©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 409 On May 16, 2023, a California federal district court weighed in on the California board diversity statute requiring directors from underrepresented groups. The federal court found that the statute’s board diversity requirement constitutes a facially invalid racial and ethnic quota and violates the federal Constitution’s Equal Protection Clause and federal civil rights statute 42 U.S.C. § 1981.46 It remains to be seen what impact the federal court decision might have on the two appeals pending before the California Court of Appeal regarding the underrepresented groups and gender board diversity statutes. 20.9 Pay For College Athletes The Fair Pay to Play Act, which became effective on September 1, 2021,47 authorizes California student athletes enrolled in California public and private four-year colleges and universities and California community colleges to earn money from endorsements, sponsorship deals, and any other activities related to their athletic skills, without losing their status as student athletes. The Act also forbids California colleges, universities, and community colleges from denying their student athletes the chance to hire agents and earn money for use of their names, images, and likenesses.48 1 Code Civ. Proc. § 1001. The section does not prohibit confidentiality as to the amount paid in settlement or the identity of the claimant—if the claimant so requests and if no party is a government agency or official. 2 AB 3109, 2018 bill adding Civil Code § 1670.11. 3 SB 1300, 2018 bill adding Gov’t Code § 12964.5(a). This prohibition does not apply to any negotiated agreement to settle a FEHA claim filed in a legal proceeding or through the employer’s internal complaint process. 4 Bus. & Prof. Code § 16600. 5 Lab. Code § 925. This prohibition does not apply to agreements the employer negotiates with individuals represented by legal counsel. 6 Lab. Code § 206.5. Parties can, however, enter into enforceable agreements to settle wage claims that the employer disputes in good faith. 7 Lab. Code § 432.6(a). Exempted are “postdispute settlement agreements” and “negotiated severance agreements.” Lab. Code § 432.6(g). 8 Lab. Code § 432.5. 9 Lab. Code § 925(a), (d). 10 Lab. Code § 925(a), (b). 11 Lab. Code § 925(e). 12 Lab. Code § 925(c). 13 Lab. Code § 925(f). 14 Lab. Code § 450. Although employees may lack a private right of action under section 450, Sanchez v. Aerogroup Retail Holdings, Inc., 2013 WL 1942166, at *4-5 (N.D. Cal. May 8, 2013) (section 450 does not create private right of action); Harris v. Vector Mktg. Corp., 2010 WL 2077015, at *2 (N.D. Cal. May 20, 2010) (same), employees might still seek civil penalties under PAGA. See § 5.15. In some cases, federal law may preempt the forced patronage statute. McDaniel v. Wells Fargo Invs., LLC, 717 F.3d 668, 671 (9th Cir. 2013) (“[F]ederal securities law preempts the enforcement of California’s forced-patronage statute against brokerage houses that forbid their employees from opening outside trading accounts.”). 15 Lab. Code § 407. Corporation Code section 408 provides an exception to Labor Code section 407 with respect to (a) a stock purchase plan or stock option plan or (b) securing the employment of someone to be an officer of the corporation or any parent or subsidiary thereof. 16 Lab. Code § 2871. 17 Lab. Code § 2870. 18 Lab. Code § 2872. 19 Lab. Code § 1308.10. 20 Lab. Code § 1311.5. 21 Lab. Code § 1393.5(f). 22 AB 267, 2019 bill amending Lab. Code §§ 1286, 1308.8. 23 AB 3175, 2020 bill amending Lab. Code § 1700.52. 24 Civ. Code § 1714.43(a), (c). 25 Civ. Code § 1714.43(d).
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