In the midst of the COVID-19 pandemic, an economic crisis that is predicted to be as bad as the great depression, and unrest over racial inequality and police brutality that is giving birth to a global movement for social change, the U.S. Supreme Court issued a landmark decision in Bostock v. Clayton County, Georgia (Case
New Laws that Will Significantly Impact the Litigation of Employment Disputes
The October 13, 2019 deadline for Governor Newsom to take his final actions in the 2019 legislative season has come and gone and as expected, he signed into law a number of employment-related bills. Below is a summary of just a few of those bills that will have a significant impact on employment litigation in California. To read the full article, please click here.
A. Assembly Bill 51
AB 51 was introduced by Assemblymember Lorena Gonzales and will severely restrict the use of mandatory arbitration agreements in employment. The Bill adds section 12953 to the California Government Code (“FEHA”) and states that it is an unlawful employment practice for an employer to violate section 432.6 of the California Labor Code.
B. Senate Bill 707
In Armendariz v. Foundation Health Psychcare Services, Inc. case (2000) 24 Cal. 4th 83, the California Supreme Court concluded, among other things, that “when an employer imposes mandatory arbitration as a condition of employment, the arbitration agreement or arbitration process cannot generally require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court.” In a number of cases after Armendariz, courts have held that an employer’s failure to pay the arbitration costs [and thus delaying or preventing the arbitration of the dispute] constitutes a material breach of the arbitration agreement.
In line with this case law, SB 707, introduced by Senator Wieckowski, provides that a company’s failure to pay the fees of an arbitration service provider in accordance with its obligations contained within an arbitration agreement or through application of state or federal law or the rules of the arbitration provider hinders the efficient resolution of disputes and contravenes public policy. According to SB 707, a company’s strategic non-payment of fees and costs severely prejudices the ability of employees [or consumers] to vindicate their rights. This practice is particularly problematic and unfair when the party failing or refusing to pay those fees and costs is the party that imposed the obligation to arbitrate disputes.
Therefore, among other things, SB 707 adds section 1281.97 to the California Code of Civil Procedure and provides that in an employment or consumer arbitration that requires, either expressly or through application of state or federal law or the rules of the arbitration administrator, the drafting party to pay certain fees and costs before the arbitration can proceed, if the fees or costs to initiate an arbitration proceeding are not paid within 30 days after the due date, the drafting party is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel arbitration. As a result, the employee [or consumer] may do either of the following:
- Withdraw the claim from arbitration and proceed in a court of appropriate jurisdiction; or
- Compel arbitration in which the drafting party shall pay reasonable attorney’s fees and costs related to the arbitration.
If the employee withdraws the claim from arbitration and proceeds with an action in a court of appropriate jurisdiction, the statute of limitations with regard to all claims brought or that relate back to any claim brought in arbitration shall be tolled as of the date of the first filing of a claim in any court, arbitration forum, or other dispute resolution forum. Further, if the employee proceeds with an action in a court, the court shall impose sanctions on the drafting party in accordance with Civil Code section 1281.99, which requires the drafting party to the reasonable expenses, including attorney’s fees and costs, incurred by the employee as a result of the material breach. The court may also impose additional sanctions against a drafting party including, but not limited to, discovery sanctions and terminating sanctions.
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Now Available! Weintraub Tobin’s 2020 Labor and Employment Seminar and Training Schedule
California Employers Have Another Year To Comply With New Mandatory Sexual Harassment Prevention Training Requirements
Last year, new California legislation effective January 1, 2019 expanded the mandatory sexual harassment prevention training requirements for California employees. That law required that, by January 1, 2020, employers with 5 or more employees must provide their supervisory employees with two hours of classroom or other effective interactive training and education AND must provide their…
Neutral Services 2019: A New Year that Brings New Training Obligations
While it has always been good practice for employers of all sizes to train both their supervisory employees and non-supervisory employees on the prevention of harassment, California law now mandates such training by 1/1/20 (and every 2 years thereafter) for any employer with 5 or more employees. The attorneys in Weintraub Tobin’s Labor & Employment Department have years of experience conducting energetic, compliant, and effective harassment prevention training for employers of all sizes and in all industries. The Training Division of the Labor & Employment Department is headed up by Shareholder Beth West. Feel free to reach out to her or Department assistant Ramona Carrillo if you are interested in scheduling training – we are available to discuss a training program that meets the specific needs of your workplace.
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