In law school, aspiring attorneys are taught fundamental concepts related to contracts, including “agency”, “third party beneficiary”, and “equitable estoppel”, terms which relate to determining who should be subject to the terms of a contract.  In Hernandez v. Meridian Management Services, LLC, the California Court of Appeals referred back to these law school basics in denying a motion to compel arbitration brought by a number of companies who were alleged to be “joint employers” of an employee, but who were not signatories to an arbitration agreement between ...

Until recently, employers had the luxury of interpreting the outside salesperson exemption to minimum wage, overtime and meal and rest period requirements at face value.  This is because the definition of an “outside salesperson” is simply codified as “any person, 18 years of age or over, who customarily and regularly works more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services, or use of facilities.” 

However, in Espinoza v. Warehouse Demo Services, Inc.

In the 2020 general election, Californians passed Proposition 22, which gave ride-sharing and delivery app companies such as Uber, Lyft, and DoorDash the ability to continue classify their drivers as independent contractors.  Shortly after the proposition passed, a group of drivers challenged its constitutionality.  At its core, the issue is whether drivers in the gig economy should be entitled to the benefits typically afforded to employees.  As independent contractors, these workers forgo such benefits in exchange for the right to set their own work schedule and receive ...

Over the last few years, employers throughout the United States have enjoyed some measure of protection from former employees who signed severance agreements.These agreements routinely contained a confidentiality provision that restrains former employees from disclosing the contents of the agreement to third parties other than (1) a spouse; (2) professional advisors for the purposes of obtaining legal counsel or tax advice; or (3) if legally compelled to do so by a court or administrative agency of competent jurisdiction.  These agreements also typically contained a ...

The saga of challenges to mandatory employment arbitration agreements is almost over. After three years of challenges, the United States Chamber of Commerce successfully appealed the enactment and enforcement of California’s Assembly Bill 51 (“AB 51”), which was originally intended to take effect on January 1, 2020. This piece of legislation would have banned the use of mandatory arbitration agreements as a condition of employment, and went so far as to include civil and criminal penalties on employers who violated the statute. 

After a federal district court granted a ...

Governor Newsom signed Assembly Bill 2448 into law, which will enact Civil Code section 51.17. The law requires the Civil Rights Department (formerly the Department of Fair Employment and Housing) to establish a pilot program to recognize businesses that promote or create environments free from discrimination and harassment of customers.  Recognition will come in the form of a certificate the department would issue to qualifying businesses that may be prominently displayed on site. The department would also publish on its internet website a list of businesses receiving the ...

Effective January 1, 2023, Senate Bill 1044 will prohibit employers from taking or threatening adverse action against any employee for refusing to report to, or leaving, a workplace or worksite during an “emergency condition” when the employee has a reasonable belief that the workplace or worksite is unsafe.  An “emergency condition” means the existence of either: (1) conditions of disaster or extreme peril to the safety of persons or property at the workplace or worksite caused by natural forces or a criminal act; or (2) an order to evacuate a workplace, a worksite, a ...

Since its enactment in 2020, employers have been forced to be mindful of the burdensome imposition of Code of Civil Procedure section 1281.97 et seq., which requires an employer to pay the full amount of arbitration fees within 30 days of an arbitrator’s invoice being due, unless the arbitration agreement specifies a different deadline. In a recent opinion titled Espinoza v. Superior Court, the Court of Appeals clarified that this deadline must be strictly followed and there is no leeway for “substantial compliance.” 

In Espinoza, a defendant employer failed to pay the ...

Among other protections and rights, employees are entitled to the use of suitable seats when the “nature of the work reasonably permits the use of seats” pursuant to the Industrial Welfare Commission’s Wage Orders. As recently as 2016, the California Supreme Court detailed a fact-intensive framework and multi-factor test to assist employers with the determination of when the nature of the work permits the use of seats.  However, the question of how to determine whether an employee was in fact “provided” suitable seating by his or her employer remained unresolved.

Employers throughout California have been keenly awaiting the final decision from the 9^th Circuit Court of Appeals regarding the United States Chamber of Commerce’s challenge to California Labor Code section 432.6, which is designed to prohibit employers from enforcing mandatory arbitration agreements or requiring them as a condition of employment.

In our last report, the 9^th Circuit was awaiting the decision from the United States Supreme Court in the Moriana v. Viking River Cruises case, which also addressed the applicability of the Federal Arbitration Act’s ...

