In a recent win for California employers, a California Appellate Court provided some leeway for employers who do not have separately signed arbitration agreements for their employees.  The court in Harris v. TAP Worldwide ruled that employers can enforce arbitration agreements under certain conditions even where an employee has not signed the specific agreement itself. Plaintiff Dwayne Harris filed a complaint against his employer, TAP Worldwide, asserting wrongful termination and wage and hour claims. TAP Worldwide attempted to compel the plaintiff to arbitration by relying on the arbitration agreement attached as an appendix to the company’s employee handbook, for which the plaintiff signed an acknowledgment of receipt. However, the plaintiff denied the existence of an arbitration agreement because he had not signed the actual attached agreement. The trial court denied TAP Worldwide’s request to compel arbitration.

On appeal, TAP Worldwide argued that the arbitration agreement was enforceable and that the arbitration policies were contained in three documents, including the employee handbook with the arbitration agreement attached in the appendix. Further, TAP Worldwide argued that because the arbitration agreement specifically stated that continued employment with the company will be deemed voluntary consent to the terms of the arbitration agreement, the plaintiff impliedly agreed to the arbitration provision.

The Court Has Extended The July 1, 2016 Cut-off For Signing Up To Make AB 1513 Payouts

On June 30, 2016, in Nisei Farmers League v. CA Labor and Workforce Development Agency et. al, the Court granted a temporary restraining order temporarily preventing the enforcement of the July 1, 2016 AB 1513 (CA Labor Code section 226.2) sign-up deadline. As a result, the time to sign up to make payments under AB 1513 and receive the safe harbor it provides has been extended until at least July 28, 2016. A hearing has been set for July 18, 2016 to determine if the entire enforcement of AB 1513 will be halted while the Nisei Farmers League prosecutes their case against the State to have AB 1513 declared unconstitutional. The lawsuit, in effect, claims that the law is too vague to be enforceable, provides inadequate description of what is required to comply with the law, is unlawful because the piece rate systems under which employers were paying employees were not contrary to the then existing law, that the law improperly interferes with contracts, functions as retroactive punishment, and constitutes an unlawful taking of property.

The Nisei Farmers League has filed a lawsuit challenging AB 1513.  On June 30, 2016, a hearing will be held in that case to consider the Nisei Farmers League’s request that a temporary restraining order be issued preventing the Department of Industrial Relations (“DIR”) from enforcing (1) the July 1, 2016 deadline for employers to provide the DIR notice that they are electing to participate in the “Safe Harbor” provisions and (2) the December 15, 2016 AB 1513 payment deadline pending trial in this case.  If a temporary restraining order is granted, the Nisei Farmers League would stay the enforcement of the AB 1513 deadlines for a period of time, possibly through the time of trial if the matter does not settle. In other words, if successful, the Nisei Farmers League’s actions would push back these deadlines for months, if not potentially years.


We know many of you have signed up with the DIR and want to know what your next steps should be.  If you have not signed up, but are considering doing so, we would recommend you do so by the July 1, 2016 deadline.  For those of you who have signed up, we recommend that you continue with business as usual for the time being by preparing calculations for payments to employees in advance of the December 15, 2016 AB 1513 payment deadline. 

The Saqui Law Group will provide you with a further update on how to proceed with the AB 1513 Safe Harbor process once the Court rules on Nisei Farmers League’s request for a temporary restraining order.  

Can an employer and an employee agree to an arbitration agreement which prohibits class actions? Until recently, the answer appeared to be yes. Unfortunately, the Seventh Circuit recently broke ranks with every other federal court that has reviewed the issue, holding that employers and employees may not make such an agreement. The Seventh Circuit’s decision to go rogue has created a circuit split which will almost certainly cause the Supreme Court to take up the issue. Hopefully the Supreme Court will then decide the issue once and for all.

FedEx will be paying a total of $467 million to settle claims in a California lawsuit and a multi-district suit in Indiana, that its delivery drivers were improperly classified as independent contractors (“IC”). ICs generally have less legal protections, rights, and benefits as compared to those workers classified as employees. If a court finds that workers were misclassified, employers are often on the hook for a great deal of back pay of overtime wages among other damages and penalties.

On May 18, 2016, the U.S. Department of Labor Department (“DOL”) issued the final version of the overtime exemption rule.  The much-anticipated federal rule raised the minimum salary threshold required for an employee to qualify for the “white collar” exemption from overtime to $47,476 per year ($913 per week), up from $23,660 ($455 per week). Now, if an employee makes under $47,476, they are subject to federal overtime laws. The rule will take effect December 1, 2016.

“White collar” employees are those employees who are paid on a salary basis who perform primarily executive, administrative or professional duties. The new rule calls for permanently raising the “white collar” exemption equal to the 40th percentile of weekly earnings for full time, salaried workers in the U.S’s lowest income census region (which is currently the South). This amount is currently estimated at $913 per week.

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