Recent Employment Law Decisions

California Courts of Appeal

California courts continue to uphold trial courts who deny petitions to compel arbitration, confirming their role in maintaining access to the courts for workers. Courts are even more hostile to class action waivers, which cause employees to give up substantial rights for no benefit at all. In this case, the court found that an arbitration and class action waiver provision were both exempt from the Federal Arbitration Act, and were therefore subject to California law. Applying our Supreme Court’s precedent, the arbitration was properly denied and the class action waiver was properly deemed unenforceable.

MURO v. CORNERSTONE STAFFING SOLUTIONS, INC.

MURO DROVE TRUCKS THROUGHOUT THE WESTERN STATES

Plaintiff Muro was a truck driver for Defendant/Appellant Cornerstone Staffing Solutions. Cornerstone provided employees for its employer-clients, specializing in transportation and logistics.

MURO SIGNED AN ARBITRATION AGREEMENT AND CLASS ACTION WAIVER, BUT BROUGHT HIS CLAIMS IN SUPERIOR COURT ANYWAY

As a condition of his employment, Muro signed an arbitration agreement. That agreement stated that it was governed “solely by the Federal Arbitration Act,” and that it would proceed under the rules of the American Arbitration Association. The agreement also provided for a waiver of the right to proceed with or participate in a class action.

Nonetheless, Muro filed a putative wage and hour class action with the Superior Court. Cornerstone petitioned to compel arbitration.

THE FAA DID NOT APPLY

The Court of Appeals upheld the trial court’s denial of the petition. Even though the agreement specifically referenced the Federal Arbitration Act, and even though Muro was engaged in interstate commerce – which the FAA specifically holds is within its purview – the court found that “transportation workers” fell within a specific FAA exemption.

Section 1 of the FAA specifically exempts from its coverage all “contracts of employment of seamen, railroad employees,” and, as pertinent here, “any other class of workers engaged in foreign or interstate commerce,” which the United States Supreme Court has interpreted to mean “transportation workers.” This has consistently been held to include truck drivers who cross state lines. This was sufficient to find that the FAA did not apply, and the court then analyzed the contract under California law.

THE CLASS ACTION WAIVER AND THE ARBITRATION AGREEMENT WERE UNENFORCEABLE

California applies a four part test to determine if a class action waiver is enforceable. The party opposing the clause must show (1) the modest size of the potential recover for the individual, (2) potential for retaliation against members of the class, (3) absent

members of the class may be ill informed of their rights, and (4) other, real world obstacles to vindication of the class members’ rights through individual arbitrations. Trial courts that conclude that a class action is more effective as a practical matter may void the class action waiver, as did the trial court here.

CONCLUSION: Trial courts that deny petitions to arbitrate and class action waivers will be upheld by the appellate courts. The four factor test shown above indicates that the class action mechanism is preferable for promoting the rights of California workers.

CELA INVOLVEMENT: CELA member Jamie Serb helped litigate this matter, along with the Turley & Mara Law Firm

Ca. Ct. App., Fourth District, Division 1. Filed 2/23/18. Opinion by Judge Dato. 20 Cal.App.5th 784

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Legislative Update
By Mariko Yoshihara, CELA Legislative Counsel & Policy Director

Mariko Yoshihara

Since the start of this year’s new legislative session, CELA has been working with policy makers, women’s and workers’ rights groups, and survivors of sexual harassment and assault, to figure out how we can combat the abuses of power in the workplace, provide greater accountability for sexual misconduct, and ensure safe and equitable working environments where women and men can thrive. We decided to team up with Equal Rights Advocates (ERA) and our legislative allies to introduce a slate of bills to address some of the challenging policy gaps in our existing sexual harassment and discrimination laws. Together, these bills would give California the nation’s strongest protections against sexual harassment and discrimination by:

  • Extending the amount of time workers have to file harassment and discrimination from one to three years;
  • Clarifying that individuals can be held personally liable for retaliating against an employee for exercising his or her legal rights;
  • Strengthening training requirements to prevent workplace harassment;
  • Prohibiting non-disparagement agreements and “sneaky releases” that force survivors into silence and strip them of their legal rights;
  • And clarifying that harassment by investors, elected officials, lobbyists, directors, and producers is unlawful.

