Employment Contracts and Agreements

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The use of “No Rehire” Provisions in settlement agreements between employers and their former employees allow employers to protect themselves against “boomerang” lawsuits.  For instance, a former employee who claims he/she was terminated because of discrimination would be prevented from later submitting a new job application and then suing the employer again claiming he/she was not hired because of discrimination.  This common provision is basically an agreement by the employee that in exchange for consideration, usually the payment of a sum of money, he/she will dismiss their claims against the employer and will contractually agree not to seek to be rehired.  A recent decision from a panel of judges in the Ninth Circuit, however, has called the “No Rehire” provisions into question as possibly violating section 16600 of the Business and Professions Code.James-Kachmar-08_web

In Golden v. California Emergency Physicians Medical Group, the plaintiff doctor sued after he lost emergency room privileges at one of CEPMG’s facilities.  Prior to trial, the plaintiff doctor agreed to settle his claim for the payment of a large sum of money and initially agreed (at least orally through counsel) not to seek employment with CEPMG again.  The “No Rehire” provision that was subsequently incorporated into a written settlement agreement provided that the plaintiff doctor would not seek re-employment with CEPMG and also provided CEPMG the right to terminate the plaintiff’s employment should he be working at any facility that it subsequently acquired.  (CEPMG is a large consortium that manages or staffs many emergency rooms, in-patient clinics and other facilities in California and other Western states and intends to continue expanding.)

After the plaintiff doctor refused to sign the written settlement agreement containing the “No Rehire” provision, his former counsel filed a motion to enforce the settlement agreement (apparently to obtain his contingency fee from the settlement proceeds).  The District Court concluded that the “No Rehire” provision was not a “non-compete” provision and therefore did not run afoul of section 16600.  The Court ordered plaintiff to execute the written settlement agreement containing the “No Rehire” provision.
Continue Reading Are “No Rehire” Provisions in Settlement Agreements at Risk?

Brenden Begley_retouchIt is no secret that arbitration agreements may greatly reduce the risks that many employers face in disputes with employees.  For example, when used correctly, such agreements can curb exposure to class actions by forcing employees to arbitrate disputes on an individual basis instead of a class basis.  See, e.g., Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014).

However, when such an agreement either contains certain language or fails to include other language, it may result in a class action or a representative action being litigated in front of an arbitrator instead of a court.  This can be problematic for many reasons, not the least of which is that an arbitrator’s hourly charges typically are paid by the employer – and those fees can add up quickly in a complicated matter involving numerous parties.

Thus, instead of decreasing the cost of defending a class action or a representative action, a poorly drafted arbitration agreement could result in greatly escalating such costs.   A pair of recent decisions from the California Court of Appeal for the Fourth Appellate District (in San Diego) underscore the need for employers to use great care in drafting such agreements to avoid such outcomes.
Continue Reading Arbitration Agreements Can Backfire on Employers

LaborEmpSeminarLogoSummary of Program

Most employers know that it is crucial to have well trained supervisors to help ensure that rank and file employees perform their jobs effectively and efficiently.  However, many employers don’t realize how important it is that supervisors be trained to understand the many employment laws that govern the workplace.  Untrained supervisors can take actions (or fail to take actions) that result in significant legal consequences for an employer.  Come join the employment lawyers at Weintraub Tobin for a discussion of best practices for training supervisors and reducing the potential for liability.

Program Highlights

  • An overview of employment laws that impact the workplace and common mistakes supervisors make when they don’t understand those laws.
  • Tips for effective communication between supervisors and employees, including how to give constructive performance feedback.
  • Common supervisor mistakes when hiring and firing.
  • The importance of consistent, objective, and timely discipline.
  • Preventing and responding to harassment and other Equal Employment Opportunity complaints.
  • Documentation:  The good, the bad and the ugly.

Continue Reading Upcoming Seminar: Well Trained Supervisors – Your First Line of Defense

The U.S. Supreme Court has declined to review California high court’s landmark decision in Iskanian v. CLS Transportation Los Angeles, which held that arbitration agreements with mandatory class waivers are generally enforceable, but carved out an exception for the state’s Private Attorney General Act (“PAGA”) claims.

As discussed in our prior blog post, The…

Brenden Begley_retouchMany employers have arbitration agreements wherein employees agree to waive the right to file a lawsuit against the employer under various laws, including the California’s Private Attorney General Act (“PAGA”).  Employers were disappointed when the California Supreme Court ruled last June that such waivers of PAGA lawsuits are invalid, at least in state court.  See Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014).

However, a number of federal trial judges in the Golden State subsequently disagreed and ruled that PAGA waivers are enforceable in their courts.  See, e.g., Ortiz v. Hobby Lobby Stores, Inc., E.D. Cal. Case No. 2:13-cv-01619 (Sept. 30, 2014).  Because a PAGA waiver still may be enforceable against an employee in federal court, many employers have either kept or inserted such waivers in their arbitration agreements.

This week it became apparent that including a PAGA waiver may destroy an employer’s ability to require arbitration in any type of lawsuit, be it under PAGA or some other theory (e.g., alleged discrimination, harassment, retaliation, or wage-and-hour or meal-and-rest-period violations).  Specifically, the California Court of Appeal ruled that a PAGA waiver will invalidate an entire arbitration agreement in state court if that agreement also includes a non-severability clause.  See Montano v. The Wet Seal Retail, Inc., Cal. Ct. App. Case No. B244107 (Jan. 7, 2015).
Continue Reading The New PAGA-Waiver Trap Door