Articles Discussing Human Resource 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 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).

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 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.

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.

Reversing an order compelling arbitration, the California Court of Appeal has held that an arbitration agreement in an employee handbook was unconscionable because it was a contract of adhesion, failed to give adequate notice of the arbitration rules that will apply, and lacked mutuality. Thus, the Court held that the agreement was unenforceable and ordered the trial court to vacate its order compelling arbitration.

Showing continued hostility toward employee arbitration agreements, the California Court of Appeal has struck down as unconscionable an arbitration agreement because the employer failed to provide the high-level employee a copy of the arbitration rules referenced in the agreement.