Adam L. Parry
Adam L. Parry
Shareholder, San Diego
Education
  • B.A., Political Science, California Polytechnic State Univ., San Luis Obispo;
  • J.D., University of San Diego School of Law;
  • USD Institute on Comparative International Law, Barcelona, Spain.

I was seven years old and arguing with my mom. Realizing that there was nothing I loved better than an argument, she told me I was going to be a lawyer when I grow up. At seven, I didn’t really know what that meant, and—in character—objected vehemently.

Mom was right. I relish the challenge of aggressively advocating for clients in litigation. I have had the pleasure of effectively and successfully representing a wide range of clients through summary judgment, arbitration, mediation, and trial. I bring diverse legal experience to my employment practice, and an enthusiasm for tackling unique and novel problems thrown my way. When a hotel client has a construction contract dispute, I’m ready to dive in head first. When a restaurant needs help with their lease, I have the experience to get it done.

At the risk of disappointing my seven-year-old self, I eventually realized that an effective lawyer’s role isn’t just to argue. In practice, I’ve learned that clients are often best served through creative problem solving and dispute avoidance. Guiding clients through legal minefields and enabling them to make critical decisions with confidence to avoid lawsuits is key to providing effective and complete client service. Perhaps my most personally satisfying experiences as an attorney have been in helping avoid or resolve problems before litigation. The hospitality industry, in particular, provides great opportunities to work closely with clients to craft effective policies and creative solutions to unique challenges the industry presents. Working and connecting with the talented and exceptional individuals that make the hospitality business run is a highlight of job.

Like many native Southern Californians, I’m most at home when out in the sun. When I get a chance to ditch the suit for some shorts and a t-shirt, you can find me exploring San Diego’s amazing parks and beaches with my daughter, trying (usually failing) to surf, or playing guitar in a local rock band.

More employees will now be considered non-exempt, as the U.S. Department of Labor raised the minimum salary threshold for workers to qualify for the Fair Labor Standards Act’s “white collar” exemption. In replacing an Obama administration rule, the new proposal would raise the salary threshold requirement from $23,660 to $35,308 per year. As a result, more employees will be subject to compensation for any time exceeding 40 hours in the workweek.

The replacement rule updates the FLSA’s overtime exemptions for executive, administrative and professional workers, making more than a million workers eligible for overtime pay. This also replaces a currently enjoined rule from 2016 that doubled the minimum salary threshold from $23,660 to over $47,000. It also created an index for future increases to the threshold.

The proposed rule will be subject to a 60-day public comment period after publication in the Federal Register. The DOL estimates it will then take effect in January 2020. The agency is asking for public comment as to whether the threshold should be subject to periodic automatic increases, like the Obama administration’s proposed rule.

What this means for employers: The DOL estimates that, under the new rule, more than a million workers would move from exempt to non-exempt status, qualifying them for overtime pay. Under the rule, in order to be exempt from overtime compensation, employees must now be paid at least $35,308 per year, as opposed to the previous requirement of only $23,660. Employers should thus be prepared to adjust their payroll accordingly if the proposal survives any legal challenge.

For a printable PDF of this article, 2019.3.7-DOL.Raises.FSLA.Overtime.pdf.

Does your company still perform background checks on employees? If you answered yes, then the Ninth Circuit’s recent ruling on background check disclosures applies and you should review your company’s background check disclosures immediately.

The Fair Credit Reporting Act (“FCRA”) requires employers to provide each applicant with a “clear and conspicuous” disclosure that the employer will perform a background check on the applicant. This disclosure must be a standalone document that is separate and distinct from any other application paperwork. Employers can include some minor additional information in the notice, like a brief description of the nature of background reports, but only if it does not confuse or detract from the notice. Various states also have particular disclosure requirements in addition to the FCRA. Often, the various state disclosures are included in the same “standalone” FCRA disclosure document on forms provided by consumer reporting agencies.

