The proposed Arbitration Fairness Act (Feingold/Johnson) would essentially ban arbitration agreements in employment. While I’m skeptical of this bill’s chances of success in getting a vote in the Senate, or in being signed by the President, and I believe this mostly is done to show that someone is “doing something,” I think it’s something to take note of.

This site has contained an editorial skepticism about arbitration as a panacea for employment disputes, and has maintained a professional skepticism about the long-term viability of overly aggressive arbitration agreements. This bill’s introduction marks the beginning of the blow-back phase that, in my view, was inevitable.

Politicians in this country aren’t functioning as some sort of court of final review. If they are working to overturn court decisions, or change the law, they are doing so because they have detected, most likely through polling data, some political support for what they are doing. This political support has come from overly aggressive employers putting their hands in the arbitration cookie jars and getting caught one too many times.

The next interesting result will be the California Supreme Court’s take on class action waivers in arbitration agreements. While a pro-employer victory would be wonderful for our side of the bar, I believe it would result in considerable political blow-back.

And the thing about political blow-back is that it doesn’t often return things to the status quo ante; instead, it tends to go even further.

I don’t have much to say on the EFCA except for that I seem to be seeing an awful lot of news and commentary about it.  I’m sure the attorneys who write these are smart enough to understand that, even in the mostly unlikely event that it passes the Senate, it is not going to become law.

Are emotional distress injuries taxable? No, says the D.C. Circuit, at least for now. Murphy v. IRS, 460 F.3d 79 (D.C.Cir. 2006).

While this is clearly beyond the normal scope of this page, the question of taxation is always the last small opportnity for lawyers to quibble in settling employment cases (and perhaps even have the settlement fall apart). This adds a whole new dimension.

Are we about to undergo a wave of increasing summary judgment denials?

I’m not sure that that necessarily follows from the >230:1 ratio between CEO pay and average employee pay, or the wave of minimum wage hikes. But I listen when Michael Fox speaks.

Yesterday,
the Sixth District filed an opinion that found an employer immune from state
law tort claims under the Communications Decency Act of 1996 (CDA). The plaintiffs alleged that an Agilent
employee had used Agilent’s computers to send threatening email messages to the
plaintiffs, and sought damages from Agilent for intentional and negligent
infliction of emotional distress. Agilent successfully brought a motion for summary judgment, claiming
immunity under the CDA, which plaintiffs appealed.

Under the
CDA, a defendant has immunity when: 1) the defendant is a provider or user of
an interactive computer service; 2) the cause of action treats the defendant as
a publisher or speaker of information; and 3) the information at issue is
provided by another information content provider. 47 U.S.C. 230(c)(1). Because plaintiffs did not dispute that the
Agilent employee was the “information content provider,” the court in Delfino
focused on the following two questions in its application of the CDA. First, the court asked whether Agilent was a “provider
of an interactive computer service.” Second, the court asked whether plaintiffs’ state law claims for
negligent and intentional infliction of emotional distress treated Agilent as a
publisher or speaker of the information at issue.

Addressing
the first question, the court stated that it was unaware of another opinion
that addressed the issue of whether a corporate computer network qualifies an “interactive
computer service” under the CDA. The
court first compared the approaches used by various federal circuits and California state courts,
and noted that courts have broadly defined the term to encompass entities other
than ISPs. The court also surveyed
academic sources, and noted that several journal articles concluded that
employers, like ISPs, should be covered by the CDA’s immunity provisions. Ultimately, the court found that employers
who provide employees access to the internet meet the CDA’s definition of a
“provider of an interactive computer service.”

Addressing
the second question, the court first noted that most cases addressing the scope
of CDA immunity under section 230 involve defamation. However, the court noted that some cases had
applied CDA immunity to claims of intentional infliction emotional
distress. In addition, the court cited a California opinion from the First District had applied CDA immunity to claims of nuisance,
premises liability, and a taxpayer suit under CCP section 526a. The court found further support for the
proposition that CDA immunity applies to civil claims generally. Without further elaboration, or a statement
of the exact claims CDA immunity applies to, the court held that plaintiffs’
claims of negligent and intentional infliction of emotional distress treated
Agilent as “a publisher or speaker of the information at issue” under the
CDA.

The court’s
opinion in Delfino seems part of a trend, where courts will broadly interpret
the CDA’s immunity provisions in section 230 to limit plaintiffs’ ability to
bring state law tort claims against any entity that provides a means for
transmission of tortuous electronic communications. However, the opinion in Delfino resulted, at
least in part, from the plaintiffs’ inability to provide a sufficient rebuttal
to the evidence offered by Agilent in its summary judgment motion. It remains to be seen if the CDA’s immunity
provisions will be applied as broadly in a case where the facts are more
favorable to plaintiffs seeking to overcome an assertion of immunity under the
CDA.

The California Supreme Court ruled today on Prop. 64, as most of you are likely aware.  The rulings are Solomonic: yes, Prop. 64 applied to pending cases, but, yes, you can amend to add people who were affected.

The Supreme Court did not address to too-clever-by-half "statutory repeal" rule that many of the lower court rulings had depended on.  The Court instead relied on the substance/procedure distinction.

Of course, this is all well and good, nearly two years beyond the election that put this law into place.

My analysis is that the Supreme Court is in the process of walking back some of its strong anti-retroactivity opinions of the early part of this decade and the late 1990s. 

The NLRB has ruled that overly broad arbitration agreements can violate the NLRA.  More here.  Some details:

On May 20, 2003, U-Haul distributed a mandatory arbitration policy to
        its employees that stated: "Your decision to accept employment or
        to continue employment with [U-Haul Co. of California] constitutes your
        agreement to be bound by the [U-Haul arbitration policy]." The policy
        "covers all disputes related to or arising out of an employee’s
        employment with UCC or the termination of that employment."

