Class Action (Employment)

Recent California Case Law Review

By Al Mohajerian | May 13, 2021

Recent decisions from California appellate courts and the Ninth Circuit Court of Appeals impact employers in the state in some key areas. Issues settled among the recent decisions include the method of assessing an employee’s compensation as it relates to calculating the overtime rate, the rounding of time punches as related to meal breaks, and Family Medical Leave Act (FMLA) leave claims for “rotational employees”.

Per Diem Benefits As Part Of Overtime Compensation

In the recent class action Clarke v. AMN Services, LLC, the Ninth Circuit considered whether per diem payments should be included as part of their regular wage rate when calculating overtime pay. Each week, the defendant healthcare staffing company, ANM, paid its traveling clinicians a per diem benefit when they were required to work more than 50 miles from their homes. The clinicians brought a class-action lawsuit against ANM, arguing that the company had wrongly excluded the per diem benefits from their regular rate of pay under Fair Labor Standards Act. This exclusion had the effect of decreasing their rate of pay for overtime work. The Ninth Circuit Court ruled that, since the per diem benefits operated to compensate the clinicians for their work, rather than to reimburse them for expenses that they incurred, like gas costs or other travel-related expenses, the benefits should have been included in the clinicians’ regular rate of pay when calculating overtime pay.

No Rounding Time On The Clock For Meal Breaks

While federal law and California case law have generally permitted employers to round punch-in and punch-out times, the California Supreme Court recently considered the issue of rounding time on the clock with regard to meal breaks specifically. In Donohue v. ANM Services, LLC, the company’s timekeeping system rounded its employees’ punch times to 10-minute increments. With that system, an employee who punched out for lunch at 12:32 PM (rounded back to 12:30 PM) and punched back in from lunch at 12:55 PM (rounded up to 1:00 PM) was documented to have taken a lunch break of 30 minutes, even though they really only had a 23-minute break. The Court said that, although rounding of time is generally regarded as a fair labor practice, rounding times clocked in and out for meal breaks is not permissible. Finding that “even relatively minor infringements on meal periods can
cause substantial burdens to the employee,” the Court pointed to “health and safety concerns” that are the reasons behind meal break requirements in federal and California law, and ruled that the practice of time rounding in that context would violate that purpose.

Weeks Already Off May Still Count As Workweeks Of Leave For FMLA

In Scalia v. State of Alaska, the Ninth Circuit Court of Appeals considered whether already-scheduled weeks off were to be counted as workweeks for leave under the federal Family and Medical Leave Act (FMLA). The FMLA allows eligible employees to take “12 workweeks of leave” for personal or familial medical issues. In this case, the U.S. Secretary of Labor argued that “rotational employees,” whose schedules consisted of one week of work followed by one week off, were entitled to 24 weeks off, as their already-scheduled “off weeks” should not be counted as “workweeks of leave” for purposes of FMLA leave. The Ninth Circuit disagreed, siding with the State of Alaska, and ruled that the “workweek” is not based on the individual employee’s work schedule, but rather is just a week-long period during which the employer is in operation. Therefore, the state workers are only entitled to 12 weeks of FMLA leave, even if they already would have had half of those weeks off due to their rotating shifts.

California Employer Lawyers Are Here For You

Backed by more than two decades of experience, Mohajerian Law Corporation is skilled at helping employers successfully handle a vast range of labor and employment matters. We are ready to help your business meet its unique transactional, regulatory and litigation challenges. To find out more about how Mohajerian Law Corporation can help your business, call (310) 556-3800 or contact us online.

Filed Under: Class Action (Employment)Labor & Employment

Update On COVID-19 Laws In The Workplace

By Al Mohajerian | May 13, 2021

Many people may feel that the COVID pandemic is on its way out, as vaccinations have become more widespread and more people have some immunity from previous exposure to the virus. However, experts warn that society is far from the end of the crisis. With this in mind, California legislators have enacted some new labor laws that will require employers to keep the virus in their minds, and in company policies, for some time to come.

New Reporting Requirements For Potential Exposure In The Workplace

Under the new amendments, California employers are required to notify their employees within one day of becoming aware of a potential exposure at the worksite. The company must also notify the union representative, if applicable. If there are three or more confirmed or probable cases in the workplace, the employer must report the outbreak to the local health department.

