June Newsletter

Legalized Marijuana and Drug Free Workplace Policies and Enforcement

By Sara Boyns

On November 8, 2016, 56% of California voters approved Proposition 64 legalizing the recreational use of marijuana by adults 21 years of age and older.  Does this mean that employees who use recreational marijuana can come to work under the influence or impaired by marijuana use, or smoke or use marijuana at work? The answer is no. Although Proposition 64 legalizes the recreational use of marijuana, it does not change employers’ right to maintain drug free workplaces or drug testing policies.

Proposition 64 is the third time California voters had the opportunity to vote on legalizing marijuana.  The first ballot measure was the Compassionate Use Act of 1996, which passed and allows medicinal use of prescription marijuana.  Then, in 2010, Proposition 19 failed to pass, in part because that proposition prohibited employers from maintaining a drug free workplace.

Proposition 64 explicitly states that it is intended to “allow public and private employers to enact and enforce workplace policies pertaining to marijuana.” The proposition also states that it will not be construed or interpreted to amend, repeal, affect, restrict or pre-empt:

“The rights and obligations of public and private employers to maintain a drug and alcohol free workplace or require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale or growth of marijuana in the workplace, or affect the ability of employers to have policies prohibiting the use of marijuana by employees and prospective employees, or prevent employers from complying with state or federal law.  Health and Safety Code Section 11362.45 (f).”

Therefore, even with the passage of Proposition 64, employers may continue to prohibit use, possession and impairment at work, as well as continue to test for use when appropriate. The challenge for employers is to clearly communicate to employees their policies regarding drug use and drug testing.

It is important to have drug free workplace policies that clearly communicate that:

  • the  use, possession or sale of alcohol and drugs, including marijuana, is prohibited;
  • being under the influence of an illegal or controlled substance, including alcohol and marijuana, while on the job or performing company business is prohibited; and
  • the drug free workplace policy applies to the use of marijuana, whether prescribed or used recreationally.

It is also important to remember that although recreational marijuana use is now legal in California for adults 21 and older, marijuana remains an illegal Schedule I substance under the federal Controlled Substances Act.

Employers who conduct post-offer, pre-employment drug tests may continue to do so and may deny employment if the drug test comes back positive, even if the applicant was legally using marijuana under the state’s Compassionate Use Act.  Proposition 64 does not change employers’ ability to conduct drug testing and to consistently enforce their drug free workplace policies.

Finally, it is prudent to make sure managers and supervisors are familiar with the drug free workplace policy and to train them to recognize the signs of drug and alcohol use and impairment.

Sara Boyns is a lawyer with the Fenton & Keller law firm in Monterey.  This article is intended to address topics of general interest, and should not be construed as legal advice.  For more information, please visit www.fentonkeller.com.


SB 1069 and AB 2299 Reduce Obstacles To Constructing Accessory Dwelling Units

By Derric Oliver

In an effort to help alleviate California’s affordable housing shortage, Governor Brown signed into law, effective January 1, 2017, Senate Bill (“SB”) 1069 and Assembly Bill (“AB”) 2299, which collectively remove certain regulatory and financial obstacles to constructing accessory dwelling units (a.k.a. “granny units” or “in-law units”) on California real property located within single-family and multi-family residential zones.  Accessory dwelling units (“ADUs”) are defined as attached or detached residential dwelling units (1,200 sq. ft. max.) that provide complete, permanent, and independent living facilities (e.g., living, sleeping, eating, cooking, and sanitation) situated on the same parcel of land as the existing dwelling.

The amended law is intended to increase the supply of available affordable housing for family members, students, the elderly, in-home care providers, the disabled, and others.  Among the changes, SB 1069 and AB 2299 prohibit cities and counties from adopting ordinances which wholly preclude ADUs and require ministerial (i.e., non-discretionary) approval of applications (within 120 days) to remodel existing homes and garages if compliant with building and safety codes.  The amended law also eases regulatory burdens by providing several exceptions to off-street parking requirements (e.g., ADUs located within one-half mile of public transit), eliminating excessive fire sprinkler requirements (e.g., required for the ADU only if required for the primary residence), and prohibiting attached or existing detached ADUs from being considered new or separate units for purposes of establishing and calculating connection fees and service charges for utilities (including water and sewer).

While SB 1069 and AB 2299 effectively diminish city and county discretion as to certain aspects of ADUs as highlighted above, local agencies retain authority to designate areas within the jurisdiction where ADUs may be permitted, based on criteria such as the adequacy of water and sewer systems and ADUs’ impacts on traffic flow and public safety.  Under the new law, local agencies can also continue to impose standards on ADUs relating to such things as setbacks, lot coverage, and architectural review.  The law also allows local jurisdictions to prohibit the use of ADUs as short-term rentals (i.e., rental terms of 30 days or less).  In addition, the law does not alter the applicability of the California Coastal Act, except that local jurisdictions are not required to hold public hearings for coastal development permit applications for ADUs.

Proponents argue that the passage of SB 1069 and AB 2299 will lead to more housing, more jobs and shorter commutes, facilitate intergenerational living arrangements, and create more affordable housing for teachers, nurses, and others who want to live in a community but have been priced out.  As explained by the sponsor of SB 1069, state Senator Bob Wieckowski (D-Fremont), the new law “returns more power to homeowners” and removes “the most egregious obstacles to building [ADUs]” to “help increase the supply of affordable housing in California and allow more people to remain in the communities they call home.”

