Insight & Commentary on California Workplace Law Issues & Developments
Requiring class and collective action waivers as a condition of hire or continued employment violates the National Labor Relations Act (“NLRA”), the Ninth Circuit Court of Appeals ruled on August 22, 2016.
In April 2011, the U.S. Supreme Court ruled that class claims can be waived in a valid arbitration agreement under the Federal Arbitration…
Nearly all California employment wage and hour class action lawsuits assert a cause of action under California Labor Code Section 226 as plaintiffs’ attorneys almost always automatically include such cause of action when there are other alleged underlying wage violations, i.e. failure to pay overtime. By asserting this cause of action in their class action…
We previously reported on Governor Brown’s 2016/2017 budget change proposal as something employers should monitor.[1] The proposal included increased funding for the Labor & Workforce Development Agency (“LWDA”), the agency responsible for overseeing the Private Attorneys General Act of 2004 (“PAGA”). The budget proposal also contained recommendations for widespread changes to the way PAGA…
On April 4, 2016, the California Supreme Court took a stand by issuing a long-awaited opinion in Kirby v. CVS Pharmacy, Inc. The decision clarifies certain ambiguities in an employer’s obligation to provide suitable seating to employees. At issue was a provision in California’s Wage Orders that requires employers to provide all employees “with suitable seats when the nature of the work reasonably permits the use of seats.” The Court held that “nature of the work” refers to the task performed at a given location where the employee is claiming a right to a suitable seat, instead of a holistic approach. The Court also adopted a “totality of the circumstances” test to assess whether a work location “reasonably permits” suitable seating.
Background
Kirby v. CVS Pharmacy, Inc. arises from a putative class actions filed by a cashier and bank teller. The plaintiffs alleged their employer violated the suitable seating provision in various California Wage Orders by failing to provide seats. The plaintiffs appealed unfavorable district court decisions to the Ninth Circuit Court of Appeals. The Ninth Circuit requested clarification from the California Supreme Court on the proper interpretation of three areas of the suitable seating provision, including the meaning of “nature of work” and “reasonably permits,” and who bears the burden to show suitable seating is available.
Continue Reading The California Supreme Court Finally Weighs In on Suitable Seating
Denying an employer’s motion to compel individual arbitration of a wage and hour class action, a California federal court ruled that the employer’s dispute resolution program violated its employees’ right to engage in concerted action under the National Labor Relations Act (“NLRA”). Totten v. Kellogg Brown & Root, LLC. Notably, this ruling departs from the established trend of federal courts declining to follow the precedent set in In re D.R. Horton, Inc. (“Horton I”) and has significant implications for employers contemplating whether to remove a class action involving the enforcement of arbitration agreements to federal court.
Kellogg Brown & Root LLC’s (“KBR”) hired David Totten (“Totten”) in 2012. During his new hire orientation, Totten signed an agreement to participate in KBR’s Dispute Resolution Program (“DRP”) as a condition of his employment. The DRP required employees to arbitrate any claims against KBR that related to, or arose out of, their employment. The DRP also prohibited “KBR, employees and applicants from pursuing claims on a class, collective, or representative basis…” KBR terminated Totten’s employment in June 2014. Approximately one month later, Totten filed a class action against KBR for alleged wage and hour violations and unfair business practices.
Continue Reading Arbitration Agreements
Despite recent U.S. Supreme Court decisions strongly upholding the enforceability of class action waivers in arbitration agreements, opposition to class action waivers on both the political and legal fronts persists, especially in California. As interpreted by California courts, the state’s law traditionally has looked with disfavor on the enforcement of class action waivers, and that attitude continues despite repeated rebukes from the federal courts and the U.S. Supreme Court. Now, the Supreme Court, in a 6-3 decision, has held that the California Court of Appeal’s restrictive interpretation of an arbitration agreement is inconsistent with the Federal Arbitration Act (FAA), and that the FAA requires that the arbitration agreement, including the class action waiver, be enforced. DirecTV, Inc. v. Imburgia, et al., No. 14-462 (Dec. 14, 2015).
Denying class certification in an action for alleged meal period violations under the California Labor Code and Industrial Welfare Commission Wage Order No. 5-2001 (“Wage Order 5”), the California Court of Appeal ruled that a 24-hour residential care facility for developmentally disabled individuals did not have a policy that violated wage and hour laws common to the class members. Palacio v. Jan & Gail’s Care Homes, Inc. Specifically, the Court ruled that the residential care facility did not need to inform employees whom it required to waive their right to uninterrupted meal periods and eat their meals with the residents under Section 11(E) of Wage Order 5, that the employees could revoke the waiver at any time under Section 11(A).
Continue Reading No Class Action for Residential Care Facility Employees Over On-Duty Meal Periods
Employers doing business in California have seen a barrage of class actions and representative claims for various alleged wage and hour Labor Code violations. Some cases are premised solely on “technical” wage statement violations, where the employer may not have even realized the practice was occurring or was unlawful.
Continue Reading Why You Should Take a Closer Look at California’s New Piece-Rate Legislation
On October 26, 2015, a California Court of Appeal held that the Federal Arbitration Act (“FAA”) does not apply to interstate truck drivers, and as a result, it ruled that an employer’s class action waiver was unenforceable as a matter of public policy under the California Gentry rule. Garrido v. Air Liquide Industrial U.S. LP, No. B254490 (Cal. Ct. App. Oct. 26, 2015). This case is significant because it expands the scope of the “transportation worker” exemption under the FAA. Practically, numerous employers who physically distribute their own goods interstate will now be prevented from compelling individual arbitration of class action lawsuits.
Continue Reading Employer Cannot Enforce Class Action Waiver Because Court of Appeal Rules Interstate Truck Drivers Not Subject to FAA
Declining to enforce a representative action waiver contained in an arbitration agreement, the Ninth Circuit Court of Appeals, in San Francisco, has held that the Federal Arbitration Act (“FAA”) does not preempt California’s “Iskanian rule,” which prohibits waiver of representative claims under the state Private Attorneys General Act of 2004 (“PAGA”), Cal. Lab. Code § 2698 et seq. Sakkab v. Luxottica Retail North America, Inc., No. 13-55184 (9th Cir. Sept. 28, 2015).
The PAGA “authorizes an employee to bring an action for civil penalties on behalf of the state against his or her employer for Labor Code violations committed against the employee and fellow employees, with most of the proceeds of that litigation going to the state.” Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348, 360 (2014). Thus, a PAGA claim is a type of government enforcement action where the representative employee acts as the state’s proxy.Continue Reading California Ban on Waiver of Representative PAGA Claims Not Barred by Federal Arbitration Act, Federal Court Holds