Companies’ reporting obligations arise when the employer becomes aware of a case of COVID-19 in a “qualifying individual,” which is defined as an employee who has:

  1. been confirmed to have a positive case by laboratory testing or by diagnosis by a licensed health care provider;
  2. received an isolation order from a public health official; or
  3. died due to COVID-19.

Notifying Employees

The reporting requirements are both thorough and immediate when the company learns of exposure in the workplace. Within one business day of learning of the potential exposure, the employer must notify all employees about it. If there were any subcontracted workers at the worksite during the time that any employee was in the infectious period of the virus, the company also must notify the workers’ employer, which may be a staffing agency.

The notice must be in writing in English and, if applicable, in the non-English language understood by a majority of workers. It must state the dates that the infected worker was at the site, but it cannot identify the individual by name or with any information that could give away the person’s identity.

In addition to providing written notice of the exposure, the employer must supply employees with information regarding benefits that they may be entitled to use, as well as options for COVID-related leave, worker’s compensation, and paid sick leave if they have been exposed. They also are required to inform the workers of anti-discrimination and anti-retaliation policies that protect employees when they use those benefits. Finally, the employer must explain the company’s disinfection and safety plan to the employees to prevent additional exposure, as per Centers for Disease Control and Prevention (CDC) guidance.

Notifying The Union

If the company’s workers are unionized, the employer must notify the union representative of the workers’ potential exposure. As with notifying the employees, the employer is required to do this within one day of becoming aware of the COVID-19 case.

Reporting To The Health Department

Unlike with the other required reports, the company only must report to the local health department if there is an “outbreak” of COVID cases at that worksite. The CDC defines the term “outbreak” as three or more confirmed or probable cases of COVID-19 in the workplace within a 14-day period. The cases must be from different households. Also, they cannot be identified as a close contact in any other COVID-19 case investigation. Once the employer is aware of an outbreak, they have 48 hours to report the outbreak to the health department.

California Attorneys Who Represent Employers

Mohajerian Law Corporation has more than two decades of experience helping California employers in all types of labor and employment matters including regulatory compliance, execution of legal contracts and policies, and litigation. Our knowledgeable employer-side attorneys are here for you and will help ensure that your business’s interests and rights are protected. Contact Mohajerian Law Corporation by calling (310) 556-3800 or by contacting us online.

Filed Under: Class Action (Employment)Labor & Employment

Expansions To The California Family Rights Act

By Al Mohajerian | May 13, 2021

In 2021, new labor laws in California may impact how employers relate to their employees in some important ways. Some of the most significant changes come in the form of amendments to the existing California Family Rights Act (CFRA).

One significant change is in the size of the company covered by the CFRA. Previously, the requirements applied to companies that employed at least 50 people. Under the revised law, companies with as few as five employees may now be subject to the regulations. This substantial change greatly widens the scope of the CFRA and means that many more companies must now learn and follow the regulations. There are some provisions, however, that even larger companies will have to learn, now that the law has been amended.

Time Off For A New Child Or A Medical Condition In The Family

The amended law changes the requirements as to how much time off employers are required to allow employees who have had a child (by birth or adoption) or who experience another qualifying medical situation. Under the new provisions of the CFRA, employers are obligated to allow covered employees to take up to 12 weeks of unpaid, job-protected time off in a 12-month period following the birth (or adoption or fostering) of a child, or to care for a personal medical condition.

The CFRA allows an employee this leave to care for a child, parent, spouse, or domestic partner with a medical condition requiring the employee’s care. With the new amendments, the law now also covers time off to care for three new categories of family members: grandparents, grandchildren, and siblings.

Previously, an employer was not required to grant an employee CFRA leave if the company employed fewer than 50 people within a 75-mile radius of the worksite. The new revisions to the CFRA eliminated this 75-mile restriction. However, the law continues to require that the employee has to have been with the company for over a year and must have worked at least 1,250 hours at the company during the previous span of 12 months in order to be entitled to leave under the CFRA.

Family Leave For Both Parents At The Same Company

If a company employs both parents of a new child, the company is required to provide them both with up to 12 weeks of unpaid, job-protected leave for bonding with the new family member. Along with the changes, the law eliminated the New Parent Leave Act (NPLA) beginning at the start of 2021, because the updates to the CFRA made the law so broad that it now covers all of the companies and issues that the NPLA covered, making the NPLA redundant and unnecessary.