The upshot is that you’re signing employees to an illegal contract (beware: the UCL lurks!) if you’re overzealous with your arbitration agreement.

This is yet another example of why I caution employers not to go running to their attorneys every time a law firm’s newsletter claims some new court ruling requies their arbitration agreements be re-written.  Arbitration agreements can implicate literally every element of the complex state and federal web of employment laws.  I urge employers to be conservative, and not to be part of an experimental avant garde with these. 

In California, at least, even the mere act of signing employees to an illegal contract can give rise to liability under the UCL.  Being overly agressive with these agreements may, therefore, not net any benefit to you–unless you like being the fee-paying guinea pig for a labor lawyer’s experiments with the limits of the law.

UPDATE: Apropos of this, take a look at this article at law.com. "Arbitration’s Fall From Grace."

Yesterday’s The Recorder has a leads with an article about Miles Locker and the fracas at the DLSE, all apparently centering over the 226.7 wage/penalty issue.  I can’t find an online link.

This morning’s Los Angeles Times has an article about Miles Locker’s departure from the DLSE:

In a 22-page complaint detailing Locker’s dismissal, labor standard
officials charged him with trying to undermine his supervisors’ efforts
to interpret state wage and hour laws. The complaint, relying in part
on e-mails taken from Locker’s office computer, called him disloyal
because he "secretly communicated … disagreements" with his supervisors
to lawyers outside the government.

The complaint also accused Locker, who is appealing his firing to the
state Personnel Board, of making comments last year that ridiculed
then-Labor Commissioner Donna Dell.

I couldn’t skip this one.  Professor Suja Thomas has written a law review claiming that summary judgment under Rule 56 violates the Seventh Amendment because no similar procedure existed under the Common Law.

Under the Common Law in 1791, there was no procedure for the judge to determine the facts.  Of course, there were demurrers of various flavors.  It seems clear from her own paper that regardless of who read the facts and who read the law, judges did have the power to throw out cases.

I’m not seeing the importance of this circular law/fact distinction in the question.  The question to me is simply whether a judge can throw out a case.  Under Common Law, he could.

Furthermore, lets not forget, the judge acts as a gatekeeper for the evidence even in a jury trial, so Thomas’s assertion that his consideration of the evidence is some strange animal doesn’t fly.  Plus, summary judgment does not allow the judge to "weigh" the evidence.   Strictly speaking, if there is a dispute of a material fact, trial goes forward. 

In sum, there may not be an exactly analogous power under Common Law, but there are no new powers given to the judge; it’s just a hodge podge of other existing powers.

Quite frankly, this article defines "academic" in both the literal and pejorative senses of the word.  Rule 56 will stand one way or another.

Transferring a group of workers from one company to another is not a “mass layoff” requiring 60 days notice under the Labor Code.

A recent Gallup poll places lawyers above union leaders, senators, business executives, stockbrokers, car salesman, and telemarketers in terms of the public’s perception of our ethics. 

I am in Colorado this week for yet another NITA conference.  Posting will continue to be light through the New Year.

Employer sought writ of mandate to
challenge Unemployment Insurance Appeals Board determination that an applicant
was its employee,
effectively sought to prevent the collection of a tax and was thus
barred by the state Constitution’s “pay first, litigate later” rule. Employer
may obtain judicial review of board’s determination only by paying assessed
unemployment insurance contributions, claiming a refund, and filing an action
for refund in the superior court if the claim is denied.

Over at the UCL Practitioner (a fellow TypePad immigrant), Kimberly has begun a series of posts on the statutory repeal rule. In the course of my studies to be admitted to the roll of Solicitors in England, I had occassion to re-read Blackstone, and his view of the common law.   This is central to the statutory repeal rule, because rights at common law are not subject to this rule, according to the precedent she mentions. And the UCL as it stood pre-prop 64 clearly was not a right at common law, but it’s not clear exactly why (to me). Is it because there was no standing requirement? there was an unfair competition tort at common law, so that can’t be it, but it wasn’t as extensive as the prior UCL.

But nor was there any common law tort for discrimination or sexual harassment in employment, yet the Supreme Court held only a year ago that amendments to that law were not presumptively retroactive in McClung.  I’m having trouble reconciling to the two.

So, today, as a series of new ballot initiatives are voted on, we still don’t know what one approved a year ago means.

You’ve heard a lot about California being “anti-business” and its laws and policies being hostile to employers. It’s an article of faith among some of my colleagues. Apparently, ho

• California does in fact lose business and jobs because of relocation, but the effect on employment is negligible. In any year from 1993 to 2002, the net job loss from business relocation was never higher than one-tenth of 1 percent of the total number of jobs. . .
• Employment change is primarily driven not by interstate relocation but by the expansion and contraction of existing businesses and by the births of new businesses and the deaths of existing ones. . .
• When they do move, businesses are much more likely to move locally than across state boundaires. . .

Also, not this interesting factoid: “Those who have argued that California’s business climate has pushed businesses out of California have rarely relied in empirical evidence of relocation behavior, but rather or surveys that elicited subjective assessments from employers.”

In other words, someone is creating a positive-feedback loop that is scaring the crap out of medium and small businesses in the state, driven by a justifiable frustration at complicated regulation. Nonetheless, fear-mongering at the state of things in the world’s fifth largest economy is not productive. One wonders whether the rust-belt states are claiming the same problems as they lose population in droves to the sun-belt. California is a great place to do business, especially relative to where else you can go, even if sub-optimal in all aspects.

You can read the entire report here in the California Economic Policy Journal.