Thursday, September 14th marked the deadline for California’s two legislative bodies – the state assembly and state senate – to pass bills. Bills passed by both bodies will now head to Governor Gavin Newsom’s desk, where the governor will have one month to determine which bills to sign into law.
The employment bills Mr. Newsom will consider for approval run the gamut, from legislation on caregiver discrimination to bills increasing paid sick days. Below is a recap of the bills at the governor’s desk that figure to have the greatest impact on California’s workers if approved.
Family Caregiver Discrimination – AB 524
AB 524 would amend the state’s Fair Employment and Housing Act (FEHA) by adding “family caregiver status” to the list of protected characteristics that employers cannot take into account when making employment decisions such as hiring and firing.
Consideration of this bill comes at a critical time. Caregivers are the fastest growing workplace identity group and may make up us much as 73% of the American workforce. More than 63 million Americans care for at least one child, and 40.4 million Americans provide unpaid care to someone aged 65 years or older. The pandemic’s aftermath and America’s rapidly aging population have only exacerbated the challenges faced by caregivers.
Arbitration Appeal Delays – SB 365
When trial courts find that a forced arbitration agreement is invalid, employers frequently use delay tactics, such as filing an appeal, that can effectively pause a case for years at a time. If signed into law, SB 365 would undercut such tactics and allow employment lawsuits to move forward when defendants file appeals involving a petition to compel arbitration.
WARN Act Expansion – AB 1356
California’s Worker Adjustment and Retraining Notification (WARN) Act protects employees by requiring employers to give a 60-day notice to affected employees before a plant closing or mass layoff. AB 1356 would expand the WARN Act’s protections by requiring employers to provide employees with 75 days of advance notice. It would also prohibit employers from requiring employees to waive their rights by signing onerous severance agreements with releases and non-disparagement provisions in exchange for the payment of back wages. The bill was inspired by the massive layoffs at tech companies like Google and Meta, particularly Elon Musk’s alleged mishandling of layoffs at the company formerly known as Twitter.
Additional Paid Sick Days- SB 616
SB 616 would require California’s employers to provide workers with five days of paid sick leave instead of the current allotment of three. Increasing the number of paid sick will reduce the frequency at which workers, particularly low-income workers, are forced to make difficult decisions between foregoing pay and going to work sick. If signed into law, the bill is also expected to strengthen public health protections. According to the Washington Center for Equitable Growth, “paid sick leave guarantees are seen by many public health experts as one of the strongest tools in stopping the spread of infectious diseases.”
For a list of other employment bills heading to Mr. Newsom’s desk, click here. The governor will have until October 14th to sign bills from this year’s legislative session into law.
Lauren Teukolsky Quoted by Bloomberg Law and Law.com on long-awaited CA Supreme Court Ruling in Adoph v. Uber
Lauren Teukolsky was quoted by Bloomberg Law and Law.com in a pair of articles this week on the CA Supreme Court’s Monday decision in Adolph v. Uber Technologies, Inc.. In the highly anticipated ruling, the Court held that the state’s workers could continue to pursue representative PAGA labor claims even if their individual labor claims were forced into arbitration. The Court’s ruling is considered a huge win for California’s workers.
PAGA (Private Attorneys General Act) is a state law that authorizes employees to collect civil penalties for violations against themselves and their coworkers on behalf of California’s Labor Commissioner, which has struggled to manage a backlog of cases for the past several decades.
Arbitration is a private dispute resolution process that overwhelmingly favors employers and shields corporations from public scrutiny and accountability. Employers frequently require their employees to sign agreements stipulating that all claims made by them will be resolved in private arbitration as opposed to being litigated through the courts, a process that is public and more favorable to workers.
A ruling in Uber’s favor would have made it very difficult to bring PAGA cases forward – due to the prevalence of arbitration agreements – and would have seriously eroded workers’ ability to enforce the state’s labor laws.
Uber’s lawyers have indicated that the company is considering appealing the Court’s decision. According to analysis Ms. Teukolsky published on LinkedIn, the U.S. Supreme Court is unlikely to hear such an appeal, especially in light of its 2022 decision in Viking River Cruises, Inc. v. Moriana. She said, “It's unlikely SCOTUS will hear a case from a state supreme court involving entirely state-law issues; there must a federal question involved.”
Ms. Teukolsky has represented workers for over two decades and her commentary on the latest developments in employment law is regularly featured by major publications such as Bloomberg Law, Law360, Law.com, and the Los Angeles Times.
To access the Bloomberg Law article in its entirety, click here. To access the Law.com article in its entirety, click here.
