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California Court Rejects Arbitration Agreement for Unconscionability

On October 27, 2015, the California Court of Appeal, in an unpublished decision, issued yet another ruling applying the unconscionability doctrine to arbitration agreements in the employment context. In Prince v. Pletcher, B260864, a former production company employee alleged that the defendants violated California’s Fair Employment and Housing Act (FEHA) and committed various other wrongs including fraud, misrepresentation, and breach of contract. The defendants moved to compel arbitration and the plaintiff argued that, among other things, the arbitration agreement was both procedurally and substantively unconscionable. The Court of Appeal affirmed the trial court’s denial of the defendants’ motion to compel arbitration.

California Employers Beware: Many California Cities Have Enacted Minimum Wage Ordinances

California’s minimum wage increased to $10 per hour effective January 1, 2016. This is the second increase in just 18 months under legislation originally signed by Governor Jerry Brown in 2013. Unfortunately, this latest increase to the statewide minimum wage is not the only one facing California employers. More than a dozen cities across California have already enacted their own minimum wage ordinances requiring employers to pay workers at rates as high as $15.37 per hour – and several other cities are looking to follow suit. It is a hodgepodge environment in our state, when it comes to minimum wage regulation.

Arbitration Agreements

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.

PAYING PIECE-RATE WORKERS

Beginning on January 1, 2016, a new California law (AB 1513) affects how employers must pay “piece-rate” workers (those employees paid for completing a particular task or making a particular piece of goods). Piece-rate compensation is common in certain industries to incentivize workers to complete tasks efficiently, such as automobile mechanics or agricultural workers. However, following the passage of AB 1513, paying piece-rate workers is more complicated.

California Court of Appeal Holds Employee’s Agreement to Reimburse Training Costs in Event of Resignation Does Not Offend Public Policy

A California court recently upheld an employer’s right to condition free training on continued employmentin the matter of USS-POSCO Industries v. Case, No. A140457 (Jan. 26, 2016).

What California Retail Employers Need to Know About Accommodating Pregnancy

Navigating the California laws on discrimination and accommodation of pregnant employees is a significant challenge for retail employers. The Golden State’s protections for pregnant employees are many and they differ from those of federal law and of other states.

AB 816: Cooperatives come to California

Jason Brown’s article “AB 816: Cooperatives come to California” was featured in the Daily Journal on January 20, 2016.

Court of Appeal: Employer Entitled to Recoup Training Costs Under Repayment Agreement

Employers invest in employees in different ways. For example, sometimes employers pay for employees to undergo significant training. And they hope the employee will not promptly leave and use that training while working for another employer. So, they may ask the employee to repay the cost of the training if they leave employment within a period of time after receiving the training. At the same time, California law favors employee mobility, and disfavors employers' passing along the costs of doing business to employees.

WHY AT-WILL EMPLOYMENT STILL MATTERS

The California Labor Code still includes section 2922, which sets out a fundamental employment principle: employment is presumed “at-will.” Absent an agreement to the contrary, either employer or employee can end the employment relationship at any time, for any reason. That contrary “agreement” may come in the form of an individual employment contract, a collective bargaining agreement, or a state’s civil service law.

A New Year’s Resolution for California Employers: Fair Pay Act Compliance

California employers are preparing for the effects the Fair Pay Act—the new law signed by Governor Brown last October that significantly changes California’s gender equality pay law. Senate Bill 358 (SB 358), which went into effect on January 1, 2016, requires employers to pay employees of the opposite sex equivalent wages for “for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” This is a significant change from the law’s former requirement that employees of the opposite sex receive equal pay for “equal work.”