While employees continue to challenge binding arbitration agreements with gusto, California courts have shown a consistent willingness to enforce agreements where fundamental fairness exists. In Serpa v. California Surety Investigations, Inc., No. B237363 (Cal. Ct. App. Apr. 19, 2013), a California Court of Appeal reversed a trial court order denying the employer’s motion to compel arbitration. Even though the arbitration agreement itself was not mutual because it required only the employee to arbitrate disputes, the employer’s handbook — which was incorporated into the arbitration agreement — applied the arbitration policy to the employer and employees alike. Therefore, the Court held the handbook “salvaged” the arbitration agreement. It also rejected the argument that the employer could unilaterally change the handbook policy at any time, finding that the implied covenant of good faith and fair dealing limited the employer’s right to alter the agreement unilaterally and defeated the employee’s illusory promise and unconscionability theories. Click here for more information.

The California Court of Appeal has ruled that public agencies are prohibited from using partners in the same law firm as an advocate in a contested matter and as an advisor to the decision maker in the same matter, even if the law firm has established an ethical wall between the partners. Sabey v. City of Pomona, No. B239916 (Cal. Ct. App. Apr. 16, 2013). The Court found that, although there was no evidence of bias or improper conduct — as the attorneys did not communicate about the matter and could not access each other’s files — the situation created the appearance of unfairness and bias because the attorneys, as partners, owed one another a fiduciary duty of loyalty. Consequently, the Court held that the public agency’s law firm could not serve as both advocate and advisor, and the use of an ethical wall was not sufficient to prevent actual or the appearance of unfairness and bias. For details on Sabey, please see Private Attorneys from Same Firm Cannot be Public Entity’s Advisor and Advocate in Single Matter, California Court Rules.

Employees often attempt to prove discrimination by offering evidence that other, similar employees were subject to the same treatment, often referred to as “me too” evidence. The California Court of Appeal rejected an employee’s attempt to use “me too” evidence when the employee sought to introduce evidence showing how employees outside his protected class were treated. Hatai v. Department of Transp., No. B236757 (Cal. Ct. App. Mar. 28, 2013). However, the Court allowed the employee to introduce evidence of discrimination against other persons of the same race as the employee.

Kenneth Hatai, who was of Japanese and Asian ancestry, claimed that his boss, Sameer Haddadeen, who was of Arab ancestry, discriminated against him based on his Asian national origin and ancestry. At trial, Hatai attempted to introduce evidence showing that Haddadeen discriminated against anyone who was not an Arab. The trial court refused to allow Hatai to introduce this evidence, and the Court of Appeals agreed and ruled that the “me too” doctrine only permitted Hatai to present evidence that Haddadeen subjected other employees of East Asian or Japanese ancestry to similar discriminatory conduct, but not employees outside of his protected class.

For details on Hatai, please see California Appeals Court Rejects ‘Me Too’ Evidence in Race and National Origin Discrimination Case.

Class certification is unwarranted where auto center managers and assistant managers alleged they were improperly classified as exempt and denied overtime and meal and rest breaks in violation of the California Labor Code, the California Court of Appeal has ruled in Dailey v. Sears, Roebuck and Co.Statistical Sampling Could Not Establish Liability in Wage-Hour Class Action, California Court Rules, for more information.) The Court also held the class representative failed to show the employer had a uniform policy of depriving managers of meal or rest breaks., No. D061055 (Cal. Ct. App. Mar. 20, 2013). Affirming a trial court determination, the Court concluded that the class representative could not rely on random statistical samples to establish liability and that individual issues predominated over common issue in this case. (See our article,

The California Court of Appeal has held in a case under the California False Claims Act (FCA) that California’s Rules of Professional Conduct, generally prohibiting an attorney, directly or indirectly, from communicating with a represented party, including the party’s employees, did not apply to prohibit communications between two qui tam plaintiffs and the defendant-employer’s current employees. San Francisco United Sch. Dist. ex. rel. Contreras v. First Student, Inc., No. A134405 (Cal. Ct. App. Feb. 19, 2013). For details on Contreras, please see Plaintiffs Can Communicate with Defendant’s Employees in California False Claims Action, Court Rules.

