Are you searching for more information about arbitration agreements and employment contracts for San Diego employers? Due to recent decisions in the Supreme Court of The United States and the California Supreme Court and the continuing implementation of increased thresholds for overtime pay and other wage and hour issues, employment contracts for San Diego employers require modification and updating.
Arbitration Agreements and Employment Contracts
The employer defense attorneys at the Watkins Firm are helping our clients to understand that the importance of effective arbitration agreements and employment contracts have never been more important for area employers. Recent decisions in Chamber of Commerce v. Bonta (9th Circuit) and Viking River Cruses, Inc. v Moriana (SCOTUS) have substantially changed the legal landscape for San Diego employers.
Class action lawsuits under the California Private Attorneys General Act (PAGA) have substantially increased in San Diego and Southern California over the past few years. The US Supreme Court held that California’s rule “invalidating provisions in arbitration agreements to waive the right to assert representative claims, including representative claims under PAGA” is “preempted by the Federal Arbitration Act (FAA) to the extent California precludes division of PAGA actions into individual arbitrable claims and non-individual, non-arbitrable claims.”
What does this mean for San Diego and Southern California employers? It means there is presently a substantial defense available to area employers which can provide substantial protections against individual and class actions by employees when they are brought under PAGA.
This means you will be able to put a stop to many legal actions before they ever begin and limit your exposure in many instances to the arbitration of a single issue, even in a class action. The implementation of well-crafted arbitration agreements and employment contracts will provide the type of protections that have been unavailable to California employers for several years.
It’s Time to Review and Update Your Hiring Process and Employment Contracts and Handbooks
San Diego employers must carefully structure all communications prior to an offer for employment. The offer letter itself is another opportunity to clearly establish corporate policies and guidelines regarding wage and hour policies that will help to defend against future employee disputes as part of arbitration agreements and employment contracts.
The employment contract should also be reviewed and perhaps restructured to include specific content addressing classification and overtime issues. For example, the contract should clearly state how and when overtime will be paid and restate the company’s policy regarding prior written approval requirements from an employee’s supervisor. The employment contract should address limitations regarding the access of email and voicemail systems after working hours.
These policies must be supported by the employee handbook and reinforced during onboarding and orientation training. It is wise to require a signed acknowledgment from the employee at the completion of training requiring them to initial key components of the policies and procedures manual. These should include the requirement to seek advanced written authorization prior to working overtime, as well as regulations regarding leaving the primary work area during meal and rest breaks.
Employment contracts and employee handbooks should also provide a clear overview of disciplinary procedures, policies regarding leave and FMLA requests and requirements for calling in when work is to be missed. In essence, the employment contract documentation begins with initial correspondence, continues through the offer letter, is clearly established in the employment contract itself and then supported through the employee handbook and policy and procedures manuals. Internal controls must ensure the systematic implementation and consistent application of management oversight in these areas, as well as the documentation of hours worked on pay records.
The arbitration agreement ensures that any dispute remains as an individual (and small) dispute whenever possible and that any genuine legal disputes will be resolved between the employer and the employee in arbitration.
Many employers are requiring their employees to sign a time card or payroll form that lists the specific hours they’ve worked in their own handwriting under the “penalty of perjury.” These strategies combine to reduce unpaid overtime disputes and litigation, wage and hour lawsuits, PAGA exposure, and employee related issues.
Effective arbitration agreements and employment contracts for San Diego and Southern California employers reduce the substantial risks of plaintiff’s lawsuits and PAGA actions currently facing area employers. We invite you to review our Podcast Episode 29 – Recent Big News in Arbitration as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
