A Viking River Cruises Retrospective: New Challenges to the Use of Arbitration Agreements to Manage PAGA Risks

Wage and hour claims asserted under the Private Attorneys General Act of 2004 (“PAGA”) are often compared to class actions, but without the same gatekeeping principles. Under PAGA, a single employee can potentially represent hundreds or thousands of other employees for a garden variety of wage and hour allegations, even if the representative did not experience the same violations—and even if the representative only ever experienced one violation. PAGA’s lack of standards, combined with the persnickety character of the Labor Code, are a recipe for “sue first, ask questions later” lawsuits and difficult decisions to fight or fold.

Categories: Labor/Employment
Rising Inflation Means Rising Minimum Wage in 2023

Due to a cost-of-living increase required by the State’s minimum wage law, effective January 1, 2023, California’s minimum wage will increase from $15.00 to $15.50 per hour for all employers, regardless of their number of employees.

California Court of Appeal Increases Potential Employer Exposure by Allowing Recovery of Attorney’s Fees in Meal and Rest Break Actions

On September 12, 2022, the California Court of Appeal, Second District, held that employees are entitled to recover attorney’s fees and costs stemming from a claim for failure to provide uninterrupted rest periods. Betancourt v. OS Restaurant Services, LLC, Case No. B293625 (Cal. Ct. App 2022). In her complaint, plaintiff Raquel Betancourt also alleged that she was retaliated against and wrongfully terminated for reporting these repeated rest break and food safety violations.

Categories: Wage & Hour

On September 2, 2022, the California Court of Appeal, Second District, delivered a rare victory for California construction employers in Jerome Oswald v. Murray Plumbing and Heating Corporation (2022) __ Cal.Rptr.3d __, Dkt. No. B312736.  At its core, this case shows how qualifying employers can—and should—take advantage of California’s construction industry exemption from the Private Attorneys General Act of 2004 (“PAGA”).

Often it is said that “the best result in mediation is the one that makes everyone equally unhappy.”  Even so, experience proves that the party who usually comes out best in mediation is the one who is most prepared.  This article provides some common sense, practical tips to help with that preparation.

Mediation has become an essential part of litigation because the risks of going to trial are so considerable.  A defendant that cannot resolve a case before trial runs the risk of a court or jury awarding substantial damages to the plaintiff.  If the plaintiff recovers anything at all, the defendant also may have to pay the plaintiff’s attorneys’ fees and costs.  Even when defendants win (and they do), the fees they pay to their own counsel to secure a defense win are substantial.  Plaintiffs also are at risk.  While many plaintiffs may have contingent fee arrangements with their own counsel, a losing plaintiff likely will be on the hook for significant hard costs incurred in litigation by their own counsel.  Even worse, they can be responsible for the defendant’s legal costs, and on rare occasions, attorneys’ fees.

Categories: Litigation
Tags: Mediation

In a recent article, the National Labor Relations Board (“NLRB”) reported that during the first six months of 2022, union representation petitions filed at the NLRB increased 58%—up to 1,892 from 1,197 during the first half of 2021.  (https://www.nlrb.gov/news-outreach/news-story/correction-first-three-quarters-union-election-petitions-up-58-exceeding).  The NLRB also reported that in 2021, 52% of petitions filed resulted in a victory for the union as compared to only 46% in 2020.  (https://www.nlrb.gov/reports/nlrb-case-activity-reports/representation-cases/intake/representation-petitions-rc).

Tags: NLRB, unions
California Court of Appeal Confirms That 2018 Federal Regulation Preempts California Meal and Rest Break Laws for Truck Drivers but Holds Regulation is Not Retroactive

On December 28, 2018, the Federal Motor Carrier Safety Administration (“FMCSA”) issued a regulation under the Motor Carrier Safety Act of 1984 (49 U.S.C. § 31101, et seq.) that preempted California’s meal and rest break rules.  In doing so, the FMCSA decided that California may no longer enforce its meal and rest break laws with respect to drivers of property-carrying commercial motor vehicles.

On November 15, 2021, the West Hollywood city council enacted an ordinance that establishes a local minimum wage, and requires employers to provide paid and unpaid leave benefits. On May 16, 2022, the city council approved amendments to the ordinance and published Administrative Regulations (637879708613130000 (weho.org)) regarding the law, discussed below.

The ordinance’s minimum wage and leave benefits are restricted to only hourly, non-exempt, employees. There are also exceptions available for unionized employees subject to a collective bargaining agreement. 

Supreme Court Lowers the Bar for Plaintiffs to Establish Waiver of Right to Arbitrate Due to Employer’s Delayed Motion to Compel Arbitration 

On May 23, 2022, the U.S. Supreme Court issued a unanimous decision in the case of Morgan v. Sundance, Inc., which held a party’s waiver of the right to arbitrate a dispute by virtue of a delay in seeking enforcement of the arbitration agreement, no longer requires a showing of prejudice to the party opposing enforcement of the arbitration agreement. Prior to this, the circuit courts followed the rule of determining whether prejudice existed prior to finding waiver. After the Morgan decisionthe analysis reverts to the standard contract waiver analysis “focus[ing] on the actions of the person who held the right; ... [rather than] the effects of those actions on the opposing party.” This new rule applies whenever a party seeks to stay litigation and enforce an arbitration agreement under the Federal Arbitration Act (“FAA”).

The federal Fair Credit Reporting Act (“FCRA”) permits background checks for employment purposes, so long as employers obtain authorization from and provide the appropriate “stand-alone” disclosure to the applicant or employee regarding the background check, among other requirements. Willful violations of the FCRA’s stand-alone disclosure requirement can lead to recovery of statutory damages ranging from $100 to $1,000 per violation. Thus, a central issue in FCRA cases is whether the employer’s violation is “willful,” which requires a showing that the defendant’s conduct was “intentional” or “reckless.” 

Categories: Litigation

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