New Law Prohibits Employers From Forcing Workers To Bring Claims In Other States and Countries

On September 26, 2016, Governor Jerry Brown signed Senate Bill 1241, which addresses choice of law Gear-and-Gavel_dark-blueand choice of forum clauses in employment contracts.  Simply put, some employers try to force workers to bring any claims they might have (for discrimination, failure to pay wages, etc.) in other states.  The most aggressive seek to force workers to bring their claims in other countries.  See, for example, Petersen v. Boeing Co. (9th Cir. 2013) 715 F.3d 276, in which the employer attempted to compel the plaintiff to litigate his claims in Saudi Arabia.

Choice of forum clauses are particularly burdensome for low wage workers.  It is often a challenge for these workers to find an attorney to represent them, in part because their claims are generally thought to be worth less money.  A choice of forum clause requiring a worker to litigate in another state renders it even more difficult to find an attorney willing to take the case.

Beginning on January 1, 2017, California workers will have an important tool to combat choice of forum clauses.  The new Labor Code section 925 will prohibit employers from requiring employees who primarily reside and work in California to agree that they must bring employment-related claims outside of California, provided that the employees’ claims arise in California.  Under section 925, such contractual provisions are voidable, and any dispute over them must be heard and decided in California.  Additionally, section 925 provides for attorney’s fees to an employee who is enforcing rights under that section. Continue reading “New Law Prohibits Employers From Forcing Workers To Bring Claims In Other States and Countries”

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Perez v. U-Haul: Employers cannot compel arbitration of standing issue in PAGA cases

Some companies continue to try to force employees to arbitrate their individual PAGA claims before bringing their representative PAGA claims in court.  Two appellate decisions make it crystal clear that California courts have rejected these efforts, and that workers are not required to litigate PAGA claims in multiple forums.

By way of background, in Iskanian v. CLS Transportation, the California Supreme Court held that employers could not compel plaintiffs to arbitrate their representative PAGA claims.  In the wake of that case, some defendants began to argue that where workers had signed an arbitration agreement, they should be required to arbitrate their individual claims before proceeding with their representative claims in court. Continue reading “Perez v. U-Haul: Employers cannot compel arbitration of standing issue in PAGA cases”

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California Wage Statements and Exempt Employees

Gear-and-Gavel_dark-blueCalifornia Labor Code section 226 requires that an employer provide its employees with wage statements, sometimes known as pay stubs, when it pays their wages.  Section 226(a) provides a list of the specific information that must be included in wage statements.  Employers that ignore these requirements face liability both under section 226(e), and, through PAGA, under section 226.3.

One of the requirements of section 226(a) is that the employer state the total number of hours that an employee worked.  This requirement is important for most employees, because it is the most effective way to figure out whether you are paid for all hours worked.  But what about employees who are not paid by the hour, like salaried employees or employees who are paid on a commission basis? Continue reading “California Wage Statements and Exempt Employees”

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Some Real Data Regarding the Gig Economy-and What It Tells Us About the Future of the U.S. Economy

It feels like the “gig economy” (also referred to euphemistically as the “sharing economy”) has taken Gear-and-Gavel_dark-blueover.  Uber, Grubhub, TaskRabbit, wherever you look, it seems like employees are being replaced by independent contractors or temporary workers who are being exploited by internet-based companies.  This perception is stoked by predictions in the tech industry, such as Intuit’s recent claim that by 2020, 43 percent of workers will be employed in the on-demand labor market.  (Of course, Intuit markets its products to “on-demand employers,” so such predictions should be taken with a grain of salt.)

A tectonic shift of this nature would upend the way that we think about work and wages.    Among other things, independent contractors are not subject to many wage and hour requirements, such as overtime and the minimum wage.  And temp workers often struggle to piece together a livable income from multiple sources of employment. Continue reading “Some Real Data Regarding the Gig Economy-and What It Tells Us About the Future of the U.S. Economy”

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PAGA and Intervention: Replacing a Plaintiff Who Wants Out

One of the seminal cases in the world of California’s Private Attorneys General Act, or PAGA, is Iskanian v. CLS Transportation.  Iskanian wound its way up to the California Supreme Court, which ultimately held that arbitration agreements that attempt to limit a plaintiff’s right to bring PAGA actions are unenforceable.

