©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 15 Representative PAGA claims are not arbitrable. Several appellate courts held that a plaintiff’s individual PAGA claims may be compelled to arbitration, but the individual retains standing to pursue representative claims that remain in court. (See § 5.15.3.) California courts are split regarding the susceptibility of PAGA cases to motions to strike on grounds of manageability. California’s Courts of Appeal are divided as to whether a PAGA claim is subject to a motion to strike on the ground that it is unmanageable. (See § 5.15.3.) Employers may be liable for failure to accommodate when on notice of medically authorized drug use. An employer who learns of drug use through pre-employment testing may be liable for failure to engage in the interactive process or accommodate if rescinding an offer based on pre-employment drug screening results. (See § 6.3.4.) Rounding called into question. In reversing the trial court’s award of summary judgment to the employer based on its facially neutral rounding practice, the Court of Appeal held that where an employer can, and does, capture all time worked during a shift, then the employee must be paid for this time. (See § 7.4.4.) Outside salesperson exemption. An employee working at a fixed site not owned or leased by the employer does not fall under the outside salesperson exemption where an employer controls the employee’s hours and working conditions. (See § 7.7.4) Independent contractor misclassification threatens more than just wages and missed break issues. A finding of misclassification can result in liabillty as to improper deductions of management, sales, and marketing fees. (See § 7.12.7.) Plaintiff, not the court, decides whether to pursue individual liability for Labor Code violations. Even if an employer has the resources to fully satisfy a judgment against it for Labor Code violations, the decision whether to pursue claims for those violations against an individual business owner rests with the plaintiff. (See § 7.20.) Premiums are wages that must appear on wage statements, and are due at termination. The California Supreme Court reversed the lower court and held that premiums paid for missed meal and rest periods constitute wages that must be reported on wage statements and timely paid at termination. (See §§ 13.3.2. and 16.3.1.) California trial courts and a federal District Court strike down board diversity requirements. Multiple trial courts issued decisions striking down statutes requiring that corporate boards include a specified number of women or members of underrepresented communities. Both statutes are enjoined pending appeals. A federal court also recently found the statute requiring underrepresented community member directors is unconstitutional. (See § 20.8.) Judicial Developments Provide Some Glimmers of Hope The Ninth Circuit strikes down California’s attempted ban on mandatory arbitration agreements. Following a series of judicial twists and turns, in February 2023 the Ninth Circuit ruled that AB 51, which would have prohibited employers from requiring an employee or applicant to enter into an agreement to arbitrate employment-based claims as a condition for obtaining or retaining employment, was entirely preempted by the FAA. (See § 5.42.) Representative plaintiff under PAGA must have statutory standing. An individual is not an “aggrieved employee” for purposes of standing under PAGA if the individual does not assert claims within PAGA’s one-year statute of limitations. (See § 5.15.)
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