Up-to-date information for employers on topics and issues that may affect workplace operations. The posts are current as of the date of the posting.


by Jennifer Brown Shaw and Julia C. Melnicoe | The Daily Recorder | Dec 10, 2015

There are a number of important employment cases pending on the California Supreme Court’s docket. Unlike the U.S. Supreme Court, California’s high court does not decide cases according to a strict schedule. We highlight below the key employment law cases that the Court may decide in 2016 based on their time on the docket.

Baltazar v. Forever 21, Inc. (Case No. S208345)

Baltazar sued her former employer, Forever 21, alleging wrongful termination, discrimination, and harassment. Forever 21 sought to arbitrate Baltazar’s claims under the arbitration agreement she had signed at hiring. But Baltazar claimed the arbitration agreement was unconscionable because it was too one-sided. The agreement allowed either party to go to a court to obtain “provisional” relief (such as temporary restraining orders and preliminary injunctions). But Baltazar claimed that employers are more likely to seek provisional relief, so employers would not be bound to arbitrate to the same extent as she was.

California courts in past cases have required strict “mutuality” of obligation to arbitrate. There are opinions in which arbitration agreements were invalid when they authorized provisional relief for only claims that an employer might bring. The agreement in this case, however, allows either party to seek provisional relief with a court. Even the California Arbitration Act already grants the right to seek similar remedies in court.

The issue for the Supreme Court therefore comes down to the real meaning of “mutuality” in arbitration agreements. The Court’s recent decision in Sanchez v. Valencia Holding Co. LLC may have signaled a relaxation of mutuality requirements in light of the Federal Arbitration Act. We will see.

Kilby v. CVS Pharmacy, Inc. / Henderson v. JPMorgan Chase Bank (Case No. S215614)

Most California employers are subject to the Industrial Welfare Commission “wage orders” regulating the wages, hours, and working conditions of California employees. Almost all of California’s wage orders require employers to provide employees with “suitable seats when the nature of the work reasonably permits the use of seats.” The wage orders also obligate employers to provide an adequate number of seats close to the employees’ work area for them to use when not actively performing job duties.

Kilby and Henderson are two “suitable seating” cases pending before the Ninth Circuit Court of Appeals. The key issue in both cases is whether the “nature of the work” requires suitable seats and “reasonably permits” their use. If so, the employers could not mandate standing during all work time.

In the Kilby case, cashiers spent about 90% of the time working at a cash register and the remaining 10% walking around the store performing various tasks. In Henderson, tellers spend most of their time at their windows making deposits, processing withdrawals, and other duties. They also escort customers to safety deposit boxes, check ATMs and perform other duties requiring mobility.

The Ninth Circuit certified several questions relating to these cases and suitable seating to the California Supreme Court. It asked whether “nature of the work” refers to an individual task or duty that an employee performs during the course of a workday, or whether it includes the entire range of an employee’s duties. The federal court queried whether courts should consider the employer’s business judgment as to whether the work “reasonably permits” the use of a seat (e.g., facility layout). Finally, the court asked the California Supreme Court whether it is the employee’s burden to show what would constitute a suitable seat to prove that the employer has failed to provide one. The California Supreme Court’s answers to these questions may change California work places where standing is now considered part of the job.

McLean v. State of California (Supreme Court Case No. S221554)

California Labor Code Section 202 provides that employees’ wages are due no later than 72 hours if they quit without notice. If employees give more than 72 hours of notice, they should be paid on the last day of employment.

McLean retired from the California Office of the Attorney General. She did not receive her final wages on her last day of employment or within 72 hours. So, she filed a class action against the state, alleging that California failed to make prompt payments required by Section 202.

Before the Court is whether the term “quit” as used by Section 202 includes the concept of retirement, and whether a former state employee may sue the state itself instead of the specific agency for which she previously worked.

This case is probably not a nail-biter for most employers. Best practices dictate that employers should be prepared to deliver all final wages on the employees last day of work if the employee provides sufficient notice, as would be expected in the case of retirement. And when in doubt, employers should stick to the 72 hour rule where less notice is provided.

Sandquist v. Lebo Automotive, Inc. (Supreme Court Case No. S220812)

Plaintiff Sandquist filed individual and class action claims against his former employer, Lebo Automotive, alleging discrimination, harassment, and constructive discharge. Lebo moved to compel arbitration based on an arbitration agreement Sandquist signed at hiring.

The agreement stated that any claim arising out of Sandquist’s employment must be exclusively submitted to binding arbitration. However, the agreement did not address treatment of class action claims. The California Supreme Court is to decide whether the court or the arbitrator should decide whether the arbitration agreement covers class actions or not.

The U.S. Supreme Court has previously held that threshold issues about the enforceability of an arbitration agreement (including whether there is an agreement to arbitrate) is for the court, unless there is a clear agreement that the arbitrator is to decide. What is not clear is whether the availability of class arbitration is a question of arbitrability (and therefore a question for the court), or a question of interpretation of the agreement, which other case law holds should be decided by the arbitrator. Employers that clearly draft whether courts or arbitrators will handle these issues may avoid lengthy court battles over jurisdiction.