, Android devices, etc. • Employees utilize these devices to perform work for the Company • Whether company provided or employee’s personal device • Result: “Dual-Use” Device • Both personal and company data and activity • Handling personal matters while at work – more difficult to monitor • Why are employers doing this?

4. Advantages • Expected in today’s fast paced and instant gratification environment • Tablets and Smartphones are replacing traditional PCs & laptops • Cost savings • Improves Employee Productivity and Availability • Always reachable, employees are familiar with device functions and capabilities • Mobility • Work remotely: Home and on the road • Work/Life Balance • Personalization/Familiarity • Employees know their devices

5. BYOD - Risks • Risks • Numerous risks exist which client often do not consider • Compliance and Security two main risks • Who is affected within the Company? • Legal • E-Discovery • Accessing the Device (or information contained therein) • Wage and Hour • International Law Concerns • Employee Conduct • HR • Handbooks • E-Communications/Social Media • Finance • IT • Obligations to protect, safeguard, encrypt • Employees

6. Trade Secret Protection, Smart Phones and BYOD Risks • Employee uses phone or tablet to receive and store information • Employee uses phone or tablet to transmit or forward information • Employee or visitor uses phone to capture information (including photographs or video)

7. Trade Secret Protection, Smart Phones, and BYOD Steps to Protect Trade Secrets and Confidential Information Polices. Employers must consider trade secret protection in their BYOD policies and BYOD implications in their confidentiality/non-disclosure agreements. Limitations. Certain types of employees may not be appropriate to participate in BYOD - Research Scientists - Executives - Sales Software Termination Procedures - Ingram Micro - Remote Wipe - AirWatch - Inspect the phone - BoxTone - Return of other property - Fiberlink - Signed acknowledgment - MobileIron - SAP/Sybase - Zenrprise

8. International Issues/HIPPA • International data privacy requirements – • BYOD needs to be considered even more carefully when implemented on a global scale. Cross border transmissions of personal data and different employment standards from country to country • HIPAA and state data security requirements • MUST DECREASE EXPECTATION OF PRIVACY. Various federal and state laws (e.g., HIPAA, GLBA, and state mandates in CA, MA, CT, TX, NY, OR, MD, and others) regulate and laws to quickly react to data breaches enhance this concern • Rogue employee who refuses to return the device • Diligent employee who happens to inadvertently use an unsecure wireless network • Ability to "wipe" a device in the event of a security risk. BYOD device management vendor/solution, IT capabilities, as well as communicating the “wipe” possibility to employees and CONSENT BY EMPLOYEE prior to wipe

9. E-Discovery/Wage and Hour • E-Discovery • Complicated when some of information may be stored on an employee’s personal device • Preservation • Access • Wage and hour • BYOD and personal communication devices can further blur the lines between personal and work time, raising the issue of whether time is compensable • Non-exempt employees emailing after hours or on weekends • Requiring response and interplay with on-call policies • Business expense reimbursement issues

10. Record Retention and Destruction • Record retention and destruction requirements Employee changes his or her device. Tossing the device in the trash, even if in an environmentally friendly way, may not be consistent with the federal or state data disposal laws requiring personal information be appropriately destroyed. • Labor • Issues during union organizing and control • Union employer – duty to bargain with the union on whether it can implement such a program

11. New California Disability & Pregnancy Regs • Allow support animals in workplace – not just dogs! • Definitions now include examples – broad examples – of disabilities and reasonable accommodations • Expands definition of “health care providers” to include M&F therapists, acupuncturists, podiatrists, dentists, clinical psychologists, chiropractors, midwives and PAs • ERs have “affirmative duty” to provide reasonable accommodations for the known disability of any EE or applicant unless it would cause undue hardship • The Duration of Pregnancy Leave and calculation of PDL has changed!!!!

12. New Agency Activism • Independent Contractor audits are increasing by federal and state agencies • California Labor Code 226.8 penalties are severe • EEOC’s and DOL’s focus on systemic investigations and prosecutions continues • Now account for over 20% of EEOC litigation • What does this mean for you?

13. New California Laws • Increase to State Minimum Wage • $9.00 starting July 1, 2014 and up to $10.00 per hour by January 1, 2016 (AB 10) • In July 2014, the minimum salary test for the Executive, Administrative, and Professional overtime exemptions will increase from $33,280 to $37,440 annually • In January 2016, the minimum salary test will increase to $41,600 annually for those exemptions • Employers with collective bargaining agreements with different overtime premiums than the Wage Orders should verify union employees are earning at least 30 percent more than the state minimum wage

14. New California Laws • Expanded Leave for Emergency Rescue and Police Officers • Employers with at least 50 EEs must provide temporary LOAs of up to 14 days per calendar year to EEs who serve as volunteer firefighters, reserve police officers or emergency rescue personnel • AB 11 • Time Off for Crime Victims • Covers time testifying for certain serious crimes • SB 288 • Time Off for Stalking Victims • ERs with 25 or more EEs (AB 400)

15. New California Laws • Paid Family Leave • Extended to grandparents/grandchildren, in-laws, siblings • New law limits on ER right to recover fees and costs in wage cases • Used to be either prevailing party could recover • ERs now can recover only in the event of “bad faith” (SB 462) • AB 442 adds additional liquidated damages for violations

16. New California Laws • Military and Veteran Status added to list of individuals protected from employment discrimination under FEHA • AB 556, signed October 10, 2013 • Employers cannot ask about expunged, sealed or dismissed convictions • SB 530 – allows certain exemptions where information is required by law (banks and securities) or firearm use required • “Cool down” and “recovery” periods added to breaks for which denial results in penalty of one hour’s pay • SB 435

17. New California Laws • New protection for employees who assert rights under Labor Code. • Current law only explicitly prohibits discharge and discrimination • New law prevents any form of retaliation or adverse action • Specifically includes a written or oral complaint by an employee that he/she is owed unpaid wages • Adds new civil penalty of up to $10,000 per violation • AB 263

18. New California Laws • Retaliation and Unfair Immigration Practices • AB 263 also prohibits employers from engaging in “unfair immigration-related practices” when an employee asserts protected rights under the Labor Code • Employer may not threaten to contact, or contact, immigration when an EE complains about wages or working conditions • Creates private cause of action • Similarly SB 666 permits the state to suspend or revoke an employer’s business license where that employer reports, or threatens to report, the immigration status of any employee because the employee makes a complaint about employment issues • Allows disbarment of attorneys for similar conduct against witnesses or parties • Covers reports, or threats to report, employees, former employees, prospective employees or family members, as defined, to immigration authorities • Can result in criminal prosecution • I-9 reporting exempted • New SF flexible workweek law

19. Significant Take-Away Points • BYOB – are you prepared? • Independent Contractor status will be hot issue for 2014 • Have you reviewed key new California laws for your operation and the effect of the state minimum wage changes in 2016?