Employers often rely on multiple onboarding documents to establish an employee’s obligation to arbitrate employment-related disputes.  Unfortunately, that approach can invite a challenge from employees who argue that inconsistencies among the documents defeat mutual assent and void an agreement to arbitrate.  In that context, the California Court of Appeal’s recent decision in Santana v. Studebaker Health Care Center, LLC highlights the line between “ambiguity,” which courts resolve through contract interpretation, and “uncertainty,” which can actually ...

California’s Fifth District Court of Appeal’s decision in Ayala‑Ventura v. Superior Court is the first to directly contrast with the Second District Court of Appeal’s opinion in Cook v. University of Southern California. While both cases focus on arbitration agreements of “infinite” duration, Ayala-Ventura stresses the importance of context, industry, and drafting choices, which can mean the difference between an enforceable agreement and one that is struck down as unconscionable.

In Ayala‑Ventura, a janitorial company, CCS Facility Services, required new ...

The California Supreme Court’s decision in Fuentes v. Empire Nissan, Inc. resolves a growing split among the lower courts over whether tiny, hard‑to‑read print in an arbitration agreement counts as procedural unconscionability, substantive unconscionability, or both. For most of the last decade “fine‑print terms” and near‑illegible print in an arbitration agreements were treated as an indicator of substantive unfairness as well as procedural defects. More recently, the Fuentes Court of Appeal held that “tiny and unreadable print” was a problem only on ...

While precedential for federal cases only, the Ninth Circuit’s recent decision in Avery v. TEKsystems, Inc. offers a pointed reminder to California employers that rolling out new mandatory arbitration agreements in the middle of a pending class action – particularly when done through aggressive and one‑sided communications – can result in those agreements being invalidated for the class as a whole. In Avery, a group of California recruiters sued TEKsystems, a staffing company, alleging they were misclassified as exempt and denied overtime, and meal and rest breaks in ...

Just in time for the new year, Wise v. Tesla Motors, Inc. (2025) offers fresh guidance on how California courts should treat allegedly unconscionable terms in collateral employment agreements when deciding whether to enforce an arbitration clause. The case arose after former production associate Talia Wise sued Tesla for disability discrimination, retaliation, and related violations of the Fair Employment and Housing Act, all claims that fell within the scope of an arbitration provision in her offer letter. The trial court, applying Civil Code section 1642 to read the offer ...

The First District Court of Appeal’s decision in Quilala v. Securitas Security Services USA, Inc. underscores the significant reach of the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) in California employment disputes and the judiciary’s principal role in determining the availability of arbitration when sexual assault or harassment claims are alleged. In that case, Francisco Quilala sued his former employer, Securitas, asserting twenty-two causes of action arising from his employment, including claims for sex, gender ...

Many employers pay a signing bonus or advance incentivize a candidate to accept an employment offer.  Some employers pay for education or training for an employee to enhance skills or further the possibility of promotion within a company.  These payments often come with strings attached, as employers understandably want to make sure that they receive value for the payment.  In most cases, the employer requires the employee to work for a “retention period” over which the bonus or training payment is earned; if employment ends during the retention period, all or some of the bonus or ...

On March 14, 2025, President Donald Trump issued Executive Order 14236, titled “Additional Rescissions of Harmful Executive Orders and Actions.” This Order revoked Executive Order 14026 of April 27, 2021, “Increasing the Minimum Wage for Federal Contractors’, that had dramatically raised the federal contractor minimum wage and provided annual adjustments based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, with the most recent increase occurring on January 1, 2025, to $17.75 per hour. 

Rescinding the 2021 Executive Order means that the ...

Effective January 1, 2026, the California Department of Industrial Relations has issued a new compensation threshold for exempt computer software employees, reflecting an increase of 3.3% from last year. 

To qualify for the overtime exemption, computer software employees must be paid a salary of at least $122,573.13 annually ($10,214.44 monthly), or an hourly wage of at least $58.85.  In addition, a computer software employee must also meet the duties test set forth in California Labor Code Section 515.5, which are also included in all Wage Orders except Orders 14 and 16. 

More ...

What goes up continues to go up!  As we pointed out here last year, the trend of increasing the minimum wage throughout the State of California continues, as follows:

State:

On January 1, 2026, the California state minimum wage, excluding fast food industry employers and certain healthcare facilities, will increase from $16.50 per hour to $16.90 for employers of all sizes, reflecting a 2.49% increase, which is based on the expected rate of inflation.  The state minimum wage also governs the exempt employee threshold salary, which will increase accordingly.  The new minimum salary for ...

The California Supreme Court recently issued an opinion that serves as an important reminder to employers: good intentions regarding compliance with wage laws are not enough to avoid liquidated damages for minimum wage violations. To rely on the statutory good-faith defense, an employer must affirmatively attempt to understand and comply with the law. Simply believing a work arrangement is lawful — or assuming the worker is not an employee — will not suffice.

In Iloff v. LaPaille, a property owner allowed a tenant to perform maintenance work in exchange for free rent. After the ...