Now Iskanian is back in the news.  After years of struggle, the plaintiff, Mr. Iskanian, decided that he did not want to proceed with the case.  (It is unclear why he reached that decision.)  In an interesting twist, he then filed a motion, representing himself, to dismiss his individual claims (which were being arbitrated) as well as his PAGA claims.  His attorneys then sought to replace him with Mr. Frost, another individual from the group of limousine drivers that Mr. Iskanian belonged to.   Continue reading “PAGA and Intervention: Replacing a Plaintiff Who Wants Out”

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New PAGA Rules Take Effect July 1, 2016

Governor Jerry Brown’s budget for 2016-17 contains several significant amendments to the procedural requirements of the Private Attorneys General Act, or PAGA.  These amendments apply to PAGA cases filed on or after July 1, 2016.  They are limited to cases alleging violations of the California Labor Code provisions listed in Labor Code section 2699.5. The amendments fall […]

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Commonality, Damages, and Representative Evidence:  The Ninth Circuit Properly Cabins Dukes and Comcast, and Underscores Tyson Foods

Over the past decade or so, higher court rulings regarding class actions have tended to dramatically favor either corporations or workers.  Corporations have arguably scored the most significant victories.Gear-and-Gavel_dark-blue  However, with the recent exit of Justice Antonin Scalia from the United States Supreme Court, there are some indications that this tide has begun to turn.  At the same time, it is clear that a Republican victory in November 2016 would return a conservative majority to the Court, and devastate any positive momentum in terms of workers’ rights.

Vaquero v. Ashley Furniture Industries, Inc., No. 13-56606 (June 8, 2016), a recent decision of the Ninth Circuit, is a good example of the type of decision that we can hope to see more of in the future.  Vaquero does three important things.   First, it properly limits the scope of Wal-Mart v. Dukes, 564 U.S. 338 (2011) with respect to the issue of commonality.  Second, it limits the impact of Comcast v. Behrend, 133 S. Ct. 1426 (2013) in wage and hour class actions.  Finally, it underscores the critical holding in Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036 (2016) that plaintiffs may continue to rely upon representative evidence to prove both liability and damages.  As such, Vaquero provides powerful ammunition for workers and their advocates in class actions. Continue reading “Commonality, Damages, and Representative Evidence:  The Ninth Circuit Properly Cabins Dukes and Comcast, and Underscores Tyson Foods”

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Arbitration Agreements that Prohibit Class and Collective Actions Violate the National Labor Relations Act

 

A major storm-the biggest in decades- has been brewing for years in the American workplace.  At its center is whether employers can require workers to waive their right to bring class, collection, and representative actions.  The implications are enormous:  As union membership has declined, workers have relied moreGear-and-Gavel_dark-blue on litigation to stop companies from breaking the law.  If employers succeed in stripping workers of the right to do so, the results will be grim indeed.

Until recently, the field of combat had consisted of, on the workers’ side, the National Labor Relations Board, which held in D.R. Horton that such agreements violate Section 7 of the National Labor Relations Act (NLRA).  On the employers’ side is a series Circuit Court decisions, D.R. Horton v. NLRB (5th Cir. 2013); Owen v. Bristol Care, Inc. (8th Cir. 2013); Sutherland v. Ernst & Young LLP (2d Cir. 2013); and Richards v. Ernst & Young, LLP (9th Cir. 2013).  Each of those cases, to some degree, rejected the NLRB’s decision in D.R. Horton.

That field shifted dramatically on May 26, 2016.  In Lewis v. Epic Systems Corporation, the Court of Appeals for the Seventh Circuit held that an arbitration agreement that prohibited class and collective actions violates Section 7 of the NLRA and was therefore not enforceable.  [In a post dated February 2, 2016, I discussed a similar ruling by the Hon. Dolly M. Gee, a courageous federal judge.]  As the first Circuit Court to reach this holding, Lewis changed the legal landscape significantly in a manner that benefits workers. Continue reading “Arbitration Agreements that Prohibit Class and Collective Actions Violate the National Labor Relations Act”

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