When an employment situation sours and an employee pursues his rights, usually at some point there is talk of settlement. Almost routinely, employers include a no-rehire provision in any settlement agreement which prohibits the former employee from seeking reemployment with the employer. While this may not seem like a big deal if you work for a small company and have no intention of seeking reemployment with the same people who wronged you in the first place, for individuals who work for large employers, the no-hire provision can create significant hardship. For example, if you work for a major retailer with numerous locations and you are terminated, a no-rehire provision might prevent you from working for that company ever again, in any capacity. That means, even if you wanted to work for a store 100 miles away, you would be barred from doing so. This is particularly problematic for long-term employees who have deep knowledge of the employer’s policies and practices and have been successful in their positions for years- they know the job, and have done it well, and now they are unable to apply for any future job at the company where their skills are a perfect match. This is also a significant problem for people who work for a utility; it may be that there is really only one employer in the area you can work for and a ban on working for that company will prevent you from working, period. The no-rehire provision would require you to either move to a new location or develop skills for an entirely different field. It seems, to many employees, like a final act of retaliation by their former employer.

Starting January 1, 2020, employment dispute settlement agreements cannot contain a no-rehire provision and such provisions are void as a matter of law and public policy. There is an exception, undoubtedly inspired by the #MeToo and #TimesUp movements- if an employer has made a good faith determination that the terminated employee engaged in sexual harassment or sexual assault, the employer may prohibit or restrict the terminated employee from obtaining future employment with the employer.

The new prohibition on no-rehire provisions eliminates a punitive and sometimes career-ending tool that employers routinely employ and is a victory for workers in California. As employee-advocates we are thrilled with this new law; employees who stand up for their rights no longer have to give up potential future employment just because they did so.

Jean Krasilnikoff

It is common practice throughout California to have an employee sign an arbitration agreement at the time she is hired. These agreements are generally non-negotiable, buried in a pile of new hire paperwork, and require the employee to arbitrate any claims arising out of employment. While valid arbitration agreements provide some of the safeguards that are afforded to litigants in court, it often takes away basic protections and rights including a trial by jury, and class or collective action. Arbitration is also a private process so it allows an employer to keep their wrongdoing under wraps.

The United States Supreme Court has said, repeatedly, that arbitration agreements are valid in the employment context. Recognizing the inherent imbalance in power between employers and employees, several states have tried to stop employers from forcing employees into arbitration. However, given the Supreme Court’s rulings, it is impossible to ban arbitration in employment altogether. The hope is that in California, AB 51 will even the playing field before an employee signs an arbitration agreement; requiring that an employee can only enter such an agreement voluntarily. The law also prohibits an employer from retaliating against an employee who declines to enter into an arbitration agreement, which provides additional protection.

Another significant benefit of the law is that attorneys’ fees are available to prevailing plaintiffs for violations of the law. This is an important piece of the legislation as the availability of attorneys’ fees greatly impacts the ability of plaintiffs’ firms to actually take and litigate these claims. It also provides a valuable bargaining chip in settlement negotiations.

While we expect that there will be legal challenges to AB 51, come January 1, 2020, employees have expanded and important rights with respect to whether they agree to enter into an arbitration agreement. While worker protections at the federal level are being chipped away, in California AB 51 is a significant step in the right direction to preserving employee rights in the workplace.

Jean Krasilnikoff

Mr. Santillan filed a grievance which ultimately settled. The terms of the settlement provided that Mr. Santillan would withdraw his grievance and in exchange, he would be reinstated provided that she could pass a drug test, a physical exam, a criminal background check and “e-Verify.” E-Verify is a controversial voluntary system under federal law used to check the work authorization status of employees through federal records. Mr. Santillan passed the drug test, the physical exam and the criminal background checks. He was told to report to work with documentation showing his right to work in the United States. Mr. Santillan returned to work with his driver’s license and social security card. Nonetheless, USA Waste insisted it needed a work authorization number and the expiration date. Mr. Santillan provided his identification number, but according to his employer, could not provide the expiration date. USA Waste terminated Mr. Santillan for a second time.

Mr. Santillan filed a lawsuit based on several claims including age discrimination and wrongful termination in violation of public policy. The trial court dismissed his case holding that Mr. Santillan could not state a prima facie case for discrimination and dismissed his wrongful termination claim holding that Mr. Santillan’s failure to provide the work authorization information that USA Waste demanded within three days was a legitimate non-retaliatory reason for the termination. Mr. Santillan appealed to the Ninth Circuit.

First, the Ninth Circuit reversed the trial court on the age discrimination claim. Santillan v. USA Waste of California, Inc., 2017 WL 1289971 (9th Cir.) The Court explained that Mr. Santillan had established a prima facie case based on his testimony that he was one of five older workers who was terminated under the new supervisor and the thirteen year age gap between him and his replacement. The Court also explained that because Mr. Santillan had established his prima facie case, the burden was on USA Waste to articulate a legitimate non-discriminatory reason for his termination. While normally this is an extraordinarily low burden for employers, the Ninth Circuit held that the reasons USA Waste put forth were not sufficient.

