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.
Continue Reading U.S. Supreme Court Upholds Individualized Arbitration Where Agreement Is Ambiguous on Issue of Class Arbitration

Sauce for the goose is sauce for the gander? Not necessarily. The Ninth Circuit and California Court of Appeals recently decided two cases that substantially limit the scope and application of freedom of religion rights rooted in the U.S. Constitution. Together, these cases narrow the definition of the term “minister,” and expand the spectrum of employment law claims which may be brought against a religious employer. This new interpretation of freedom of religion rights may be difficult to reconcile with existing law from the U.S. Supreme Court which bars a minister from bringing employment discrimination claims against a religious employer.
Continue Reading Ninth Circuit and California Court of Appeals Rule on Freedom of Religion Rights

On January 1, 2019, California’s Senate Bill No. 1431 went into effect, making a slight, but potentially significant amendment to Civil Code Section 1542. The prior version of the statute read: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” SB 1431 amended Section 1542 to now read: “A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.” The amended version of the Code adds “releasing party” and “released party” alongside creditor and debtor, respectively, and also changes “must have materially affected” to “would have materially affected” the releasing party’s decision to settle.
Continue Reading California Legislature Amends Section 1542: Are Employer Settlement Agreements Now More Vulnerable to Attack?

On August 19, 2016, Governor Bruce Rauner officially signed into law the Illinois Freedom to Work Act (the “Act”), with an effective date of January 1, 2017.  The Act, while short and to the point, will have a significant impact on private sector employers who routinely require all employees, regardless of job level or wage, to enter into non-competition agreements.
Continue Reading Illinois Limits Non-Compete Agreements Yet Again

On May 26, 2016, in the matter of Lewis v. Epic Systems Corporation, the U.S. Court of Appeals for the Seventh Circuit held that an arbitration agreement, which required employees to submit to individual arbitration for any wage and hour claims against the company, violates the National Labor Relations Act (“NLRA”) and is unenforceable under the Federal Arbitration Act (“FAA”).  In issuing this decision, the Seventh Circuit gave credence to the National Labor Relations Board’s (“NLRB”) decision in D. R. Horton and, in doing so, has created a split amongst U.S. Circuit Courts of Appeal regarding the enforceability of arbitration agreements that preclude class actions.
Continue Reading Seventh Circuit Holds Class Action Waivers are Unlawful and Unenforceable Creating a Circuit Split

On March 28, 2016, the California Supreme Court handed down a long-awaited opinion in Baltazar v. Forever 21. Baltazar’s most important holding is that an arbitration agreement is not unconscionable merely because it restates existing law.  This ruling resolves a disagreement between state appellate courts that probably should never have arisen in the first place.
Continue Reading California Supreme Court: Arbitration Agreement Restating Existing Law Is Not Unconscionable

On October 11, 2015, Governor Brown vetoed Assembly Bill No. 465. AB 465 was one of the most closely watched, controversial employment related bills passed by the California Legislature in recent memory. Understandably, employers were nervous by the bill’s potential implications.
Continue Reading California Employers Exhale Relief, Governor Vetoes Ban on Employment Arbitration Agreement

In furtherance of its agenda to extend minimum wage and other wage-hour protections as broadly as possible, on July 15, 2015, the Department of Labor issued a far-reaching interpretive memorandum expressing the DOL’s belief that “most workers [classified as independent contractors] are employees under the FLSA’s broad definitions.”
Continue Reading DOL Says Most Independent Contractors Actually Employees

In Verdugo v. Alliantgroup, L.P., the California Court of Appeal held that a forum selection clause in an employment agreement was unenforceable because the employer could not prove that the employee’s rights under the California wage and hour law “would not be diminished in any way” if the lawsuit proceeded in a non-California court.
Continue Reading California Court of Appeal Refuses to Enforce Forum Selection Clause Because Employer Would Not Stipulate to Apply California Law and Did Not Show that the Foreign State’s Legal Protections Were Equal to California’s

On January 20, 2015, the United States District Court for the Southern District of New York issued a decision plainly reminding employers of the importance of precisely drafting employment documents.  In the case of In re Lehman Brothers Holdings Inc., 2015 WL 247403 (S.D.N.Y. Jan. 20, 2015), the Court held that a prospective employee, who had never worked a day at Lehman Brothers Inc. (“LBI”), was not entitled to a $350,000 performance bonus detailed in an offer letter which LBI rescinded.  Significantly, in reaching this conclusion, the Court relied exclusively upon its reading of the offer letter itself.
Continue Reading New York Court Finds That Plaintiff Who Never Worked a Day For Company Is Not Entitled To A $350,000 Performance Bonus