In Sonic-Calabasas v. Moreno (Sonic II), the California Supreme Court recently clarified the scope of the state law doctrine of unconscionability as applied to arbitration agreements in light of the United States Supreme Court’s decision in AT&T v. Concepcion, 131 S. Ct. 1740 (U.S. 2011). Sonic II is the Court’s first attempt at reconciling California law with Concepcion, which clarified the limitations that the Federal Arbitration Act imposes on a state’s capacity to enforce its rules of unconscionability on parties to arbitration agreements. Sonic II is the first of four cases that the California high court is scheduled to consider this year that will decide how California courts will navigate the new legal framework for arbitration agreements created by Concepcion.(more…)
When an employer determines to implement an arbitration clause program with its employees, one concern is that provisional relief deemed critical to prevent the loss of clients, employees, or devaluing of company trade secrets is unavailable or less effective. However, the California Arbitration Act (where it applies), has a statutory allowance for access to the courts for certain provisional remedies (such as TROs), as an aid to an arbitration proceeding. California Code Civil Procedure (“CC”) section 1281.8. Importantly for employers, the recent appellate court decision Baltazar v. Forever 21, Inc. (2012) 212 Cal.App.4th 221, confirms that invoking section 1281.8 as part of an arbitration clause will not make it unenforceable.(more…)
New California employment laws will be effective as of January 1, 2013. Some of the laws that employers are likely to regularly run into are summarized below. Are you ready?
Commission contracts now must be written, and may survive expiration
Starting January 1, 2013, employers are required to provide commissioned employees with written contracts that set forth the applicable formula for calculating the commissions and method of payment. (AB 1396, AB 2675). The new laws apply to both in-state and out-of-state employers, require that employers provide copies of the signed commission contracts to their employees, and also require that employers obtain signed receipts from the employees for such contracts. Even if a contract governing commissions expires, the terms will “live on” past the contract’s date of expiration until the parties enter into a new agreement or until the employment is terminated.
Action plan: Review your variable compensation contracts to identify those that are commission-based. If the contracts are not spelled out in sufficient detail, prepare compliant agreements to be effective January 1, 2013. Obtain signatures, get receipts and maintain your records. Calendar when existing contracts are set to expire, so that any new terms, if needed, can be added.(more…)
Employers and arbitration enthusiasts should take note of Richey v. AutoNation, Inc., 2012 Cal.App.LEXIS 1177, No. B234711 (2d Div., Nov. 13, 2012) (“Richey”). In Richey, the California Court of Appeal vacated an arbitration award and held that employers cannot interfere with an employee’s rights to leave under the California’s Family Rights Act (“CFRA”) based solely on an “honest belief” that the employee is abusing those rights. Given the expectations of extremely limited review of arbitration decisions (particularly an arbitrator’s legal or factual conclusions), and the dangers of navigating CFRA, Richey warrants attention.(more…)
Employment lawyers can argue about the pros and cons of arbitration versus court cases all day long, but the “right” answer from a strategic perspective, and real driver as applied in any specific case (we are, after all, advocates for our clients’ positions), always depends on the circumstances at issue and side you are on. Generally, there is a positive correlation for company lawyers, and negative correlation for plaintiff-side lawyers, between sensitivity/risk and the desire to have arbitration. That is, with sensitive/risky matters (primarily defined as involving bad publicity that can damage the company or its executives, large dollars and/or the uncertainty involved in a “run away jury”), companies want to arbitrate and plaintiffs do not. In contrast are more “mundane” matters (ie. no risk of bad publicity and small damages), where companies and plaintiffs align more often in wanting arbitration.(more…)
I am very pleased to introduce SV Employment Law Firm’s blog, which we will use to (1) report employment law developments that are pertinent to the SV audience; and (2) provide practical and strategic tips regarding employment litigation, counseling, investigations and training. We will also do a little deconstruction along the way as the employment law market and employment law principles continue to evolve, with the goal of providing a useful conceptual framework for employment law-related decisions. We look forward to using our blog in combination with our other communications and speaking engagements to disseminate what we hope is useful information to companies, groups and individuals who may be interested in these topics.