Employment Update

Summer/Fall 2011
U.S. Supreme Court Upholds Class Action Waivers
***Excerpt taken from the Summmer/Fall 2011 Management Newsletter
California employers may have been given a significant legal victory as the United States Supreme Court ended California’s judicial prohibition of class action waivers in arbitration agreements.
California’s Supreme Court had previously conditioned enforceability of arbitration agreements on the availability of class action procedures in arbitration, and California’s trial and appellate courts had generally refused to enforce arbitration agreements that expressly disallowed class action procedures in arbitration. In AT&T Mobility LLC v. Concepcion, however, the Supreme Court determined that the Federal Arbitration Act (“FAA”) prohibits such conditional enforceability and instead requires all courts to enforce arbitration agreements according to their terms, even if those terms prohibit class proceedings in arbitration.
The Concepcion Court addressed defendant AT&T Mobility’s motion to compel arbitration under a cell phone contract requiring arbitration to be pursued on an individual basis, not as a representative of a class of thousands of similar customers. In doing so, it comprehensively analyzed the 2005 decision of the California Supreme Court in Discover Bank v. Superior Court, which held that arbitration provisions precluding class-wide arbitration are unconscionable and unenforceable in “contracts of adhesion” (e.g., a “take it or leave it” consumer agreement in which the non-consumer party writes the contract to its decided advantage).
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Oct. 13, 2011
Summary Of New Employment Laws That Will Apply To California Employers In 2012

Let’s start with the good news. Governor Brown vetoed several unappealing employment bills, including (1) AB 267, which would have invalidated forum selection and choice of law provisions in employment contracts with California employees, (2) AB 325, which would have required California employers to provide bereavement leave, and (3) SB 931, which would have imposed new requirements for use of payroll cards. 
 
Now the bad news. 

Governor Brown signed the following employment related bills into law:
 
AB 469 (Notice of Pay Details):  This new law requires employers to provide each employee, at the time of hire, with a notice that specifies (1) the pay rate and the basis, whether hourly, salary, commission or otherwise, as well as any overtime rate, (2) allowances, if any, claimed as part of the minimum wage, including meals or lodging, (3) the regular payday, (4) the name of the employer, including any “doing business as” names used by the employer; (5) the physical address and telephone number of the employer’s main office or principal place of business, and a mailing address if different, and (6) the name, address and telephone number of the employer’s workers’ compensation carrier.  The employer must notify each employee in writing of any changes to the information set forth in the notice within 7 days of the changes, unless such changes are elsewhere reflected on a timely wage statement or other writing required by law to be provided. The law also significantly increases the penalties that can be imposed on an employer who fails to timely pay or appeal from a Labor Commissioner award of wages or penalties to an employee, including in some circumstances authorizing a temporary restraining order preventing the employer from doing business in California. 
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July 12, 2011
California Court Holds That Employees May Not Waive Right To Pursue PAGA Claims In Court

In California’s first judicial response to the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, the Second District Court of Appeal held that Concepcion does not apply to representative actions brought pursuant to California’s Private Attorney General Act of 2004 (PAGA). As a result, arbitration agreements waiving an employee’s right to pursue a representative action under PAGA remain unenforceable under California law.
 
The plaintiff employee in Brown v. Ralphs Grocery Co. brought a class action and representative action under PAGA against her employers for alleged violations of the Labor Code and Business & Professions Code. The employers petitioned to compel arbitration on account of plaintiff’s employment application, which included an acknowledgement of and agreement to a binding arbitration policy. Soon after the trial court determined that the arbitration provision was unconscionable and thus unenforceable, the United States Supreme Court handed down its decision in AT&T Mobility LLC v. Concepcion, which held that the Federal Arbitration Act (“FAA”) preempted California’s judicial prohibition of class action waivers in arbitration agreements. The Concepcion Court determined that the FAA requires all courts to enforce arbitration agreements according to their terms, even if those terms prohibit class proceedings in arbitration.
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April 13, 2011
Court Upholds Employee Termination for Misconduct Caused by Bipolar Disorder

The California Court of Appeal today upheld the termination of a court employee who was discharged for directing threats of violence at coworkers, despite the fact that such threats were caused by the employee’s mental disability. The court ruled that an employer may reasonably distinguish between disability-caused misconduct and the disability itself when such misconduct includes threats of violence against coworkers.
 
In Wills v. Superior Court, the plaintiff-employee was a court clerk with the Orange County Superior Court. The employee had been diagnosed with bipolar disorder two years prior to beginning her employment. During her employment, the employee was required to take several medical leaves of absence to treat the condition, but had never informed her employer that she had bipolar disorder. 
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