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On April 19, 2023, the California Court of Appeal held that an employer’s arbitration agreement was unenforceable because of unconscionable terms found in other documents provided to employees during the onboarding process. The decision was certified for publication on May 10, 2023. In Alberto v. Cambrian Homecare (Apr. 19, 2023, No. B314192) ___Cal.App.5th, the Court of Appeal affirmed the trial court’s decision that a standalone arbitration agreement was unconscionable based on terms contained within the employer’s confidentiality agreement. Because the arbitration and confidentiality agreements were presented to the employee at the time of hire and related to the employee’s employment, the Court found that the employer’s confidentiality agreement was part of the “contract” to arbitrate, and the two agreements must be read together. The Court then reasoned that unconscionable terms in the confidentiality agreement permeated the arbitration agreement rendering it unenforceable. The Alberto decision is an important development for employers utilizing arbitration agreements along with other types of employment-related agreements as it creates a new risk of losing the benefits of arbitration.…

Continue Reading It Is Time to Check Your Onboarding Documents – Employer’s Confidentially Agreement Renders Its Arbitration Agreement Unenforceable

California’s Private Attorneys General Act of 2004 (“PAGA”) allows employees to act as an “agent” of the State of California and recover civil penalties for violations of the Labor Code through a civil action filed on behalf of themselves and other current or former employees. In Viking River Cruises, Inc. v. Moriana, the U.S. Supreme Court held that the Federal Arbitration Act partially preempted a California rule prohibiting employers from requiring their employees to enter into pre-dispute arbitration agreements that contractually waived the right to assert “representative” claims under PAGA. Viking River held that while California could validly prohibit pre-dispute arbitration agreements effecting “wholesale waivers” of PAGA claims, the Federal Arbitration Act preempts any rule against requiring employees to arbitrate their “individual” PAGA claims.…

Continue Reading Fording Viking River, Another California Court of Appeal Holds That PAGA Plaintiffs Maintain Standing to Pursue “Representative” Claims Even if Compelled to Arbitrate “Individual” Claims

On March 31, the Office of Federal Contract Compliance Programs (OFCCP) rescinded a Trump Administration rule that provided a faith-based carve-out exempting federal contractors from compliance with certain anti-discrimination obligations. Federal law has long recognized a religious exemption to anti-discrimination obligations for federal contractors. The Trump Administration rule, which went into effect on January 8, 2021, expanded this faith-based carve-out. The rescission of the 2021 rule, which was published in the Federal Register on March 1, returns OFCCP to its pre-2021 religious exemption rule.…

Continue Reading Rescinding a Lame Duck Trump Administration Rule, DOL Returns to Its Longstanding Policy on Religious Exemptions for Federal Contractors

On March 22, 2023 Jennifer Abruzzo, General Counsel (“GC”) of the National Labor Relations Board (“NLRB” or the “Board”) issued a memorandum intended to assist the Regions in responding to inquiries regarding the Board decision in McLaren Macomb, 372 NLRB No. 58 (2023).…

Continue Reading NLRB General Counsel Releases Memo Concerning Confidentiality and Non-Disparagement Clauses in Severance Agreements Post-McLaren

On February 2, 2023, the California Court of Appeal issued an important follow-up decision to the United States Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana, — U.S. —, 142 S. Ct. 1906 (2022). Galarsa v. Dolgen California, LLC, — Cal. Rptr. 3d — , 2023 WL 2212196 (2023),addresses whether a plaintiff alleging claims under the California Private Attorneys General Act of 2004 (PAGA) retains standing to assert claims premised on California Labor Code violations suffered by other employees when the claims arising from alleged violations suffered by the plaintiff are compelled to arbitration. The Court of Appeal ordered Galarsa published on February 24, 2023, making the decision binding on state trial courts for the time being.…

Continue Reading California Court of Appeal Holds That a PAGA Plaintiff Maintains Standing to Assert Representative Claims Even When Individual Claims Are Compelled to Arbitration

As we previously reported, the National Labor Relations Board (“NLRB” or “Board”) under President Biden is working to undo much of any employer-friendly actions taken during the previous administration. On February 21, 2023, the Board continued in its trend and wiped away a Trump-era ruling which gave employers certain latitude in drafting and executing severance agreements with their employees. Specifically, the Board, in a divided decision, ruled employers can no longer offer severance agreements containing clauses that (i) prevent employees from making disparaging remarks about their former employer or (ii) compel departing employees to keep the contents of the severance agreement confidential.…

Continue Reading We Can Now Add Civility and Secrecy to the List of Things Money Can’t Buy: NLRB Rules Non-Disparagement and Confidentiality Clauses in Severance Agreements Unlawfully Restrain and Coerce Employees

On Tuesday January 10, 2023, the Equal Employment Opportunity Commission (“EEOC”) publicly released its Draft Strategic Enforcement Plan (“SEP”) for fiscal years 2023-2027. The SEP describes the EEOC’s top enforcement priorities, making it critical information for employers around the country.…

Continue Reading EEOC Announces Enforcement Priorities for 2023-2027

On December 7, 2022, President Biden signed the Speak Out Act (the “Act”) into law. The Act limits the enforceability of pre-dispute non-disclosure and non-disparagement clauses relating to sexual assault and sexual harassment claims, but does not prohibit such provisions in settlement agreements or severance agreements.

Continue Reading President Biden Signs “Speak Out Act” Limiting the Enforceability of Non-Disclosure and Non-Disparagement Provisions in Sexual Harassment Cases

The New Year will usher in several new Illinois employment laws. These laws cover a myriad of topics and will require revisions to employee handbooks and general employment policies. …

Continue Reading New Year Brings New Laws for Illinois Employers

The United States Supreme Court is currently considering two cases concerning whether race-conscious admissions programs are permissible under federal law. While these cases are limited to the relatively narrow universe of college admissions, the Court’s decision may be instructive to private employers and will likely have implications beyond the classroom.…

Continue Reading Could the Supreme Court’s Decision in the Harvard and UNC Cases Indirectly Affect Corporate Diversity Initiatives?

As economists argue whether a recession is on the horizon, some employers may begin to prepare to cut expenditures, including through a reduction in force. While not necessary under most state laws, many employers opt to provide severance to employees they choose to lay off. This severance is usually provided by way of a separation agreement in exchange for the employee’s agreement not to bring certain claims against the employer, among other things. As employers begin determining whether they will undergo a reduction in force, they should ensure their separation agreements adhere to applicable state laws.…

Continue Reading Considering a Reduction in Force? Time to Revise Your Separation Agreement Template