Lauren Teukolsky’s commentary was featured in a recent Law360 article on the Ninth Circuit’s recent ruling that California’s A.B. 51 is preempted by federal law. AB 51 prohibited employers from forcing employees to give up their civil rights, such as the right to a jury trial and the right to appeal an adverse decision, as a condition of employment. The ruling, a reversal of the Ninth Circuit’s own prior decision in 2021, is a significant blow to the state’s workers.
California Governor Gavin Newsom signed A.B. 51 into law in 2019, making it illegal for employers to force individuals to waive their right to bring civil rights cases in court as a condition of employment. Arbitration agreements typically stipulate that all claims made by workers—regardless of their severity—must be resolved under private arbitration, a process that overwhelmingly favors employers, disproportionately harms historically marginalized communities, and shields corporations from public scrutiny and accountability. A.B. 51 was meant to ensure that employees were not coerced into signing away their rights, and that all waivers of these significant rights were voluntary.
Last year, a three judge Ninth Circuit panel voted to revisit a 2021 decision in which it partially reversed an injunction that stopped California from enforcing A.B. 51. Last month, the panel found that the Federal Arbitration Act preempted A.B. 51, nullifying the law in most situations and allowing California’s corporations to once again force workers to sign arbitration agreements waiving their civil rights.
Law360’s article features analysis and advice from management-side and workers- side attorneys on how corporations and workers’ advocates should respond to the Ninth Circuit’s decision. In the article, Ms. Teukolsky advises plaintiffs’ lawyers to be extremely cautious when advising clients on arbitration agreements:
"’Plaintiff-side employment attorneys need to think very carefully before they advise an employee to refuse to sign one of these arbitration agreements,’ Teukolsky said. ‘I think you need to advise them: you may lose your job over this. Is that a risk you're willing to take?’" Ms. Teukolsky speaks from experience: she filed one of the only cases under A.B. 51 after her client was fired for expressing opposition to signing away her rights.
To read the article in its entirety, click here. For the Court’s opinion holding that A.B. 51 is preempted, click here.
If you have concerns about an arbitration agreement your employer has recently asked you to sign, click here to get in touch with our office.
Teukolsky Law Files NEW Lawsuit UNDER AB 51 CHALLENGING EMPLOYER'S REQUIREMENT THAT EMPLOYEE WAIVE HER ACCESS TO COURTS AS A CONDITION OF EMPLOYMENT
On Friday, April 8, Teukolsky Law filed a lawsuit in Los Angeles Superior Court on behalf of April Blackwell, a 37-year-old Black woman, against The Pendry West Hollywood, a luxury hotel owned by Montage International on the iconic Sunset Strip. The lawsuit is the first of its kind, alleging that the Pendry terminated Ms. Blackwell because she said she did not want to sign a mandatory arbitration agreement giving up her ability to sue the Pendry for race discrimination and similar claims in a court of law.
Forcing job applicants and employees to sign forced arbitration agreements was recently made illegal in California by Assembly Bill 51 (AB 51). Under forced arbitration agreements, all claims made by workers—regardless of their severity—must be resolved under private arbitration, a process that overwhelmingly favors employers, disproportionately harms historically marginalized communities, and shields corporations from public scrutiny and accountability. As a condition of employment, The Pendry required Ms. Blackwell to give up her right to access the courts, her right to a jury trial, her right to appeal an erroneous decision, and her right to conduct full discovery to prosecute her claims. When she refused to give up her rights, the Pendry fired her after just one day of work.
California Governor Gavin Newsom signed AB 51 into law in late 2019 after widespread public outrage over arbitration agreements that hid allegations of sexual harassment and assault against Hollywood producer Harvey Weinstein and other prominent figures. The fate of AB 51 is currently in limbo. In 2021, the Ninth Circuit Court of Appeals upheld AB 51 in Chamber of Commerce of United States v. Bonta, 13 F.4th 766, 771 (9th Cir. 2021) (“Bonta”). However, the Ninth Circuit is deferring a vote on whether to rehear Bonta until after the United States Supreme Court issues a ruling in another arbitration case argued in late March 2022.
Still, even if AB 51 is ultimately struck down, Ms. Blackwell’s claims against the Pendry will survive because California law protects employees who are terminated for expressing opposition to conduct they reasonably believe is unlawful, which is exactly what Ms. Blackwell did.
To view the complaint, click here.
Lauren Teukolsky Publishes "Wage And Hour Case Notes" in the California Labor & Employment Law Review
In the March 2022 edition of the California Labor & Employment Review, Lauren Teukolsky published the "Wage and Hour Case Notes," describing five new decisions from California's appellate courts that impact wage-and-hour law. The column includes a discussion of notice requirements for Private Attorneys General Act ("PAGA") cases, the application of California's paystub requirements to flight attendants, the legal standard for reviewing PAGA settlements, whether pizza delivery drivers are exempt from arbitration, and whether non-profits may use unpaid volunteers.
