1. Misclassification Issues in the Era of the On-Demand Economy
More and more, retailers turn to novel staffing models to meet the demands of today's consumer. But retailers must continue to carefully structure relationships with employees and independent contractors to avoid misclassification risks. In the independent contractor analysis, courts often look to factors such as the degree of control exercised over the worker, who owns the location and instrumentalities of work, and the opportunity for profit and loss. Thus, retailers must consider those factors when drafting contractor agreements and imposing rules and requirements on contractors. Retailers also must consider how to walk the fine line between asserting too much control and ensuring contractor compliance. All retailers need to periodically evaluate their independent contractor relationships to assess the risk value; but retailers in California, in particular, should reevaluate all of their existing independent contractor relationships in light of the California Supreme Court's recent expansion of the definition of who qualifies as an "employee" in Dynamex Operations West, Inc. v. Superior Court.
How Steptoe Can Help
We assist employers with all stages of structuring and managing independent contractor relationships, from drafting initial contracts to conducting audits of and advising revisions to existing engagements to minimize risk. We also help retailers navigate the murky crossroads of ensuring independent contractors comply with legal and regulatory requirements without exercising so much control as to convert the relationship into an employer-employee or joint employment relationship.
2. Myriad of Local Employment Laws
Over the last few years, cities and counties started enacting a patchwork of employment-related laws, ranging from minimum wage and predictive scheduling laws to paid family and sick leave requirements. In today's political climate, the trend shows no sign of slowing. Retailers in multiple cities and states must carefully monitor developments in all jurisdictions where they operate and must adjust policies and procedures accordingly.
How Steptoe Can Help
We assist employers with monitoring developments in local and state laws around the country, and we can help draft updates to policies and procedures as necessary under new laws.
A number of unions target retail operations (e.g., the UFCW), thus retailers must stay vigilant to employee morale issues and potential organizing. Union organizing presents risks not only to the costs and lost operational flexibility associated with an organized workforce; but today's unions increasingly use other tactics to gain leverage that expose retailers to additional risks. Unions wage massive publicity and social media campaigns that can harm public opinion and investor relations, such as the Fight for 15 movement. They also file NLRB and EEOC charges and class action lawsuits that cause retailers to incur significant litigation expense. Thus, retailers must routinely provide updated labor relations training to all levels of management—particularly direct supervisors who regularly interact directly with employees. Retailers must also develop and routinely update plans for lawfully responding to potential picketing, flash mobs, and demonstrations outside their facilities.
How Steptoe Can Help
We provide routine labor training to managers to keep them up-to-date on the law, as well as provide tips and tricks for maintaining a loyal workforce and recognizing and responding to the early signs of union organizing. We assist employers in building an enterprise-level framework to maximize positive employee engagement, which minimizes union-organizing risks. We also help employers draft quick-reference guides for managers to use in the heat-of-the-moment in dealing with on-site demonstrations.
Employment-related class actions continue to pose significant risks for retailers around the country. Common wage-hour class action claims against retailers include misclassification of exempt employees, off-the-clock work (including bag checks and security screenings), meal-and-rest breaks under California law, and improper expense reimbursement policies. As for employment discrimination claims, anecdotally, we see an increase in class allegations against retailers involving gender pay disparities, pregnancy discrimination, and disability. Thus, retailers must remain vigilant in auditing their existing pay practices and leave and accommodation policies, among others.