California employment case index

A Tesla yard hostler who moved 53-foot trailers of out-of-state auto parts around the Fremont factory — never crossing a state line — sued for wage-and-hour violations, and Tesla moved to compel individual arbitration. In the published portion of its opinion, the First District holds yard hostlers are FAA section 1 transportation workers exempt from arbitration, and clarifies which wage claims Labor Code section 229 keeps in court.

A former UPS seasonal driver sued for wage violations; the district court compelled arbitration of her individual claims but refused to decide whether the FAA or state arbitration law governed, reasoning the result was the same. The Ninth Circuit grants a writ of mandamus: under New Prime, the court — not an arbitrator — must decide whether the FAA section 1 transportation-worker exclusion applies before compelling arbitration.

A staffing agency hired a worker under an arbitration agreement and placed him at a client; when the placement ended, the client hired him directly, and he later sued the client over that direct-employment period. The First District affirms denial of arbitration: the client was not a party or “affiliate” of the agency, the claims fell outside the agreement’s scope, and the worker was not equitably estopped — a nonsignatory cannot simply borrow a staffing agency’s arbitration clause.

A railcar repairman who inspected and repaired freight cars taken out of service in a rail yard brought a wage-and-hour class action and argued his arbitration agreement was exempt as a transportation worker’s contract. The Second District disagrees: he is neither a “railroad employee” nor a “transportation worker” under FAA section 1, because repairing decommissioned cars is too far removed from actual transportation — so his arbitration agreement and class waiver are enforceable.

Studebaker made a new employee sign three onboarding arbitration documents; the trial court found their “conflicts” showed no valid agreement and denied arbitration. The Second District reverses and compels arbitration — ambiguities must be reconciled to give effect to the intent to arbitrate, the agreement was not unconscionable, and an inconsistent wholesale PAGA waiver should have been severed.

After two of four bellwether arbitrators found a travel-nursing agency’s arbitration agreements invalid, a district court used non-mutual offensive collateral estoppel to void 255 other employees’ separate agreements. The Ninth Circuit reverses: the FAA guarantees individualized, one-on-one proceedings, and forbids using other arbitrators’ rulings to invalidate other parties’ agreements wholesale.

A nursing student said the faculty member running her hospital clinical rotation sexually harassed her and tanked her grade when she refused him. The Fourth District holds a student in a required clinical placement is an “unpaid intern” protected by FEHA, and reverses summary judgment on standing, Government-Claims-Act notice, and deliberate indifference.

The California Supreme Court holds that illegible, one-sided arbitration print is procedural (not substantive) unconscionability — and that no presumption favors arbitration.

Twenty-two months into a wage-and-hour class action, TEKsystems rolled out a new mandatory arbitration agreement to the recruiter class members and moved to compel arbitration. The Ninth Circuit affirms denial of that motion: Rule 23(d) lets a district court refuse to enforce an agreement obtained through misleading, mid-litigation communications that threaten the fairness of the class action — the FAA gives arbitration no special protection.

A coworker’s off-site sexual advances were not work-related and not imputable to the employer — yet the Fifth District held the employee still stated a FEHA hostile-work-environment claim, because the employer’s refusal to act and its HR representative’s mocking response could independently alter the workplace in an objectively severe manner. A pleading-stage reversal that imports the Ninth Circuit’s totality-of-the-circumstances, employer-response framework (Fuller, Okonowsky) into California law.

A newly hired care coordinator was pressured to sign an arbitration agreement amid a stack of 31 onboarding documents on her first day. When she said she did not understand it, the HR manager assured her it would let the company resolve disputes cheaply and without lawyers — untrue, since the agreement imposed adversarial federal-rules arbitration with each side bearing its own fees. The Court of Appeal affirmed the denial of arbitration: the oral misrepresentation, contradicting the written terms, made the agreement substantively unconscionable because it defeated the employee's reasonable expectations. Intent to mislead was not required — the court focused on effect, not intent.

An LAPD captain never witnessed officers passing around a fake nude photo of her and was never confronted to her face — yet the Second District affirmed a $4 million FEHA verdict, holding that her secondhand knowledge of the department-wide circulation, and the LAPD’s refusal to stop it, supplied substantial evidence of a severe or pervasive hostile work environment. A leading application of Government Code section 12923.

A terminated employee resisted arbitration of his FEHA claims, arguing that under Aixtron the arbitrator could not compel prehearing third-party discovery. The Sixth District reversed the denial of arbitration: applying Ramirez’s five discovery factors and construing the clause to preserve validity, it held that JAMS Rule 17 (2014) gives the arbitrator authority to expand nonparty discovery when necessary, so the agreement was not substantively unconscionable. The court disapproved Aixtron to the extent it read an arbitrator’s authority narrowly — creating an intra-district split — and noted that Senate Bill 940 now supplies CAA third-party discovery by default for current agreements.

After a court compelled arbitration of a wage-and-hour class action, neither side filed a demand, and the trial court lifted the stay on the theory that the employer — which had moved to compel — waived arbitration by not commencing it. The Court of Appeal reversed: reading the agreement as a whole, the ‘party who wants to start the Arbitration Procedure’ is the claimant asserting a legal claim, so the employees who agreed to ‘submit’ their claims had to file the demand; the employer’s inaction was neither a breach nor a waiver. The court expressly declined to reach the separate arbitration-fee-default statute (Code Civ. Proc., § 1281.98).

