California Employment Law Update

Category Archives: Arbitration Agreements

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Chapter 11 Automatic Stay Applies To PAGA Claims

Porter v. Nabors Drilling USA, LP, 2017 WL 1404392 (9th Cir. 2017) Jeremy Porter, a former employee of Nabors Drilling, filed a complaint alleging various claims against Nabors, including a claim arising under the Private Attorney General Act (“PAGA”). After removing the action to federal court, Nabors moved to compel arbitration of all of Porter’s … Continue Reading

FAQ About California’s New Law on Venue and Choice of Law in Employment Agreements

We recently blogged about Governor Brown signing S.B. 1241, which is now codified as Section 925 of the California Labor Code. The law, which affects venue and choice of law provisions in agreements entered into as a condition of employment, will begin applying to agreements entered into, modified, or extended beginning on January 1, 2017. … Continue Reading

California Protects Employees’ Rights to Have Their Claims Heard in the State, Under California Law

In recent years, some employers doing business in the Golden State have required their employees to sign arbitration and employment agreements that require the employee to sue or arbitrate in – or under the law of – another state.  After January 1, 2017, this practice will be illegal unless the employee was represented by legal … Continue Reading

Ninth Circuit Strikes Down Employer’s Class Action Waiver

Morris v. Ernst & Young, LLP, 2016 WL 4433080 (9th Cir. 2016) As a condition of employment, Stephen Morris and Kelly McDaniel were required to sign agreements not to join with other employees in bringing legal claims via arbitration against their employer. Morris and McDaniel filed a class and collective action against the company, alleging … Continue Reading

California Enacts a Raft of New Employment Legislation

The latest legislative session has just ended, and, true to form, the California Legislature has added more than a dozen new laws affecting employers doing business in the nation’s largest state.  These statutes are in addition to the other six new laws that we reported on in September: Signed legislation: Sick Leave: Accrual And Limitations Language … Continue Reading

California Legislature Targets Employment Arbitration Agreements

It is no secret that California is no friend to arbitration agreements. As the United States Supreme Court noted in its 2011 opinion in AT&T Mobility LLC v. Concepcion, “California’s courts have been more likely to hold contracts to arbitrate unconscionable than other contracts,” despite directives from the High Court that arbitration agreements must be … Continue Reading

California is at it Again! Chamber of Commerce Releases Its 2015 List of “Job Killer” Bills

The Chamber of Commerce has just released its preliminary list of “job killer” bills that have been proposed in the California Legislature. Don’t forget that California remains tied with Louisiana for the fourth highest rate of unemployment in the country at 6.7%. This year’s list identifies 16 proposed laws, including four new “Increased Labor Costs” … Continue Reading

U.S. Supreme Court Tires (For Now) of Playing “Whack-a-Mole” With California Over Arbitration

On January 20, 2015, the U.S. Supreme Court denied the petition for certiorari filed in CLS Transp. Los Angeles, LLC v. Iskanian, a case in which the California Supreme Court held that waivers of employees’ right to bring representative actions under California’s Private Attorneys General Act of 2004 (“PAGA”) are unenforceable under state law. You … Continue Reading

Multiple PAGA Representative Claims Crumble As Federal Courts Continue To Reject Iskanian and Enforce Arbitration Agreements Containing PAGA Waivers

When the California Supreme Court decided Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014), this June, some legal commentators assumed that employees could not waive pre-litigation claims under the Private Attorneys General Act (PAGA). Those assumptions may have been premature. As we noted here, at least one federal court refused to … Continue Reading

Employers Should Now Run—Not Walk—Toward Adopting Arbitration Agreements in California

Yesterday, the California Supreme Court issued its long-awaited decision in Iskanian v. CLS Transp. Los Angeles, LLC, upholding class action waivers in employment arbitration agreements. This means that the U.S. Supreme Court’s 2011 opinion in AT&T Mobility LLC v. Concepcion is to be given full force and effect in the employment setting in California. That … Continue Reading

NLRB Takes D.R. Horton One Step Further While the Ninth Circuit Upholds Its Contrary Decision

On January 17, 2014, the National Labor Relations Board Judge Lisa D. Thompson concluded that an agreement that did not prohibit class or collective action still violated Section 8(a)(1) of the National Labor Relations Act because the Agreement “interfere[d], restrain[ed], or coerce[d]” plaintiff and other similarly situated employees’ “substantive rights to file classwide litigation.”  This … Continue Reading

D.R. Horton and the Arbitration Hotchpotch: Emerging “Rules” and the Future of Compelled Arbitration in California

Horton Hears an Employer Victory Last December, the Fifth Circuit issued its long-awaited decision in D.R. Horton, Inc. v. NLRB, holding that employers may require employees to sign arbitration agreements categorically waiving the right to pursue employment claims in a collective or class action. In doing so, the Fifth Circuit’s rejected the NLRB’s opinion that … Continue Reading

Court Holds Arbitration Agreement Requiring Employee to Pay Half of Arbitration Costs is Unconscionable