Wage-and-hour law is a dynamic field, with new appellate decisions that regularly reshape the legal landscape. Ms. Teukolsky is an expert in California wage-and-hour law, and speaks regularly on wage-and-hour topics at national and state conferences.
If you would like to consult with Ms. Teukolsky on a wage-and-hour matter, you can use this page to get in touch.
U.S. Senate passes landmark law to protect victims of sexual assault and harassment from arbitration
Last week, the United States Senate passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, signaling a huge victory for victims of sexual assault and harassment across the country. The law prevents employers from using forced arbitration clauses to protect themselves from lawsuits alleging sexual assault and harassment. The bill invalidates forced arbitration clauses in “any dispute or claim that arises or accrues” after the date it is signed into law. This appears to mean that it applies to existing agreements that an employee has already signed, but does not revive sexual assault or harassment cases that have already been arbitrated.
Employers often include forced arbitration clauses in their employees’ employment contracts to ensure that employees’ claims of sexual assault or harassment are resolved through private arbitration, rather than normal court. Many employers do this because the employees tend to fare worse in private arbitration than they do in court. According to a paper published by the Economic Policy Institute, employees in private arbitration win only about a fifth of the time (21.4 percent), whereas employees in federal court win over one-third (36.4 percent) of the time. Employees also tend to be awarded less in damages in mandatory arbitration than in federal courts.
The new bill, H.R. 4445, has not been signed into law yet, but has now been passed by both chambers of Congress with strong bipartisan support. President Biden has indicated support for the bill in the past and is expected to sign it into law soon.
If you believe you have faced sexual assault or harassment at work, or have questions about arbitration, contact Teukolsky Law today for a free consultation.
On October 27, the Washington Post reported that U.S. employers closed nearly 14,000 private arbitration cases in 2020, a 17 percent increase from 2019. The Post wrote about findings from a report by the American Association for Justice.
“Critics say the system, in which cases are decided by private arbitrators, keeps employment disputes out of the public eye and fails to hold corporations accountable,” the Post wrote. Mandatory arbitration agreements are increasingly common, both as a condition of employment and for consumers signing up for products and services.
This week, the House Judiciary Committee is marking up the Forced Arbitration Injustice Repeal (FAIR) Act, which would ban mandatory arbitration. According to a 2018 report from the Economic Policy Institute, arbitration disproportionately affects low-wage workers and the retail industry; arbitration typically favors companies while shielding them from accountability for working conditions. According to the new report, employees were awarded money in just 1.6 percent of arbitrations in 2020. Decisions in arbitrations are final and cannot be appealed.
California has moved to prohibit mandatory arbitration for employees, but nationwide, just three states, including California, require arbitration companies to self-report certain data, like claim types and the prevailing party in each case.
Lauren Teukolsky is one of the leading experts in California on arbitration agreements. She is a frequent speaker at statewide conferences on the topic of arbitration, including for the California Employment Lawyers Association and the California Lawyers Association (formerly State Bar). If you have questions about whether an arbitration agreement is enforceable, contact us today for a consultation.
Teukolsky Law Asks Chateau Marmont To Reconsider Request To Move Lawsuit from Open Court To Secret Arbitration Proceedings
Last week, Teukolsky Law asked Chateau Marmont's attorney to reconsider the Chateau's request that TL client, Thomasina Gross, dismiss her race discrimination and sex harassment lawsuit against the famed Hollywood institution and refile her claims in private arbitration proceedings. Here is the letter:
Dear Mr. Stone:
We are in receipt of your March 10 letter in which you ask our client, Thomasina Gross, to dismiss the lawsuit she filed in Los Angeles Superior Court against your client, the Chateau Marmont, and instead file her race discrimination and sexual harassment claims with JAMS, a private arbitration company whose proceedings are not open to the public. We recognize that the arbitration agreement Ms. Gross signed when she started working for the Chateau appears to be enforceable. However, we would ask that you reconsider your request for the following reasons.
First, the Chateau’s treatment of its employees is a matter of substantial interest to the public and should accordingly be evaluated in a public forum, so that the public can make informed decisions about whether or not to give their business to the Chateau. Whereas arbitrations are essentially a “secret system controlled by the wrongdoers,” court cases ensure that the public has access to information that affects them. If Ms. Gross’s claims proceed in arbitration, none of the documents filed in the case will be a public record, and the testimony provided by witnesses will not be accessible to the public.
Second, a plaintiff’s ability to conduct discovery to learn information about the defendant’s case is far more constrained in arbitration than in court. For example, the JAMS Employment Arbitration Minimum Standards provide for only one deposition per party, while California state courts allow for the parties to take the depositions of all witnesses with relevant information. Given the nuances involved in evaluating a race discrimination and sexual harassment claim, we believe broader discovery is necessary.
