California Employment Law Blog

California Court of Appeals Rules that Arbitration Clause is Unconscionable and Unenforceable in Recent Employment Decision

Published on: March 17, 2022 | The Nourmand Law Firm, APC

Many corporations and other California employers with large numbers of employees like to use arbitration agreements with their employees to streamline the process of addressing employment law-related issues. At first glance, arbitration agreements offer both employees and employers a simplified process to address grievances between the parties. In practice, however, arbitration agreements function to put employees at a disadvantage when compared to other acceptable ways of addressing complaints and disputes. The California Court of Appeals recently addressed a claim by an employee that the arbitration process they agreed to was unfair and should not be enforced.

The plaintiff in the recently decided appeal had been an employee of the defendant, a large communications company. As a condition of her employment with the defendant, the plaintiff was required to enter into an arbitration agreement to resolve any disputes. The agreement included provisions that would make it more difficult for employees to succeed at making claims against the defendant. The plaintiff was terminated from employment with the defendant less than one year after starting the job, and she alleged that the termination was unlawful. The plaintiff made several claims in state court under the Fair Employment and Housing Act, alleging unlawful termination.

In response to the plaintiff’s lawsuit, the defendant attempted to enforce the arbitration agreement, remove the plaintiff’s claims from state court, and collect attorneys’ fees from her for filing the suit in the first place. The plaintiff responded that the arbitration clause was unconscionable and against public policy because employees were essentially forced to give up their legal rights to a fair process in order to work for the defendant. The California state court ultimately agreed with the plaintiff, finding that the defendant was violating public policy by forcing their employees to adhere to an unfair arbitration agreement. The defendant appealed the ruling to the state Court of Appeals, where the lower court’s ruling and reasoning was affirmed. Specifically, the court ruled that several provisions of the arbitration agreement were unconscionable and unenforceable, and as a result, the plaintiff’s claim shall proceed in the state court.

California Court of Appeals Revives Workplace Discrimination Claim Against City of San Francisco

Published on: February 15, 2022 | The Nourmand Law Firm, APC

Addressing issues with employment law in California can be a confusing and daunting task. Municipal, state and federal laws can have a bearing on a potential case, and civil, administrative, and even criminal laws and procedures may dictate what relief a plaintiff is entitled to. Usually, employees who have suffered unfair treatment or discrimination in the workplace are required to seek an administrative remedy before pursuing a civil claim in the state or federal court. A plaintiff’s failure to timely and adequately pursue an administrative remedy could prevent them from obtaining relief through a civil suit. The California Court of Appeals recently addressed an appeal filed by a woman whose workplace discrimination lawsuit had been dismissed for failing to properly seek an administrative remedy before filing the civil lawsuit.

In the recently decided case, the plaintiff is a woman who had been employed by the defendant, the City of San Francisco, for over 15 years when she developed a vision problem. According to the facts discussed in the appellate opinion, the plaintiff’s vision problem resulted from a disability that developed in response to excessive computer use through the plaintiff’s career with the city. Upon the advice of her medical providers, the plaintiff requested to be reassigned to a job with limited computer use as a reasonable accommodation for her disability. After several months without a new work assignment, the plaintiff retired on July 30, 2016.

After leaving her post, the plaintiff sought administrative relief for her discrimination claim through the California Department of Fair Employment and Housing. Although she started the complaint process in February of 2016, the DFEH did not prepare a complaint for her to sign and submit until July 2, 2017. After completing the regulatory process through the DFEH, the plaintiff filed a civil claim in state court against the defendant, alleging discrimination and failure to accommodate her disability.

California Court of Appeals Orders Increase in Jury Verdict on Retaliation Claim

Published on: January 30, 2022 | The Nourmand Law Firm, APC

When California employment law claims proceed through trial and are put before a jury, the initial verdict amounts may be subject to modification by the judge based on legal requirements. Often, a jury will agree to award a plaintiff an amount that is prohibited by law. Trial courts have the discretion to reduce jury awards that are inconsistent with the law. The California Court of Appeals recently addressed a case where the trial court had reduced the jury’s award for attorney’s fees to a plaintiff by nearly $700,000, and the plaintiff appealed the reduction.