Family Leave For Military Service In The Family

The amendments to the CFRA also involved changes to the Paid Family Leave program. The law now allows an employee to take time off to be involved in certain situations (“qualifying exigencies”) that relate to the active duty service, or a call to active duty, in the U.S. Armed Forces, for an employee’s spouse, domestic partner, child, or parent.

California Labor, Employment Attorneys Are Here For You

With more than two decades of experience defending the rights and interests of employers, Mohajerian Law Corporation has the skill and discernment to help your business meet its unique challenges and opportunities. Mohajerian Law Corporation offers a host of labor and employment services in this respect. Find out more about how Mohajerian Law Corporation can help your business by calling (310) 556-3800 or by contacting us online today.

Filed Under: Class Action (Employment)Labor & Employment

Practical Tips to Avoid Retaliation Claims by Employees

By Al Mohajerian | April 15, 2021

An employee might complain of retaliation if they face negative consequences after raising a workplace concern or complaint. A retaliation lawsuit might cost you a lot of money in the form of penalties, settlements, and legal fees. Use the following tips to avoid retaliation complaints from your employees.

Keep Complainants’ Identities Confidential

Some of your supervisors or managers might retaliate against an employee who paints them in a bad light. For example, an employee who complains about racial jokes in the cafeteria might face retaliatory actions from the relevant supervisor.

A good way to avoid such retaliation is to keep the employee’s identity confidential. Investigate the complaint and take appropriate action without mentioning the person responsible for the original complaint.

Keep Communication Channels Open

Let your employees know that you are accessible and that they can reach you with any information. Keeping the channels of communication open is especially useful for victims of alleged retaliation. Help the employees understand the company’s anti-retaliation policy. Encourage the alleged victims to report any negative experiences they might have in the workplace.

Explain Disciplinary Actions

Employees who face disciplinary actions sometimes claim retaliation even where retaliation doesn’t exist. Such a complaint is especially likely if an employee faces genuine disciplinary action soon after making a complaint.

In such a case, you don’t have to abandon your disciplinary policy. Rather, go the extra mile to explain to the employee why you are disciplining them. Show any documentary evidence you might have for the employee’s actions.

Watch Out for Red Flags

Some victims of retaliation might not speak up. Some people prefer to handle things on their own. Others might not speak up for fear of worsening their situations. However, retaliation is bad whether someone reports it or not.

Therefore, you should always be on the lookout for signs of retaliation in your workplace. You should be especially keen after an action that might trigger retaliation. For example, pay attention to your workplace when an employee complains about a manager or supervisor. Telltale signs of retaliation include:

  • Increased scrutiny of a complainant
  • Inconsistent documentation of employee conduct
  • Inconsistent review of employees

Don’t jump to conclusions if you suspect something amiss. Investigate further before taking action.

Take Action If Retaliation Occurs

Employers who look the other way when retaliation occurs in their workplace encourage the vice. Take relevant action if an employee complains of retaliation. Taking action may include:

  • Preserving evidence, such as emails or documents, related to the complaint
  • Conducting an internal investigation
  • Warning or disciplining the perpetrators as the circumstances demand
  • Consulting legal counsel if necessary

Taking action will also encourage future victims to speak up.

Establish a Clear Anti-Retaliation Policy

Every company should have an anti-retaliation policy from its conception. Establish such a policy as soon as possible if you don’t have one. Your policy should have:

  • A definition of what constitutes retaliation
  • Actions to take (such as who to inform) on suspicion of retaliation
  • Red flags that might constitute retaliation

Review and update the policy as necessary. Ensure your policy is consistent with relevant employment laws.

Provide Relevant Training

Your anti-retaliation policy might not help much if your employees don’t understand it. The people in charge, especially managers and supervisors, should especially understand how to avoid retaliation or its appearance. Provide training, for example, in the form of workshops to ensure everyone understands your anti-retaliation policy.

The above tips should help you avoid retaliation complaints. However, you have to deal with all retaliation complaints, whether they are genuine or not. Contact Mohajerian Law Corp if an employee has raised a retaliation complaint. We will review your case, advise you, and help you defend your rights.

Filed Under: Class Action (Employment)Litigation

Employers cannot engage in the practice of rounding time punches.

