Why Does it Matter?

Many employers ask (or require) employees to sign arbitration agreements. Once signed, the employee gives up their right to sue their employer in court over job-related issues such as wrongful termination, breach of contract, and discrimination. An employee who signs an arbitration agreement promises to pursue legal claims against the employer through arbitration, rather than through a lawsuit. It might not sound like a big deal when you’re starting a new job and settling into a new routine or making friends with the people you work with, but if your rights are later violated at work, that arbitration agreement might come back to haunt you.

So, What are the Pros and Cons of Arbitration?

First, the Cons

You may wonder why you should care where your claims get heard, as long as they are heard somewhere, whether in an arbitration proceeding or a court of law. An arbitration differs from a court case in several ways, and many of these differences work against employees.

Most important, an arbitration is heard and decided by an “arbitrator” — a private citizen (often a retired judge) who is paid by one or both sides to listen to the evidence and witnesses. That means you won’t have a jury hear your story — and juries often decide cases based on sympathy and relate better to an employee than an employer.

In addition, the arbitration process limits the amount of information each side can get from the other (a process called discovery). In employment cases, this generally hurts the employee, because the employer is usually the one in possession of most of the documents and information relating to the employee’s case.

Finally, an arbitration usually cannot be appealed, which makes arbitration awards more final than court verdicts. If you think the arbitrator’s decision is unfair or wrong, you won’t get a second chance to argue your case before a higher court — a second chance that you might have gotten had you gone to a court trial.

The Pros

An arbitration does have some advantages over a court trial. Arbitrations are less formal than court trials, and this informality can make the process easier for all involved, especially employees who are not used to litigation. Also, cases in arbitration are heard and decided much more quickly than court cases, which can take several years from start to finish.

What Should You Do if Asked to Sign an Arbitration Agreement?

Read ALL of the Documents Carefully, or Have them Reviewed

Employees often sign arbitration agreements unintentionally. How can this happen? Some employers give new employees piles of paperwork to fill out on their first day, and some employees, in turn, sign documents without reading them. Although many employers are straightforward and present the arbitration agreement to employees openly in a separate contract, others bury arbitration agreements in other documents, such as an employment contract, a hiring letter, or an employee handbook.


When you sign a contract, letter, handbook acknowledgment form, or any other document from your employer, you agree to all the terms of the document — even the ones that you may not have read. This is a particular problem with handbooks, which might be very long. To protect yourself from unwittingly giving up your rights, don’t sign any document acknowledging you’ve read something unless you actually have read it and understood it completely. And don’t sign any document that says you agree to the terms unless you have read all of the terms and do in fact agree to them.

What if You Do Not Want to Sign the Arbitration Agreement?

If your employer asks you to sign an arbitration agreement, you can refuse, but that may put your job in jeopardy. Usually, an employer can rescind an employment offer if a prospective employee refuses to sign the arbitration agreement. And an employer can fire an at-will employee who refuses to sign one. Therefore, declining to sign the agreement could jeopardize your job.

Some employers will negotiate this point, however, especially if they are more excited about you than they are about arbitration. If you are a highly sought after prospect, or if you are a valued employee in your company, your employer may allow you to refuse to sign rather than give you up.

Another option is to agree to sign, but only if you can negotiate an agreement that is fair to you, as described below.

How Can You Make the Agreement Fair?

If your employer won’t let you refuse to sign, it may allow you to negotiate certain terms of the agreement to make it at least balanced. You may have to consult with an attorney for help negotiating the fairest agreement possible. Here are some provisions that can help create a more balanced arbitration process.

•Choice of arbitrator. You should get as much say in choosing the arbitrator as the employer. Given the power of the arbitrator, and given the fact that you probably won’t get to appeal the arbitration decision, you will want to have rights equal to those of your employer in selecting the arbitrator. You and the employer should have the right to reject at least one arbitrator without having to give a reason.

•Disclosure of information. A potential arbitrator should have to disclose information about his or her business and personal interests so you can make sure that the arbitrator is not biased in favor of the employer. For example, the arbitrator should not be someone who is a stockholder in the company. You and the employer should have the right to reject any arbitrator who has a conflict of interest.

•Costs of arbitration. Because the employer is the one who wants to use arbitration — something that costs money — the employer should have to pay for it.

•Remedies available. Make sure that you can receive through arbitration all of the remedies that you would have gotten if you had filed your claim in a court of law. For example, the agreement should not prohibit you from seeking punitive damages or damages for emotional distress.

•Attorney representation. You should have the right to be represented by an attorney throughout the arbitration process.