According to the facts discussed in the appellate opinion, the plaintiff in the recently decided case was a Black man over 50 who was employed by the defendant, an auto parts store. The plaintiff alleged in his complaint that he was a victim of workplace discrimination and harassment based on his race and age. The plaintiff also claimed that the defendant retaliated against him for making in-house complaints about how he was being treated.

The claims went to trial, after which a jury decided that the plaintiff made a valid claim for retaliation, although the other claims were not accepted by the jury. As part of the jury’s verdict, the plaintiff was awarded nearly $900,000 in attorney’s fees for pursuing the valid claim. After the verdict was awarded, the trial judge reduced the attorney fee award by about $700,000, ruling that only the portion of the fees attributable to the retaliation claim should be awarded to the plaintiff and not the fees incurred pursuing the two other claims.

California’s Unfair Competition Law Can Help Workers Collect Unpaid Wages

Published on: January 15, 2022 | The Nourmand Law Firm, APC

California workers who have been subject to unfair or illegal employment practices by their employers may have several different routes to fight back against unfair treatment by employers. In addition to state legal remedies, such as a breach of contract claim, wronged employees can pursue federal legal and administrative remedies through federal courts or the U.S. Department of Labor. California has also passed laws allowing wronged employees to seek equitable remedies for mistreatment.

One such remedy comes through applying California’s Unfair Competition Law (UCL), which gives workers a separate cause of action to address unfair labor practices. The California Court of Appeals recently heard a case in which a plaintiff brought a claim of unlawful business practices under the UCL against their former employer, alleging that the defendant’s failure to pay the plaintiff’s due wages was a violation of the law. In the recently decided case, the plaintiff brought suit against the defendant for failing to pay sufficient wages under an employment agreement. According to the procedural history discussed in the appellate opinion, the plaintiff made legal claims for breach of contract based on unpaid wages and failure to reimburse business expenses and brought up equitable claims under the UCL with the same complaints.

The defendant responded to the plaintiff’s lawsuit by seeking to compel arbitration of the plaintiff’s claims as agreed to in the employment contract. The parties’ employment contract contained a provision that legal claims for wage loss would be handled in arbitration; however, the contract specifically stated that equitable claims under the UCL were not subject to mandatory arbitration. The plaintiff agreed to dismiss their non-UCL claims but sought to have the UCL claim heard in court, not at arbitration. Based on the language of the arbitration agreement in the employment contract, the trial court denied the defendant’s motion to compel arbitration, triggering the appeal.

Emotional Distress Damages in California Under the Civil Rights Act of 1964

Published on: December 31, 2021 | The Nourmand Law Firm, APC

The United States Supreme Court is set to address whether emotional distress damages are available to those who prove disability discrimination under federal law. Disability discrimination can impact a person and their family in a myriad of ways. While a financial loss is the most apparent, emotional distress can have a life-changing impact on a person’s livelihood. California state and federal law prohibit discrimination based on a person’s disability in employment, government programs, private and non-profit businesses, commercial facilities, transportation, and telecommunications. Those who experience discrimination in these settings can hold the violating party liable for their damages. However, plaintiffs often encounter challenges in establishing emotional distress damages.

Emotional distress damages include a variety of harms, including:

Psychiatric conditions such as anxiety and depression;

California Employee Fends Off Arbitration Clause in PAGA Suit

Published on: December 15, 2021 | The Nourmand Law Firm, APC

California employment laws afford workers a variety of protections and legal rights. One of the most essential rights employees have is the right to litigate certain claims against their employer.

The main alternative to court for resolving a dispute between an employee and an employer is arbitration. Arbitration uses a supposedly neutral third party to resolve disputes in and out of the employment context. Because arbitration often yields a faster resolution than a trial would, many employers require their employees to sign an arbitration agreement as a condition of their employment. Once signed, arbitration agreements essentially waive an employee’s right to sue her employer in court.

A recent case helped cement the principle that California employees cannot be compelled to arbitrate claims under a major employment law in the state, even when they have signed an agreement to arbitrate disputes arising out of the employment.

The Difference Between an Employee and an Independent Contractor Under California Employment Laws

Published on: November 30, 2021 | The Nourmand Law Firm, APC

Given the growth of the “gig economy” in recent years, a growing number of companies are relying less on employees and more on independent contractors. While hiring independent contractors affords companies and individuals greater flexibility, it also opens the door to potential abuses by employers.