Conversely, while opponents such as the California League of Cities and the California State Association of Counties acknowledge California’s housing shortage, they claim SB 1069 and AB 2299 will do little to alleviate the problem and will instead strip local jurisdictions of their power to regulate ADUs, which could hinder neighborhood character and lead to other negative effects.  A City of Monterey planning official explained to the Monterey Herald in an article published December 21, 2016, that homeowners in single-family districts would like their districts to remain that way, citing general concerns about ADUs’ potential impacts on parking, noise, and privacy.

Opinions aside, as of January 1, 2017, SB 1069 and AB 2299 void and replace any pre-existing or future city or county ordinance governing the creation of ADUs that fails to include the non-discretionary approval of ADUs consistent with SB 1069 and AB 2299 or includes any discretionary processes or requirements above and beyond those allowable under the new law, unless or until the city or county adopts a legally-compliant ordinance.  Ultimately, the result of SB 1069 and AB 2299 may be a proliferation of ADUs in your neighborhood, the net effect of which remains to be seen.

Employees Paid on a Commission Basis Must be Separately
Compensated for Rest Periods

By Evan Allen

The California Court of Appeal recently held that workers paid on a commission basis must be separately compensated for legally required rest periods.  In Vaquero v. Stoneledge Furniture, LLC, plaintiff employees worked as sales associates for Stoneledge Furniture, LLC, operating in California as Ashley Furniture HomeStores.  The written commission plan provided for employees to be paid on a commission basis for furniture sales.  If a sales associate failed to earn at least $12.01 per hour in commissions in any pay period, the employees were paid a “draw” against “future advanced commissions” so that employees would always receive at least $12.01 per hour for every hour worked.   Employees clocked in and out for their shifts using an electronic tracking system.  Although employees tracked their non-selling time, including time spent in meetings, training, and during rest periods, the commission agreement did not provide for separate compensation for this time. In determining whether an employee received at least $12.01 per hour, the employer averaged all hours worked, including time spent on rest periods, to calculate the amount to be paid for commissions or draws against those commissions.

Plaintiffs filed a class action arguing this pay structure violated California Labor Code section 226.7, which requires employers to provide paid rest periods and entitles employees to one additional hour of pay for each workday a paid rest period is not provided.  The trial court ruled for the employer, finding its payment system “specifically account[ed] for all hours worked” and “by tracking all the hours that its employees were present at the facility, including rest periods, Stoneledge was able to ensure the compensation it paid to its employees via commission would never fail to include payment for the time employees spent taking their mandatory rest periods.”

However, the Court of Appeal reversed, holding that the applicable California Wage Order requires employers to separately compensate employees who are paid commissions for rest periods.  The applicable Wage Order states that all employees must be permitted to take rest periods and such authorized rest period time “shall be counted as hours worked for which there shall be no deduction from wages.”  The court interpreted this language as requiring employers to “separately compensate employees for rest periods where the employer uses an ‘activity based compensation system’ that does not directly compensate for rest periods.”

Accordingly, under current California law, employees who are paid by piece-rate or by commission must receive separate compensation for rest periods as required under California law.   Such unproductive time has to be compensated separately and cannot be included or averaged with commissions paid for productive time to satisfy the applicable minimum wage requirements. In addition, the separate pay for rest periods must be shown as a separate line item on the employees’ paystubs.


Dennis McCarthy is Awarded the 2016 Lewis L. Fenton Excellence in Advocacy Award!

Fenton & Keller is pleased to congratulate Dennis McCarthy on being awarded the 2016 Lewis L. Fenton Excellence in Advocacy Award!  The Fenton Award is presented each year by the Monterey County Bar Association to one well deserving attorney in our community, as a memorial to the great Lewis Fenton.  We at Fenton & Keller are so pleased to see the award returning to one of our own valued partners here, and believe it could not have gone to a more worthy recipient!

Dennis has all of the qualities one would expect in an award winning advocate, including a top tier legal education from New York University, over 30 years of experience, an unmatched work ethic, countless high stakes trial wins, and the privilege of mentorship from Lewis Fenton himself.  More importantly, however, Dennis has devoted himself as a dedicated servant of his community, volunteering his time as a board member, leader and coach for a variety of organizations.  Dennis has served on the Monterey Parks and Recreations Commission, on the Board for the Rotary Club of Monterey, as a vice chair for the United Way of Monterey County, as a volunteer with the Big Sur International Marathon, as a coach and past President for Monterey PONY Baseball/Softball, and as an avid basketball coach for the YMCA.

Beyond this praiseworthy resume lies the man himself, whom we are so proud to call our friend and partner.  Dennis is a joy to work with and is always ready to share his insight and intellect when needed.  He is a true asset to our firm, both as a leader and mentor – and we are so proud he has been recognized as such by the Monterey legal community.  In his remarks at the award ceremony Dennis recounted the many people who helped and guided him along his journey, and he discussed the responsibility that rests with each of us to give back.  He spoke movingly about the need to provide both personal and professional opportunities and encouragement when we can.  Dennis has exemplified this spirit throughout his life and legal practice.  From all of us at Fenton & Keller – CONGRATULATIONS DENNIS!