DOL Set to Rescind Restrictions on Tip Pooling

Author: Sean Gentry

The U.S. Department of Labor is preparing to eliminate a 2011 restriction on certain hospitality employers from entering into tip-sharing agreements with individuals who are not customarily and regularly tipped.

The effect of this is that restaurant employers will likely be able to include kitchen and back-of-the-house employees in the tip pool.  This may alleviate problems some restaurants have had in retaining high quality back-of-the-house employees because it may allow employers to more easily compensate such employees in comparison to tipped employees.

As a reminder, employers are still subject to state laws.  In California this means that the tip-pool may not include any owners and most managers or supervisors, even if those individuals provide direct service to a customer.

The 9th Circuit Court of Appeals previously upheld this 2011 regulation, but that case is now before the U.S. Supreme Court in the case of Oregon Restaurant & Lodging Assoc. v. Perez.  Therefore, despite some serious concerns about the effects this change in policy may have on tipped employees nationwide, we expect to see dramatic changes this year as the DOL and Supreme Court weigh in on tip-pooling, and as California’s legislature might react by imposing some of its own new regulations.

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Attorneys’ Fees for Computer Misuse? What about for Defendants?

Author: Michael Dorsi

Attorneys who have dealt with computer misuse statutes know that while the federal Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030, provides federal jurisdiction, California’s Comprehensive Computer Data Access and Fraud Act (“CDAFA”), Cal. Penal Code § 502, has a broader scope and more plaintiff-friendly remedies. Those remedies include attorneys’ fees. But what happens if a plaintiff sues under the CDAFA, and loses. Can the defendant win fees?

There is a frustrating split of authority on this question.

The split is between Swearingen v. Haas Automation, Inc., No. 09CV473 BTM(BLM), 2010 WL 1495204, at *3 (S.D. Cal. Apr. 14, 2010), and US Source LLC v. Chelliah, No. G049481, 2014 WL 6977597, at *6 (Cal. Ct. App. Dec. 10, 2014). Swearingen says fees are for plaintiffs only; US Source says defendants* can win fees as well.

Normally this would be easy to work out. US Source is more recent and decided by the California Court of Appeal on a question of state law. Swearingen is a federal district court decision, so it is not binding on anyone (beyond its own case). Going forward, US Source ought to control.

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Tenants’ Rights in Single Family Homes

Author: Michael S. Dorsi

San Francisco’s Rent Ordinance rules concerning housing do not apply to single family homes, right? Wrong.

San Francisco has both eviction controls and rent controls.  California’s Costa-Hawkins Rental Housing Act (Civil Code § 1954.50 et seq.) exempts single family homes (and other separately alienable dwellings) from local government’s rules that limit rent increases. The San Francisco Rent Ordinance reflects this rule, exempting single family homes from the limits on rent increases. As a result, landlords renting out single family homes can raise the rent beyond the increases permitted by the San Francisco Rent Ordinance.

However, the San Francisco Rent Ordinance also has specific rules for owner move-in evictions.  Single family homes are governed, generally, by eviction controls.

Single family homes in San Francisco . . .

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What To Do When The ICE-Man Cometh

Author: Trina Clayton

Less than a month after federal immigration officials raided nearly 100 7-Eleven stores nationwide, U.S. Immigration and Customs Enforcement (ICE) agents conducted another sweep at the end of January – searching 77 businesses in the San Francisco and Sacramento areas in what was believed to be the largest localized raid since President Donald Trump took office.  What’s more, it doesn’t look like this will be the end of the ICE raids.  ICE acting director Thomas Homan has made a call for a “400 percent increase” in agency operations focusing on workplaces and, specifically, workplaces in California.  In light of this governmental shift, what, exactly, is an employer supposed to do when ICE comes to call?

Fortunately, California employers have been provided slightly firmer ground on which to stand, based, in large part, by a recent law which went into effect January 1, 2018 – the Immigrant Worker Protection Act (AB 450).

AB 450’s provisions include the following:

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