Articles Posted in Legislation

Just ahead of the bill-signing deadline in October, Governor Newsom signed several worker-friendly bills including AB 51, AB 9, SB 142, and AB 749.

When an employment situation sours and an employee pursues his rights, usually at some point there is talk of settlement.  Almost routinely, employers include a no-rehire provision in any settlement agreement which prohibits the former employee from seeking reemployment with the employer. While this may not seem like a big deal if you work for a small company and have no intention of seeking reemployment with the same people who wronged you in the first place, for individuals who work for large employers, the no-hire provision can create significant hardship. For example, if you work for a major retailer with numerous locations and you are terminated, a no-rehire provision might prevent you from working for that company ever again, in any capacity. That means, even if you wanted to work for a store 100 miles away, you would be barred from doing so. This is particularly problematic for long-term employees who have deep knowledge of the employer’s policies and practices and have been successful in their positions for years- they know the job, and have done it well, and now they are unable to apply for any future job at the company where their skills are a perfect match. This is also a significant problem for people who work for a utility; it may be that there is really only one employer in the area you can work for and a ban on working for that company will prevent you from working, period. The no-rehire provision would require you to either move to a new location or develop skills for an entirely different field. It seems, to many employees, like a final act of retaliation by their former employer.

Starting January 1, 2020, employment dispute settlement agreements cannot contain a no-rehire provision and such provisions are void as a matter of law and public policy. There is an exception, undoubtedly inspired by the #MeToo and #TimesUp movements- if an employer has made a good faith determination that the terminated employee engaged in sexual harassment or sexual assault, the employer may prohibit or restrict the terminated employee from obtaining future employment with the employer.

For years, the battle over arbitration clauses and agreements has raged on in courts and legislatures throughout the country. The latest development in arbitration in employment in California came on Thursday in California when Governor Newsom signed AB 51. The governor’s approval of AB 51 is a victory employees throughout California- it effectively prohibits employers from forcing employees into mandatory arbitration agreements starting January 1, 2020.

It is common practice throughout California to have an employee sign an arbitration agreement at the time she is hired. These agreements are generally non-negotiable, buried in a pile of new hire paperwork, and require the employee to arbitrate any claims arising out of employment. While valid arbitration agreements provide some of the safeguards that are afforded to litigants in court, it often takes away basic protections and rights including a trial by jury, and class or collective action. Arbitration is also a private process so it allows an employer to keep their wrongdoing under wraps.

The United States Supreme Court has said, repeatedly, that arbitration agreements are valid in the employment context. Recognizing the inherent imbalance in power between employers and employees, several states have tried to stop employers from forcing employees into arbitration. However, given the Supreme Court’s rulings, it is impossible to ban arbitration in employment altogether.  The hope is that in California, AB 51 will even the playing field before an employee signs an arbitration agreement; requiring that an employee can only enter such an agreement voluntarily. The law also prohibits an employer from retaliating against an employee who declines to enter into an arbitration agreement, which provides additional protection.

Last month, we discussed the new changes to the Equal Pay Act that will prohibit employers from relying on an applicant’s prior salary to determine how much to pay the applicant.

As happens at this time of the year, the governor signs a number of pieces of legislation, many of which impact employees. Today we are looking at a few more important pieces of legislation protecting employees with criminal histories, women, immigrants, and families.

First, Governor Brown signed Ban the Box. This legislation broadens the current legislation.  Now, it will be an unlawful employment practice to ask a potential employee about his or her criminal convictions or to consider any convictions until after a conditional offer of employment is made. After making such an offer, the law sets forth limits on how an employer may consider facts surrounding a conviction, including an individualized assessment and notice. The law applies to employer’s with over five employees.  See, AB1008.