CBS NEWS: The gay rights movement saw a significant victory at the Supreme Court today, even as the court dodged the fundamental issue of whether marriage is a constitutionally-protected right for all couples, gay or straight.

In a 5-4 ruling today in United States v. Windsor, the court struck down a provision of the 17-year-old Defense of Marriage Act (DOMA) that denies federal benefits — like Social Security benefits or the ability to file joint tax returns — to same-sex couples legally married.

“DOMA is unconstitutional as a deprivation of the liberty of the person protected by the Fifth Amendment,” Justice Anthony Kennedy wrote for the majority. “The history of DOMA’s enactment and its own text demonstrate that interference with the equal dignity of same-sex marriages, a dignity conferred by the States in the exercise of their sovereign power, was more than an incidental effect of the federal statute. It was its essence.”

Kennedy was joined in the majority by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan. Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas and Samuel Alito dissented.

At the same time, the court ruled in another 5-4 decision that the defendants in the case of Hollingsworth v. Perry, which considered the constitutionality of California’s same-sex marriage ban (called Proposition 8), have no standing in court. Supporters of Prop. 8 brought the case to the Supreme Court after a lower court struck down the law but California’s governor and attorney general declined to defend it. By dismissing the case on procedural grounds, the court passed up the opportunity to issue a significant ruling on the issue of marriage.

“We have never before upheld the standing of a private party to defend the constitutionality of a state statute when state officials have chosen not to. We decline to do so for the first time here,” Chief Justice John Roberts wrote for the majority, joined by Scalia, Ginsburg, Breyer and Kagan.

The practical impact of dismissing the Prop. 8 case is limited. It leaves the lower court ruling striking down Prop. 8 in place, applying statewide at best. However, the ruling may apply only to couples who directly challenged Prop. 8, or the counties in which they originally made those challenges. The lawyers who defended Prop. 8 said Wednesday that they are committed to seeing that Prop. 8 is enforced in the state.

“We are happy Prop. 8 remains the law of California,” Austin Nimocks, senior counsel with Alliance Defending Freedom, said outside of the court.

The impact of the DOMA case, by contrast, is clear. DOMA impacts around 1,100 federal laws, including veterans’ benefits, family medical leave and tax laws. There are about 130,000 married same-sex couples in the United States today who up to this point were treated as unmarried as it pertained to those federal laws.

Edie Windsor, the 83-year-old lesbian who sued the United States government for discriminatory treatment under the Defense of Marriage Act (DOMA), said she felt “honored, humbled and overjoyed” after Wednesday’s ruling came down.

Windsor sued the government because under DOMA, it did not recognize her marriage to her late partner, Thea Spyer. After living together in New York for more than four decades, Windsor and Spyer finally married in 2007, when Spyer became seriously ill. When Spyer died in 2009, she left Windsor her estate. Because DOMA didn’t recognize their marriage — even though the state of New York did — the IRS hit Windsor with $363,053 in estate taxes.

Even though the Prop. 8 case was dismissed, the two couples who initially challenged the law in court and their lawyers called both cases victories for gay rights.

Plaintiff Paul Katami, who challenged the law with his partner Jeff Zarillo, turned visibly emotional outside of the Supreme Court Wednesday. Choking up, he turned to Zarillo and said, “It’s the day that I finally get to look at the man that I love and finally get to say, will you please marry me.”

David Boies, one of the lawyers representing the plaintiffs, called Wednesday “a great day for America.” “Today the United States Supreme Court in two important decisions brings us that much closer to true equality,” he said.

While the Prop. 8 case was not decided on the merits, Boies said the DOMA ruling gave him hope. “Everything the Supreme Court said in the Defense of Marriage opinion… demonstrates that when that case finally does come to the Supreme Court on the merits, marriage equality will be the law throughout this land,” he said.

Monday’s decisions represent the latest development in a dynamic and fast-moving national dialogue – largely taking place at the state level — over gay rights, and same-sex marriage in particular. Just this year, Minnesota, Delaware and Rhode Island adopted laws recognizing same-sex marriages, bringing the number of states that do so to 12. At the same time, 35 other states have laws or constitutional amendments barring same-sex marriage.

The Supreme Court’s first foray into the subject of same-sex marriage, while limited in impact, reflects the American public’s growing acceptance of same-sex marriage. Just as the court is finally broaching the subject, a number of politicians at the federal level – both Democrats and Republicans – are taking a cue from the public and coming out in support of same-sex marriage. Even if the court had left DOMA completely intact, it would have almost surely faced a political challenge in Congress. The debate over the constitutional right to marriage, meanwhile, will continue at the state level for now.


