California employment case index

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.”

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.

A unanimous Supreme Court holds that a signed offer letter stating employment is "at will" and terminable "at any time" is unambiguous — recruitment talk of a "long-term fix" cannot create an implied for-cause contract or support fraud reliance — with Justice Baxter (joined by Corrigan) urging reconsideration of Pacific Gas and Justice Moreno reserving "upon notice" clauses.

Guz v. Bechtel National, Inc.The at-will presumption can be overcome by an implied-in-fact contract to discharge only for good cause, judged on the totality of the relationship — but the implied covenant of good faith and fair dealing cannot impose substantive limits beyond the agreement’s actual terms, and a FEHA discrimination claim must survive the […]

The Tameny claim failed because Foley’s report about a coworker served the employer’s private interest, not a fundamental public policy. Foley nonetheless adequately pleaded an implied-in-fact contract to discharge only for good cause — based on longevity of service, promotions, raises, assurances, and the employer’s…

Yes. The longevity of Pugh’s service, together with the employer’s commendations and assurances and its acknowledged practices, supported an implied-in-fact promise that he would not be discharged except for good cause; the nonsuit was therefore error and the judgment was reversed (id. at p. 330).