The California Court of Appeal's ruling in Gurganus v. IGS Solutions LLC reinforces a critical lesson for California employers: courts will meticulously examine the cumulative effect of all related employment agreements when determining if an arbitration agreement is truly mutual. The court affirmed the trial court's decision to deny IGS’ motion to compel arbitration, concluding that the company's Arbitration Agreement, when read together with the concurrent Confidentiality and Non-Disclosure Agreement (the “Confidentiality Agreement”), was permeated with ...

On the heels of the California Supreme Court’s ruling in Hohenshelt v. Superior Court, the California Court of Appeal’s recent decision in Wilson v. TAP Worldwide, LLC has provided welcome clarity and significant breathing room for employers by limiting the punitive consequences of Code of Civil Procedure section 1281.98. Specifically, the appellate court confirmed that a mere administrative oversight in fee payment will not automatically result in both the forfeiture of the employer’s right to arbitrate and the substantial fee-shifting penalties of the statute.

The ...

After years of appellate cases and several rulings holding California employers to the very strict payment standards of the California Arbitration Act (CAA), the California Supreme Court has, for the first time, addressed whether provisions of the CAA are preempted by the Federal Arbitration Act (FAA). In Hohenshelt v. Superior Court of Los Angeles County, the Court ultimately held that Code of Civil Procedure § 1281.98 remains valid and enforceable. Nevertheless, the decision represents a meaningful victory for employers because the Court rejected a rigid application of the ...

California is adapting to the prevalence of technology in the modern workplace – especially artificial intelligence – as these digital tools become more embedded in business infrastructure. Among other consequential AI-related bills currently under consideration, Assembly Bill 1221 (AB 1221) stands out.  Now advancing through the legislature, the bill is poised to impose comprehensive restrictions on workplace surveillance technologies.

If enacted, the bill would require businesses to provide clear and timely notice – at least 30 days in advance – before ...

On May 14, 2025, the California Court of Appeal issued a decision in Rose v. Hobby Lobby Stores, Inc., addressing whether the California Labor and Workforce Development Agency (LWDA) can be held liable for an employer’s litigation costs in an unsuccessful Private Attorneys General Act (PAGA) action where the LWDA was not an active participant.

The plaintiff, a former cashier at Hobby Lobby, filed a representative PAGA action alleging violations of California’s “suitable seating” requirements. Following a nine-day bench trial, the court ruled in favor of Hobby Lobby ...

In Chavez v. Hi-Grade Materials Co., the California Court of Appeal issued a ruling that significantly impacts how and when employees can appeal orders denying class certification, especially in cases involving both class claims and a Private Attorneys General Act (“PAGA”) claim. This decision is particularly important for California employers wary of facing wage-and-hour class actions and PAGA lawsuits.

The plaintiff, a former employee, brought a putative class action alleging various wage-and-hour violations and sought penalties under PAGA. After the trial court ...

The Private Attorneys General Act (“PAGA”), which permits individual employees to sue employers on behalf of themselves, other employees and the State of California to recover civil penalties for California Labor Code violations, has long garnered criticism for excessively penalizing employers and incentivizing frivolous lawsuits.  Business groups had proposed a ballot initiative for the upcoming election that sought to repeal PAGA and replace it with a new law which did not include the state in the collection of civil penalties and which provided resources for employers ...

The Los Angeles County Board of Supervisors recently passed the Los Angeles County Fair Workweek Ordinance (the “Ordinance”), which generally requires that certain retail employers in the unincorporated areas of the County of Los Angeles give workers their schedules two weeks in advance, compensate them for last-minute schedule changes and provide at least ten hours between shifts.  The Ordinance will go into effect on July 1, 2025, and largely duplicates the Los Angeles Fair Work Week Ordinance which became effective in the City of Los Angeles on April 1, 2023. The Ordinance ...

The Federal Trade Commission recently issued a final rule largely banning the use of non-compete agreements nationwide.  The stated purpose of the rule is to address the substantially increased harm non-compete agreements have caused to fair competition in recent years.  While several states, including California, already have similar bans in place, the FTC determined that a nationwide rule was necessary as the state-by-state approach did not adequately address the issue.

The FTC estimates that approximately 30 million workers are currently covered by non-competes.  By wiping ...

On January 1, 2023, Assembly Bill (“AB”) 676 will go into effect, significantly amending the California Franchise Relations Act and Franchise Investment Law.  The provisions of AB 676 will only apply to franchise agreements entered into, amended or renewed on or after January 1, 2023.  If the amendment was initiated by the franchisee and the amendment does not adversely impact the franchisee’s rights, that amendment is not subject to AB 676.

AB 676 prohibits franchise agreements from including a provision requiring the franchisee to disclaim their reliance on ...

On September 5, 2022, Governor Gavin Newsom signed Assembly Bill 257, a controversial and far-reaching law that will have a major impact on California fast food employers and is likely to shape the way the state regulates other industries in the future.

AB 257, the Fast Food Accountability and Standards Recovery Act or FAST Recovery Act, regulates nearly all fast food restaurants in the state and is poised to dramatically shake up regulation of the industry and impose standards far beyond the already high standards set for minimum wages and working conditions as enshrined by ...