The California legislature is notoriously hostile to mandatory arbitration agreements in the employment context. That’s because the legislature believes employers have more negotiating power than employees; thus, the arbitration agreements that employers give to employees often have one-sided terms that heavily favor the employer. The employee often feels that he has little choice and must… Read More
Posts Tagged With: arbitration agreement
Employers Beware: Don’t Allow Employees to e-Sign Arbitration Agreements
Many (wise) California employers use arbitration agreements requiring employees to submit any future employment-related dispute to mandatory arbitration. Arbitration is typically favored by employers because it is cheaper, faster, and more private than litigation. There’s also the perception that arbitrators are more conservative and less emotional than jurors, which employers believe translates into more friendly… Read More
Court of Appeals Confirms That Arbitration Agreements Won’t Protect Employers from PAGA Litigation
California’s Private Attorneys General Act (“PAGA”) authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for violations of the California Labor Code. Lawsuits brought under PAGA have resulted in employers paying millions of dollars in penalties that the state almost certainly would not have… Read More
Note to Employers: Craft Your Arbitration Agreements Carefully
A recent Court of Appeal decision underscores the importance of reviewing severability provisions in arbitration agreements. In Kec V. Superior Court, Plaintiff Nichole Kec brought individual, class, and Private Attorneys General Act (“PAGA”) claims against her former employer, defendants R.J. Reynolds Tobacco Company and Reynolds American, Inc. (“Reynolds”), as well as three individual employees at… Read More
Pay Your Arbitration Fees Late? Risk Losing Your Right to Arbitrate
Senate Bill (“SB”) 707, which became effective on January 1, 2020, creates substantial consequences for employers that fail to pay the costs and fees associated with the arbitration on time. Specifically, after January 1, 2020, an employer that fails to pay arbitration fees within 30 days after such fees are due will be held to… Read More
Three New Cases on the Enforceability of Arbitration Agreements
In the employment context, an arbitration agreement is a contract between an employer and an employee in which the parties agree to resolve disputes in front of an arbitrator rather than in civil court. These agreements are often standard in new hire paperwork. Employers like arbitration because it is considered to be more efficient and… Read More
One Day, Two Opposite Results in Arbitration Cases
On the same day, two different California appellate courts reached opposite conclusions as to whether an employer’s arbitration agreement was enforceable or not. Subcontracting Concepts v. DeMelo — Arbitration Agreement Void and Unenforceable In one case, Subcontracting Concepts, LLC v. DeMelo, the Court found that the arbitration agreement was both procedurally and substantively unconscionable and, therefore, unenforceable…. Read More
U.S. Supreme Court Upholds Class Action Waivers
It was only a few weeks ago. California employees and their lawyers were jubilant after the CA Supreme Court delivered its game-changing Dynamex decision that made it even harder for California employers to properly classify workers as independent contractors. As a result, employment protections were extended to millions of California workers who were also given the right… Read More
Arbitration Agreements — A Seawall to Surging PAGA Lawsuits?
Since its passage in 2004, California’s Private Attorneys General Act (“PAGA”) has been a weapon used by employees and their lawyers across California. PAGA allows one “aggrieved employee” to sue his/her employer in a representative capacity and to recover penalties and attorneys’ fees for technical violations of the California Labor Code suffered by that one employee… Read More
California Legislature Approves AB 465 — Future of Employment Arbitration Agreements in Doubt in California
Recently, the California Legislature passed AB 465 which prevents employers from requiring employees to sign mandatory pre-employment arbitration agreements as a condition of employment. This bill, which is now sitting on Governor Brown’s desk awaiting his signature, adds a new provision of the California Labor Code making it illegal to: “Require another person to waive… Read More
