The Unruh Civil Rights Act is one of four statutes enforced by the California Department of Fair Employment and Housing (DFEH), an agency of the California state government established in 1959. The overseeing DFEH protects its state residents from employment, housing and public accommodation discrimination, along with hate violence. According to a study of employee charge trends by specialty insurer Hiscox, ten states have their own anti-discrimination and fair employment practices laws that drive employee lawsuit activity. The DFEH is the largest state civil rights agency in the United States out of the ten.
This month, the California Supreme Court decided Sanchez v. Valencia Holding Co., LLC, ___ P.3d ___, 2015 WL 4605381 (2015), wherein it held that the anti-waiver provision of California's consumer protection statute is preempted by the Federal Arbitration Act ("FAA"). Id. at 15.
The case involved a car purchaser who filed a putative class action against a dealership regarding the sale of a car. Claims were made pursuant to California's Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code §§ 1750-1754, among other statutes. When the dealership moved to compel arbitration, the trial court denied the motion, finding the class waiver unenforceable.
As long as judgments have included economic damages, there have been judgment proof defendants. In personal injury law, for example, this problem has been addressed by the concept of mandatory coverage for those who participate in the activities that typically give rise to such claims. From car and homeowners insurance to workers compensation programs, these initiatives have gone a long way toward ensuring that those who are wrongfully injured are justly compensated.
In employment law, however, considerable shortfalls remain. Although California law requires all employers to participate in workers compensation andunemployment coverage, there remains a considerable gap with respect to the state's anti-discrimination and anti-harassment laws. While many larger employers are either self-insured or purchase Employment Practices Liability Insurance (EPLI), studies show that less than two percent of small businesses are covered. The same studies show that more than half of all wrongful employment claims are filed against those same employers. This means that each year in California alone, thousands of claims - though not all meritorious - are hopeless before they're ever filed. As a result, a startling proportion of the employment sector is effectively exempt from the FEHA and other critical employee protections.
In Burwell v. Hobby Lobby Stores, Inc., 134 S.Ct. 2751 (2014), the Supreme Court held that the so-called contraceptive mandate of the Patient Protection and Affordable Care Act (ACA) violated the Religious Freedom Restoration Act (RFRA). After finding that for-profit corporations are "persons" under the RFRA, the Court proceeded to declare that the ACA's regulatory requirement that insurance benefits offered to employees include contraceptive coverage burdened a company's free exercise of religion in a manner that exceeded the RFRA's "least restrictive means" requirement. Id. at 2768, 2775, 2780.
Leaving aside the questionable means by which the Court reached its decision in Burwell, one thing the Court neglected to address was the manner in which this newly established right of a legal fiction to practice religion impacts the rights of employees under well-established anti-discrimination statutes. See, e.g., Title VII, 42 U.S.C. § 2000e et seq. (prohibiting discrimination against employees on the basis of race, color, religion, sex, and national origin); Americans with Disabilities Act, 42 U.S.C. § 12101 et seq. (prohibiting discrimination on the basis of disability); California Fair Employment and Housing Act, Cal. Gov. Code § 12900 et seq. (prohibiting discrimination against California employees based on a more expansive list of protected categories than Title VII). After allowing employers to use religion as a basis for withholding contraceptive coverage from its employees, the Court did not conclude that a corporation's exercise of its religion trumped the right of employees to be free from discrimination in the workplace.
Whistleblower has become a bit of a buzzword in recent years. Thanks in part to household names like Bradley Manning and Edward Snowden, the word is hardly reserved to the legal profession. As such phenomenons often go, the infusion of such terms and ideas in to popular culture - frequently made manifest through movies, books and television series - can often have a diluting effect on their meaning.
Over the weekend, California Governor Jerry Brown signed Assembly Bill 1897, which imposes new joint liability for companies whose labor subcontractors violate wage and workplace safety laws. The bill was hotly contested. While labor groups are calling it a major victory for California workers, business groups argue that the bill is a "job killer" that threatens the state's economy.
Last month, the California Supreme Court issued its 4-3 decision in Patterson v. Domino's Pizza, LLC, wherein it held that, under the specific circumstances of that case, the Domino's franchisor could not be held liable as a joint employer for the sexual harassment committed by its franchisee. Given the recent debate sparked by the NLRB's joint employer decision, those critical of the agency's decision are likely to construe the Patterson decision as delivering a considerable blow to the notion of franchisors as joint employers. However, such a characterization seems both shortsighted and ultimately ill-supported by the majority opinion.
As economic demands pressure businesses to take steps to remain competitive, employers often look to labor as a means of cutting costs and staying "lean." For example, if the employer is a manufacturer, the company might enlist another company to manage the production arm of its business as an alternative to hiring its own employees. In other sectors such as service, outsourcing as a manufacturer might simply is not feasible. In such instances, many employers have taken to cutting costs by choosing to enlist independent contractors instead of employees.
Last month, the National Labor Relations Board (NLRB) issued an administrative decision that, if untouched by the courts, will force corporate employers to take a greater interest in the labor practices of their franchisees. Following a number of complaints submitted to the NLRB by several McDonald's employees, the Office of the General Counsel stated that in addition to the McDonald's franchisees for whom these employees worked, McDonalds, USA, LLC, would also be named as a joint employer.
While the complaints addressed by the Board were specific to McDonald's, the potential effect of the decision is much wider.