In Gilberg v. Cal. Check Cashing Stores, the Ninth Circuit clarified that the FCRA “standalone disclosure” requirement prohibits inclusion of state-specific disclosures on the same form. The court considered forms used by Cal. Check Cashing Stores, which included multiple state and federal disclosures all within the same document, and concluded that the disclosure violated both federal and California law. The Ninth Circuit clarified that “standalone” under the FCRA means that the disclosure form consists solely of the FCRA disclosures that apply to that applicant. Including notices for various states that do not apply, or including the disclosure form in an application packet, is likely to confuse the applicant, and violates the FCRA and California’s Investigative Consumer Reporting Agencies Act.

To comply with the FCRA, a background disclosure must include a disclosure that the consumer report may be used for employment purposes. The disclosure may also ask for the applicant’s basic identifying information, and require their signature authorizing procurement of an investigative report. However, including extraneous information, such as state-specific disclosures, or requesting applicant input other than basic identifying information, violates the FCRA. While the Ninth Circuit does not explicitly prohibit including all state notices, even applicable state-specific disclosures (in this case, CA), we recommend keeping all state-mandated disclosures separate from the FCRA disclosure.

We recommend that employers review their current disclosure forms or any disclosure forms they receive from third-party background check agencies to ensure they meet the “standalone disclosure” requirement. If the background check disclosure form includes information regarding other state disclosures, or if the form is provided to applicants as part of an application packet, the form likely violates the FCRA and should be modified immediately.

For a printable PDF of this article, click here.

The National Labor Relations Board’s recent ruling in SuperShuttle DFW, Inc. returns to a longstanding standard in evaluating proper independent contractor classification. Although its scope is limited, the recent ruling eases restrictions on proper independent contractor classification for purposes of unionization rights under the NLRA, specifically where the workers’ role involves “entrepreneurial opportunity.”

The case involved the issue of whether franchisees of shuttle-van drivers at Dallas-Fort Worth Airport qualified as employees or independent contractors. Amalgamated Transit Union sought to represent a group of SuperShuttle DFW drivers as employees. SuperShuttle representatives emphasized that because the franchisees do not share fares with SuperShuttle and operate their vehicles with little control, the franchisees have total autonomy over their work, thereby classifying them as independent contractors and exempt from the National Labor Relations Act.

By a 3-1 party-line vote, the Board ruled that the franchisee shuttle van drivers for SuperShuttle were independent contractors under the common law test. In doing so, the Board further held that entrepreneurial opportunity, like employer control, is a principle by which to evaluate the overall effect of the common law factors.

The decision reverses the Board’s prior ruling in FedEx Home Delivery, where the Board found that a worker’s “entrepreneurial opportunity” was merely a consideration as part of the broader factors under the common law test. This test considers any constraints placed on an employee’s ability to conduct an independent business.

The Board affirmed, finding that the franchisees’ ownership (or lease) and control of their vans, the nearly unfettered control over their daily work schedules and working conditions, and the method of payment by a monthly fee all weighed in favor of independent contractor status. The combination of these factors demonstrated that the franchisees are provided with significant entrepreneurial opportunity and control over how much money they make each month.

While the Board’s reemphasis on “entrepreneurial opportunities” does not affect contract employees in California, which has its own independent contractor test for state law wage and hour purposes , these same individuals may be considered exempt from coverage by the NLRA. Nonetheless, this decision comes as good news for companies that prefer to use contract labor by allowing for more factual inquiry into a worker’s entrepreneurial opportunity in determining his or her employee status for the purposes of unionizing.

For a printable PDF of this article, click here.

On Tuesday, the Bureau of Consumer Financial Protection published a new version of the “Summary of Your Rights Under the Fair Credit Reporting Act”. This version must be provided to job applicants when conducting employment background checks pursuant to the Fair Credit Reporting Act (“FCRA”). The revised Summary of Rights alerts applicants to their right to obtain a free national “security freeze”, which prohibits credit reporting agencies from releasing a person’s credit report without their consent. The revisions are intended to comply with the Economic Growth, Regulatory Relief, and Consumer Protection Act passed in May this year, which is aimed at combating identity theft.