USA Waste claimed that under the Immigration Reform and Control Act of 1986 (“IRCA”) required them to obtain certain documents to ensure that an employee was authorized to work. The Court explained that Mr. Santillan was exempt from the IRCA requirements because those requirements applied to new employees and Mr. Santillan was not a new employee- he was reinstated. The Court also said that Mr. Santillan was exempt from the requirements because he had been hired prior to a date specified in the law. The Court held that “an employer’s incorrect view of the law is not a legitimate reason for firing an employee.”

The Court went even further, holding that the provision of the settlement agreement that required that Mr. Santillan pass e-Verify was void as it violates the public policy of California.

The Court also held that Mr. Santillan had established a prima facie case for wrongful termination in violation of public policy, and held that USA Waste had failed to articulate a legitimate non-retaliatory reason for his termination for the same reasons as in the age discrimination claim- USA Waste had relied on an incorrect interpretation of the law.

This is an important win for employees! Normally, employers are able to easily shift the burden back on employees at summary judgment by articulating any justification for terminating an employee- so long as the reason is not discriminatory or retaliatory. However, the Ninth Circuit’s decision suggests that courts should look more closely at whether an employer’s seemingly legitimate justification is actually legitimate.

Jean Krasilnikoff

Brian McVeigh worked as an operations supervisor at Pier 96 for Recology San Francisco, the company that provides waste recycling and disposal in the County of San Francisco. During his employment, Mr. McVeigh discovered that employees were engaging in “tag inflation” meaning that the Recology attendants were weighing customers’ recyclables but inflating the weight on the tag. As a result, customers received inflated payments from the California Department of Conservation and attendants were potentially receiving kickbacks from this practice. He reported the fraud to both Recology and the San Francisco police.

Later, Mr. McVeigh was transferred to the company’s buy-back center in Brisbane. Mr. McVeigh began suspecting tag inflation and a management cover up at the Brisbane location and reported his suspicions to local police. After finding out about his reports, Recology threatened Mr. McVeigh by telling him that he would be fired if he continued to pursue the CRV fraud, which he reported to HR. Thereafter, Mr. McVeigh was terminated and Mr. McVeigh sued under a number of legal theories.

In 2011, the San Francisco Superior Court said the whistle-blower laws did not apply to Mr. McVeigh because it was his job to look into recycling irregularities. The judge also found that because three years had passed since Mr. McVeigh first reported the irregularities and his termination, that there was no connection between the two events. However, the Court of Appeal disagreed. Significantly, the Court determined that Mr. McVeigh’s claim under California Labor Code section 1102.5 could proceed because the statute “protects employee reports of unlawful activity by third parties such as contractors and employees, as well [as] unlawful activity by an employer.”

Whether or not Mr. McVeigh will prevail on the merits of his case remains to be seen but this decision potentially expands protections for whistle-blowers who report the unlawful activity of other employees, not just the employer. You can read the full Court of Appeal opinion here.

June 26, 2013 Siegel LeWitter Malkani

Let’s do what the court did not do, which is look at the facts. Mr. Medeiros was presented with a disciplinary action document by his employer. His employer demanded that he sign the document in the meeting with his employer representatives. He refused to sign it and cited a number of reasons.

Paratransit and Mr. Medeiros’ union had negotiated a memorandum of understanding that required that employees sign disciplinary notices when presented to the employees but explicitly required that “the notice states that by signing, the Vehicle Operator is only acknowledging receipt of said notice and is not admitting to any fault or to the truth of any statement in the notice.” Fair enough! However, the notice presented to Mr. Medeiros did not include this required language. It stated “Employee signature as to receipt”. Perhaps this meant the same thing as required by the union contract, but it sure wasn’t clear and it should have been reason enough for Mr. Medeiros to wait to sign the agreement.

However, this Court of Appeals was on a rampage, attacked Mr. Medeiros’ credibility with a vengeance, declaring that he lied, and determining that he should have signed the disciplinary action and because he hadn’t, denying him unemployment. What was the real harm in his refusal to sign right on the spot? Shouldn’t the employer have given him the opportunity to consult his union rep and then sign? Why didn’t the employer offer to clarify the language so that the employee understood that he wasn’t admitting he agreed with the disciplinary action? Why in the world would any court deny an employee unemployment because he refused to sign a disciplinary notice on the spot, given the standard for denial of unemployment benefits is “misconduct”?

The lesson to be learned? Although your work situation and rules may certainly be different, it is a safe practice to sign for receipt of a disciplinary notice when requested to by your employer, whether you agree with the merits of the disciplinary notice of not. Second, if the form does not so indicate, write something on it such as “I am signing simply to acknowledge receipt of this notice, and do not agree with the content”, or something to that effect. The third and final lesson to be learned is that some court and some rulings simply are wrong, mean-spirited and disingenuous. You really have to shake your head at the two (out of three) judges who signed their names to this opinion!

Jody LeWitter June 26, 2012