Reversing summary judgment for United Airlines, the Court of Appeal held that whether three male employees with comparable social-media accounts were "similarly situated" comparators was a question for the jury, applied the continuing violation doctrine and section 12923's low bar to the harassment claim, and found a two-week complaint-to-termination gap sufficient for retaliation causation.

The Ninth Circuit reversed summary judgment for the Bureau of Prisons, holding that a corrections lieutenant’s off-duty Instagram page targeting a prison psychologist — followed by more than a hundred coworkers — is part of the totality of the circumstances in a Title VII hostile-work-environment claim. There is no rule that only conduct inside the physical workplace counts, ‘especially in light of the ubiquity of social media,’ and the employer’s dismissive, ineffectual response can independently create a hostile environment.

Charter’s mandatory arbitration agreement directed employees’ claims into arbitration while carving out the claims Charter itself would bring, compressed FEHA filing to the one-year administrative window, and made anyone who unsuccessfully resisted arbitration pay the fees incurred to compel it. The Supreme Court held all three terms substantively unconscionable — but validated the four-deposition discovery cap, disapproving the line of cases that judged discovery limits by a particular plaintiff’s later needs. On remedy, the court rejected clause-counting: severance is a qualitative, totality inquiry under Armendariz, and the refusal to enforce was reversed and remanded for that analysis.

USC required a staff employee to sign an arbitration agreement reaching ‘all claims, whether or not arising out of’ her employment, against USC and a broad web of affiliated persons, surviving her employment indefinitely and revocable only by the university president. The Court of Appeal affirmed the denial of arbitration: the agreement was substantively unconscionable for three independent reasons — overbroad scope, infinite duration, and lack of mutuality — and the trial court reasonably refused to sever, because curing it would require rewriting the plain language and would hand USC a windfall. Unconscionability is judged at the time of contracting, so the employer could not save the agreement by noting the plaintiff’s actual claims were employment-related.

Delivery drivers sued for wage and misclassification violations; their employer moved to compel arbitration and dismiss. A unanimous Supreme Court held that FAA § 3 gives a district court no discretion to dismiss a suit it sends to arbitration when a party requests a stay — ‘shall’ means ‘shall’ and ‘stay’ means ‘stay.’ Staying rather than dismissing preserves the parties’ return ticket to court if arbitration breaks down, a point with real stakes for employees whose employers later default on arbitration fees.

A unanimous Supreme Court held that the Federal Arbitration Act’s § 1 exemption for transportation workers turns on what a worker does, not the industry the employer occupies. Bakery-goods delivery drivers who sued for wage violations therefore could not be forced into arbitration merely because their employer sells bread rather than transportation. The decision resolves a circuit split and completes the § 1 line running from Circuit City through Saxon, while expressly leaving open whether these particular distributors qualify as transportation workers at all.

Analysis · Key Case Cvejic v. Skyview Capital, LLC (2023) 92 Cal.App.5th 1073 Court of Appeal, Second Appellate District, Division Eight · Docket No. B318880 · Decided June 28, 2023 Verify before relying. A summary and analysis as of its publication date — not legal advice, and not a representation that the decision remains good […]

Eight warehouse workers alleged their employer let staff blast “sexually graphic, violently misogynistic” music for nearly two years over almost daily complaints. The Ninth Circuit vacated a Rule 12(b)(6) dismissal, holding that pervasive sexist content can create a Title VII hostile work environment even if it targets no one and offends both sexes — and that an employer’s “equal opportunity harasser” status “provides no escape hatch for liability.”

Kindercare’s arbitration agreement contained a “poison pill”: a clause providing that the whole agreement is invalid if its class/representative-action waiver is unenforceable. Because a wholesale predispute waiver of representative PAGA claims cannot be enforced after Iskanian and Viking River, the Court of Appeal held the poison pill voided the entire agreement — sending every claim, including the employee’s individual claims, to court. Had Kindercare omitted the poison pill, Viking River would have let it compel the individual claims; its own drafting foreclosed that path. The drafter was held to the all-or-nothing clause it wrote.

A Rite Aid district manager sent a staff pharmacist lewd photos in a late-night, off-site text exchange that grew out of a friendship predating her employment. The Fifth District affirmed summary judgment for the employer, holding that FEHA strict liability for supervisor harassment attaches only when the supervisor acts “in the capacity of supervisor,” not where the conduct arises from a completely private relationship — and that the plaintiff, invited back after the harasser was fired, was not constructively discharged.

The Ninth Circuit held the Federal Arbitration Act preempts AB 51 (Labor Code § 432.6), California's attempt to ban mandatory employment arbitration, because a state rule that burdens the formation of arbitration agreements stands as an obstacle to the FAA.

The FAA preempts Iskanian to the extent it bars division of a PAGA action and prevents arbitration of an employee’s individual PAGA claim; an employer may compel the individual PAGA claim to arbitration. (The Supreme Court further opined that, under its reading of California law, the plaintiff would then lack standing…

Morgan v. Sundance, Inc. A court may not condition waiver of the right to arbitrate on a showing that the opposing party was prejudiced; the FAA’s “policy favoring arbitration” places arbitration agreements on equal footing with other contracts and does not authorize arbitration-specific procedural rules. Morgan v. Sundance, Inc. (2022) 596 U.S. 411 Parallel citations: […]