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.

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.

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.

In Naranjo II (2024) 15 Cal.5th 1056, the California Supreme Court holds that an employer’s objectively reasonable, good-faith belief that its wage statements complied with the law defeats both Labor Code § 226 penalties (no “knowing and intentional” violation) and § 203 waiting-time penalties (no “willful” failure) — harmonizing the two penalty statutes around a common good-faith defense.

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.

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…

Naranjo v. Spectrum Security Services, Inc. (Naranjo I)Premium pay owed for missed meal and rest breaks under Labor Code section 226.7 constitutes “wages,” so it must be reported on wage statements under section 226 and is subject to waiting-time penalties under section 203 when not timely paid at separation.Naranjo v. Spectrum Security Services, Inc. (2022) […]

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: […]

Ferra v. Loews Hollywood Hotel, LLC (2021) 11 Cal.5th 858 holds that the meal/rest premium under Labor Code § 226.7(c) must be paid at the “regular rate of compensation,” which is synonymous with the overtime “regular rate of pay” and includes all nondiscretionary payments — not just base hourly wages. The holding is retroactive.

Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58 holds that employers may not round meal-period time punches, and that time records showing short, late, or missed meal periods raise a rebuttable presumption of a violation — usable even at summary judgment.

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.

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.

Augustus v. ABM Security Services, Inc. (2016) 2 Cal.5th 257 holds that a compliant rest period must be free of both duties and employer control: an employer may not require employees to remain “on call” during a rest break, even if interruptions rarely occur.

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.

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…

Neither Labor Code section 1194 nor section 218.5 authorizes an award of attorney fees to a party that prevails on a section 226.7 claim; such claims are not actions for the nonpayment of minimum wages or overtime (§1194) and are not the kind of nonpayment-of-wages action that triggers §218.5 fee-shifting, so each…

Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 is California’s foundational meal-and-rest decision: an employer must provide a duty-free meal period but need not ensure no work is done; it sets the meal-timing and rest-period rules and confirms that courts may resolve merits questions enmeshed with class certification.

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…

The section 226.7 meal/rest payment is a wage (premium pay), not a penalty, and is therefore governed by the three-year statute of limitations applicable to wage claims rather than the one-year period for penalties.

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…