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California Court of Appeal Finds Overbroad Confidentiality Agreements Can Violate California’s Ban on Restrictive Covenants and be Grounds to Overturn an Arbitration Award

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. (more…)

California Voters Help App-based Transportation Companies by Approving Proposition 22

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. (more…)

Case Alert — An Arbitrator’s Power To Order Third Party Discovery Depends On The Applicable Arbitration Language

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. (more…)

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: (more…)

DOL Opinion Letter That Some Gig Workers Are Contractors Has Little Significance In California Given Dynamex

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. (more…)

The Rapidly Evolving Cannabis Laws: It’s Time to Think About Your Drug Use Policy

Federal, state, and local laws regarding the legalization of marijuana, and medical use of marijuana, are rapidly changing, which puts employers in a tough situation when they learn of an employee’s marijuana use. Federal law still classifies marijuana as a Schedule 1 drug, but California has legalized both recreational and medical marijuana use. As of today, California employers are not required to accommodate an employee’s use of medical marijuana outside of work. Given the rapid changes in the laws, however, it’s a good idea to make sure that your company’s drug use policy is up to date. (more…)

Update — Important Changes In Sexual Harassment And Other Laws In California

Outgoing Governor Jerry Brown signed dozens of bills into law on Sunday, September 30, 2018. Many of these new laws are in response to the #metoo movement and specifically target sexual harassment. This blog summarizes the key features of these laws and their effect on employers as well as others, such as VCs, who can now be held legally responsible under the sexual harassment laws for harassing non-employee persons who work for actual or potential portfolio companies. (more…)

Class Certification Defeated in Twitter Gender Discrimination Case

Recently, another technology company defeated class certification in a gender discrimination lawsuit. On July 3, 2018, a California state court judge denied female Twitter employees class certification in a lawsuit entitled Huang v. Twitter. This ruling follows a federal judge’s denial of class-action status to females in a gender bias case against Microsoft Corporation. Similar cases are currently pending against Google and Oracle. (more…)

New Protections For Employers Reporting Sexual Harassment Claims In Reference Checks

California employers for the most part play it safe by following their job reference policies allowing them to state period of employment, job title, and possibly compensation (with the employee’s consent). For those who go beyond these basics, there is a dilemma when asked to respond to a reference check regarding a former employee who has had his or her employment terminated due to an accusation of sexual harassment. Thus, by informing a future employer of an employee’s misconduct, the former employer opens itself up to a defamation claim by an employee claiming he or she was falsely accused. (more…)

The U.S. Supreme Court Upholds Class Action Waivers In Employment Arbitration Agreements

The United States Supreme Court has issued its much-anticipated opinion in Epic Systems Corp. v. Lewis, 584 U.S. __ (2018), and two companion cases. In a decision that will be welcomed by employers, the Court has upheld the use of arbitration agreements with class action waivers that require employees to litigate any claims against their employers individually in arbitration. Specifically, the Court has held that class action waivers in arbitration agreements between employers and their employees do not violate the National Labor Relations Act (NLRA) by preventing employees from engaging in protected concerted activity. (more…)