The New California Labor Code section 432.6 prohibits employers from requiring applicants for a job or employees to agree to waive their right to file a claim with a state or law enforcement agency or a lawsuit for violation FHEA or labor code violation as a condition of employment or continuing employment. This law also precludes employers from threatening, retaliating, or discriminating against any employee or applicant who refuses to agree to waive their right to filing a claim or a lawsuit for FEHA violation or labor code violations as a condition of continuing employment.
This new prohibition applies to any contracts for employment entered into, modified or extended on or after January 1, 2020, but does not apply to post dispute settlement agreements or negotiated settlement agreements. This means that the employer can continue to lawfully require an employee, as a condition of receiving severance, to sign a severance and release of all claims agreement which will contain a mandatory arbitration provision. Likewise, when parties settle their dispute, it will continue to be lawful to require as a condition of that settlement, to arbitrate any disputes arising out of or related to complying with the terms of that agreement.
It's important to note that this law doesn't prohibit entering into mandatory arbitration agreements with regard to FEHA and labor code violation claims. This law simply precludes employees from requiring them as condition of employment, or retaliating against employee who choose not to agree to arbitration.
One of the most common mistakes that people make when going into business with their close friends or relatives is not having a partnership agreement in writing. They feel that they trust each other, and they don't want to suggest that they doubt each other by enter into any written agreements. This leads to all kinds of disputes all too often. Ironically, these disputes tend to be far nastier than similar disputes between partners who otherwise didn't have a close personal relationship. Since the expectations from friends and relatives are higher and involve more personal emotions, any type of dispute becomes more personal and tend to feel not just like a business issue but also like some sort of betrayal by someone who you are so close with.
Therefore, you must have a written business agreement in place with your business partner/s no matter who they are, and no matter how long you have known each other. When you suggest signing an agreement, which you absolutely should, there should be no reason for you to be embarrassed of it, and there should be no reason for other partners to be offended by it. All the partners should understand that the reason that you are signing the agreement is not because you don't trust each other, but because each one of you wants to be clear about your respective rights, obligations, and expectations.
The primary purpose of your agreement is not to prevent you from deceiving each other (that can never be 100% prevent) but to avoid any misunderstanding and ambiguities about the rights and obligations of each partners. The more specifically you outline what each partner must do and what he is entitled to, the more clear you will be about your partnership, and the less likely you are to have any type of disagreement due to not being on the same page, or due to simply not remembering what you agreed upon when you started working together.
A typical sign-on bonus language in an employment offer letter will state that an employee's compensation is to include a "one-time, discretionary sign-on bonus in the amount of $x". The most common issue relating to sign-on bonuses is related to repayment obligations.
To minimize the likelihood of disputes over repayment of a hiring bonus, employers should clearly outline their employees' repayment obligations in the offer letter. The following language can be used as a guideline: "Employee agrees to repay this bonus payment in full, shall he resign or be dismissed for cause prior to one-year anniversary of his employment with Company". This type of language protects the employer's right to repayment, and it also protects the employee on the other end of that agreement from having to repay the bonus, if he is terminated for insufficient performance, or some other reason lesser than serious misconduct or violation, or if that employee is simply laid off due to restructuring or reduction in force.
The problem with the above bonus repayment language from an employee's perspective is that he could potentially work for almost a whole year and then have to repay the bonus, just because they quit right before that one-year anniversary. To avoid this situation, an employee may request that the bonus repayment language be modified to include some type of pro-rata reduction in bonus repayment obligation. A typical arrangement can be as follows: an employee's sign-on bonus repayment obligation is to be reduced by 1/12 after each month employment.
The above terms are of course highly negotiable and the parties are free to agree on whatever bonus repayment terms they deem reasonable and acceptable. The important part is to clear about what these terms are and keep the above points in mind.
Like in most other business dealings, having a clear, well drafted equity contract regarding entitlement to company shares is very important in order to avoid all types of future disputes of who owes what to whom.
Here is a typical scenario, especially in the Bay Area start-up world: a young start-up engages in hiring discussions with an engineer or a marketing person. The employer is in a hurry to hire the right person to get their business up and running as soon as possible, and the candidate is also anxious to get hired. They begin discussing the details of that employee's equity rights. They go back and forth by email a few times, running numbers and percentages by each other, trying to reach an agreement. Then, as that employee comes on board and becomes focused on and consumed with his work, that conversation dies down for some time. It's not clear what they agreed upon if anything. Earlier, the start-up CEO might have promised to give that employee a formal equity plan as soon as possible but never followed through, getting caught up with dealing with a hundred other things that need to be addressed at a young company.
Then, one day that employee leaves the company for one reason or another. What equity is he entitled to, if the parties never signed any stock agreement? An employer cannot say that he doesn't owe that employee any equity. If there is some written communication regarding equity, then at the very least the employer usually owes that employee the lowest amount of equity they offered during those early negotiations. But how and when should that equity vest, and how and when can it be exercised? What about all the other relevant terms of equity grant? Absence of written agreement creates many such questions that can and often do lead to litigation, that could have been easily avoided if the parties had a clear, written agreement in place regarding equity rights and obligations.
Therefore, whether you are the employee who expects equity to be part of his compensation, or whether you are an employer who plans to compensate his employees in part with equity in your company - it's in your best interest to have a written and signed equity grant agreement in place as soon as possible.