Jennifer Becerra, Montinique Dever, Andrea Bourke and Lauren Benge have filed a lawsuit on behalf of themselves and all other hourly, non-exempt current and former employees (“Class Members”), alleging that while working for the famed chef, he and his restaurant:

“(1) required Class Members to work through their meal and rest periods without paying compensation for missed meal and rest breaks; (2) failed to pay Class Members minimum wages for all hours worked; (3) failed to pay Class Members premium compensation for all overtime hours worked; (4) failed to pay Class Members all wages due at termination and/or resignation; (5) failed to maintain and provide Class Members with proper documentation concerning their hours worked and their compensation; (6) converted the property of the Class Members; and (7) committed unfair business practices in an effort to increase profits and to gain an unfair business advantages at the expense of the Class Members and the public.”

The Fat Cow is a Ramsay restaurant located in Los Angeles’ famous outdoor shopping center — The Grove, and is owned by defendants The Fat Cow LLC, FCLA LP and Gordon Ramsay Los Angeles.

California’s law regarding employer use of social media precludes an employer from requiring or requesting an employee or applicant to:

(1) Disclose a username or password for the purpose of accessing personal social media;

(2) Access personal social media in the presence of the employer; or

(3) Divulge any personal social media, except an employer’s existing rights and obligations to request an employee to divulge personal social media reasonably believed to be relevant to an investigation of allegations of employee misconduct or employee violation of applicable laws and regulations, provided that the social media is used solely for purposes of that investigation or a related proceeding.

California law does not limit an employer’s right to require or request an employee to disclose a username, password, or other method for the purpose of accessing an employer-issued electronic device.

Retaliation against a California employee or applicant for not complying with a request or demand by the employer that violates this section is prohibited. However, this section does not prohibit an employer from terminating or otherwise taking an adverse action against an employee or applicant if otherwise permitted by law.

Oregon recently adopted a similar law. On May 22, 2013, Oregon Governor John Kitzhaber signed into law House Bill 2654, making Oregon the tenth state to prohibit employers from accessing employees’ private social media sites. The new law goes into effect on January 1, 2014, and makes it an unlawful employment practice for employers to compel employees or applicants for employment to provide access to their personal social media accounts.

The definition of “social media” includes such standard social media venues as Facebook, Twitter and LinkedIn, as well as newer sites like Pinterest and Instagram, and personal email accounts are also included. In fact, “electronic medium that allows users to create, share and view user-generated content, including, but not limited to, uploading or downloading videos, still photographs, blogs, video blogs, podcasts, instant messages, electronic mail or Internet website profiles or locations” is covered under the new law.

Under the new law, employers, including employment agencies (i.e., temp services, etc) are prohibited from “requir[ing] or request[ing] an employee or an applicant for employment to disclose or to provide access through the employee’s or applicant’s user name and password, password or other means of authentication that provides access to a personal social media account.” Passwords and other forms of identification used to provide access to employees’ social media sites are now beyond the reach of employers or prospective employers in Oregon.

In addition to precluding the compelled access to social media accounts, Oregon employers are prohibited from “compel[ing] an employee or applicant . . . to add the employer . . . to the employee’s . . . list of contacts associated with a social media website.” In other words, employers cannot gain access to social media sites by requiring employees and/or applicants to “friend” them or to make them a contact on their social media accounts.

Oregon employers are also precluded from requiring or demanding that “an employee . . . access a personal social media account in the presence of the employer,” thus preventing the employer from viewing an employee’s content by having the employee log on to the site for the employer.

The law also prevents employers from retaliating or threatening to retaliate against employees or otherwise penalizing employees or applicants with any adverse employment action, including failure to hire, because the employee or applicant failed to provide the employer with access to the site by any of the means prohibited by the statute.

There are some limited exceptions to the new law. If the employer provided the social media account, or if the account was provided on behalf of the employer to be used for the employer, then the employee must disclose the user name and password he or she uses to access the account.

The new law does not prohibit an employer from complying with state and federal laws, rules and regulations, or conducting a legitimate employment investigation “for the purpose of ensuring compliance with applicable laws, regulatory requirements or prohibitions against work-related employee misconduct,” if the employer has reason to believe, based on specific information, that content of an employee’s personal online account or service is implicated or otherwise involved. The investigating employer may also require an employee to share social media content reported to the employer if it is necessary for the employer to make a factual determination about alleged unlawful work-related misconduct. Even so, the employer is prohibited from requiring an employee to disclose a username, password or other form of access to his or her social media accounts.