A positive development for employers. To establish liability in “mixed motive” employment discrimination cases under the California Fair Employment and Housing Act (FEHA), the employee must show that unlawful discrimination was a substantial factor motivating the adverse employment decision, the California Supreme Court ruled. Harris v. City of Santa Monica, No. S181004 (Cal. Feb. 7, 2013). However, if the employer proves that it would have made the same decision absent such discrimination, a court may not award damages, back pay, or order reinstatement. The employee could seek declaratory and injunctive relief, as well as attorney’s fees and costs. For the details, please see California Supreme Court Requires Discrimination as Substantial Motivating Factor in Mixed Motive Cases, Limits Damages Available to Employees.

California employers should be prepared to welcome support dogs and other animals into the workplace as a reasonable accommodation for disabled workers requiring support under new disability regulations issued by the California Fair Employment and Housing Commission. The new regulations significantly expand protections for disabled workers and outline new requirements regarding reasonable accommodations, the interactive process, and proof of discrimination. For information on the key provisions, please see New California Disability Regs Allow Support Animals in Workplace, Mandate Broad Protections for Disabled Workers

 A California court of appeal has recently ruled that an employee is not protected by the Fair Employment and Housing Act (“FEHA”) for refusing to participate in or cooperate with a Company investigation into misconduct. McGrory v. Applied Signal Tech., Inc., (Cal Ct. App. No. H036597, 1/24/2013). In McGrory, California’s Sixth Appellate District rejected an employee’s claim that his employer committed unlawful retaliation by terminating the employee based on the employee’s uncooperative and deceptive behavior during a Company investigation into allegations of sex discrimination. The Court held that giving untruthful information in an investigation or failing to cooperate does not constitute “protected conduct” under the FEHA. Employers are not prohibited under the FEHA from taking action against employees on the basis of such conduct.

The Court reasoned that a company investigation does not meet the definition of a “proceeding” which is protected by the FEHA. Protected proceedings are those which are conducted by California agencies such as the Department of Fair Employment and Housing. The Court relied on analogous federal authority under Title VII to support its decision, as no California state authority addressed the issue. The Court also held that an employer’s honest communication to coworkers about the basis for the termination was not defamatory, as it met the standard for a privileged statement of opinion on a topic of mutual interest.

The Court acknowledged the limitation that uncooperative or deceptive conduct might be protected if it is in opposition to an unlawful practice. Absent such opposition, however, McGrory is a good case for employers dealing with belligerent employee witnesses. Employers are advised to consult with legal counsel to determine whether an employee’s conduct under such circumstances is protected and also to review how such a case would be viewed by the federal National Labor Relations Board under the National Labor Relations Act.

The California Supreme Court has ruled that unions may continue to engage in “peaceful” picketing and other otherwise lawful union activities on an employer’s private property during a labor dispute and that two California anti-injunction statutes regarding labor activities do not run afoul of the First or Fourteenth Amendments of the U.S. Constitution. Ralphs Grocery Co. v. United Food & Commercial Workers Union, Local 8, No. S185544 (Cal. Dec. 27, 2012). The Court’s decision continues California jurisprudence favoring unions as a special interest group with the right to engage in what would be viewed in other states as an unlawful trespass. See our detailed article discussing the cases entitled, “Peaceful Union Picketing Permitted on Private Property, California High Court Rules, Upholds Labor Anti-Injunction Statutes”

There are a number of new California  laws which could impact the workplace. We prepared a chart which lists the major pieces of employment legislation introduced in the California State Senate and Assembly during 2012 that were signed into law by Governor Jerry Brown. All of the bills listed become effective January 1, 2013. Please click here for a list of new laws.