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 firm filed a wage-and-hour class action duplicating one it had already filed elsewhere, then opposed a stay with a brief — drafted by a contract attorney using generative AI — full of nonexistent citations and at least eight fabricated quotations. The First District affirms $6,000 in section 128.7 sanctions: counsel of record bear ultimate responsibility for what they sign, and the duty to verify authority cannot be delegated to any form of technology.

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.

A terminated Blue Origin executive opposed arbitration of his FEHA and related claims. The Court of Appeal affirmed the denial of arbitration on unconscionability grounds — expressly declining to reach the federal EFAA — holding the adhesive agreement substantively unconscionable in at least four ways: overbreadth, lack of mutuality, a predispute jury-trial waiver, and a representative/PAGA waiver. Applying Ramirez v. Charter Communications, the court refused to sever, because curing the overbreadth and non-mutuality would require impermissible reformation and would reward one-sided drafting; severance “would not further the interests of justice.”

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.

Intuitive Surgical defended a harassment suit by pointing to the adequacy of its attorney-led investigation, then tried to withhold the investigator’s findings as work product. The Sixth District grants the employee a writ: putting the investigation’s adequacy at issue waives privilege and even core work product over the investigator’s factual findings and anything bearing on the investigation’s scope and adequacy.

A terminated COO forwarded her employer’s e-mails — some attorney-client privileged — to her personal account and handed them to her lawyers for her wrongful-termination and harassment cross-claims. The Fourth District holds the State Fund rule on handling privileged materials applies even to such intentional, unauthorized disclosures, and reverses the denial of the employer’s motion to disqualify counsel.

Two Chico State physics professors sued the CSU Trustees for retaliation, alleging a sham investigation and sabotage of their move to a new university after they reported harassment. The Trustees moved to strike the claims under the anti-SLAPP statute as “based in part” on protected speech. The Third District affirms denial: a movant must analyze each claim element-by-element and identify which acts are protected — “based in part” is not enough.

Cambodian villagers forced to work at Thai seafood factories sued a U.S. marketer under the trafficking civil-remedy statute; their case was dismissed because the statute then reached only those who succeeded in benefiting, not those who attempted to. After Congress amended the law, the en banc Ninth Circuit holds the clarifying amendment retroactive — and that Landgraf governs all such amendments, overruling the “clarifying amendment” exception — reviving the claims.

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 resident manager whose apartment came with the job refused to leave after she was terminated. The Appellate Division affirms an unlawful detainer judgment: housing provided as part of employment compensation is not a protected tenancy, the former manager became a tenant at sufferance or licensee outside the Tenant Protection Act, and her retaliatory-eviction defense failed for lack of evidence.

A fire-department mechanic repeatedly confronted management and then alluded to an incident in which a firefighter fatally shot another firefighter. The Second District affirms a three-year workplace violence restraining order under section 527.8: the veiled reference was a credible, implied threat outside the First Amendment, and the order’s firearm restriction survives Second Amendment review under Rahimi.

The California Supreme Court holds that CCP §1281.98's arbitration-fee-payment forfeiture rule is not preempted by the FAA — but, rejecting the rigid automatic-forfeiture reading, only where a late payment is willful, grossly negligent, or fraudulent rather than a good-faith mistake or excusable neglect.

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.

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).

Quach v. California Commerce Club, Inc.California abandons its arbitration-specific rule requiring proof of prejudice to establish that a party waived the right to compel arbitration; waiver is now governed by the same general contract principles — proof by clear and convincing evidence of an intentional relinquishment — that apply to any other contractual right.Quach v. […]

The California Supreme Court unanimously upholds Proposition 22 (Bus. & Prof. Code, § 7451), holding that the Legislature’s “plenary” and “unlimited” authority over workers’ compensation under article XIV, section 4 is not exclusive of the people’s reserved initiative power — while expressly reserving the harder questions about Proposition 22’s seven-eighths amendment rule.

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 […]

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.

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: […]

Vazquez v. Jan-Pro Franchising International, Inc. (2021) 10 Cal.5th 944 holds that the ABC test adopted in Dynamex applies retroactively — to all cases not yet final when Dynamex was decided — exposing pre-2018 wage-order conduct to the new worker-classification standard.

The Court of Appeal affirms a statewide preliminary injunction against Uber and Lyft, holding the People likely to prevail under prong B of the ABC test (Lab. Code, § 2775) — rideshare driving is within the usual course of the companies’ business — and rejecting the “technology platform” defense as a false dichotomy. (Predates Proposition 22; see Castellanos.)

The agreement was both procedurally and substantively unconscionable and therefore unenforceable. The manner of presentation — a take-it-or-leave-it document thrust at a low-wage worker for immediate signature, in dense legalese he was unlikely to understand — was highly oppressive and surprising, and the arbitral…

In Wassmann v. South Orange County Community College Dist. (2018) 24 Cal.App.5th 825, the Court of Appeal affirmed summary judgment against a dismissed community-college librarian, holding her FEHA discrimination and harassment claims time-barred. Applying the three-part continuing-violation test from Richards v. CH2M Hill, the court held the doctrine could not save the claims because the pre- and post-limitations acts were “not at all similar” and the employer’s conduct “acquired a degree of permanence” when her employment was terminated — and post-dismissal acts of a neutral administrative law judge could not be imputed to the employer.

Arbitration agreements providing for individualized proceedings — including class- and collective-action waivers in the employment context — are enforceable under the FAA, and the NLRA does not override the FAA or render such agreements unlawful; courts must enforce the agreements according to their terms.

Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 adopts the “ABC test” for California wage-order claims: a worker is presumed an employee, and the hiring entity must prove all three prongs — freedom from control, work outside the usual course of business, and an independently established trade — to establish independent-contractor status.