Third, while forced arbitration is unfair to all workers (Americans are more likely to be struck by lightning than to win their cases in arbitration), it disproportionately affects female workers and Black workers, who are the most likely groups to be bound by forced arbitration. Meanwhile, only 28.84% of JAMS arbitrators are women, and only around 4% are African-American. We believe that our client, an African-American woman alleging race discrimination and sexual harassment in the workplace, deserves to have her case heard by a jury of her peers that is reflective of the community of Los Angeles.
For these reasons, we would respectfully request that you permit Ms. Gross to proceed with her claims in court, and not require her to proceed in arbitration. We appreciate your consideration of our request.
In a unanimous decision issued today in the closely-watched case of Lawson v. ZB, N.A., the California Supreme Court held that employees who file claims against their employers for penalties under the Private Attorneys General Act ("PAGA") to enforce the Labor Code may not seek to recover unpaid wages under Labor Code section 558 on behalf of employees. In the lower courts, the parties fought about whether a PAGA plaintiff subject to an arbitration agreement seeking both penalties and unpaid wages through Labor Code section 558 would be required to arbitrate the unpaid wages portion of their claim. The Cal Supremes cut off this argument at the knees, holding that a PAGA plaintiff may not even seek unpaid wages under Section 558 because the statute authorizes only the State, not a private plaintiff, to bring such a claim. Because the Court previously held that a PAGA plaintiff seeking penalties may not be compelled to arbitration, the Lawson plaintiff -- now stripped of her claim for unpaid wages -- could not be compelled to arbitration.
Sadly, this case is a big victory for employers. It limits the scope of the remedies a private plaintiff may seek under PAGA, the only remaining claim that can be brought in court (as opposed to arbitration) for Labor Code violations. The Supreme Court issued a bright-line ruling that private plaintiffs may seek only penalties (which have a one-year statute of limitations and which must be shared with the State) and can't seek unpaid wages (which arguably have a three-year statute of limitations and which go 100% to the employees). The case is a victory for employees only to the extent that the Court reaffirmed its previous ruling that PAGA claims for penalties may not be compelled to arbitration.
The practical effect of this ruling will be to send much more PAGA settlement money to the State. Previously, in a PAGA-only settlement, the plaintiff could designate a significant portion of the settlement money as unpaid wages and distribute that portion 100% to the employees. The plaintiff could designate the remaining portion as pure PAGA penalties, 75% of which must be shared with the State. Now, PAGA plaintiffs will no longer have the option to designate any portion of a PAGA-only settlement as unpaid wages, which means that 75% of the settlement must go to the State. This means less money in the hands of employees who actually suffered the violations. Hopefully, the State will use the money to hire more attorneys to enforce the Labor Code.
For you legal eagles out there, the critical passage of Lawson states: [T]he amount for unpaid wages referenced in section 558 is not part of that section’s civil penalty and is not recoverable through a PAGA action. Instead . . . this part of a section 558 citation represents compensatory damages. Section 558, in other words, authorizes only the Labor Commissioner to issue a citation that includes both a civil penalty and the same unpaid wages Lawson can alternatively recover under section 1194 through a civil action or an administrative hearing. But section 2699, subdivision (a) does not authorize employees to collect section 558’s unpaid wages through a PAGA action."
If you believe that you have not been paid all of the wages owed to you by your employer, contact us today for a free consultation.
Teukolsky Law founder Lauren Teukolsky was quoted in a Courthouse News story on the Private Attorneys General Act ("PAGA"), a California law that allows private attorneys to stand in the shoes of the State to bring labor enforcement actions against employers who break the law. PAGA is under attack by a consortium of businesses that are suing to have PAGA declared unconstitutional. Teukolsky Law represents a group of 57 nurses who have sued a Tenet-owned hospital in Templeton, CA for labor violations, including failing to provide rest breaks because the hospital was understaffed and the nurses did not want to leave their patients unattended.
Nine of the nurses have brought a PAGA action in San Luis Obispo Superior Court to represent all nurses at the hospital because they all signed arbitration agreements requiring them to bring their claims in secret, private arbitration proceedings. Courts currently allow employees to bring PAGA claims in open court, even if they have signed arbitration agreements. The arbitration agreements the nurses signed contain class action waivers, which means that the nurses are not allowed to bring an action to represent all of the nurses with similar claims at the hospital -- except through PAGA.
If business groups are successful in having PAGA declared unconstitutional, this could greatly impair the ability of employees to vindicate their workplace rights. Teukolsky Law will continue to fight every day for the rights of employees against powerful business lobbies that seek to take away their rights. If you believe that your rights have been violated, contact us today for a free consultation.
Lauren Teukolsky is the founder and owner of Teukolsky Law, A Professional Corporation.