To close out the 2019 legislative season, Governor Gavin Newsom signed dozens of bills into law, which will have lasting impacts for California employers. In addition to the summaries and clarifications from prior blog posts, below is an overview of key new employment laws.
Continue Reading 2020 Vision: California’s New Employment Laws
Arbitration Agreements
It’s Official: Newsom Expands The Definition of “Employee” Under California Law
On September 18 2019, Governor Gavin Newsom signed into law AB-5, which codified the California Supreme Court’s Dynamex v. Superior Court decision. In Dynamex, the California Supreme Court adopted the so-called “ABC” test to determine coverage under the Industrial Welfare Commission (“IWC”) Wage Orders. AB-5 expands the application of the ABC test to the entire California Labor Code and will take effect on January 1, 2020.
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Three Major Workplace Bills to Land on Gov. Gavin Newsom’s Desk
Following the launch of the so-called “MeToo” movement, the California Legislature (controlled by a Democratic supermajority) has aggressively churned out new bills that further strengthen the ability for workers to sue their employers and increase the already-significant regulatory burden on these companies. This fall, the California Legislature is geared to send three significant bills to Governor Gavin Newsom that all California employers should carefully follow.
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Southern District of New York Invalidates State Ban on Mandatory Arbitration of Harassment and Discrimination
By Brian Murphy & Myles Moran on
On June 26, 2019, Southern District of New York Judge Denise Cote granted a motion to compel arbitration of a plaintiff’s sexual harassment claims finding that the New York State prohibition on mandatory arbitration of sexual harassment claims is preempted by the Federal Arbitration Act (“FAA”). As we mentioned in our blog upon this law’s enactment, the United States Supreme Court has routinely held that state laws expressly identifying a category of non-arbitrable state law claims are preempted by the FAA. In Latif v. Morgan Stanley & Co., the Southern District followed the Supreme Court and found the New York ban on mandatory arbitration of sexual harassment claims unenforceable.
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U.S. Supreme Court Upholds Individualized Arbitration Where Agreement Is Ambiguous on Issue of Class Arbitration
In a 2010 decision, Stolt-Nielsen S. A. v. Animalfeeds International Corp., the United States Supreme Court held that parties may not be compelled to submit to class arbitration under the Federal Arbitration Act (FAA) unless there is a contractual basis for concluding that they agreed to do so. The Court held that such an agreement could not be presumed from the fact that the arbitration agreement is “silent” on the issue of class arbitration or the mere fact that the parties agreed to arbitrate.
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Did New Jersey Just Try to Ban Employment Arbitration Agreements?
By James Hays on
On March 18, 2018, the New Jersey Law Against Discrimination (NJLAD) was amended to prohibit prospective waivers of substantive and procedural rights or remedies relating to a claim of discrimination, retaliation, or harassment and that provisions in employment contracts waiving such rights shall be deemed against public policy and unenforceable. The new amendment further provides that “no person shall take any retaliatory action, including but not limited to failure to hire, discharge, suspension, demotion, discrimination in the terms, conditions, or privileges of employment, or other adverse action, against a person, on grounds that the person does not enter into an agreement or contract that contains a provision deemed against public policy.”…
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SCOTUS Holds Independent Contractor Truck Drivers Exempt from Arbitration Under FAA
On January 15, 2019, the Supreme Court issued its decision in New Prime Inc. v. Oliveira, where it decided independent contractor truck drivers cannot be forced into arbitration. The Court’s decision is based on Federal Arbitration Act § 1, which excepts from coverage disputes involving “contracts of employment” with “workers engaged in foreign or interstate commerce.” …
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U.S. Supreme Court Rejects ‘Wholly Groundless’ Exception to Delegation Clauses in Arbitration Agreements
By John Ellis & Tyler Johnson on
On January 8, 2019, the United States Supreme Court issued a unanimous opinion in Henry Schein, Inc. v. Archer & White Sales, Inc. strengthening the enforceability of arbitration “delegation clauses.” These clauses have been previously upheld by the U.S. Supreme Court and allow parties to agree that an arbitrator, rather than a court, will decide the threshold issue of whether a dispute must be arbitrated, as well as the merits of the dispute. The Supreme Court in Henry Schein rejected a doctrine adopted by several federal Circuit Courts of Appeals and the California Court of Appeal, which permitted courts to decline to enforce delegation clauses if the underlying assertion of arbitrability was “wholly groundless.” Under Henry Schein, courts must refer questions of arbitrability to the arbitrator when the parties have agreed to a clear and unmistakable delegation, even if the court believes the claim of arbitrability is frivolous.
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#MeToo Changes the Face of Sexual Harassment Litigation for Employers
With the rise of the #MeToo movement, companies have been forced to re-examine how they litigate and settle allegations of sexual harassment in the workplace. Specifically, companies are facing increasing criticism if they compel claims of sexual harassment to private arbitration or force employees who allege sexual harassment to sign settlement agreements with confidentiality clauses, effectively shielding both the company and the alleged sexual harasser from public scrutiny.
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New Wave of Employment Bills Signed into Law
On Sunday, September 30, 2018, Governor Jerry Brown signed into law a number of bills that will have a significant impact on litigation and legal counseling in the employment context. Many of the new laws are a response to the traction gained by the “me-too” movement and are summarized herein.
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