As we reported on June 30, 2022, the Los Angeles City Council voted unanimously to adopt a Healthcare Workers Minimum Wage Ordinance, which was designed to increase the minimum wage for workers of private healthcare facilities in Los Angeles to $25.00 per hour (the “ LA Ordinance”). The Ordinance would have gone into effect on August 13, 2022, but for a referendum petition against the ordinance filed on August 10, 2022. Similar ordinances have been passed in Long Beach, Monterey Park, and Downey. Like the LA Ordinance, the ordinance in Downey is also the subject of a referendum.

As a ...

Private Attorneys General Act (“PAGA”) actions are the proverbial boogeyman to California employers.  On June 15, 2022, the United States Supreme Court reined in some of this statute’s bite by holding that “aggrieved employees” who signed arbitration agreements governed by the Federal Arbitration Act (“FAA”) cannot split their individual claims and their PAGA claims by proceeding with arbitration for the former and a court action for the latter.  An enforceable arbitration agreement will cover all claims, including PAGA claims, raised by the representative ...

In the words of Tom Cruise’s character Lt. Daniel Kaffee in A Few Good Men, “the hits keep on coming.” This quote crystallizes how California employers will undoubtedly feel following the California Supreme Court’s ruling in Naranjo v. Spectrum Security Services, Inc., decided on May 23, 2022.

Initially decided by the Second Appellate District in 2019, Naranjo previously stood for the proposition that failure to provide missed meal and rest break premium pay did not entitle employees to pursue waiting time penalties under Labor Code section 203 or paystub violation ...

Since the California Supreme Court’s ruling in Iskanian v. CLS Transportation Los Angeles, LLC in 2014, it has been widely understood that Private Attorneys’ General Act (“PAGA”) actions cannot be subject to employment arbitration agreements. The rationale for this decision has been that PAGA actions are unique in that the employee that brings the claim is not acting in an individual capacity, but rather acts as a representative for the Attorney General on behalf of the State of California.  For that reason, the Federal Arbitration Act (FAA), which would otherwise preempt ...

On the same day that the United States Supreme Court imposed a stay of enforcement on OSHA’s vaccine mandate for private employers with over 100 employees, the Court ruled that the Centers for Medicare & Medicaid Services (CMS) had the statutory authority to impose a vaccination mandate on healthcare providers who care for Medicare and Medicaid patients. Facilities in states that were not previously subject to injunctions (listed below) must demonstrate that their staff is fully vaccinated by February 28, 2022.

For those states where injunctions were lifted following the ...

Following an expedited hearing on January 7, 2022, the United States Supreme Court granted a petition for stay of enforcement of OSHA’s COVID-19 Vaccination and Testing; Emergency Temporary Standard that would have been imposed on employers of 100 or more employees.  This stay is, in effect, injunctive relief pending disposition of the numerous businesses, trade groups, and non-profit organizations’ consolidated petitions for review in the Sixth Circuit Court of Appeals.

The Court disagreed with the Sixth Circuit’s prior opinion and determined that the applicants’ ...

On January 5, 2022, Los Angeles County’s Department of Public Health modified its ongoing COVID-19 health order due to drastic increases in cases and resultant hospitalizations related to the Omicron and Delta variants. Among these modifications is an important new requirement which pertains to the wearing of masks by employees. 

Specifically, employers in Los Angeles County must now provide their employees who work indoors and in close contact with other workers or the public with a well-fitting medical-grade mask, surgical mask or higher-level respirator, such as an N95 ...

Businesses and attorneys alike have kept a close eye on the developments surrounding the challenge to California Assembly Bill 51 (now codified as Labor Code section 432.6). Most recently, in a 2-1 decision, the 9^th Circuit Court of Appeals declared that the Federal Arbitration Act (“FAA”) did not preempt the new law which bars California employers from utilizing mandatory arbitration agreements or from requiring an employee to sign an arbitration agreement as a condition of employment.  One month after this decision came down, the Chamber of Commerce of the United States filed ...

Since being enacted in 2004, the Private Attorneys General Act (PAGA) has been a proverbial bogeyman for employers in California. Despite having only a one-year look-back period, PAGA claims commonly inflate plaintiff’s demands and judicial decisions to a punitive degree that decimates an employer’s incentive to maintain a business in California. This statute, among other factors, has served to motivate a mass exodus of businesses fleeing to other, more business-friendly states. While PAGA has withstood many challenges and attempted reforms over the years, there is ...

