Cal-Peculiarities: How California Employment Law is Different - 2023 Edition

©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 57 to other agencies; and (3) applicants and employees required to be tested under state or federal laws and regulations or as a condition of an employer receiving federal funding or federal licensing benefits or entering into a federal contract. As a practical matter, California employers are likely going to (1) move away from urine drug testing to comply with the testing methodology aspect of the law, (2) rely on saliva (and perhaps hair) specimens, which target THC – the parent drug and primary component of cannabis that is psychoactive – to lawfully deny employment to applicants who test positive for cannabis, and (3) regardless of testing methodology, face significant risk in taking adverse action against current employees who test positive for cannabis. 3.2 Disclosure of Wages California employers must not prohibit employees from disclosing the amount of their wages. More specifically, employers must not (1) require an employee to refrain, as a condition of employment, from disclosing the amount of the employee’s wages, (2) require an employee to waive the right to disclose the amount of the employee’s wages, or (3) discharge, formally discipline, or discriminate against an employee for disclosing the amount of the employee’s wages.13 California courts interpret “wages” in this context broadly to include bonuses.14 Similar provisions appear in California’s pay-equity law. Under these provisions, employers must not forbid employees to (1) disclose their own wages, (2) discuss the wages of others, (3) inquire about other employees’ wages, or (4) aid or encourage other employees to exercise those rights.15 The Legislature added an afterthought for those employees who do not want to discuss their own or others’ wages: “Nothing in this section creates an obligation to disclose wages.”16 3.3 Disclosure of Working Conditions California employers must not forbid employees to disclose information about working conditions. More specifically, as to working conditions, an employer must not (a) require an employee to refrain from disclosing information, (b) require an employee to waive the right to disclose information, or (c) discharge, formally discipline, or otherwise discriminate against an employee for disclosing information.17 The Ninth Circuit has indicated that this law may invalidate a clause in an arbitration agreement forbidding the sharing of information about the specifics of an arbitration case.18 This law may be preempted by federal labor law to the extent that it concerns concerted complaints about working conditions and not health or safety complaints.19 This California law runs roughly parallel to NLRA law that empowers employees to engage in concerted activity for their mutual protection.20 The NLRB once ruled that employers run afoul of the law when they require employees to observe confidentiality during workplace investigations,21 but in 2019 the NLRB reversed course, to close a previous gap between California law and federal law.22 We expect another reversal in NLRB-made law as the composition of the NLRB changes during the current federal administration. In addition, when an employer uses a nondisparagement provision, or a clause that otherwise restricts an employee’s ability to disclose information related to conditions in the workplace, the agreement shall include a phrase along the lines of, “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct you have reason to believe is unlawful.”23 An agreement that fails to adhere to this requiremenet is contrary to public policy, and shall be unenforceable.24

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