Of course, employers may access information and content posted by or about an employee or applicant that is publicly available – for example, the public information on a Facebook account and any content not designated as private by the account holder.

Numerous states have placed social media related laws on their agendas. Washington state recently passed a law similar to Oregon’s statute. And, at the federal level, Rep. Ed Perlmutter (D-CO) introduced the Password Protection Act of 2013 in the U.S. House of Representatives. The federal House bill would amend the Computer Fraud and Abuse Act and make it unlawful for employers to require employees to authorize access to a computer that the employer does not own or operate. Further, the federal House bill provides no exception allowing employers to obtain password-protected social media content that reasonably relates to a workplace investigation into allegations of harassment.

Obama administration continues moving forward to implement health care law by releasing final rules on employment-based wellness programs

WASHINGTON — The U.S.  Departments of Health and Human Services, Labor and the Treasury today issued  final rules on employment-based wellness programs. The final rules support  workplace health promotion and prevention as a means to reduce the burden of  chronic illness, improve health and limit growth of health care costs, while  ensuring that individuals are protected from unfair underwriting practices that  could otherwise reduce benefits based on health status.

The final rules  continue to support participatory wellness programs, which generally are  available without regard to an individual’s health status. These include  programs that reimburse for the cost of membership in a fitness center; that  provide a reward to employees for attending a monthly, no-cost health education  seminar; or that reward employees who complete a health risk assessment,  without requiring them to take further action.

The rules also  outline standards for nondiscriminatory health-contingent wellness programs,  which generally reward individuals who meet a specific standard related to  their health. Examples of health-contingent wellness programs include programs  that provide a reward to those who do not use, or decrease their use of,  tobacco, or programs that reward those who achieve a specified health-related  goal, such as a specified cholesterol level, weight, or body mass index, as  well as those who fail to meet such goals but take certain other healthy  actions.

Today’s final  rules ensure flexibility for employers by increasing the maximum reward that  may be offered under appropriately designed wellness programs, including  outcome-based programs. The final rules also protect consumers by requiring  that health-contingent wellness programs be reasonably designed, are uniformly  available to all similarly situated individuals and accommodate recommendations  made at any time by an individual’s physician, based on medical  appropriateness.

The final rules  will be effective for plan years beginning on or after Jan. 1, 2014.

Piece-rate employees must be paid separately for work that does not fall within the scope of the work that is the subject of the piece rate.

So, if you’re a brake mechanic and are paid by the brake job (or other repair), but also clean the shop, make appointments, open/close the shop or any other duties that are not related to the brake jobs themselves, you must be compensated for the extra work. The hours spent working on non-piece rate tasks must be paid at least at minimum wage.

For example, in one case, an auto dealership compensated its auto mechanics based on a “piece rate” system. For repairs, the company would pay the employees based on a standard period of time allowed for a repair (flag hours).  The pay rate was significantly higher than minimum wage.  So, if the job took longer than standard hours, there was enough wages to ensure the mechanic earned more than minimum wage.

But the mechanics spent significant time at work NOT performing repairs, such as in training, cleaning, etc.  The dealership would calculate the total hours worked vs. the compensation it would pay for flag hours.  If the pay rate fell below minimum wage, the dealership would make up the difference.  The dealership did not pay a separate hourly rate for non-repair time that would not have been covered under the piece rate.

The court held that policy was illegal. The main issue is whether the applicable wage order (here Wage Order (Wage Order 4-2001)), requires payment of at least minimum wage for each hour worked, or an average of minimum wage for all hours worked in the work week.  The trial court and Court of Appeal, relying on an earlier case, Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314 agreed with the plaintiffs that the former interpretation was correct.
If you earn a piece rate for tasks completed, but also perform unrelated duties and wonder if you are being paid correctly under California labor law, give us a call. If you would like to read the entire case summarized above, you can find it here.

Hollingsworth v. Perry (Docket Number: 12-144)

Date Argued:03/26/13

For those of you following the same-sex marriage debate, the oral argument heard by the Supreme Court can be downloaded or played by clicking one of the below:

Media Formats:

mp3  MP3 Download Play
Windows Media  Windows Media Download Play
RealAudio  RealAudio 10 Download
PDF Transcript (PDF) View
To download file:
  • From Windows XP/Vista/7 – Right click the “Download” link and select “Save Target As…” or “Save Link As…”
  • From Mac – Press Ctrl key while clicking the “Download” link, or just right click the link if you have a double button mouse, and select “Save Linked File As…”

Health care facilities must comply with California Health and Safety Codes in order to ensure that patients and medical staff are not subjected to an unreasonable risk of health or safety within the facility.  At times, hospital and other medical facility employees observe conditions that run the risk of creating a danger, but often worry that reporting the condition might cost them their job.

