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Written by Alfredo Ortega
Last week, the U.S. District Court for the Eastern District of California granted a request for a preliminary injunction to prohibit the State of California from enforcing Assembly Bill 51 (AB 51) as to arbitration agreements governed by the Federal Arbitration Act (FAA). AB 51 generally bars conditioning employment or employment-related benefits on the signing of an arbitration agreement covering claims under the California Fair Employment and Housing Act or the Labor Code. The U.S. Chamber of Commerce and other business organizations filed this lawsuit, Chamber of Commerce of the U.S.A. v. Becerra, seeking to have AB 51 declared preempted by the FAA. The preliminary injunction will remain in place until the case is resolved on the merits.
For now, employers may continue to require employees to sign mandatory arbitration agreements (as long as they are subject to the FAA). We will continue to keep an eye on the Chamber of Commerce case and will apprise you of any updates.
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Written by Jonathan Turner
If you regularly deal with union concepts, read on! Otherwise you may find this a tad wonky…
After some three years into the current administration, the NLRB (“Board”) has issued new election rules that reverse or modify rules put in place during the Obama administration. The Obama era rules, commonly referred to as the “fast track” or “quickie” election rules, were the subject of controversy and debate between the business community and organized labor prior to their becoming law in 2014. The stated policy objectives for the Obama era rules were “to simplify and modernize” the Board’s election procedures for determining employee desire for union representation, establish “greater transparency and consistency” in administration of those procedures, and provide for a more “fair and expeditious resolution” of NLRB election cases; however, the business community objected to the Obama era rules primarily because they imposed procedural and substantive limits on the types of issues that can be adjudicated in a pre-election hearing, and shortened the time frame within which such hearings were to occur.
The new rules became effective December 18, 2019. Set forth below is a summary of the more significant aspects of the new rules and how those rules differ from those previously in place. (more…)
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Written by Jeremy Mittman
Recently, we informed our readers about a new law making it more difficult to classify independent contractors as such. Unfortunately, that was just the tip of the iceberg. A number of additional new employment-related bills recently signed into law by Governor Gavin Newsom will have a negative impact on California employers. Unless specifically noted, these laws go into effect on January 1, 2020. MSK recommends that any employer with California employees should consult with their employment counsel to address questions regarding changes to current policies/procedures in light of these new laws. (more…)
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Written by Jonathan Turner
The NLRB under the current administration continues to issue decisions that factor in legitimate business considerations of employers when evaluating rules that are alleged to restrict employee protections under the NLRA. One such recently issued decision, LA Specialty Produce Company, 368 NLRB No. 93 (October 10, 2019), may have particular significance to many of MSK’s clients because it addresses an important issue on which we frequently have consulted with clients in the past — restrictions on communications responsive to inquiries from the media.
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Written by Jeremy Mittman and Stephen Rossi
Finally, an employer-friendly law passed in California! Unfortunately, it only affects a small number of employees— but for those employers that are implicated, the law is a welcome reprieve.
On September 5, 2019, California Governor Gavin Newsom signed into law Senate Bill 671, the “Photoshoot Pay Easement Act,” which went into effect immediately. This law specifies that any short-term print shoot employee (from models to crew members) can be paid on the employer’s next regular pay day (including by mail), rather than on the last day they work. (more…)
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Written by Jeremy Mittman
This week, the U.S. Department of Labor (“DOL”) unveiled the final version of its overtime exemption rule, which sets the annual salary threshold workers need to exceed to qualify for the Fair Labor Standards Act’s (“FLSA”) “white collar” exemptions at $35,568 per year (up from the current annual salary threshold of $23,660). The DOL estimates that about 1.3 million workers who hadn’t previously been eligible for overtime will now stand to receive it once the rule takes effect on January 1, 2020.
The FLSA’s “white collar” exemptions apply to employees employed in bona fide administrative, executive, professional, and computer-related capacities, as well as outside sales employees. If employees meet the requirements for these exemptions (including, where applicable, the salary basis requirement), employers need not pay them overtime for any time worked over 40 hours per week under federal law.
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Written by Jeremy Mittman, Jeffrey Davine, Robert Lowe, Susan Kohn Ross and Samuel Richman
On September 18, 2019, California Governor Gavin Newsom signed into law A.B. 5, codifying the “ABC test” adopted in the California Supreme Court decision, Dynamex (see, e.g. prior posts here, here, and here) and ensuring that most California workers should appropriately be classified as employees instead of independent contractors. The bill goes into effect January 1, 2020.
Though supporters state that the bill is aimed primarily at the so-called “gig economy,” in reality A.B. 5 affects virtually every type of business in California.
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Written by Jeremy Mittman
California employers received mostly good news this past month on the arbitration front, with a trio of pro-employer arbitration-related rulings. The California Supreme Court’s recent ruling invalidating an employer’s arbitration agreement (discussed below) is a notable exception.
California Supreme Court Invalidates Employer’s Arbitration Agreement As Unconscionable.
In OTO LLC v. Ken Kho, the California Supreme Court ruled that an Oakland Toyota dealership’s arbitration agreement with a former employee was unenforceable and was so unfair and one-sided that it was procedurally and substantively unconscionable. “Arbitration is premised on the parties’ mutual consent, not coercion, and the manner of the agreement’s imposition here raises serious concerns on that score,” the majority opinion said. (more…)
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Written by Jeremy Mittman and Bethanie Thau
In 2018, California passed a law that greatly expanded sexual harassment training requirements for employers (see here). Under the law, employers of as few as five people must provide two hours of interactive sexual harassment training to their supervisors and one hour to all non-supervisory employees. The training was to have been completed by January 1, 2020. Just before Labor Day, California Governor Gavin Newsom gave employers a welcome reprieve by extending the deadline to comply with the new training requirements by a year — to January 1, 2021. The bill signed by the Governor that extended the deadline also confirms that those employees who received sexual harassment training in 2019 need not be re-trained again for two years.
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By Jeremy Mittman and Stephen Franz
Last week, the California Supreme Court ruled that a former start-up employee could not hold his former boss personally liable for unpaid wages based on the theory of common law conversion. Conversion is a legal term for theft. This is a win for employers as, if the Court had ruled otherwise, employers potentially could be held liable for tort damages (including punitive damages) for failing to pay wages. (more…)