Less than a year ago, the California Supreme Court in Ramirez v. Charter Communications, Inc. opined, in the context of employment arbitration agreements, that there is no bright line rule that requires a court to refuse enforcement if a contract has more than one unconscionable term.  Rather, the appropriate inquiry is qualitative.  “At the outset, a court should ask whether the central purpose of the contract is tainted with illegality. [Citations]. If so, the contract cannot be cured, and the court should refuse to enforce it.”  This ruling gave lower courts the power to ...

The case of Parra Rodriguez v. Packers Sanitation Services LTD., LLC typifies the reason employers and employment counsel must stay on top of arbitration case developments. 

The Second District Court of Appeals in California in Leeper v. Shipt, Inc. recently decided that all Private Attorney General Act (“PAGA”) actions necessarily have “individual” and “representative” components, regardless of whether individual claims are pleaded.  This holding was significant because employers could then compel arbitration of the otherwise absent individual PAGA claims ...

The Private Attorneys General Act of 2004 (“PAGA”) was intended to allow employees to bring actions on behalf of the State of California against employers who failed to comply with Labor Code sections that were considered underenforced. This well-intentioned goal ultimately became a wrecking ball, tearing down California employers with an onerous penalty scheme that could cripple the average employer.

After a concerted effort to amend the PAGA statute last year via ballot initiative, the California Legislature compromised with California businesses and passed reforms

Since its enactment in 2019, Code of Civil Procedure 1281.98, which governs arbitration fee payments, has been inviolate: arbitrators do not have the unilateral power to extend the fee payment deadline; “checks in the mail” do not satisfy the 30-day payment deadline; there are no extensions based on the date or method by which the invoice was issued; and the Federal Arbitration Act (“FAA”) may not preempt the California Arbitration Act, or the statutory fee payment deadline.

Despite these rulings, employers and their counsel continue to search for some reprieve against ...

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “Act”), a federal law, is unique for its role in overriding the policy in favor of the enforcement of arbitration agreements.  The Act was legislated so that victims of sexual assault and harassment in the workplace would be entitled to their day in court, rather than behind the closed doors of a private arbitration, if that is what they prefer.  As such, where the Federal Arbitration Act (“FAA”) applies, so too does the Act.

Recently, however, the California Court of Appeal was posed the ...

Readers of this blog are, by now, aware of California’s judicial and legislative hostility toward arbitration.  Over the last few months, however, employers have seen a surprising number of appellate victories in their respective bids to enforce valid arbitration agreements with their employees.  The recent opinion in Vo v. Technology Credit Union continues this recent trend.

Prior to Vo, it had been well-established that, absent an explicit reference to the California Arbitration Act (“CAA”) which includes provisions providing for discovery in arbitration, an ...

Q: I am a state court receiver for an LLC that owns a number of apartment buildings, which I am now managing. I have been sued by some tenants and a tenant group. They have not obtained receivership court permission to sue me, which I think is required. They contend that because their claims relate to my managing the business of the LLC they do not need prior permission to sue me and have cited 28 U.S.C. §959(a). Does this federal statute apply to me—a state court receiver?

A: No. 28 U.S.C. §959(a), which is an exception to the Barton Doctrine [Barton v. Barbour, 104 U.S. 126 (1881)], requiring ...

There is no greater threat to an employment arbitration than Code of Civil Procedure section 1281.98, which mandates that the party who drafted the arbitration agreement pay the fees and costs of the arbitration within 30 days after the due date.  A failure to do so will result in a “material breach” of the arbitration agreement, which will entitle the non-drafting party (i.e., the employee) the right to withdraw from the arbitration and obtain onerous sanctions against the drafting party (i.e., employer). Employers have no room for error under this statute. 

 In every case prior to ...

Prior to the United States Supreme Court’s decision in Viking River Cruises Inc. v. Moriana, California courts did not consider the components of a Private Attorneys General Act (“PAGA”) claim.  In the Viking River opinion, the Court delineated between a “representative PAGA claim” – referring to a PAGA claim based on violations that employees other than the plaintiff had suffered – and an “individual PAGA claim”, which referred to a portion of a PAGA action that is “based on code violations suffered by the plaintiff.”  The California Supreme Court followed ...

Q:      I am a state court receiver in a case that has been disrupted by a bankruptcy filing. The bankruptcy trustee has been threatening to sue me, in the bankruptcy court, for what she claims were negligent actions and to recover alleged preferential transfers. Doesn’t the trustee have to get prior permission from the state receivership court to be able to sue me?

A:      Yes. The Barton Doctrine [ Barton v. Barbour, 104 U.S. 126 (1881) ] provides that a party seeking to sue a receiver must first obtain leave of the appointing court to do so and, absent such leave, no other court has jurisdiction to ...