Join Kelley Drye’s Labor and Employment team for the 2022 WORKing Lunch Series, which includes five webinars focused on the latest trends and developments in workplace law. Sign up for one, some, or all of the programs below. Invite a colleague, grab your lunch and let’s take a deep dive into these timely employment topics.
Tuesday, June 28, 2022 at 12:30pm ET
Employers use arbitration agreements to avoid costly and protracted litigation. And, in turn, employers can often rely on courts to enforce their arbitration clauses, either dismissing or staying the case pending completion of arbitration. A California-based employee, however, recently convinced the California Courts of Appeal that his arbitration agreement was too unfair to be enforced, and the court agreed. In Nunez v. Cycad Mgmt. LLC (“Nunez”), 77 Cal. App. 5th 276 (Cal. Ct. App. 2022), the California Courts of Appeal held that an employer’s arbitration clause was unconscionable—that is, too unfair—and, as a result, the arbitration clause was invalid and unenforceable.
That decision was rooted in the doctrine of unconscionability. Originally a contract defense, the doctrine unconscionability excuses a party from compliance with a particular contractual provision when that provision both was negotiated in an oppressive manner and would involve an overly harsh or one-sided result. A plaintiff invoking the doctrine of unconscionability must demonstrate both procedural and substantive unconscionability.
Continue Reading California Arbitration Agreements: Greater Hurdles To Enforceability
Courts have little leeway to avoid enforcement of an arbitration clause. Indeed, the United States Supreme Court has spilt much ink reinforcing the power and scope of the Federal Arbitration Act (“FAA”), the legislation requiring that courts compel arbitration of claims subject to an arbitration clause. In California, however, employees can circumvent their arbitration clauses by asserting Private Attorneys General Act (“PAGA”) claims, a loophole that two California Courts of Appeal decisions have recently reinforced. The United States Supreme Court, nonetheless, appears poised to step-in and potentially close this loophole for good.
Continue Reading CA Courts Still Reluctant to Enforce Arbitration Agreements For PAGA Claims
President Biden just signed into law the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” known informally as the “Me Too” law. It becomes effective immediately, and amends the Federal Arbitration Act (FAA) to ban the mandatory arbitration of sexual assault and harassment claims.
What does the new law mean for the future of employment arbitration? Can employers still have any type of a mandatory arbitration program? The answers to these questions are not immediately obvious, but you can be assured that the Me Too Bill will make harassment claims more expensive and more complicated to resolve. It is also not a surety that the end of arbitration will be good for victims or potential plaintiffs.
What the law will mean for your business will depend on a number of factors, including where you are doing business (as mandatory arbitration is already prohibited in some states), and whether your company had a mandatory arbitration program in place for customers or employees. However, all businesses may see an uptick in harassment claims, as that often happens whenever there is a very public legal development in this area.
What does the Me Too law say?
The main provision of the law is short enough to reproduce here:
“[A]t the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no predispose arbitration agreement or predispose joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.”
The terms “sexual assault dispute” and “sexual harassment dispute” are not confined to federal claims, but is any such claim as defined according to “applicable Federal, Tribal, or State law.”…
Continue Reading The End of Arbitration? What the “Me Too” Law Means for the Future of Employment Arbitration
JOIN US: TUESDAY, JULY 21, 2020 | 12:30PM EST
Four months ago, the Dow was close to 30,000, employment rates were at historic highs, the coronavirus was still “novel,” and millions had not yet taken to the streets in global protests against police brutality and racial inequality. The workplace we now return to exists in…
JOIN US: Tuesday, March 17, 2020 at 12:30 PM EST
Employers are in uncharted territory with the COVID-19 pandemic, which has created complicated employment issues that continue to evolve by the hour. Join Kelley Drye’s Labor and Employment co-chairs Barbara Hoey and Mark Konkel as they share practical advice for employers looking to keep employees…
As federal, state and local governments continue to develop their responses to the COVID-19 outbreak, employers may find themselves in uncharted territory as to how to deal with emerging employee issues.
There are three overriding rules that all employers should remember:
- Think safety first. Keeping those employees who are infected or at risk of infection at home to ensure that the rest of the workforce is safe should be the number one priority.
- Think about how you can keep your business going. Make sure your work-from-home policies and technology are up to date, and remind employees how to use them.
- Avoid stereotypes. Do not allow employees to assume that people of certain ethnicities are at a higher risk than others. If you become aware of any discrimination or harassment—stop it immediately.
Below are some general answers to questions our clients have been asking. However, please be aware that this is a very fact-specific and complex topic; COVID-19 related employment issues are evolving by the hour. Employers are cautioned to stay abreast of federal, state, and local government advisories, and to consult legal counsel before making employment decisions or changing policy.…
With the arrival of 2019 novel coronavirus (“COVID-19”) to the United States, employers should begin thinking about strategies to mitigate business interruptions, ensure employee safety, and avoid unnecessary litigation.
Know Your Resources
Employers should continue to monitor reliable guidance provided by the U.S. Centers for Disease Control and Prevention (“CDC”) and local public health agencies. Understanding how COVID-19 is transmitted and what steps can be taken to protect diagnosed or exposed employees is essential to dispelling employee fears. Employers can educate employees on prevention and symptoms and should be prepared to answer employee concerns regarding workplace safety. The following are guides which may be helpful to employers:
- Up to date information on COVID-19 can be found here: Coronavirus Disease 2019 (COVID-19)
- The CDC’s interim guidance to employers can be found here: Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19), February 2020
- Information regarding employee travel can be found here: Traveler’s Health
- The CDC’s Interim Guidance for Risk Assessment Guide can be found here: Interim US Guidance for Risk Assessment and Public Health Management of Persons with Potential Coronavirus Disease 2019 (COVID-19) Exposure in Travel-associated or Community Settings
On October 13, 2019, California Governor Gavin Newsom signed into law Assembly Bill 51 (“AB 51”). In a momentous upheaval of existing law, AB 51 prohibits California employers from requiring employees to agree to arbitrate certain disputes as a condition of new or continued employment. AB 51 also prohibits employers from retaliating against any employee who refuses to agree to arbitration. AB 51 takes effect January 1, 2020.
AB 51 is one of many bills to pass the desks of California governors since the beginning of the #MeToo movement. This bill specifically forbids employers from requiring employees to “waive any right, forum, or procedure” for claims arising from the Labor Code or the California Fair Employment and Housing Act (“FEHA”), California’s principal statute outlawing employment and housing discrimination. While AB 51 is a response to the #MeToo movement, and gained popularity as a measure aimed at bringing to light workplace sexual misconduct, AB 51’s reach is extensive, and touches any mandatory employment agreement which compels arbitration of any claim brought pursuant to the Labor Code or the FEHA.…
In the first post-Epic Systems decision regarding arbitration agreements, the NLRB has underscored just how pro-arbitration courts and regulators have become. In Cordúa Restaurants, the Board put its stamp of approval on employers revising arbitration provisions even after employees file a claim. In doing so, employers can exercise more control as to how employees must bring their claims and—particularly, as in the case of Cordúa Restaurants, by limiting class and collective actions.
In Cordúa Restaurants, employees, as a condition of their employment, had to sign arbitration agreements waiving “their right to file, participate or proceed in class or collective actions.” Despite this agreement, some employees still filed collective wage and hour actions in federal court. Additional employees began “opting-in” to these collective actions.
In response, the employer revised its arbitration agreement so that employees waived their right to opt-in to a collective action. The agreement was revised to say “I agree that I cannot file or opt-in to a collective action under this Agreement, unless agreed upon by me and the Company in writing.” Employees had to sign this new arbitration agreement as a condition of employment.…