This month, we co-hosted an event in Los Angeles with ERA, ALCU SoCal, and SAG-AFTRA, to brief members of Hollywood and the #TimesUp movement on our legislative proposals, and find ways we can work together. Days later at the Oscars, actress and activist Mira Sorvino announced our slate of sexual harassment bills on the red carpet and the importance of these legal reforms to create lasting change.

Our sponsored bills continued to gain attention and draw wide support on CELA’s Lobby Day this March, when over 50 CELA members came together in Sacramento to walk the halls of the Capitol and rally on its steps, asking for stronger laws to protect women and men who face harassment and discrimination at work. That day, CELA members joined with our organizational partners of the Stronger California Advocates Network for a rally and press conference, announcing the launch this year’s priority legislative agenda to help advance women’s economic security — an agenda that includes nearly all of CELA’s sponsored legislation. A big thank you to all of the CELA members who showed up in force for this year’s lobby day!

Over the next few months, we will need to continue to raise awareness and garner support for our campaign to combat sexual harassment and violence in the workplace. CELA members can learn more about our bill package with ERA and

sign the petition in support of our bills by clicking here. In addition, we are looking for stories or cases that CELA members can share to help illustrate the need for some of these important workplace protections. Please email mariko@cela.org if you would like to get more involved in our legislative efforts and if you have a case or story you can share.

CELA-sponsored bills:

  • SB 1300 (by Senator Jackson) strengthens sexual harassment protections under the Fair Employment and Housing Act (FEHA) by providing statutory guidance on the “severe or pervasive” standard, strengthening sexual harassment training requirements, prohibiting non-disparagement agreements, and prohibiting employers from requiring employees to waive their right to file sexual harassment and other discrimination claims as a condition of employment or for an employment benefit such as a raise or bonus.
  • AB 1870 (by Assembly Members Reyes, Friedman, and Waldron) extends the Statute of Limitations for filing claims under FEHA from one to three years.
  • SB 1038 (by Senator Leyva) clarifies that individuals may be held personally liable for retaliation under the Fair Employment and Housing Act (FEHA)
  • SB 224 (by Senator Jackson) clarifies that sexual harassment by investors, elected officials, lobbyists, directors, and producers is prohibited under the Unruh Civil Rights Act. This bill addresses the unique relationship that exists between investors and entrepreneurs, directors or producers and actors, and elected officials and staff, in which power imbalances leave women and others particularly vulnerable to sexual harassment and violence.
  • AB 2613 (by Assembly Member Reyes) provides waiting time penalties for late payment of wages.
  • AB 2282 (by Assembly Member Eggman) clarifies that prior salary cannot be used on its own, or in combination with another factor, to justify a wage differential under the California Equal Pay Act
  • SB 1284 (by Senator Jackson) requires California employers with 100 or more employees to submit a pay data report annually to the Department of Industrial Relations, outlining the compensation and hours worked of its employees by gender, race, ethnicity, and job category.

Bills We Are Tracking

Thank you to all the CELA members who have helped support our legislative efforts. With our strong grassroots efforts, we can effect broad scale change! For a full list of bills we are tracking, please visit www.cela.org/legislation. If you have experience with any of the legislative issues listed or if you have any feedback you would like to share, please email me at mariko@cela.org.

