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at Lehman Brothers Inc. (“LBI”), was not entitled to a $350,000 performance bonus detailed in an offer letter which LBI rescinded.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

Most employers have separation agreement forms that have served them well over the years.  The terms have become fairly standardized and, aside from the occasional tweak, they don’t change much and are rarely challenged.  Enter the EEOC, upsetting the apple cart with its new strategic enforcement initiative.  In recent litigation, it has staked out an aggressive (and new) position challenging what appear to be fairly standard separation agreement provisions.  Although it suffered a minor setback earlier this month, we shouldn’t expect it to back off from its new-found position.
Continue Reading The EEOC’s Assault on Separation Agreements – A Bump in the Road, But It’s Far From Over

The California Court of Appeal for the Fourth District recently refused to enforce a covenant not to compete against the former employee and selling shareholder of a video game company. In Fillpoint, LLC, v. Maas et al., Case No. G045057, 2012 Cal. App. LEXIS 914 (Cal. Ct. App. Aug. 24, 2012), the Court of Appeal determined that half of a two-part noncompete agreement entered into in the context of the sale of a business was unenforceable, despite the exception for such covenants found in Business and Professions Code Section 16601 (“Section 16601”). This case answers what had previously been an open question under California law: Whether an acquiring company can obtain a non-compete that begins to run upon termination of employment (as opposed to or in addition to a non-compete that begins to run upon closing) from a shareholder who becomes an employee of the buyer. See Hilb, Rogal & Hamilton Ins. Servs. v. Robb, 33 Cal. App. 4th 1812 (1995) (enforcing a noncompete agreement against a selling shareholder that commenced at termination of employment, without any discussion or analysis of whether using termination of employment as the trigger for a noncompete violates Section 16601).
Continue Reading California Court Of Appeal Refuses To Enforce Non-Compete Against Selling Shareholder

While many have been enjoying well deserved summer vacations, the National Labor Relations Board (“NLRB”) has been busy. In the past two weeks the NLRB has issued decisions regarding investigative confidentiality directives and the permissible scope of the well-recognized “at-will” statement.
Continue Reading Recent Notable National Labor Relations Board Decisions

In the recent California Court of Appeal decision of Pulli v. Pony International, LLC, the court clarified that Labor Code section 206.5 prohibits an employer from requiring an employee to execute a release of a claim for wages only and does not prohibit the employer from requesting that the employee waive his right to a jury trial by agreeing to arbitrate his employment-related claims. Although the court refused to rule on whether the arbitration agreement itself was enforceable (even though it expressly held that the provision was not automatically unenforceable), the decision appears to be at least a small victory for employers and plain language statutory constructionists.
Continue Reading California Court of Appeal Provides Clarification of Labor Code Section 206.5’s Restrictions on Releases of Wage Claims