In Chavarria v. Ralphs Grocery Co., No. 11-56673, 2013 WL 5779332 (9th Cir. Oct. 28, 2013), the plaintiff, a former deli clerk, brought a class action against Ralphs for various alleged wage and hour violations of the California Labor Code.  As a condition of employment, Chavarria signed an arbitration agreement containing a class action waiver.  … Continue Reading

Right To Compel Arbitration Agreement Not Waived If Plaintiff Suffered No Prejudice From Delay

In a post last week, we noted a recent trend of federal courts strongly enforcing employment arbitration agreements under the Federal Arbitration Act (“FAA”). That trend continues in Richards v. Ernst & Young, LLP, Case No. 11-17530 (9th Cir. Aug. 21, 2013), which holds that a defendant’s pretrial participation in litigation does not, absent prejudice … Continue Reading

Second Circuit Reaffirms Enforceability of Arbitration Agreements Containing Collective Action Waivers In Two FLSA Cases

Two recent decisions from the U.S. Court of Appeals for the Second Circuit have reaffirmed the enforceability of employment-related arbitration agreements containing class action waivers. In Sutherland v. Ernst & Young and Raniere v. Citigroup, Inc. the Second Circuit held that the Federal Arbitration Act (FAA) requires courts to enforce a valid agreement to arbitrate … Continue Reading

Arbitration Clauses Are Enforceable Despite Waiver Of Classwide Arbitration Rights

Flores v. West Covina Auto Group, 2013 WL 139200 (Cal. App. Jan. 11, 2013) Israel Flores and Andrea Naasz sued West Covina Toyota (WCT) and Toyota Motor Sales for selling them a “lemon,” alleging both individual and class action claims, including claims for violations of the Consumer Legal Remedies Act (CLRA).  WCT filed a motion … Continue Reading

California Court Upholds Arbitration Agreement

Baltazar v. Forever 21, Inc., 2012 Cal. App. LEXIS 1292 (Dec. 20, 2012) Maribel Baltazar sued her former employer, Forever 21, Inc., alleging she was constructively discharged and subjected to discrimination and harassment based on her race and sex.  In response, Forever 21 filed a motion to compel arbitration pursuant to an arbitration agreement between … Continue Reading

California Court Criticizes Prior Case Law Invalidating Class Action Waivers, Then Punts To State Supreme Court

Truly Nolen of America v. Superior Court, 2012 WL 3222211 (Aug. 13, 2012) California law involving classwide wage-and-hour arbitration continues to evolve in the aftermath of the United States Supreme Court’s landmark decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), which generally prohibits states from requiring additional due process guarantees (not … Continue Reading

Nelsen v. Legacy Partners Residential, Inc. – Court of Appeal Not Persuaded by D.R. Horton – Arbitration Agreements Precluding Class Arbitration O.K.

Breaking with the National Labor Relations Board’s ruling that arbitration agreements containing class waivers can violate federal labor law, the California Court of Appeal recently held that an arbitration agreement precluding class arbitration was not unconscionable, nor would enforcing it violate California state law, federal law or public policy.… Continue Reading

California Court Approves Class Action Waivers In Employment Arbitration Agreements

The plaintiff in Iskanian v. CLS Transp. Los Angeles, LLC, brought a putative class action and a representative action under California’s Private Attorney General Act (PAGA) for various wage and hour violations. During his employment, Iskanian agreed that he would not assert class action or representative action claims against his employer and, instead, agreed to submit … Continue Reading

California Court Holds that Representative PAGA Claims Are Not Subject to Mandatory Arbitration

In a 2-1 decision, the California Court of Appeal held that representative actions under California’s Private Attorney General Act (PAGA) may not be waived in mandatory, pre-dispute employment arbitration agreements. (Brown v. Ralphs Grocery Co., Cal. Ct. App., No. B222689. This decision comes as something of a surprise in light of the U.S. Supreme Court’s recent ruling … Continue Reading

State Limitations On Arbitration Agreements Are Preempted By Federal Law

AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011) In this landmark new opinion, the United States Supreme Court held that the Federal Arbitration Act (“FAA”) prohibits states from conditioning the enforceability of an arbitration agreement on the availability of class action arbitration procedures. Although this case arose in the consumer context (it involved AT&T’s … Continue Reading

U.S. Supreme Court Tips the Scales Back Toward Arbitration

In a ruling that has garnered significant interest among employers, the U.S. Supreme Court held on Wednesday that the Federal Arbitration Act (FAA) preempts the California Supreme Court’s efforts to impose heightened unconscionability standards on class action waivers in consumer arbitration agreements. This decision may also sound the death knell for similar restrictions imposed by California … Continue Reading

California Supreme Court Expands Judicial Review of Employment Arbitration Awards

A recent decision by the California Supreme Court could have resounding implications for the enforceability of arbitration awards - a matter of great concern in employment law given the prevalence of arbitration agreements governing employment relationships - and opens the door for employees to petition the courts to compel arbitrators to decide the merits of their statutory claims. … Continue Reading
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