Employees Versus Independent Contractors

Historically, most companies hired employees to perform all the necessary tasks related to the business. However, hiring an employee is expensive for a company because it must pay payroll taxes and often feels competitive pressure to provide employees with certain benefits, such as health and dental insurance. Moreover, employees are entitled to receive a minimum wage, and certain employees must be paid overtime wages. Employees are also covered by workers’ compensation insurance.

Independent contractors, on the other hand, are much less expensive for businesses to use. For example, a business can use independent contractors only when needed without worrying about paying for their benefits. While the use of independent contractors used to only be common in certain industries, that’s changed in recent years.

California Court Finds Arbitration Agreement Signed as Precondition to Employment Unconscionable

Published on: November 15, 2021 | The Nourmand Law Firm, APC

Although arbitration agreements mean that a case must be resolved through arbitration, not all agreements are enforceable. If a party does not have a real opportunity to negotiate the terms of the contract or a contract heavily favors one party, these may be indications that the agreement is unconscionable and thus, unenforceable. A California court recently found that an arbitration agreement signed between an employer and an employee was unconscionable based on those circumstances. In that case, the plaintiff submitted an electronic application for employment with a property management company. The plaintiff electronically signed an agreement that was required as a precondition to employment. In the agreement, it stated that the plaintiff and the property management company agreed to settle all “claims, disputes, and controversies” related to the plaintiff’s application for employment, employment, and cessation of employment with the company exclusively through final and binding arbitration.

The plaintiff obtained employment at the company and later filed a claim against the company, alleging that he was not compensated for overtime work or certain business expenses and that he was not provided with accurate wage statements. He also alleged that he injured his back at work, took leave, and once he was able to return to work, he never heard back from the company. The company argued that the suit was required to be resolved through arbitration based on the language of the agreement. The plaintiff argued in part that the agreement was unconscionable and could not be enforced.

Unconscionability Under California Law

Aiding and Abetting Employment Discrimination in California

Published on: October 27, 2021 | The Nourmand Law Firm, APC

The Court of Appeals of California recently issued an opinion addressing several employment claims, including whether a union may be responsible for aiding and abetting discrimination. The plaintiff in this matter filed a wrongful termination case against his employer, a janitorial services company, and the union that represents the employer. The relevant issue on appeal is whether the trial court erred in denying the plaintiff’s leave to amend to claim that the Union aided and abetted the employer’s violation.

In 2012, the employer hired the plaintiff to work as an “additional services” employee to provide janitorial services at a location. About a year later, the employer-provided written confirmation that the plaintiff was a “permanent employee.” In 2014, the plaintiff took leave under the California Family Rights Act (CFRA) to care for his terminally ill wife. A day after returning to work, his supervisor informed him that he was terminated because another employee had filled the position. Shortly after his termination, the plaintiff filed a discrimination and retaliation charge against his employer and the Union.

In response, the employer argued that they unintentionally and erroneously issued the plaintiff a “permanent employee” letter. Further, they explained that another employee was next in line to obtain the position according to their seniority scheme. The Union argued that their actions were not motivated by discrimination but solely their responsibility to enforce their seniority hiring protocols.

The Impact of the Anti-SLAPP Statute in California Employment Discrimination Lawsuits

Published on: October 15, 2021 | The Nourmand Law Firm, APC

California’s anti-SLAPP statute refers to the Strategic Lawsuits Against Public Participation. Lawmakers designed the statute to protect those who wish to speak out about public policy issues against more powerful corporate entities. In California, the term primarily refers to lawsuits stemming from discouraging speech about significant issues or public participation in governmental proceedings.

While the statute provides many benefits, it also has significant implications for California employees wishing to pursue employment discrimination or retaliation against their employers. Anti-SLAPP statutes permit defendant employers to present a motion to strike causes of action that stems from “any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution; in connection with a public issue.”

Following a California Supreme Court case, the Court held that the anti-SLAPP statutes do not include an exception for retaliation or discrimination claims. As such, a plaintiff’s allegations against an employer’s motives will not protect the claim from preliminary screening for merit.