By Al Mohajerian | March 7, 2021

DONOHUE v. AMN SERVICES, LLC S253677

Opinion of the Court by Liu, J.
Under California law, employers must generally provide employees with one 30-minute meal period that begins no later than the end of the fifth hour of work and another 30-minute meal period that begins no later than the end of the tenth hour of work. (Lab. Code, § 512, subd. (a); Industrial Welfare Commission (IWC) wage order No. 4-2001, § 11(A) (Wage Order No. 4).) If an employer does not provide an employee with a compliant meal period, then “the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal . . . period is not provided.” (Lab. Code, § 226.7, subd. (c); Wage Order No. 4, § 11(B).)

In this case, we decide two questions of law relating to meal periods. First, we hold that employers cannot engage in the practice of rounding time punches — that is, adjusting the hours that an employee has actually worked to the nearest preset time increment — in the meal period context. The meal period provisions are designed to prevent even minor infringements on meal period requirements, and rounding is incompatible with that objective. Second, we hold that time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations, including at the summary judgment stage.

Filed Under: Class Action (Employment)Labor & Employment

Labor Code 12750.3 Takes Effect On January 1, 2020

By Al Mohajerian | October 13, 2019

“Under the ABC test, a worker is presumed to be an employee, unless the hiring entity establishes each of the following:

“(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.” (Dynamex, supra, 4 Cal.5th at p. 957.)”

Garcia v. Border Transportation Group, LLC (2018) 28 Cal.App.5th 558, 569.
A plumber hired by a retail store would not be considered an employee; by contrast, a cake decorator servicing a bakery for custom cakes, or an at-home seamstress sewing dresses from patterns supplied by a clothing manufacturer, would. (Id. at pp. 959–960.) Garcia, supra, 28 Cal.App.5th 558, 569-570.

Because “a hiring entity’s failure to satisfy any one of the three parts itself establishes that the worker should be treated as an employee for purposes of the wage order, a court is free to consider the separate parts of the ABC standard in whatever order it chooses.” (Dynamex, supra, 4 Cal.5th at p. 963.) Garcia v. Border Transportation Group, LLC, supra, 28 Cal.App.5th 558, 569.

Dynamex applies to wage order claims. Dynamex did not purport to replace the Borello standard in every instance where a worker must be classified as either an independent contractor or an employee for purposes of enforcing California’s labor protections. Garcia v. Border Transportation Group, LLC, supra, 28 Cal.App.5th 558, 570.
“The [Dynamex] court cites with approval a Utah case that explained, “‘the appropriate inquiry under part (C) is whether the person engaged in covered employment actually has such an independent business, occupation, or profession, not whether he or she could have one.’” (Dynamex, supra, 4 Cal.5th at p. 962, fn. 30, quoting McGuire v. Department of Employment Security (Utah Ct.App. 1989) 768 P.2d 985, 988. .)” Garcia v. Border Transportation Group, LLC (2018) 28 Cal.App.5th 558, 573. the third prong, it is not enough to show that the individuals are free to engage in similar activities for others or work as employees for others.” Garcia, supra, at 573.

New Labor Code 2750.3

The ABC test has been codified in the new Labor Code § 2750.3 which is effective January 1, 2020. Labor Code § 2750.3(a) states, inter alia:
“(1) For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:

(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(B) The person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”

New Labor Code 2750.3 also lists occupations that are exempt.

“(b) Subdivision (a) and the holding in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex), do not apply to the following occupations as defined in the paragraphs below, and instead, the determination of employee or independent contractor status for individuals in those occupations shall be governed by Borello.

(1) A person or organization who is licensed by the Department of Insurance pursuant to Chapter 5 (commencing with Section 1621), Chapter 6 (commencing with Section 1760), or Chapter 8
(commencing with Section 1831) of Part 2 of Division 1 of the Insurance Code.

(2) A physician and surgeon, dentist, podiatrist, psychologist, or veterinarian licensed by the State of California pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code, performing professional or medical services provided to or by a health care entity, including an entity organized as a sole proprietorship, partnership, or professional corporation as defined in Section

(3) An individual who holds an active license from the State of California and is practicing one of the following recognized professions: lawyer, architect, engineer, private investigator, or accountant.

4) A securities broker-dealer or investment adviser or their agents and representatives that are registered with the Securities and Exchange Commission or the Financial Industry Regulatory Authority or licensed by the State of California under Chapter 2 (commencing with Section 25210) or Chapter 3 (commencing with Section 25230) of Division 1 of Part 3 of Title 4 of the Corporations Code.

