Second Division Deems Arbitration Agreements Unconscionable and Executed by Fraud
In a decision recently certified for publication on October 22, 2021, the California Court of Appeals, Second Division, reviewed two versions of arbitration agreements executed between a group of employers and their employees. The decision stems from a class action lawsuit, Yeni Najarro et. al. v. Horizon Personnel Services Inc. et. al., wherein the employees filed eighteen employment related claims against their employers. The employers attempted to hide behind the different versions of arbitration agreements and compel the employees to dispute their claims before an arbitrator which would have prevented the employees from filing a lawsuit in court.
However, the Appellate Court determined that the arbitration agreements were unenforceable as the employee's consent to arbitration was secured by unconscionable terms and fraud in the execution of the agreements. This post will briefly highlight the big picture points of the Appellate Court's decision, and demonstrate how employees can overcome unfair arbitration agreements provided by their employers.
Arbitration Agreement Impact on Employees
We have written before the employers prefer arbitration for various reasons, but arbitration agreements may have a negative impact on employees and disadvantages employees after signing arbitration agreements. It is important to remember that there is an inherent imbalance of bargaining power at the time of hiring - with employers tending to hold all the power over employees. Many employers use this advantage by including arbitration clauses that deprive employees of their right to have their day in court - which was the situation in the Najarro case - and restrict employees in many other ways. The Srourian Law Firm and its attorneys have experience overcoming unfair arbitration agreements and securing employee's employment rights to have their day in court.
What makes an Arbitration Agreement Unconscionable?
In the Najarro class action lawsuit, although there was an arbitration agreement between the employers and employees which delegated power to an arbitrator to preside over and resolve disputes between employers and individual employees, the courts typically have the power to review all agreements or contracts for enforceability.
Unconscionability is one argument employees may raise to have an unfair agreement deemed unenforceable. In California, unconscionability is referred to as the absence of meaningful choice on the part of one party to a contract, and the contract terms unreasonably favor the other party involved in the contract. Unconscionability can be procedural - meaning that during the negotiation process one party may be oppressed or surprised due to having unequal bargaining power. Unconscionability can also be substantive - meaning the substance of the terms will result in overly harsh results to one party and one-sided favorable results to another party.
Applying the doctrine of unconscionability, the Second Division determined that one version of the arbitration agreement was unfair to employees, and therefore unenforceable, because the arbitration agreement (1) forced employee's to waive their right to file a class action lawsuit for employment related claims, (2) the employers did not countersign the agreement, which is required to demonstrate mutual intent to enter into an agreement, and (3) the employees were not provided a meaningful opportunity to negotiate the terms of the arbitration agreement with their employers. Here, the employees were pressured into signing arbitration agreements that took away their power to file a class action lawsuit in court. Underlying the lawsuit was the fact that the employees had difficulty understanding and speaking the English language which the court later addressed in its discussion of fraud in the execution of agreements.
What is Fraud in the Execution?
One key aspect of the Second Division's ruling in Najarro is the court's discussion of fraud in the execution of arbitration agreements and the implications it may have for employees that speak and or read English as a second, or maybe even third or fourth language. In California, a claim for fraud in the execution is not subject to arbitration where the facts can demonstrate that there was not mutual assent between employer and employee to enter into an agreement. Fraud in the execution of an agreement occurs when an employee signs an agreement but is deceived by the employer as to the nature of the agreement; and, the employee does not fully grasp the terms that he or she is agreeing to. In the event that this happens, the court will review the facts underlying the lawsuit in relation to the contract terms to determine whether or not the agreement is void or unenforceable.
In the Najarro lawsuit, the employees were not proficient at reading Spanish and English, nor were they proficient at speaking English. Additionally, the employers - taking advantage of the obvious language barrier - merely handed the arbitration agreements to the employees and referred to the agreement as being "unimportant". Moreover the employers took advantage of the employees by pressuring them to essentially "take it or leave it" when it came to accepting the offer for employment. The employers conditioned the employees employment on on whether or not the employees signed the arbitration agreement.