Enacted in 2004, California’s Private Attorneys General Act (“PAGA”) authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations. Although only 25% of the amount recovered can be retained by the aggrieved employees with 75% going to the Labor and Workforce Development Agency, PAGA has become a tool commonly used by plaintiffs to attempt to inflate even minor claims beyond reasonable value.  Although the Legislature has made minor changes to the law over the years ...

For much of the COVID-19 pandemic, employers have been frustrated by the lack of notice regarding important mandates issues by different public health officials at all levels of state and local government. Senate Bill 336 is designed to make obtaining current information a little easier. 

With the enactment of SB 336, if either the State Department of Public Health or a local health officer issues an order or mandatory guidance related to COVID-19, the respective agency must do the following:

(1) Publish on their internet website the order or mandatory guidance and the date it takes ...

Since the turn of the century, the judicial and legislative branches in California have added barrier after barrier to employers who have consciously sought arbitration; an oft-stated “preferred” method of resolution. The most draconian of these barriers became effective on January 1, 2020, with the enactment of Code of Civil Procedure § 1281.97 et seq.  These statutes provide that if an employer fails to timely pay the fees for the arbitration, the employee would be entitled to either withdraw the claim from the arbitration and proceed in court or otherwise compel arbitration ...

COVID-19 has had a unique and continued impact on health and safety requirements in the workplace.  As a result, laws are being revised to catch up to the current work climate. Assembly Bill 654, which amends California Labor Code sections 6325 and 6409.6, is one such law. The amendments to these two statutes which initially established California’s COVID-19 notice and reporting requirements went into effect on October 5, 2021 and the statutes themselves shall remain in effect only until January 1, 2023.

What Does AB 654 Do?

Amendment to Labor Code § 6325

As a minor amendment to this ...

“It is the intent of the Legislature to afford all Californians, regardless of whether they have disabilities, with protections to ensure equal pay and equal treatment in the workplace.” These are the closing words of the preface to Senate Bill 639; a noble goal. However, the good intentions paving the way for this new law – equalizing the monetary playing field for employees with disabilities – may result in more harm than good for some of those very workers.

Before SB 639 was passed, employers could apply to the Industrial Welfare Commission for a special license, renewable ...

In 2013 the California Legislature passed Assembly Bill 1386, which amended Labor Code section 98.2, giving the Labor Commissioner additional means to collect wages and penalties on behalf of workers. Labor Code section 98.2 was modified so that any amount due under a final order by the Labor Commissioner permits the Labor Commissioner to record a Certificate of Lien against the employer’s real property.

Fast forward to September 2021 and the passage of Senate Bill 572.  This bill adds section 90.8 to the Labor Code, which becomes effective January 1, 2022.  This statute will allow ...

In a year of tough decisions for California employers, the Ninth Circuit just issued another mixed bag of legal decisions to navigate, this time regarding the enforceability of mandatory arbitration agreements.

CA Labor Code § 432.6 and Chamber of Commerce of the United States v. Bonta

In October, 2019, California passed Assembly Bill 51, which became codified as Labor Code § 432.6, effective January 1, 2020. This law provided that employers could not require employees to sign a mandatory arbitration agreement as a condition of employment. In addition, it created civil and criminal ...

On September 9, 2021, President Biden signed two Executive Orders imposing sweeping new vaccine mandates on federal workers and contractors. This new mandate represents a shift in the White House’s policy on vaccinations, which had previously offered an alternative to those who wish to remain unvaccinated by allowing those individuals to wear masks while on federal property as long as they submitted to regular screening for COVID-19.

All federal employees, contractors and subcontractors employed by the federal government shall be required to provide proof of vaccination ...

Since 2019, California employers have relied on Ferra v. Loews Hollywood Hotel, LLC, 40 Cal.App.5th 1239, for the proposition that only hourly wages would be used to calculate “premium pay” for meal or rest breaks under Labor Code section 226.7. In a serious blow to California employers, the California Supreme Court has reversed this ruling and held that non-discretionary bonus payments and commissions must be included in calculating these premium payments in the same manner as calculating for overtime pay. Adding insult to injury, the Court has held that its ruling will ...

As technology has advanced, employers routinely rely on electronic timekeeping software to ensure accurate record keeping. Such software often includes a setting to round employees’ time (typically to the nearest quarter hour) and is implemented as a result of either deliberate company policy or through inadvertent default. Regardless, employers should review these policies and settings following the California Supreme Court’s recent decision in Donohue v. AMN Services, LLC.

In Donohue, the Court unequivocally held employers may no longer round an employee’s in and ...