When trying to prove a discrimination claim, the so-called comparative evidence can be quite useful in establishing that the employer engaged in an unlawful discrimination practice. Comparative evidence is “evidence that the claimant was treated differently from others who were similarly situated” but are outside the plaintiff’s protected class. (Guz v. Bechtel National, Inc. (2000)) Evidence that an employer treated “similarly situated” employees outside the plaintiff’s protected class more favorably is probative of the employer’s discriminatory or retaliatory intent. (McDonnell Douglas Corp. v. Green (1973)) [evidence that elevant white employees who engaged in comparable conduct were retained or rehired while the plaintiff, who is black, was laid off].)
To be probative, comparative data . . . must be directed at showing disparate treatment between employees who are "similarly situated" to the plaintiff in all relevant respects. In general, “individuals are similarly situated when they have similar jobs and display similar conduct.” (Vasquez v. County of Los Angeles (9th Cir. 2003); Wills v. Superior Court (2011) 195 Cal.App.4th 143, 172.)
Thus, one common way to prove discrimination is to show that your colleagues, who have the same or similar title and pretty much do the same work, were punished less harshly or not punished at all for the same alleged violations, mistake, or misconduct for which you were terminated. While this alone might not prove a discrimination case against the employer, it can be useful in conjunction with other pieces of evidence. Establishing comparative evidence requires showing that the same managers who terminated you for your alleged violations were actually aware of similar violations of others and didn't do much or anything to discipline those other workers. If the managers in questions didn't know about those other violations, they, of course, can't be charged with treating you differently.
If you are considering bringing a case against your employer for wrongful termination, discrimination, or any wage violations, cashing your final paycheck will generally not hurt your potential case in any way, unless you sign a document that actually states that you agree that the employer doesn't owe you any other wages and that you release any and all claims you might have against that employer.
A tricky situation occurs when an employee signs a severance agreement and general release of all claims in exchange for accepting a certain amount of money from the employer as severance, but while still not being paid correctly his regular wages. Under California law, an employee cannot waive by agreement his right to wages earned. Under Labor Code section 206.5 employers and employees may not enter into agreements that waive the employee’s right to receive wages that are undisputed. Labor Code section 206.5 also provides that an employer may not require “as a condition of being paid, to execute a statement of the hours he or she worked during a pay period which the employer knows to be false.” Therefore, unless the severance agreement specifically provides that the severance paid also covers wages which should have but not have been paid, the employer will still be liable for those wages, even if they pay severance, and even if that severance is significant.
A typical mistake that employers make is assuming that by having a terminated employee sign a general release form and severance agreement, which doesn't contain specific language concerning unpaid wages, they effectively settle any and all potential disputes. While claims for discrimination, wrongful termination, harassment, retaliation and similar claims are waived by this type of agreement, as noted above - an employee will still likely be able to make a claim for wages earned but not paid correctly.
California Labor Code section 515.5 provides that some software employees are exempt from overtime pay requirements if certain conditions are met, including the performance of certain duties and an hourly rate of pay no less than the specified rate. Effective January 1, 2019, the computer software employee's minimum hourly rate of pay will increase from $43.58 to $45.51 and the minimum salary exemption will increase fro $90,790.07 to $94,603.25.
It's important to note the language of section 515.5, which states that all of the requirements of that section must be met in order for exemption to be properly applied. This means that if all of the factors are satisfied except this minimum pay requirement, the employee will not be properly classified as exempt and will be entitled to overtime pay for all hours worked in excess of 8 hours per day or 40 hours per week, like other hourly employees. That employee will also entitled to the benefits that other hourly employees enjoy, such as the right to meal periods and rest periods as provided by law.
An employee's performance evaluation in most cases cannot be used a basis for defamation claim because it generally denotes opinion rather than fact. (See Barker v. Fox & Associates (2015) 240 Cal.App.4th 333, 352.) "Unless an employer's performance evaluation falsely accuses an employee of criminal conduct, lack of integrity, dishonesty, incompetence or reprehensible personal characteristics or behavior, it cannot support a claim for defamation. This is true even when the employer's perceptions about an employee's efforts, attitude, performance, potential or worth to the enterprise are objectively wrong and cannot be supported by reference to concrete, provable facts." Jensen v. Hewlett-Packard Co. (1993) 14 Cal.App.4th 958, 965. This is because mangers are given wide latitude in subjectively evaluating their subordinates. Thus, for instance, referring to an employee as "unprofessional" or "lacking in drive" is usually an opinion.
However, careful analysis of the exact statements made in employee evaluation is necessary whether a statement is actionable in court as defamatory. For example, such statement as "difficult to work with" imply an assertion that can be objectively proved as false, especially if the employer claims to have received feedback from other employees supporting this, when they in fact never received such information. (See Mamou v. Trendwest Resorts, Inc. (2008) 165 Cal.App.4th 686, 728 (...although assertions employee was "not carrying his weight" and
"evidenced a lack of direction" were opinions, other assertion that third parties complained about
employee presented provably false assertion of fact). Certainly, when the employer is caught fabricating evidence, this makes any case, including defamation case, much stronger. Both employees and employers should know that even one provably false statement can form a basis for a defamation case against the employer. This type of claim might or might not be worth pursuing, depending on other circumstances and other claims that can be made against the employer.