Labor & Employment Law Blog

In light of the unprecedented wildfires in the Los Angeles area which commenced on January 7, 2025, the DLSE published a Frequently Asked Questions website to provide guidance to California employers on laws enforced by the Labor Commissioner’s office.

I. Summary

On December 30, 2024, and just before the New Year struck, the California Court of Appeal issued a favorable employer decision on the enforceability of arbitration agreements in Private Attorneys General Act (PAGA) cases. In Leeper v. Shipt, Inc., (2024 WL 5251619), the Second District Court of Appeal, Division One, in Los Angeles, held that because every PAGA action necessarily includes an “individual PAGA claim,” PAGA plaintiffs cannot attempt to avoid arbitration by characterizing their lawsuit as a purely representative PAGA claim made on behalf of only other allegedly aggrieved employees, but not the named representative themself. In other words, the court would not allow a “headless” PAGA action to proceed. Accordingly, the court directed the trial court to order the plaintiff, Christina Leeper’s individual PAGA claim to arbitration and stay the representative action in accordance with California Code of Civil Procedure section 1281.4.  This guidance should help end recent attempts by many plaintiffs attempting to circumvent arbitration by “disclaiming” their own individual claims in order to represent only others.

Employees widely use AI often without the knowledge of management. This secret use of AI has been referred to as “shadow IT” in an article by Business Insider. AI is typically used for either content creation or content editing. Content creation includes such tasks as ideation, research assistance, and summarization. Content editing comprises spell check, grammar check, and use of a thesaurus for synonyms. As the use of AI becomes more pervasive in the workplace, one of the big downsides of using AI is its reliability. “Hallucinations” occur frequently when using AI, which causes employers to question the trustworthiness of the work product. It is becoming more challenging to distinguish between human and machine writers as AI writing tools advance.

1. Summary of the Ruling

In Gonzalez v. Nowhere Beverly Hills LLC, 2024 WL 4948533 (Dec. 3, 2024), the California Court of Appeal for the Second District held that plaintiff-employees cannot simultaneously allege their employers’ corporate subsidiaries and parent companies acted as “joint employers,” while also attempting to avoid arbitration with these related entities by arguing they were not parties to the employment contract and arbitration agreement.

In the recently decided Howell v. State Department of State Hospitals, 2024 WL 4997719 (December 5, 2024), the trial court and court of appeal upheld a Scrooge-like verdict by a jury that resulted in Ms. Howell’s receiving NO emotional distress damages and limited attorneys’ fees even though the jury found she had been discriminated against based on a mental disability.  A closer examination of why Ms. Howell found a lump of coal in her holiday stocking is merited.

On August 1, 2024, California’s Director of Finance certified that the Golden State’s minimum wage for all employers will increase to $16.50 per hour, effective on January 1, 2025. 

Effective October 10, 2024, San Diego County adopted its new Fair Chance Ordinance (“SDFCO”). The SDFCO imposes additional restrictions that covered employers must follow regarding the use of criminal history in employment, on top of what California law already requires. 

The new SDFCO applies to employers that do business in the unincorporated areas of the County of San Diego and have 5 or more employees. Applicants and current employees who are in or are seeking a position involving at least 2 hours of work, including remote work, on average each week in the unincorporated areas of the County, receive protections under the SDFCO. Unlike the California state Fair Chance Act (“FCO”), the SDFCO expressly defines an “applicant” to include those applying for employment but also current employees seeking promotions or transfers.

Back in February, 2024, the Los Angeles County Fair Chance Ordinance for Employers (the “FCO”) was adopted by the County Board of Supervisors. The FCO became operative and subject to enforcement on September 3, 2024 and adds a variety of additional compliance obligations for covered employers and added protections for covered applicants and employees, above and beyond what existing state law requires. Covered employers must ensure that they comply with the stricter of state and local laws governing the use of criminal history in employment.

With the close of the California legislative season, there are a variety of employment law bills which will become law on January 1, 2025. Golden State employers should be aware that several of these new laws necessitate updates to employment policies and handbooks. Specifically:

California health care employers will recall that Governor Newsom signed SB 525 into law in October 2023, setting into motion planned increases to the required minimum wage for certain health care employees who work at covered health care facilities. SB 525 required increases to the health care minimum wage to begin in June 2024, but the law’s start date became a matter of confusion and chaos, with the State first delaying SB 525’s start date to July 1, 2024 based upon budgetary concerns, only to then delay it again until at least October 15, 2024.