As we reported last year, the Dynamex v. Superior Court case “radically modified the test for determining whether someone working for a business is an employee or independent contractor.” Early indications are that leading gig economy employers remain unsure how to resolve treatment of individuals who do not neatly fit the traditional definition of either employee or independent contractor.
Being an employer in California is increasingly challenging. In the last few years, new laws have emerged that present additional risks to employers, not just with respect to employees, but also with respect to job applicants.
Recently, the Ninth Circuit in Gilberg v. Cal. Check Cashing Stores, LLC, held the FCRA’s “standalone document” and “clear and conspicuous” requirement means the FCRA disclosure, even if electronic, must be a separate form that cannot include any “extraneous information” (for example, including a liability release in a FCRA disclosure and an at-will employment disclaimer are prohibited). It also clarified that multi-state disclosure forms, containing disclosures from multiple states, are not compliant.
Employees may not reach outside payroll service with unpaid wage claims
Published on Mon, 03/04/2019 - 11:58pm
Many employers use outside payroll services to perform the important functions of processing payroll-related data and issuing employee paychecks. Recently, in Goonewardene v. ADP, LLC, the California Supreme Court addressed the question of whether an employee can sue an outside payroll service company for errors in the employee’s pay. In that case, an employee who alleged unpaid wages, brought claims for breach of contract, negligence and negligent misrepresentation against his employer’s outside payroll service provider. Although there was no employment relationship between the payroll service and the employee for unpaid wages under the Labor Code, the employee brought his claims based on the third party beneficiary doctrine, under which an individual or entity that is not a party to a contract (i.e., the third party) may bring a breach of contract action against a party to the contract if that individual or entity establishes that it is likely to benefit from the contract, that a motivating purpose of the contracting parties is to provide a benefit to the third party, and that permitting the third party to bring its own breach of contract action against a contracting party is consistent with the objectives of the contract and the reasonable expectations of the contracting parties.
California wage and hour laws are breeding grounds for class actions and ever more popular, Private Attorney General Act (PAGA) claims, that at least for now cannot be avoided with individual arbitration provisions. The bases for many of these claims are things like overtime, meal and rest breaks, all very familiar concepts to employers. In order to ensure compliance, dealers and other employers include compliant policies in their handbooks, and make sure managers are trained not to encourage employees to work through their breaks or off-the-clock. But, should you worry if an employee who comes in at 8 am, routinely doesn't take his lunch until 3 pm because he wants to use the time to pick up his child from school, or another employee always eats at her desk and only clocks 15-minute lunches?
But a well-drafted arbitration agreement can still prevent class action litigation
Published on Mon, 03/04/2019 - 11:57pm
Last year, in Epic Systems v. Lewis, the U.S. Supreme Court affirmed that an employee can be required, as a condition of employment, to enter into a predispute arbitration agreement waiving the right to file or participate in a class action. In the wake of the Epic decision, many have questioned whether employers can now require employees to waive their right to bring a representative action under the Private Attorney General Act (“PAGA”). This week, the California Court of Appeal answered “no.”