Health and Safety Code § 1278.5 protects individuals who lodge complaints about healthy or safety conditions, so that they are not subject to threats or retaliation from the health care facility in which they work. Specifically, the statute prohibits health care facilities from retaliating against or otherwise discriminating against employees, medical staff, or patients for voicing a complaint or grievance regarding the quality of care or conditions at the health care facility.

The legislative history behind the statute gives insight to its purpose: “The Legislature finds and declares that it is the public policy of the State of California to encourage patients, nurses, members of the medical staff, and other health care workers to notify government entities of suspected unsafe patient care and conditions. The Legislature encourages this reporting in order to protect patients and in order to assist those accreditation and government entities charged with ensuring that health care is safe.” To be held liable under the statute, the facility must satisfy the definition of a health care facility as defined in Health and Safety Code §1250.

 As part of the objective of the statute, retaliation against employees who have complained either to an employer or to the government about the conditions of the premises are entitled to reinstatement, reimbursement, or damages. Retaliation can include: wrongful termination discharge, demotion, suspension, or any unfavorable changes in the terms or conditions of employment of the employee, member of the medical staff, or any other health care worker of the health care facility, or the threat of doing any of these actions. Further, the facility itself can be fined up to $25,000 for each of the violations.

As an example: If a nurse working at a hospital makes a complaint to the Chief of Medicine about the condition of worn out medical equipment which is being used on patients in the hospital, and the hospital Board of Directors finds out about it and subsequently fires the nurse, reduces her hours, or demotes her position, then the nurse would likely have a claim against the hospital for violation of Health and Safety Code § 1278.5.

If you have complained about risks or issues of patient safety or health and feel you have been treated differently at work (terminated, disciplined unfairly, hours reduced, shift changed, received the “cold shoulder” or something similar) give us a call today.

Tip pools and tip sharing are significant topics for employees in both the food service and hospitality industry. The Second Circuit’s Court of Appeals will soon clarify the the prohibition against participation by an employer’s “agents” in tip pools and sharing arrangements.

The court’s certification order arose out of two class actions against Starbucks involving their “baristas.”  In Barenboim v. Starbucks Corp., employees objected to shift supervisors obtaining a portion of their tips because they assigned baristas to positions during their shifts, administered break periods, directed the flow of customers, and provided feedback on baristas’ performance. As such, they argued, the shift supervisors were “agents” of the Starbucks and ineligible to participate in tip pooling the applicable labor laws.

The second case, Winans v. Starbucks Corp., presented nearly the reverse issue: assistant store managers claimed that they are not agents of the employer and thus are entitled to participate in the stores’ tip pools.

The DIstrict Court certified the following questions to the New York Court of Appeals:

    1. “What factors determine whether an employee is an ‘agent’ of his employer for purposes of N.Y. Lab. Law § 196-d and, thus, ineligible to receive distributions from an employer-mandated tip pool?,” and
    2. “Does [the Labor Law] permit an employer to exclude an otherwise eligible tip-earning employee under § 196-d from receiving distributions from an employer-mandated tip pool?”

While this may be an issue pending before the Second Circuit, employees in Santa Barbara, San Luis Obispo and Ventura who have tip pooling questions are encouraged to contact Adams Law for answers.

Meal period general requirements: One 30-minute meal period for every five hours worked.

The California Labor Code and various Wage Orders prohibit an employer from employing a non-exempt employee for more than five hours without providing an unpaid meal period of at least 30 minutes. If the employee works more than 10 hours per day, he or she must be given a second 30-minute meal period.


Unpaid meal periods must meet certain requirements or else they are considered an on-duty meal period, which is counted as time worked and for which the employee must be paid. The Division of Labor Standards Enforcement (DLSE) defines an “on-duty meal period” as: a meal period during which the employee is not relieved of all duty, regardless of length.



In short, yes, but the waiver is required to contain certain elements and is sometimes invalid if you work more than 10 or 12 hours per day.

The employer and employee are permitted to waive the 30-minute meal period in two circumstances:

  1. When an employee’s work period for the day does not exceed six hours, the meal period may be waived by mutual consent of both the employer and employee. But neither the employee nor the employer can be forced to waive the meal period. For example, if the employee wants to waive the meal period but the employer does not, then the meal period cannot be waived.
  2. When an employee works more than 10 hours per day, the second meal period may be waived if: (a)the employee works no more than 12 hours that day; (b) the employee and employer agree to waive the second meal period; and (c) the first meal period has not been waived.

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