A provision in a predispute arbitration agreement that waives the right to seek public injunctive relief in any forum is contrary to California public policy and unenforceable (the “McGill rule”); and because that rule applies to contracts generally and does not single out arbitration, the FAA does not preempt it.

The arbitrator’s award was upheld. Under the narrow standard of review governing arbitration awards, the court declined to decide whether the “honest belief” defense applies to CFRA claims; even assuming the arbitrator erred in invoking it, the error did not deprive the employee of an unwaivable statutory right, so…

A franchisor is not ordinarily the employer of its franchisee’s employees and is not vicariously liable for a franchisee-supervisor’s harassment unless the franchisor has retained or assumed general control over the relevant day-to-day aspects of the franchisee’s employment practices; a comprehensive operating system…

For certification, the key question is whether the hiring entity’s right to control the manner and means of the work — the principal test of employment — can be established through common proof (such as the standard contract and uniform policies), not whether each worker was in fact controlled to the same degree; the…

Iskanian v. CLS Transportation (2014) 59 Cal.4th 348 holds that class-action waivers in employment arbitration agreements are enforceable after Concepcion (abrogating Gentry), but a predispute waiver of a representative PAGA action is contrary to public policy and not preempted by the FAA, because a PAGA claim belongs to the state.

In Kim v. Konad USA Distribution, Inc. (2014) 226 Cal.App.4th 1336, the Court of Appeal affirmed a $60,000 bench-trial judgment for a sexually harassed employee, holding that FEHA’s administrative-exhaustion requirement is “jurisdictional” only in the loose, prudential sense and does not affect the trial court’s fundamental subject matter jurisdiction. Because the defendants waited until after the case was submitted to assert non-exhaustion, they forfeited the defense; and because exhaustion is not truly jurisdictional, the court could consider post-trial materials confirming the plaintiff had in fact exhausted. The court also held a harassment claim lies against an employer of any size.

Concepcion preempts a categorical, arbitration-specific rule that a Berman-hearing waiver is per se unconscionable; but generally applicable unconscionability doctrine survives, and an arbitration agreement remains unenforceable if it is unreasonably one-sided. The court concluded this agreement’s waiver was markedly…

In Acuna v. San Diego Gas & Electric Co. (2013) 217 Cal.App.4th 1402, reviewing a sustained demurrer, the Court of Appeal held the plaintiff’s FEHA disability- and race-discrimination claims time-barred but reversed on her retaliation and wrongful-termination claims, holding that the section 12960 clock for a discharge runs from the actual termination — not from when the retaliatory motive arose — and that the employer, which controlled the termination date, controlled the accrual trigger. On the accommodation claims, continuing-violation tolling ended once the employer’s refusal reached a degree of permanence.

The FAA preempts the Discover Bank rule. A state rule that conditions the enforceability of an arbitration agreement on the availability of classwide arbitration interferes with the fundamental attributes of arbitration and stands as an obstacle to the FAA’s objective of enforcing arbitration agreements according to…

Summary judgment was improperly granted on the harassment and retaliation claims because triable issues of fact existed; the decision is notable for its strong criticism of the overuse and abuse of summary judgment in employment cases, for its treatment of the parties’ voluminous (and often meritless) evidentiary…

Reversing summary judgment, the Second District held that a lesbian mail-services employee raised triable issues on whether her FEHA administrative complaint was timely under the continuing-violation doctrine, even though her harasser stopped his explicit sexual-orientation slurs over a year before she filed. Applying Richards v. CH2M Hill, the court held the harasser's later, facially neutral work-sabotage campaign could be “similar in kind” to the slurs and that “permanence” turns on when the harassment stops, the employee resigns, or protest becomes futile — not on when the offensive words cease.

A class-action waiver in an employment arbitration agreement may be unenforceable where class arbitration would be a significantly more effective way to vindicate employees’ unwaivable statutory rights (such as overtime), considering factors like the modest size of individual recoveries, the risk of retaliation, and…

At least some class-action waivers in consumer adhesion contracts are unconscionable under California law — the “Discover Bank rule” — where the waiver is in an adhesion contract, the disputes predictably involve small amounts of damages, and the party with superior bargaining power has carried out a scheme to cheat…

The continuing-violation doctrine applies to FEHA claims: an employer’s related unlawful acts are treated as a single continuing violation — and the limitations period does not begin to run — so long as the conduct is sufficiently similar and frequent and has not yet acquired a degree of permanence that should put the…

A defendant moving for summary judgment bears the burden of showing that a cause of action has no merit — that one or more elements cannot be established or that there is a complete defense — by either conclusively negating an element or showing the plaintiff does not possess, and cannot reasonably obtain, evidence to…

An African-American electronic technician laid off in a budget cut applied for dozens of university jobs, was hired for none, and sued under the FEHA for retaliation. Affirming summary judgment, the Court of Appeal held that a string of rejections by different managers in unrelated departments is a series of isolated decisions, not a “continuing violation” — and that retaliatory remarks by HR staff who took no part in the hiring cannot establish causation, because every actual decisionmaker disclaimed knowledge of the protected grievance.

Mandatory employment arbitration of unwaivable statutory claims is permissible only if the agreement provides certain minimum protections — a neutral arbitrator, adequate discovery, a written award subject to limited review, all types of relief otherwise available in court, and no requirement that the employee bear…

S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 sets California’s multifactor control test for employee vs. independent-contractor status — the right to control the manner and means of the work, plus secondary factors, applied in light of the statute’s protective purpose. It still governs the Assembly Bill 5 exemptions after Dynamex.