(5) A direct sales salesperson as described in Section 650 of the Unemployment Insurance Code, so long as the conditions for exclusion from employment under that section are met.

(6) A commercial fisherman working on an American vessel as defined in subparagraph (A) below.
….
c)
(1) Subdivision (a) and the holding in Dynamex do not apply to a contract for “professional services” as defined below, and instead the determination of whether the individual is an employee or independent contractor shall be governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied:

(A) The individual maintains a business location, which may include the individual’s residence, that is separate from the hiring entity. Nothing in this subdivision prohibits an individual from choosing to perform services at the location of the hiring entity.

(B) If work is performed more than six months after the effective date of this section, the individual has a business license, in addition to any required professional licenses or permits for the individual to practice in their profession.

(C) The individual has the ability to set or negotiate their own rates for the services performed.

(D) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individual’s own hours.

(E) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.

(F) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.

(2) For purposes of this subdivision:
(B) “Professional services” means services that meet any of the following:

(ix) Services provided by a still photographer or photojournalist who do not license content submissions to the putative employer more than 35 times per year….. For purposes of this clause a “submission” is one or more items or forms of content produced by a still photographer or photojournalist that: (I) pertains to a specific event or specific subject; (II) is provided for in a contract that defines the scope of the work; and (III) is accepted by and licensed to the publication or stock photography company and published or posted. Nothing in this section shall prevent a photographer or artist from displaying their work product for sale.”

Mohajerian Law Defends Employers throughout California

Filed Under: Class Action (Employment)Labor & Employment

July 1, 2019 Minimum Wage Increase

By Al Mohajerian | June 18, 2019

On July 1, 2019, a series of local minimum wage increases will take place in California. Below is a short list of cities and counties subject to minimum wage increase on July 1, 2019.

Bay Area

Alameda: $13.50

Berkeley: $15.59

Emeryville:
$16.30 (all employers except small independent restaurants)
$15.00 (small independent restaurants with 20 or fewer global locations)

Milpitas: $15.00

San Francisco: $15.59

San Leandro: $14.00

Los Angeles Region

City of Los Angeles
26 employers or more: $14.25
25 employers or less: $13.25

County of Los Angeles (only applies to unincorporated areas)
26 employers or more: $14.25
25 employers or less: $13.25

Malibu
26 employers or more: $14.25
25 employers or less: $13.25

Pasadena
26 employers or more: $14.25
25 employers or less: $13.25

Santa Monica
26 employers or more: $14.25
25 employers or less: $13.25

Filed Under: Class Action (Employment)Labor & Employment

Dynamex applies retroactively!

By Al Mohajerian | May 9, 2019

In May 2019, the 9th Circuit issued a ruling in Vazquez v. Jan-Pro Franchising International, Inc. No. 17-16096 (9th Cir. 2019). In Vazquez, the 9th Circuit analyzed whether Jan-Pro’s franchisees were in fact employees, as opposed to independent contractors. The 9th Circuit held that the California Supreme Court’s intervening decision in Dynamex Ops. W. Inc. v. Superior Court of Los Angeles, 4 Cal.5th 903 (2018) is controlling and applies retroactively.

Filed Under: Class Action (Employment)Labor & Employment

The trial court ruled that YRC did not violate section 226(a)(8) by providing its fictitious business name as the employer name on its wage statements or by providing an employer address that did not contain a mail stop code or ZIP+4 Code.

By Al Mohajerian | May 8, 2019

VAIULA SAVEA, v. YRC INC.

Court of Appeals of California, First District, Division Three.

Filed April 10, 2019 (2019 DJDAR 3087).

The trial court ruled that YRC did not violate section 226(a)(8) by providing its fictitious business name as the employer name on its wage statements or by providing an employer address that did not contain a mail stop code or ZIP+4 Code. The Court decided in favor of YRC’s position, but refused to rule on whether strict compliance, rather than substantial compliance, is required by LC §226(a)(8).