Basically, the employees were compelled by the employers to sign the arbitration agreement if they wanted to be employed. The employees were not given a reasonable opportunity to read the arbitration agreements or at least have an attorney interpret the agreement for them so that they could understand exactly what they were agreeing to, and what employment rights were being waived. When a situation like this happens, as was the case in Najarro, the court is likely to deem an agreement void or unenforceable because there is no clear intent or mutual assent that the disadvantaged party - here it was non-English speaking employees that also struggled to read Spanish and English - to mutually enter into an arbitration agreement waving vital employment rights.
Each case will depend on the specific facts, so it is important to consult with an experienced labor law attorney to assess the specifics of your case to determine if your employment rights are being violated by an unconscionable arbitration agreement.
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Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is experienced in all aspects of employment law including arbitration agreements and filing class action lawsuits, and have aggressively represented employees in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra.
If you or someone you know suffered employment violations, you may have certain employee rights under state and federal law, and may be entitled to compensation as a part of a class action lawsuit. Please contact us to speak with one of our lawyers for a free consultation.
OSHA Issues COVID-19 Workplace Safety Guidelines
Employees must know their rights as businesses around the world continue to adapt to the challenges due to the CoVid-19 pandemic. As social distancing and other safety precautions are put in place, businesses must comply with local, state and federal requirements for maintaining a safe work environment and ensure the good health and safety of employees. Most laws enacted in response to CoVid-19 vary depending on whether a business is considered essential or non-essential. For example, non-essential businesses may not compel non-essential employees to report to work, and it is illegal to retaliate against any non-essential employee who refuses to go to work. Essential workers, however, also have protections that require employers to ensure and maintain a safe workplace.
In March 2020, the Occupational Safety and Health Administration (OSHA) issued new guidelines as a result of the pandemic to clarify existing federal law that protects employees. The guidelines address the additional health risks posed by CoVid-19. Under the “General Duties Clause” enacted in 1970, OSHA (as part of the Labor Code), requires employers ensure the workplace is free from “recognized hazards” that are likely to result in serious injury or death of employees.
29 U.S. Code § 654 (5)(a)(1): shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.
The new OSHA guidelines, for the most part, provide guidance that follows the advice of public health officials that are already recommended for everyone such as washing hands frequently and maintaining social distancing. While the guidelines are not legally binding, they do outline recommended precautions that employers should take in order to ensure the safety of employees.
The new guidelines address four categories, or controls, for businesses to ensure employee safety: (1) engineering, (2) administrative, (3) safe work practices, and (4) personal protective equipment. The first category, engineering, identifies safety measures to separate employees with physical barriers. Administrative controls include ensuring sick employees stay home, and creating enough space for employees to stay six feet apart. Under safe work practices, OSHA recommends that company policies and practices promote good health such as providing hand sanitizer, sufficient time to wash hands frequently, and having disinfecting products available. Finally, personal protection equipment includes providing masks, gloves and eye protection to reduce the risk of exposure to CoVid-19, and would depend on the type of work and level or risk.
Additional federal, state and local laws may provide additional protection to employees. For example, in Los Angeles County, local law requires social distancing in public as well as wearing non-surgical masks by employees of essential business as well as customers. Businesses that fail to provide employees with personal protective equipment or ensure customers are wearing masks are violating the law.
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Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is experienced in all aspects of employment law including OSHA violations and have aggressively represented employees in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra.
If you or someone you know suffered employment violations as an employee including OSHA violations, you may have certain employee rights under state and federal law. Employees may be entitled to damages as a part of the class action lawsuit. Please contact us to speak with one of our lawyers for a free consultation.
Employees Have a Right to be Safe at Work Amid COVID-19 Pandemic
The challenges we are all facing due to COVID-19 have resulted in many changes at home and in the workplace. While everyone must adapt to the rules of social distancing and the mandatory Safer-at-Home restrictions, essential businesses must also ensure their employees are safe at work during this pandemic. Employees of essential businesses continue to provide vital services despite the health risks, and will keep America operating. These front-line workers are important and have rights under California law to ensure their safety, health and well-being.
Under California law, employers must provide “reasonably adequate” safety devices and safeguards to keep the work place “safe and healthful.” Moreover, California Labor Code section 6401 requires “every employer shall do every other thing reasonably necessary to protect the life, safety, and health of employees.” If your employer does not protect your health and safety, they are violating the law. While this is especially challenging during the current pandemic, employees have the right to be safe in the workplace.
