California Court of Appeal Finds Overbro...

The California Court of Appeal recently ruled that a confidentiality provision in an employment agreement that restrains competition violates California’s non-compete statute (California Business & Professions Code § 16600) and, when an arbitrator does not address this violation of public policy, it is grounds to overturn an arbitration award. TGS Management Company LLC v. Brown (“TGS”) involved a confidentiality agreement imposed by a statistical arbitrage company on a former employee.  (Statistical arbitrage is a highly computerized form of equity...

California Voters Help App-based Transpo...

After the most expensive initiative campaign in state history, California voters approved Proposition 22 (“Prop 22”) by a 58% to 42% margin.  Prop 22, backed by app-based rideshare and delivery companies including Uber, Lyft, DoorDash, and Postmates, classifies drivers for such companies not as employees but rather as independent contractors, while providing them with some additional protections beyond those typically applicable to independent contractors. Additional driver protections include: a net earnings floor based on 120% of the minimum wage applied to a...

Case Alert — An Arbitrator’s Power...

On July 16, 2020, the California Court of Appeal held in Aixtron v. Veeco Instruments, 52 Cal.App.5th 360, as an issue of first impression, that arbitrators do not have the statutory power to issue pre-hearing discovery subpoenas to third parties unless authorized by the applicable arbitration provision. In Aixtron, an employee resigned from his position and began to work for a competitor.  The former employer initiated arbitration proceedings against the employee pursuant to an arbitration clause for, inter alia, data theft.  The arbitrator issued a pre-hearing...

The “ABC” Test, As Modified

In 2018, the California Supreme Court (in Dynamex Operations West, Inc. v. Superior Court) created a strict new test for determining whether a worker is an employee or an independent contractor, with a greater presumption that workers should be characterized as employees.  As previously discussed, the “ABC” test presumes that a worker is an employee unless the an employer can meet its burden of proof with respect to all three of the following factors: (A) that the worker is free from the control and direction of the hiring entity in connection with the performance of...

DOL Opinion Letter That Some Gig Workers...

On April 29, 2019, the U.S. Department of Labor’s Wage and Hour Division (“DOL”) issued an Opinion Letter in response to an inquiry by a single, unnamed company that sought the Department’s guidance on whether its workers could properly be considered contractors under the Fair Labor Standards Act (“FLSA”), which mandates minimum wages and overtime pay for employees, but not for independent contractors. To determine whether an individual is an employee or independent contractor, the DOL looks at six factors that demonstrate “economic dependence.” (See...