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In the June 2014 Iskanian decision, the California Supreme Court carved out an exception to the general rule that class action waivers in arbitration agreements are valid, and concluded that the right to bring representative Private Attorney General Act (“PAGA”) claims cannot be waived through arbitration agreements. PAGA allows individual workers to pursue Labor Code violations against employers in a representative action on behalf of government authorities.
Continue Reading PAGA Waivers may be Enforceable in Federal Courts

In a recent opinion with important implications for California businesses, the California Supreme Court held that franchisors are not vicariously liable for the conduct of employees managed by its franchisees.

In Patterson v. Domino’s Pizza, LLC, et al., the plaintiff, a service employee at a Southern California Domino’s Pizza franchise, alleged that she had been sexually harassed by her supervisor, the store’s Assistant Manager.  She asserted claims against the alleged harasser, the franchisee, and Domino’s Pizza, the franchisor, alleging that, although she (and the alleged harasser) formally were employed by the franchisee, the franchisor was vicariously liable for her injuries.  More specifically, she argued that because the franchisor exercised extensive control over the franchisee’s operations, the franchisee was an “agent” of the franchisor and the franchisor was an “employer” of the franchisee’s employees, subjecting the franchisor to liability for injuries arising out of the employees’ performance of their job duties. 
Continue Reading California High Court Rules that Franchisors are Not Liable for Workplace Injuries Inflicted By Franchisees’ Employees

California Governor Jerry Brown recently signed into law AB 2751, a “clean up” bill that expands the bases and remedies for immigrant-related retaliation, and clarifies the penalty and employee information provisions of AB 263 and SB 666.

AB 263 and SB 666 were enacted last year to protect immigrant workers against unlawful retaliation. These two bills have since operated in conjunction to prohibit employers from engaging in various “immigration-related practices” against employees who had exercised certain rights protected under state labor and employment laws. These “unfair immigration-related practices” included threatening to file or filing a false police report or threatening to contact or contacting immigration authorities in retaliation for some protected activity engaged in by the employee (e.g., filing a workplace complaint).
Continue Reading California Broadens Immigration-Related Retaliation Protections

A lawsuit against a trucking company for allegedly misclassifying drivers as independent contractors under California’s Unfair Competition Law (“UCL”) was not preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”), the California Supreme Court has ruled unanimously. P. ex rel. Harris v. Pac Anchor Transp., Inc., No. S194388 (Cal. July 28, 2014). The Court found the lawsuit did not relate to the company’s “price, route or service,” the concerns of the federal law. Therefore, the Court allowed the State of California’s lawsuit for unfair competition arising from the company’s alleged violations of California’s labor and insurance laws to proceed.
Continue Reading Federal Law Does Not Preempt State Unfair Competition Claim, California Supreme Court Rules

In a case alleging misclassification of an independent contractor in the transportation industry, the California Supreme Court has found that the California unfair competition law (Bus. & Prof. Code, § 17200 et seq.) (“UCL”) was not preempted by the Federal Aviation Administration Authorization Act of 1994 (Pub. L. No. 103-305 (Aug. 23, 1994) 108 Stat.…

The California Supreme Court has narrowed application of the “commission exemption” from overtime, dealing employers a setback in Peabody v. Time Warner Cable, Inc., No. S204804 (Cal. Jul. 14, 2014). Under Wage Orders 4 and 7, sales employees who earn more than 50 percent of their wages in commission and earn at least 1.5…

In Salas v. Sierra Chemical Co., No. S196568 (Cal. June 26, 2014), the California Supreme Court has ruled that federal immigration law did not preempt California law extending employee protections and remedies “regardless of immigration status,” except to the extent it authorized damages for any period after the employer’s discovery of an employee’s ineligibility…

In a decision that should not go unnoticed in the wake of the California Supreme Court’s ruling in Iskanian v. CLS Transp. Los Angeles, LLC which rejected prior limitations on class action waivers but held representative actions under California’s Private Attorneys General Act cannot be waived, the California Court of Appeal in Malone v. Superior Court (California Bank & Trust), Case No. B253891 (June 17, 2014) upheld an employer’s delegation clause requiring issues relating to the enforceability of an employer’s arbitration agreement to be sent to the arbitrator for resolution. While the U.S. Supreme Court continues to uphold arbitration provisions pursuant to the Federal Arbitration Act (FAA), California courts have been reluctant to follow the Supreme Court’s clear guidance. Malone suggests the California tide is beginning to turn in favor of arbitration.
Continue Reading California Tide is Turning in Favor of Arbitration

Overruling Gentry v. Superior Court, 42 Cal. 4th 443 (2007) as preempted by the Federal Arbitration Act (“FAA”), the California Supreme Court upheld the validity of class action waivers in employment arbitration agreements. Iskanian v. CLS Transportation Los Angeles, LLC, No. S204032  (Cal. Jun. 23, 2014).  Declining to follow D.R. Horton, 357 NLRB No. 184 (Jan. 3, 2012), the Court also rejected that class action waivers are unlawful under the National Labor Relations Act (“NLRA”).  However, the Court further ruled that employers could not require waivers of representative actions under the California Private Attorney General Act (“PAGA”) as contrary to public policy and unwaivable as a matter of state law and were not preempted by the FAA.  Accordingly, the Court reversed the judgment of the Court of Appeal and remanded the case for further proceedings.
Continue Reading California Supreme Court Okays Class Action Waivers and Overrules Gentry v. Superior Court, but Bans Waivers of Representative Actions Under the PAGA

Calling “seriously flawed” a lower court’s trial management plan which used sampling evidence to prove class liability and damages under California law, the California Supreme Court has vacated a $15-million judgment against the employer for overtime pay and remanded the case for a new trial on both liability and damages. Duran v. U.S. Bank National …