The “Summary of Your Rights Under the Fair Credit Reporting Act” is published by the Federal Government and must be provided to a job applicant when an employer requires a background check as a condition of employment. Under the FCRA, an employer must provide this Summary of Rights—along with a “stand-alone disclosure” and authorization to obtain an applicant’s background report—before obtaining a background report from a consumer reporting agency. The Summary of Rights must also be given to the applicant along with a “pre-adverse action notice” and an “adverse action notice” where the employer elects not to hire an applicant based on information in their background report.

The new Summary of Rights is available here in English or here in Spanish.

Employers nationwide who conduct background checks for applicants should begin using these new forms immediately. Please do not hesitate to contact Stokes Wagner for more information on the use of background checks in employment.

For a printable PDF of this article, click here.

On-call employees of fast food chain Yoshinoya claim they are owed reporting time pay when they call in for a shift but are not put to work. A L.A. Superior Court judge recently ruled that the plaintiffs may pursue their claims. This putative class of kitchen and cashier “on-call” employees call two hours before their scheduled shift to find out whether they are needed to work. If they fail to call in or do not show up for work when needed, they may face discipline. Plaintiffs claim that they are entitled to reporting time pay when they call in but are not put to work, even though they are not required to physically report to work.

In California, if an employee reports to work but is not put to work, the employer must pay the employee half their usual or scheduled day’s work, with a minimum of two hours. This case questions whether “report to work” means the employee must be physically present at the worksite. The employer sought to dismiss the case before trial, on the ground that the plain language of the reporting pay requirement defeats the plaintiffs’ case as a matter of law. Interpreting the reporting pay requirement in the context of “the modern era, where many workers remotely [use]{:target=”blank”} telephones to clock in and out for time keeping purposes,” the Court reasoned that common sense and the “ordinary reading” of the law would include remotely reporting via telephone under the reporting pay requirement.

This issue has been addressed in Ward v. Tilly’s, L.A. Superior Court Case No. BC595405, which is currently pending appeal and may result in a controlling decision.

What does this mean for you? While the L.A. Superior Court’s decision here is not law, this case may signal a new avenue of wage and hour liability and focus for employees and plaintiff’s counsel. As the Court notes, the issue is on appeal, and may result in controlling law in the near future. In the meantime, employers who use on-call shifts should review their policies to ensure they are implementing best practices.

For more legal news, check out our quarterly newsletter for April 2018!

Effective July 19, 2017, San Francisco became the first city in California to ban employers from asking job applicants about their salary history. This is the latest in a nationwide movement to promote gender pay equality. As cited in the San Francisco Ordinance, census data shows that women in San Francisco are paid 84 cents for every dollar a man makes, and women of color are paid even less. The ban seeks to stop the “problematic practice” of relying on past salaries to set new employees’ pay rates, which perpetuates the historic gender pay gap.

Dubbed the “Parity in Pay Ordinance,” the San Francisco law applies to all employers doing business in the City of San Francisco and to all employees applying for positions that will be performed in the City.

What does this mean for you? Employers in San Francisco may not:

  • Ask about an applicant’s salary history;

  • Consider an applicant’s salary history in determining a salary offer, even if the applicant voluntarily discloses his/her salary history;

  • Refuse to hire or otherwise retaliate against an applicant for not disclosing salary history;

  • Release the salary history of any current or former employee without written authorization from the employee.

San Francisco’s ban comes as the California legislature looks to impose a similar ban statewide. The State Assembly passed a proposed amendment (AB168) that is currently awaiting State Senate approval. New York City and the State of Massachusetts have already enacted similar bans, and efforts are underway in Philadelphia.

For more legal updates, check out our update for September 2017!