CA Court Issues Decision Upholding Arbitration Agreement

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An Arbitration agreement is a common part of many employment contracts. These clauses keep employers from having to fight court and generally save larger companies a substantial amount of money. However, these clauses are not necessarily good for employees. By signing an arbitration agreement, the employee gives up most of his or hers rights to file a lawsuit in court and agree to pursue all claims in arbitration instead.

There are many disadvantages to arbitration for employees. First, there is no jury in an arbitration, and juries are usually sympathetic to individuals who were harassed or discriminated against by their employers. Next, the arbitration process frequently limits the amount of discovery available to each side. This often works against the employee, who has less access to the employer’s documents, emails, and other files. Finally, the decision made by the arbitrator is usually not appealable – if the employee disagrees with the decision, there is little recourse.

On March 28, 2016, the California Supreme Court decided the case of Baltazar v. Forever 21, involving an arbitration agreement between an employee and a clothing company. In the case, Maribel Baltazar signed an arbitration agreement as part of her employment contract with clothing store Forever 21. Baltazar quit her job after alleging that she experienced racial and sexual discrimination and harassment. When she attempted to file a lawsuit against the company, Forever 21 enforced the arbitration clause of her employment contract.

Baltazar fought against the arbitration clause by arguing that it was unenforceable. She took issue with the language of the clause, which seemed to allow the employer more access to the court system. The arbitration clause allowed both parties to go to court (and skip arbitration) in order to ask for an injunction or other provisional remedy. Baltazar argued that Forever 21 was much more likely to seek an injunction in court, and based her argument on a similar case decided in 2010.

In 2010, the First Appellate District decided the case of Trivedi v. Curexo Technology Corp., 189 Cal. App. 4th 387. Trivedi held that arbitration agreements which exempted provisional remedies like injunctions were more likely to be used by employers rather than employees, and the discrepancy rendered the arbitration clause unconscionable and unenforceable.

The California Supreme Court disagreed with both Baltazar and the Trivedi court. The court held that even if Forever 21 was more likely to be able to use the court system, California Code of Civil Procedure ยง 1281. 8 allowed either party to an arbitration agreement to use the court system for provisional remedies. Since the arbitration clause did nothing but re-state established law, the California Supreme Court found that the arbitration clause was valid and enforceable. The court also rejected multiple other arguments made by Baltazar.

The Supreme Court’s decision is important because it reverses a recent trend of courts finding arbitration agreements unconscionable for technical or minor reasons. After this ruling, lower courts may be less likely to throw out an arbitration agreement, and employees may have no choice but to submit to arbitration.

If you have a conflict with your employer, and are unsure if you will have to go to arbitration, call the Law Offices of Michael L. Carver today and learn more about your options.

Association wins Victory on Dues Issue

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The California Teacher’s Association won a large victory for unions and organized labor in the United States Supreme Court on May 26, 2016. The justices deadlocked 4-4, which means that lower court’s ruling in the matter stands.

The case involved ten teachers from California and the Christian Educators Association International who jointly sued the California Teacher’s Association (CTA). The CTA is one of the largest and most powerful teachers’ unions in the country.

California is one of 23 states which requires public employees like teachers to pay a mandatory fee to the union even if the employee is not a union member. The state and unions reason that since all teachers benefit from the association’s collective bargaining efforts, then all teachers should pay for these costs.

The teachers argued that this “agency shop” law, which requires teachers to pay union fees as a condition of employment, is unconstitutional. The teachers believe that the rule violates their freedom of speech and freedom of association. Some teachers do not want to join the union because they disagree with unions in general, and others disagree with the CTA’s widespread political activities. Others simply do not believe they should be forced to pay money for an organization that they do not want to join.

The tied decision was expected after the death of Justice Antonin Scalia. Since the Court only has eight justices, a tie leaves the lower court decision in place but does not decide the issue permanently. The case can still be re-presented to the Supreme Court once a ninth justice is in place.

Many legal observers believed that Justice Scalia would have ruled against the unions. If this were the case, the decision would have caused a major blow to unions across the nation and would have greatly decreased their power. If the decision were overturned, non-union employees would no longer have to contribute to the union’s collective bargaining costs, and the impact would be substantial.

Anti-union activists have vowed to present the case again, and many believe that the issue is important enough that a full panel of justices will agree to re-hear the case. Unless or until that happens, California law still allows unions to charge non-members dues or fees in order to support their activities.

Concerned Over Employer Arbitration Agreement?

ArbitrationMany employers want their employees to sign “arbitration agreements” requiring disputes that arise in the workplace be resolved through arbitration rather than in the courts. Arbitration is decided by a neutral third person, often a retired judge, who makes the decision as to the dispute. This means a jury will never hear your case.