EMPLOYERS MUST PROVIDE MASKS, GLOVES, SOAP AND SANITIZER
Even though the current COVID-19 pandemic is unprecedented, given our understanding of the virus and how it is spread, essential workers that have contact with the public must be provided with masks, gloves, soap and sanitizing products. In addition, employees must be given time to properly wash their hands frequently, as recommended by health care organizations. Employers must also ensure that the workplace is clean and regularly sanitized for the protection of employees and customers.
According to the Centers for Disease Control and Protection (CDC) and most health care organizations, properly washing your hands with soap and water is the most effective way to prevent the spread of COVID-19 as well as other disease.
The need for safeguards in the workplace is particularly important for health care providers and first responders who are more vulnerable simply because they are more likely to be in direct contact with contagious members of the public. Every effort must be made to provide sufficient personal protective equipment (PPE) to every front-line worker to ensure their health and safety, and avoid further contagion.
State law also requires employers to reimburse employees for any expenses spent by employees to obtain necessary safety equipment. This also includes the cost of lodging if an employee is required to self-isolate because they live with someone who is considered vulnerable to the virus or has been diagnosed with the virus.
EMPLOYERS SHOULD ACCOMMODATE VULNERABLE EMPLOYEES
Employees who are considered vulnerable to the virus by having a pre-existing medical condition, may request an accommodation to work from home. If the accommodation is reasonable, the employer must accommodate the request or may violate protections granted under California’s Fair Employment & Housing Act (FEHA). Since California is under a state of emergency due to the virus, employees should know what changes have been made to provide workers with protection during the pandemic.
For example, while employers may ask employees whether they are experiencing COVID-19 symptoms, this information is confidential and the employee’s medical condition remains private. Similarly, if a co-worker has tested positive for the virus, or is believed to have the virus, the employer must follow the guidelines established by the local public health department as well as any current state or federal health recommendations. That may include closing the work place, deep cleaning and allowing employees to work remotely. Most importantly, employers cannot reveal the name of the employees that have tested positive or are suspected of having the virus.
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Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is experienced in all aspects of employment law including failure to ensure a safe and healthful workplace and have aggressively represented employees in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra.
If you or someone you know suffered employment violations as an employee such as failure to ensure a safe and healthful workplace in California, you may have certain employee rights under state and federal law and may be entitled to unpaid wages, interest, attorneys’ fees and costs, and/or be entitled to compensation as a part of the class action lawsuit. Please contact us to speak with one of our experienced lawyers for a free consultation.
Know the Law. Know your Rights.
Most people eagerly await payday in order to pay rent and bills on time, or maybe to splurge a little. Getting a late paycheck, regardless of the reason, is not only frustrating, but it could be against the law. Under California labor laws, employers must pay you on time, or they are violating your rights and breaking the law.
In general, employees must be paid by a certain date depending on whether paychecks are issued every two weeks (bi-weekly) or twice a month (bi-monthly). There are some narrow exceptions that apply to certain types of employees, such as salaried monthly executives, but the vast majority of employees are protected under California Labor Code section 204(a).
California Labor Code § 204(a) (in relevant part)
Labor performed between the 1st and 15th days, inclusive, of any calendar month shall be paid for between the 16th and the 26th day of the month during which the labor was performed, and labor performed between the 16th and the last day, inclusive, of any calendar month, shall be paid for between the 1st and 10th day of the following month.
For example, if an employee is paid twice a month, the pay period is often divided into the 1st through 15 days of the month; and the 16th through the last day of the month. Under California law, employers must issue paychecks no later than the 26th of the month for the first pay period, and the 10th of the following month for the second pay period.
For employees that are paid every two weeks, or weekly, the law requires employers issue checks within seven calendar days after each pay period. Failure to issue timely paychecks could subject employers to significant penalties.
Also, according to California Labor Code section 204(b)(1), Employees have a right to be paid for overtime by the next regular paycheck. That means if you accrue overtime during a particular pay period, those extra wages must be included in the next paycheck. Again, if your employer fails to pay you overtime wage on time, your rights have been violated and you should seek legal advice.
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Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is experienced in all aspects of employment law including failure to receive paychecks on time and have aggressively represented employees in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra.
