Labor & Employment Law Blog

On April 8, 2025, the Third Appellate District Court of Appeal published a decision denying an employer’s motion to compel arbitration.  The question before the Court of Appeal was whether the parties’ arbitration agreement required arbitration of the employee’s Private Attorneys General Act (PAGA) claims.  The Court of Appeal affirmed the trial court’s ruling that the agreement contained a PAGA carveout such that the employer could not compel the employee’s individual PAGA claims to arbitration.

The courts in Los Angeles are creating controversy over attorneys’ fees awards—a tale in three parts.

In Pollock v. Kelso, 107 Cal. App. 5^th 1190 (2025), Pollock sued for sexual harassment and racial discrimination. The trial court granted summary judgment, and the court of appeal affirmed. The California Supreme court reversed, and on remand, the Court of Appeal awarded appellate costs to Pollock.  Pollock moved for $526,475.63 in attorneys’ fees, and the court awarded $493,577.10.  Defendant appealed.  The summary judgment motion was reversed, and a trial was set.  The parties settled the case except for the appeal on the attorneys’ fees, and filed a stipulation with the court stating, “The court DISMISSES this entire action with prejudice as to all parties and all causes of action.”

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.

On April 17, 2024, the U.S. Supreme Court issued a decision which will make it easier for employees to establish discrimination under Title VII of the U.S Civil Rights Act of 1964. In the case of Muldrow v. City of St. Louis (USSC Case No. 22-193), the Court held that an employee need only show that an employment action brought about "some harm to an identifiable term or condition of employment," as opposed to "materially significant disadvantage” in those terms or conditions. The Court expressly acknowledged that this is a less burdensome standard than those which had been adopted by federal appellate courts in the past, and that "many cases will come out differently" under this new standard. 

Plaintiff attorneys have deluged the courts with wage and hour class actions and PAGA lawsuits.  The first question an employee advocate asks of their potential client is, “can I see a pay stub?”  Instead of agreeing to represent employees for their harassment or wrongful termination claim, they convince the disgruntled ex-employee to act as a representative for a PAGA or class action for improper wage and hour practices. 

Given the current state of the economy, many employers are considering reductions in work hours and potential layoffs.  As businesses consider taking action to save money and prevent potential closure, they must do so carefully in order to manage and reduce risk of future litigation related to its actions.  This blog discusses the appropriate steps that a business must take when conducting a reduction in force (“RIF”).

Recent mass layoffs by tech companies, such as Twitter and Meta, have made headlines.  The massive layoff by Twitter on November 4, 2022 has already resulted in a lawsuit filed by former Twitter employees for violations of the federal Worker Adjustment and Retraining Notification (“WARN”) Act.  The WARN Act requires certain employers to provide 60-day advance notice in cases of qualified plant closings and mass layoffs, allowing employees and their families with transition time to seek alternate employment or skills training.

On May 23, 2022, the U.S. Supreme Court issued a unanimous decision in the case of Morgan v. Sundance, Inc., which held a party’s waiver of the right to arbitrate a dispute by virtue of a delay in seeking enforcement of the arbitration agreement, no longer requires a showing of prejudice to the party opposing enforcement of the arbitration agreement. Prior to this, the circuit courts followed the rule of determining whether prejudice existed prior to finding waiver. After the Morgan decision, the analysis reverts to the standard contract waiver analysis “focus[ing] on the actions of the person who held the right; ... [rather than] the effects of those actions on the opposing party.” This new rule applies whenever a party seeks to stay litigation and enforce an arbitration agreement under the Federal Arbitration Act (“FAA”).

The federal Fair Credit Reporting Act (“FCRA”) permits background checks for employment purposes, so long as employers obtain authorization from and provide the appropriate “stand-alone” disclosure to the applicant or employee regarding the background check, among other requirements. Willful violations of the FCRA’s stand-alone disclosure requirement can lead to recovery of statutory damages ranging from $100 to $1,000 per violation. Thus, a central issue in FCRA cases is whether the employer’s violation is “willful,” which requires a showing that the defendant’s conduct was “intentional” or “reckless.”