This kind of agreement in the workplace have become commonplace. Employers use these agreements, because they believe the agreement will prevent disputes from going to the courts and result in more favorable treatment of employers. It is widely believed that arbitration is less expensive than courtroom litigation; however, that question is up in the air.

In the course of normal litigation, a lawsuit is filed by an employee. The employer typically pays out thousands of dollars to their attorneys to defend the court action brought by the employee. At some point the case may go to arbitration hearing unless it is settled along the way. In a California employment arbitration setting, the employer must pay most of the case costs and in many cases, the costs are more than the employer would pay in the courts.

The risk to employers is potentially greater in arbitration than in the courts. Particularly in cases involving nonpayment of overtime, the prevailing employee can recover attorneys’ fees, but the prevailing employer does not usually recover their attorneys’ fees. Worse for the employer, if they get an unfavorable decision against them by the arbitrator, the decision is usually non appealable.
There may be many reasons why employers want employees to sign arbitration agreements. The advantage for an employer in the this setting is that there is no jury, which is good because juries are unpredictable. While some studies indicate that employees win larger awards in a court trial, there is little evidence that the employers would have done better in arbitration.

There are some advantages to the employee in arbitration. Arbitrations are less formal than the court process and usually take less time than it would take to get to trial. If you’re required to sign such an agreement to obtain or keep your employment, you may want to have an attorney review the agreement and give you advice as to whether or not you should agree to the provision.

Were You Asked to Sign Something Just to Get Paid?

fiprkThe day an employee leaves their job can be a very emotional experience, even if the employee is leaving the job by choice. It is often much more so if an employee is being fired or laid off for lack of work. It makes sense, in a world where most people work paycheck to paycheck. When a job is ending, people often wonder where their next month’s rent is coming from and whether or not they’re eligible to collect unemployment.

Too often, an employer will ask an employee to sign something on this day. And employees will sign it, sometimes without even reading it, believing it is necessary to get their final paycheck. Often, they are very concerned about what their employer will say to prospective employers who call and ask about their job performance and behavior. Sometimes, employees will sign anything just because they want things to be gotten over with.

However, employees should carefully read anything they’re asked to sign regarding their employment, especially at the end of their job. The employer could be trying to get the employee to agree they have been paid everything they are owed, or even waiving their rights to sue in exchange for a small severance payment.

Labor Code 206 and 206.5 may protect employees in this situation. Labor Code Section 206.5 clearly states that an employer cannot require an employee to sign a release in order to get paid. Violation of this section can be a misdemeanor, and it covers claims regarding wages due or about to become due. Labor Code Section 206 states that in any dispute over wages, the employer shall pay the undisputed amount due within the required time limits. Triple damages can sometimes be recovered in this situation under the code. This section also provides that the employee still has the right to bring a lawsuit over disputed amounts paid, even if the employer pays the undisputed amount.

One thing an employee shouldn’t have to worry about is whether or not they’ve been paid all their wages, especially when they’re in a precarious situation to begin with.

Do You Have a Favoritism Situation, a Nepotism Case, or Discrimination?

nepOur office just received a call from an employee asking if it was legal for their boss to treat family members better than the other employees who work for them. This is a question that comes up regularly, and it is a valid question, because it involves an issue of basic fairness. Often, the caller describes a person who is related to the boss that does less work, gets more pay or gets a better schedule than the employees who are not related in these calls. The legal term here is nepotism. It means a family member is getting better treatment than the rest of the employees simply because they’re related to the boss or owner of the business. The truth is that unless you’re working for the government, and are covered under a Government Code Section, there are no specific laws preventing an employer from treating an employee better than the rest because they are related.
However, an employer could be breaking their own anti-nepotism policy. Such policies can often be found in an employee handbook. At times, union contracts forbid such treatment and require that things like preferred schedules or jobs be based upon seniority, or another neutral criteria. Sometimes, a breach of contract or breach of implied contract case can be the result of such a situation.
But, just because you don’t work for the government, have a contract or an anti-nepotism policy — that doesn’t mean you don’t have a case. Situations that look like nepotism can actually turn out to be a possible discrimination case. If you are being treated differently because of your gender, age, race, nationality or sexual orientation, you may have a violation of the law taking place. Such cases are generally fact specific and will require an interview with an experienced law office to determine what is happening.

Has a School or Training Program Promised You a Job and Failed to Deliver?

kloaThe advertisements sound so great. They show smiling, successful workers with great jobs and happy families. They can seem like the answer to all your problems, especially if you’re at home watching television because you are out of work, really unhappy with your current job, or just not sure what to do next with your life. They say if you go to this school, and complete the program, you’ll get a job that pays well and offers great benefits. You’ll be able to work in the medical profession, or other acclaimed and in-demand field. They show people who have attended the school extolling the benefits of the program –talking about their enviable promotion or new position and how it changed their lives. They are so glad they went to this program.

