E-Blasts

Assembly Bill 749 (“AB 749”) is another #MeToo-inspired bill meant to increase protections for employees. The bill addresses “no rehire” provisions which are common in employment settlement agreements and in severance agreements. A “no rehire” term requires an employee settling claims against an employer to agree to never apply to work at the employer in the future. The term often includes language that the employee agrees that if they do apply, the employer may deny the application. Some agreements go further and require the employee to agree that if they are somehow hired back, they agree to immediate termination.

Beginning on June 30 of this year, most California employers who do not offer an employer-sponsored retirement savings plan will need to register with the California Secure Choice Retirement Savings Program.  The new program, referred to as “CalSavers,” is designed to help California employees set aside money for retirement.    However, the program does not create any new costs for employers and employees can choose to opt out of the program if they wish.

California employers won yet another important victory Friday in the fight to allow the use of mandatory employment arbitration agreements in California.  See our previous articles on AB-51 here and here.  In December, the California Chamber of Commerce filed a lawsuit challenging AB-51 because it runs afoul of federal arbitration law.

In late December, a federal court in California issued a temporary restraining order blocking AB-51 from taking effect on January 1, 2020 pending an additional hearing scheduled for last Friday. During Friday’s hearing, the court decided the ban on AB-51 should stay in effect until at least January 31, 2020 as the judge further considers arguments from the state and additional case law on the subject matter.  The court previously expressed serious concerns regarding whether the new law is preempted by the Federal Arbitration Act and concerns over how this new law will disrupt the current employment agreement process and potentially send a flood of cases to an already over-crowded civil court system.  Therefore, the court ruled that the current ban will stay in place, at least for the remainder of the month, and ideally, through this litigation.

The New Year brings with it some noteworthy new laws for 2020.  The following are reminders on several new laws that all California employers should be aware of.   

AB 5: Employees and Independent Contractors.

Effective January 1, 2020, Assembly Bill 5 codified the Dynamex decision regarding whether an individual is an employee or an independent contractor.  Under the so-called “ABC Test,” workers in California are considered employees, rather than independent contractors, unless a business can show that the worker is (a) free from its supervision, (b) performs work that is outside the usual course or place of business, and (c) works in an independently established trade, occupation, or business of the same nature. 

Court Re-Emphasizes Importance of Going and Coming Rule

 By: Rebecca A. Hause-Schultz

The “going and coming” rule says that an employee is generally not acting within the scope of employment when going to or coming from the employee’s regular place of work. In a recent case, Plaintiffs argued that an employer was responsible for an employee’s accident because the employer knew or ought to have known that the employee’s workers’ compensation related back injury and medications prescribed to him because of the back injury made him a “dangerous commuter.” You can read the case here.

The court said Plaintiffs’ “dangerous commuter” argument ignored that the employee’s physician approved of his return to work and did not place any driving restrictions on him. The court said that the “going and coming” rule was created for exactly this circumstance, and said Plaintiffs could not continue their case against the employer.

California employers won an important victory this week in the fight to allow the use of mandatory employment arbitration agreements in California.  See our December 13, 2019 article here on AB-51.  In that article, we advised that the California Chamber of Commerce filed a lawsuit challenging AB-51 because it runs afoul of federal arbitration law. 

Built For Employers