If you or someone you know suffered employment violations as an employee such as not receiving paychecks on times in California, you may have certain employee rights under state and federal law and may be entitled to unpaid wages, interest, attorneys’ fees and costs, and/or be entitled to compensation as a part of the class action lawsuit. Please contact us to speak with one of our experienced lawyers for a free consultation.
Know the Law. Know your Rights.
Are you Earning at Least the Minimum Wage Required by California Law?
Employees in California must be paid the minimum wage and are protected by law. While there are some exceptions, it is illegal for employers to pay employees less than the required minimum wage. The California state minimum wage is higher than the federal minimum wage, so workers should be paid the higher required pay under state law. Moreover, some cities and counties have even higher minimum wages, so you should always be aware of the applicable minimum wage, as well as any increases to the minimum wage that typically occur every January 1.
California Labor Code §512(1)(a)
The minimum wage for employees fixed by the commission or by any applicable state or local law, is the minimum wage to be paid to employees, and the payment of a lower wage than the minimum so fixed is unlawful. This section does not change the applicability of local minimum wage laws to any entity.
If your employer is not paying you the minimum wage required by law, you can file a lawsuit to recover unpaid wages, interest on the wages, as well as attorneys’ fees and court costs. Also, if there are many employees that are not being paid the required wage, you could be part of a class action claim against the employer.
California Labor Code § 1194
Any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to such employee is entitled to recover in a civil action the unpaid balance of the full amount of such minimum wage or overtime compensation, together with costs of suit, notwithstanding any agreement to work for a lesser wage.
Also, be aware that in addition to the hours you are actually performing your job, your employer must also pay you for any additional time that your employer has control over you. For example, you are entitled to minimum wage for the time needed to change into a uniform; time on-call waiting to be called in to work; as well as time needed to pass through security between shifts. This time is covered by California labor laws, and your employer must pay you at least the minimum wage or they are breaking the law, and you may be entitled to compensation.
FREE CONSULTATION
Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is experienced in all aspects of employment law including minimum and unpaid wages and have aggressively represented employees in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra.
If you or someone you know suffered employment violations as an employee such as being paid less than minimum wage in California, you may have certain employee rights under state and federal law and may be entitled to unpaid wages, interest, attorneys’ fees and costs, and/or be entitled to compensation as a part of the class action lawsuit. Please contact us to speak with one of our experienced lawyers for a free consultation.
Srourian Law Firm Files Class Action Lawsuit Against Ruth's Chris Restaurant
Srourian Law Firm has filed a class action lawsuit on behalf of former and current workers of Ruth's Chris Steak House workers. The lawsuit includes both front of house and back of house workers, including waiters, hosts, barbacks, runners, and kitchen staff for all restaurant locations in the State of California. The lawsuit alleges that Ruth's Chris violated various provisions of the California Labor Code, including failure to pay minimum wage, failure to pay overtime, failure to authorize meal breaks, failure to authorize rest breaks, failure to timely pay final paychecks, failure to provide proper paystubs, and violation of California Private Attorney General Act, among several other violations.
The lawsuit further alleges unlawful restaurant policies of denying and discouraging breaks based on providing team meals to be eaten quickly, lack of adequate resting facilities, and a requirement to keep inaccurate records of meals breaks. The lawsuit further alleges the requirement for workers to take on-duty meal breaks in violation of California leave.
SROURIAN LAW FIRM’S CLASS ACTION LAWSUIT
The class action lawsuit, titled Adrian Quiroz v. Ruth's Chris Hospitality Group, Inc., is currently pending in Riverside Superior Court Case No. RIC1804127. If you worked for any Ruth's Chris location in California at any time from February 26, 2014, until the present and would like more information about this case, please call us at (310) 601-3131 or send an email to contact@slfla.com. Be sure to give your name, telephone number, and the best time to reach you, and an attorney will get back to you soon.
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Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is aggressively pursuing claims against MedMen, and other California cannabis dispensaries in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra. If you or someone you know suffered violations of the California Labor Code in relation to their employment with a cannabis dispensary, you may be entitled to compensation as a part of the class action lawsuit. Please contact us to speak with one of our lawyers for a free consultation.