What they don’t always say is that these results are not typical. They also might leave out the fact that the school is a for-profit institution, and that their students are borrowing thousands upon thousands of dollars, and investing months of precious time for a degree or certificate that won’t guarantee them anything.

Such schools can be sued for false advertising, misrepresentation of job placement rates, or even fraud. In some cases, schools have been targeted by the attorney general’s office for preying on veterans, many of whom served in hopes of getting money for schooling they could not otherwise afford. Even when the victims involved are not veterans, they often involve the most sympathetic of victims, in that the students just want to pursue the American dream of doing better by improving themselves through hard work.

Buyers should definitely be aware of the fine print when choosing a vocational school or college. They should keep copies of anything they sign, and ask for written material regarding placement rates, average wages achieved in placement, and exactly what services are available to help those graduates get jobs. Bringing a private fraud case, or even a class action, is a possibility if sufficient evidence exists that promises were made but not kept. It is not uncommon for some schools too simply close their doors, leaving students without what they paid for.

Painkiller Maker Pays Massive Class Action Settlement in False Claims Case

321516A drug that may be a distant memory for users made headlines recently when a case against the manufacturer settled for more than $800 million recently. Although it hasn’t been on the market since 2004, the painkiller Vioxx is still making headlines and costing its maker millions of dollars.

The company pulled the pills from the market when it was determined it could increase stroke and heart attack risks in patients. The drug company agreed to resolve a class action lawsuit by paying $830 million to shareholders recently. The shareholders argued the drug maker made misleading statements about its safety while it was still being prescribed.

The drug was introduced in 1999. The lawsuits began in 2003. They were consolidated in a case under a New Jersey federal judge and the group was certified as a class – meaning it can proceed as one action on behalf of many different parties – in 2013.

Shareholders alleged the drug company knew of the safety risks before the drug reached the market, then tried to minimize risks as problems began to publicly emerge while the drug was still being prescribed. The drug company denied allegations in court documents. Part of the case went to the U.S. Supreme Court, where it was unanimously ruled that investors hadn’t waited too long to bring their cases.

The company also faced a list of product liability class action lawsuits alleging that patients suffered heart attacks or strokes due to the drugs, and that the company failed to warn them properly of the risks. Merck admitted no liability as part of the settlement.
The company also agreed to pay $950 million to resolve accusations by the U.S. Department of Justice and state governments alleging the company lied to governments about the drug safety, and marketed it for uses not covered by the approval of the Food and Drug Administration. Merck pleaded guilty to a misdemeanor for violating federal drug laws by promoting Vioxx for use in the treatment of rheumatoid arthritis before the FDA approved it to do so.

Class Action Settles for $2 Million for Consumers

FTCLumosity customers could be in for a $2 million windfall due to a settlement of a case against the San Francisco based company. A federal consumer protection agency accused the company of lacking the proof to back up claims about improving mental sharpness through the use of their project.

The developer of “brain training” games has settled federal allegations of misleading customers by agreeing to pay $2 million. Lumosity games, accessed through online applications and programs for which customers generally paid a subscription fee, were advertising as providing a list of cognitive benefits. But the company’s advertisements suggested that playing them a few times a week could boost productivity at work and school, and possibly delay dementia, according to the Federal Trade Commission’s allegations.

The federal agency regulates advertising to consumers, and has recently taken on products including dietary supplements which claim to make people more mentally sharp. The FTC representative said that the advertising Lumosity used preyed on people’s fears of getting older and not being able to think as well, and that the company lacked the science to back up their claims. People’s fear of memory loss, dementia and Alzheimer’s disease led them to buy the product, but there was no proof any of these problems could be helped by the products in question.

Consumers of the company’s product purchased either a monthly subscription or access for a lifetime. As a part of the class action settlement, Lumos Labs must offer customers an easy way to cancel subscriptions. A judgment in the amount of $50 million was originally obtained by the agency, but the company reportedly was unable to pay that amount.

Trade publications indicate the company is one of many in the “brain training” business – worth an estimated $1 billion in sales per year. However, the Lumosity company was one of the most highly visible in the exploding field, no doubt an area of growth due at least in part to the aging population in America and other similarly developed countries around the world.

Federal law states that the only products that can claim to treat or prevent a serious disease must be reviewed and approved by the food and drug administration for their effectiveness. However, the agency has yet to approve a single “brain training” program.

Consumer class action involve claims such as these – where a customer acts on behalf of a group of people who feel they have been wronged or defrauded by a product or service. Sometimes, this is the only way that some issues can be addressed, due to the simple fact that the claims involved can be far too small to justify the high cost of bringing an individual lawsuit. The consumers, if handled individually, could not hope to sensibly pursue the matter. In some cases, the customers involved spent an amount too small to be worth filing a small claims case. Class action cases are an efficient way to address such issues.