Articles Discussing General Workplace Issues in California.

A provision in an employment application requiring the applicant, but not the employer, to submit all disputes to arbitration was both procedurally and substantively unconscionable, and therefore unenforceable, the California Court of Appeal, Third Appellate District, has ruled. Wisdom v. AccentCare, Inc., No. C065744 (Cal. Ct. App. Jan. 3, 2012). The agreement was procedurally unconscionable, the Court said, because the trial court found the plaintiff-applicants had no opportunity to negotiate its terms, the applicable arbitration rules were not provided, and the employer did not explain the agreement’s meaning. The agreement also was substantively unconscionable because, unlike the applicant, the employer was not bound to submit claims to arbitration. Consequently, the appellate court affirmed the order denying arbitration.

In the first significant ruling of its kind, the Los Angeles Superior Court in Bright v. 99¢ Only Stores granted the defendant’s motion to strike the plaintiff’s representative Private Attorneys General Act (PAGA) allegations. The plaintiff, Eugina Bright, filed a complaint against 99¢ Only Stores in June 2009 alleging that the store failed to provide her, and all other cashiers, with suitable seating.

In a ground-breaking decision that will make it easier for employers to obtain restraining orders to protect their employees from violence in the workplace, a California appellate court has ruled that “all relevant evidence” must be considered in such proceedings – even otherwise inadmissible hearsay. Kaiser Foundation Hospitals v. Wilson, Nos. D058491 & D058492 (Fourth Dist., Div. One Dec. 5, 2011).

A number of new employment bills making significant changes in California employment law and requiring review of employer human resources policies and employee handbooks has been signed by California Governor Jerry Brown. The new laws are effective January 1, 2012, unless otherwise indicated. We highlight what we believe to be the most significant below.

Responding to a stated concern over human trafficking and goods that are produced by forced or child labor, the California Legislature passed the California Transparency in Supply Chains Act of 2010 with the goal of “ensur[ing] large retailers and manufacturers provide consumers with information regarding their efforts to eradicate slavery and human trafficking from their supply chains.”1 This is the first state or federal law of its kind. Beginning January 1, 2012, every retailer and manufacturer doing business in California with annual worldwide gross receipts exceeding $100 million must conspicuously disclose on its website the extent to which it does the following:

In a case of first impression, the California Court of Appeal for the Second Appellate District ruled that there is no individual liability for discrimination or retaliation under California Military and Veterans Code section 394, which protects from discrimination employees who are called to active duty. Haligowski v. Superior Court of Los Angeles County, No. B231310 (Nov. 11, 2011).

In the latest twist in the developing law regarding the preemptive scope of California’s Uniform Trade Secrets Act (UTSA)1 a California federal court in Amron International Diving Supply, Inc. v. Hydrolinx Diving Communication, Inc.2 (“Amron”) recently issued a decision reinvigorating the growing tension between courts addressing the issue of UTSA preemption – a tension that, unfortunately, is likely to continue into the foreseeable future.

Under facts never before addressed by a California court, a California Court of Appeal recently ruled that when an on-duty employee injures an individual while engaging in arguably personal pursuits, the employer is still liable for the injuries. Vogt v. Herron Construction, No. E052434 (Fourth Dist., Div. Two Nov. 1, 2011).

In the last hours of his opportunity to veto new legislation, California Governor Jerry Brown signed SB 459. Similar to a bill previously vetoed by former Governor Schwarzenegger and dubbed the “Job Killer Act” by business, SB 459, effective January 1, 2012, might be called by some critics the “Small Business Killer Act.” Championed by organized labor and supported by Democratic legislators, the practical consequences could prove to discourage businesses from utilizing independent contractors based in California, while also discouraging service-providing sole proprietorships and other independent contractors from providing services to other businesses in California.

On January 1, 2012, retailers must be in compliance with the California Transparency in Supply Chains Act of 2010. Compliance with the Act is relatively simple: retailers are not required to take any affirmative action to ensure that products in their distribution channel do not emanate from companies that rely on slave labor, but must post on their website what, if anything, they are doing to eliminate slave labor from their supply chains.

In 2011, for the first time since 2003, California’s legislative process was controlled by a governor and a legislature of the same party. Yet the results at the end of this year’s session were not as one-sided as some had predicted or expected.

Effective January 1, 2012, California will impose significant restrictions on an employer’s ability to obtain a credit report for employment purposes.

On October 10, 2011, the Office of California Governor Jerry Brown announced that Governor Brown had signed AB 22, legislation that adds a new provision to the California Labor Code and amends the state’s Consumer Credit Reporting Agencies Act (CCRAA)1 to restrict the discretion that private and public sector employers have to use “consumer credit reports”2 for hiring and personnel decisions. Together, the new laws, which take effect on January 1, 2012, limit when employers lawfully can use consumer credit reports and impose notice and disclosure obligations on employers who intend to do so.

When an employer in California hires an independent contractor, what duty, if any, does the hirer owe to the contractor’s employee injured on the job? Generally, when employees of independent contractors are injured in the workplace, their remedy is limited to workers’ compensation. They cannot sue the contractor or the party that hired the contractor. This applies even where the on-the-job injury is allegedly caused by the hirer’s failure to comply with workplace safety requirements concerning the precise subject matter of the contract between the hirer and the independent contractor, the California Supreme Court has ruled, giving Golden State employers a small victory. Seabright Ins. v. US Airways, No. S182508 (Aug. 22, 2011). By hiring the independent contractor, the Court explained, the hirer implicitly delegates to the contractor any tort law duty it owes to the contractor’s employees to ensure the safety of the specific workplace that is the subject of the contract.

An employee who uses false documentation to secure employment with an employer has no recourse for an allegedly wrongful failure to hire, the California Court of Appeal has ruled. Salas v. Sierra Chemical Co., No. C064627 (Cal. Ct. App. Aug. 9, 2011). In addition, the “after-acquired-evidence” doctrine (where, after an allegedly discriminatory termination or refusal to hire, the employer discovers employee or applicant wrongdoing that would have resulted in the challenged termination or refusal to hire regardless of any discrimination) provides a complete defense to the employee’s claims the employer discriminated against him due to an on-the-job injury, refused to accommodate his disability, and denied him employment as punishment for filing a claim for workers’ compensation benefits. His claims also will be barred by the doctrine of unclean hands if his misrepresentation jeopardizes the employer.