Vaiula Savea (“Savea”) has been an employee of YRC since 1998. During his employment, he and other employees received wage statements from YRC that listed the employer’s name as YRC Freight and the employer address as 10990 Roe Avenue, Overland Park, KS.   Savea filed a complaint against YRC alleging YRC failed to provide the correct employer name and address on its wage statements as required by LC, § 226(a)(8). The trial court sustained YRC’s demurrer to the complaint without leave to amend; Savea appealed. He contended the court erred by: (1) determining that the wage statements—which listed YRC’s fictitious business name as the employer name and listed an employer address that did not contain a mail stop code or ZIP+4 Code—a plain violation of section 226, subdivision (a)(8); and (2) the trail court should not have considered supplemental evidence that YRC presented in a request for judicial notice.

Section 226, subdivision (a) requires an employer to provide employees with “an accurate itemized statement” that includes nine specific categories of information: (1) gross wages earned; (2) total hours worked; (3) certain information for employees paid on a piece-rate basis; (4) all deductions; (5) net wages earned; (6) the pay period; (7) the employee’s name and identifying information; (8) the name and address of the legal entity that is the employer; and (9) all applicable hourly rates.

An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not to exceed an aggregate penalty of four thousand dollars ($4,000); further the employee is entitled to an award of costs and reasonable attorney’s fees. (§ 226(e)(1).) Injunctive relief and civil penalties are also available. (§§ 226 (h), 226.3).YRC demurred to Savea’s complaint on the ground that the complaint failed to state a claim because the employer name and address on its wage statements were accurate.

Filed Under: Class Action (Employment)Labor & Employment

Must prove both procedural unconscionability and substantive unconscionability to rescind an arbitration agreement.

By Al Mohajerian | May 8, 2019

MAUREEN SALGADO, v. CARROWS RESTAURANTS, INC., et al.,

Court of Appeals of California, Second District, Division Six. Filed February 26, 2019.(2019 DJDAR 2459)

It is difficult for an employee to rescind an arbitration agreement. Courts have ruled that the party opposing arbitration must prove both procedural unconscionability and substantive unconscionability. Procedural unconscionability involves the circumstances of contract negotiation and formation. Substantive unconscionability relates to the fairness of the agreement’s terms, e.g., if the agreement is going to take away the right of trial and then, in addition, impose the same or similar cost of litigation on the party opposing arbitration as it would cost the party to go to trial; that would be just one example of substantive unconscionability.

Here, Maureen Salgado (“Salgado”) began working at Carrows Restaurant in 1984. (“Carrows”) On November 22, 2016, she filed a lawsuit in the Ventura County Superior Court alleging employment discrimination and violation of civil rights against Food Management Partners, dba Carrows Restaurant. In April 2017, she amended her complaint to add Carrows Restaurant and other defendants. In September 2017, Carrows filed a motion to compel arbitration. In that motion Carrows said Salgado “entered into a binding and enforceable agreement to arbitrate all claims arising out of her employment with Defendants, and all causes of action alleged in her Complaint arise out of such employment.” The arbitration agreement was attached to the motion indicate that Salgado signed the agreement on December 7, 2016. Carrows did not request that Salgado consult with her attorney before signing the agreement.  The trial court ruled that “Defendants …failed to demonstrate that the arbitration agreement applies to a suit that was filed prior to its signature.” The Court of Appeals (“Court”) had no problem with the enforceability of the arbitration agreement, but questioned whether Carrows knew that Salgado was represented by an attorney when it asked her to sign the agreement.   So, the Court had only one question: “Did Carrows know that at the time Salgado signed the arbitration agreement that she was represented by counsel?”

 The Court sent the case back to the trial court to determine whether Carrows knew (or should have known) that Salgado was represented by an attorney when Carrows asked her to sign the arbitration agreement. In doing so, the Court noted that otherwise doubts about the enforceability of an arbitration agreement should be resolved “in favor of sending the parties to arbitration,” citing, Cione v. Foresters Equity Services, Inc.(1997) 58 Cal.App.4th 625, 642. The Court further noted that the issue of the extent of coverage of an arbitration agreement should be decided by the trial court and “arbitration should be upheld unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute, citing Cruise v. Kroger Co.(2015)233 Cal.App.4th 390, 397, where the trial court ruled that “… language of the agreement suggest[s] that it applies to future disputes not ones that have already resulted in a formal lawsuit. The Supreme Court has stated that a petition to compel arbitration is not to be granted when there are grounds for rescinding the agreement.” Engalla v. Permanente Medical Group, Inc. (1997)15 Cal.4th 951, 973.

Filed Under: Class Action (Employment)Labor & Employment