AB 1938 (Burke D)   Employment discrimination: familial status.
Summary: This bill would prohibit an employer or other covered entity or employment agency from printing or circulating a publication, or making a nonjob-related inquiring of an employee or applicant, that expresses any limitation, specification, or limitation based upon a person’s familial status, as defined.
AB 2016 (Fong R)   Labor Code Private Attorneys General Act of 2004: civil actions.
Summary: This bill would require a written notice under The Labor Code Private Attorneys General Act of 2004 to include a statement setting forth the relevant facts, legal contentions, and authorities supporting each alleged violation and an estimate of the number of current and former employees against whom the alleged violation or violations were committed and on whose behalf relief is sought. This bill would give employers 65 days to cure any violation under the Labor Code, except for health and safety violations. This bill would provide that an aggrieved employee may be awarded civil penalties based only upon a violation by the employer actually suffered by that employee.
AB 2069 (Bonta D)   Medicinal cannabis: employment discrimination.
Summary: Would amend the Fair Employment and Housing Act to prohibit an employer from engaging in employment discrimination against a person on the basis of his or her status as, or positive drug test for cannabis by, a qualified patient or person with an identification card. The bill would provide that it does not prohibit an employer from refusing to hire an individual or discharging an employee who is a qualified or person with an identification card, if hiring or failing to discharge an employee would cause the employer to lose a monetary or licensing-related benefit under federal law.
AB 2613 (Reyes D)   Failure to pay wages: semimonthly payments: penalties.
Summary: Current law requires that employers pay wages to their employees, twice per calendar month, on days designated in advance as regular paydays. However, employees defined as executive, administrative, or professional may be paid once per month. This bill would impose specified penalties, payable to the affected employees, on employers who violate these provisions.
AB 2651 (Kiley R)   Civil actions.
Summary: Would require the moving party on a motion for summary judgment or summary adjudication to serve the motion at least 35 days before the hearing, unless the court for good cause orders otherwise, and require the motion to be heard no later than 45 days before the date of trial. The bill would authorize the moving party to arrange the separate statement of undisputed facts by cause of action or count, and would require the separate statement filed in support of any opposition to be arranged in the same order as the moving party’s separate statement with respect to facts contended to be undisputed.
AB 2732 (Gonzalez Fletcher D)   Employment: unfair immigration-related practices.
Summary: Would make it unlawful for an employer to knowingly destroy, conceal, remove, confiscate, or possess any actual or purported passport or other immigration document, or any other actual or purported government identification document of another person in the course of committing, or with the intent to commit, trafficking, peonage, slavery, involuntary servitude, a coercive labor practice, or to otherwise avoid any obligation imposed on the employer with regard to laws governing employment. The bill would impose specified civil and criminal penalties for a violation.
AB 2841 (Gonzalez Fletcher D)   Sick leave: accrual and use.
Summary: Would change the requirements of the employer’s alternate sick leave accrual method to require no less than 40 hours of accrued sick leave or paid time off by the 200th calendar day of employment, as specified. The bill would also provide an employer is under no obligation to allow an employee’s total accrual of paid of sick leave to exceed 80 hours or 10 days, as specified. The bill would raise the limitation on sick leave carried over to the following year of employment to 40 hours or 5 days.
AB 3109 (Stone, Mark D)   Contracts: waiver of right of petition or free speech.
Summary: Would specify that a contract or settlement agreement is void and unenforceable if it includes a provision that waives a party’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue or restricts a party’s right to seek employment or reemployment in any lawful occupation or profession.
SB 954 (Wieckowski D)   Mediation: confidentiality.
Summary: Would require an attorney representing a person participating in a mediation or a mediation consultation to inform his or her client of the confidentiality restrictions related to mediation, as specified, and to obtain informed written consent from the client that he or she understands the restrictions before the client participates in the mediation or mediation consultation.
SB 1276 (Moorlach R)   Civil proceedings: expert testimony.
Summary: Current law provides circumstances under which testimony in the form of an opinion based in whole or in significant part on matter that is not a proper basis for an opinion may be excluded. The California Supreme Court, in People v. Sanchez (2006) 63 Cal. 4th 665, held that statements made out of court are inadmissible hearsay even if an expert witness treats the content of those statements as true and accurate in support of the expert’s opinion. This bill would expressly abrogate the holding in that decision by providing, in civil proceedings, that evidence of a statement used to support the opinion of an expert is not inadmissible as hearsay if the court, in its discretion, determines that the statement is reliable, and would require the court to consider certain factors in making its determination.
SB 1404 (Stone R)   Pharmacists: exemption from overtime regulations.
Summary: Would provide that a person employed in the practice of pharmacy, who is participating in a postgraduate training program, as specified, who is in a field relating to the practice of pharmacy or pharmacy research, or who is performing certain procedures or functions, is not subject to coverage under any provision of the orders of the Industrial Welfare Commission.

 

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