AB 701: New transparency obligations for warehouse distribution center quotas

The first of its kind, Assembly Bill 701 requires certain California warehouse distribution employers to disclose their productivity metrics to employees. The new law, which went into effect January 1, 2022, was drafted in an effort to protect warehouse distribution workers at larger companies but will affect may warehouse distribution employers across the state, large and small.

This new law creates protection for nonexempt warehouse workers by requiring qualifying companies to notify workers of production quotas, and it specifically prohibits employers from using quotas that do not allow workers appropriate time for rest breaks, meal breaks, bathroom breaks, or compliance with health and safety laws.

Intended with larger employers in mind, AB 701 applies to employers with 100 or more employees at a single warehouse distribution center or 1,000 employees at one or more warehouse distributions centers in California. The bill defines warehouse distribution centers as those with the following North American Industry Classification System codes: 493110, General Warehousing and Storage, 423, Merchant Wholesalers Durable Goods, 424, Merchant Wholesaler Nondurable Goods and 454110 Electronic Shopping and Mail-order Houses.

What exactly does this bill require employers to do? AB 701 requires employers to provide quotas to their nonexempt employees in writing within 30 days of hire or January 1, 2022. Typically, quotas are used in warehouse distribution centers as a way to measure employee work performance in comparison to performance metrics set by the employer. Employers are not allowed to enforce quotas that prevent employees from taking their rest or meal breaks or from hindering compliance with occupational health and safety laws. Further, employers cannot take adverse action against employees for failing to meet a quota that hasn't been disclosed or for failing to meet a quota that is in violation of this bill. Within this bill exists a rebuttable presumption of retaliation, which kicks in where an employer takes adverse employment action within 90 days of the employees' request for a quota or complaint regarding a quota.

Current or former employees who believe that meeting an employer's quota creates a violation have the right to request a written description of each quota that applies to them, as well as a copy of the most recent 90 days of employees' own personal work speed data. The employer then has 21 days to provide this data. Of course, if the employer does not collect work speed data, they have no obligation to provide it.

What kind of enforcement authority does this bill authorize? Former or current employees are authorized to bring actions under this bill for injunctive relieve for compliance and recover reasonable attorney's fees in the action. Employees may also bring Private Attorneys General Act actions for violations of this act, although, the employer will have a right to cure the alleged violations.

What does this bill mean for qualified employers? In requiring companies to disclose this type of productivity data and employee performance metrics, this bill creates new avenues for liability. Employers should be careful to create quotas and productivity metrics that allow workers reasonable time to take rest breaks, meal breaks, and comply with safety laws. Employers should audit their current metrics to make sure they align with the mandates of this bill.

Importantly, because there is a rebuttable presumption of retaliation under this bill, employers should be very careful when taking adverse employment action against an employee within 90 days of the employees' initial request for quota or personal work speed data, or a complaint in reference to the same. This new potential for liability again highlights the need for employers to regularly document worker performance issues. Employers should make sure to document all performance issues regularly and routinely in an effort to create a record of poor performance and be able to defend against a claim of retaliation later, should one arise. As always, California law continues to evolve in the direction of additional employer liability and supplemental employee protections. 