Employee Arbitration Agreements No Longer OK Under New Law?
Updated 1/3/20: A federal court issued a temporary restraining order stopping the implementation of AB51. That law makes it illegal for employers to make it mandatory for employees to enter into arbitration agreements. A new law in California attacks employee arbitration agreements and prohibits anyone from requiring an applicant for employment or any employee to waive their right to sue for a violation of any provision of the Fair Employment and Housing Act “FEHA” (California’s anti-discrimination laws) as a condition of employment, continued employment, or receipt of any employment-related benefit. These waivers usually exist in an arbitration agreement. Employers also can not retaliate, discriminate against, or terminate someone’s employment for refusing to sign an arbitration agreement. The new law applies to contracts signed after January 1, 2020. However, it specifically does not apply to arbitration agreements that are valid under the Federal Arbitration Act, negotiated severance agreements, or post-dispute settlement agreements. Practical Tip: There will be plenty of litigation on this new law, but until we have the courts’ interpretations of the new prohibitions, what should employers do? 1) If you don’t have an arbitration agreement, or aren’t quite sure what one is, you should still have one. 2) If you have an arbitration agreement, have it reviewed by counsel before you … Continue reading
Arbitration Agreements and Class Action Waivers Post-Epic Systems
When business owners call my office looking for guidance because their accountant, fellow business owners, colleagues, or friends told them they should talk to an employment lawyer about their fears and concerns surrounding an employee issue, I ask a series of questions to get a better understanding of what is going on in the business. One of the questions I ask is: Do you have an arbitration agreement? 9 out of 10 times there is a pause and a response that ranges from “can you tell me what that is” and “I’m not sure.” It’s understandable because unless you’re a doctor’s office, arbitration agreements aren’t part of your everyday life. However, these businesses are missing out on a great tool that could be used in their favor if they value privacy, expediency, and cost-savings should a dispute arise with an employee. Especially given the Supreme Court’s decision in Epic Systems Corp. v. Lewis. Below is an article I wrote on the decision that was recently published in the Orange County Lawyer’s Magazine. Although aimed at attorneys, it gives employers a better … Continue reading
Confidentiality Agreements in Sexual Harassment Cases – Banned if AB 3080 Signed
It’s difficult as a business owner to know what you need to know in the area of employment law and employee rights without having someone to guide you. The legal landscape is complex and ever-changing. New laws keep getting passed and court decisions could easily turn something that was an acceptable practice into a prohibited practice, forcing employers to scramble to change practices, usually crossing their fingers and hoping that the changes don’t trigger someone to ask whether what you were doing in the past was wrong. Most of the time, you don’t even know what you don’t know. I’ve often heard business owners say “had I known that I would have done it differently, but no one told me.” We’re here to tell you. The California legislature recently passed Assembly Bill 3080 (AB 3080), which is now awaiting Governor Brown’s signature. The bill has 2 main components. Bans Confidentiality Agreements Regarding Sexual Harassment Claims The first responds to the #MeToo movement and the argument that confidentiality agreements in settlements of sexual harassment claims allow harassers to become repeat offenders … Continue reading
Arbitration Agreement: Do I Want It?
You probably signed an arbitration agreement at your last doctor’s visit, when you signed up for your gym or yoga studio membership, or when you signed a listing agreement with your realtor. The ubiquity of these agreements makes it especially important for us to understand them as consumers, business owners, employers, and employees. What is an arbitration agreement? Arbitration is one of the alternative means of resolving disputes (alternative to filing a lawsuit that is). Thus, an arbitration agreement is an agreement to take disputes out of the court system to be decided by a private arbitrator (or a panel of arbitrators) usually following a different set of procedural rules than the court. People and companies choose to arbitrate for various reasons. The process is generally more streamlined and allows for a quicker resolution of disputes. It is often times cheaper than litigating in court, and the proceedings are typically not part of the public record. Lastly, the conventional wisdom is that you reduce the risk of a run-away-jury. Do you want to arbitrate? Whether agreeing to arbitrate potential disputes … Continue reading
Are Electronic Signatures Valid?
Many have asked “are electronic signatures valid?” The answer is YES. Section 1633.7 of the California Civil Code states that an electronic signature has the same legal effect as a handwritten signature. The problem is proving who signed that electronic signature in court. Technology has made it so easy to sign our lives away with merely the click of a mouse. It’s so easy that most of us don’t read the documents nor do we remember if we clicked our agreement. But what happens when you as an employer wants to use that electronic signature as proof of an agreement? Are you able to establish in court that this particular employee clicked the mouse that caused the electronic signature to appear? If your answer is “no” or “probably not” you may have wasted the money you paid an attorney (or Google) to draft that arbitration or confidentiality agreement that a court will not enforce. Just last week, my favorite California Court of Appeal issued an opinion in Ruiz v. Moss Bros. Auto Group, Inc. upholding the trial court’s finding that Moss Bros., … Continue reading