UPDATES FOR CALIFORNIA EMPLOYERS – NOVEMBER 2015

Police Investigation Disrupts Work

In Cardenas v. M. Fanaian, DDS, Inc. the plaintiff was a former employee of defendant.  Plaintiff was terminated after filing a report with the police when her wedding ring was stolen at work.  Defendant terminated her because he claimed that the police investigation disrupted her work.  Plaintiff sued defendant for violation of Labor Code section 1102.5 and wrongful termination in violation of public policy.  A jury found in favor of plaintiff, and defendant appealed.  The Court of Appeal affirmed, explaining that Labor Code section 1102.5 is a stand-alone action that exists independently of an action for wrongful termination in violation of public policy.  Unlike an action for wrongful termination in violation of public policy, a retaliation claim under Labor Code section 1102.5 does not require an employee to show that the alleged illegal activity of her employer violates a policy that “inures to the benefit of the public at large rather than to a particular employer or employee.”  Additionally, the Court of Appeal explained that Labor Code section 1102.5 does not require an employee to show that the protected activity relates to the employer’s business.

Religious Accommodation-Protected Activity

Effective January 1, 2016, an employee’s request for accommodation for a disability or for religious reasons is considered to be a “protected activity” for a retaliation claim under the Fair Employment and Housing Act (“FEHA”).  Existing law requires an employer covered by the FEHA to provide reasonable accommodation of, among other things, a person’s disability and religious beliefs.  Existing law also prohibits discrimination against an employee because the person has opposed any practices forbidden under the act or because the person has filed a complaint.  As a result of Assembly Bill 987, which was signed on July 16, 2015, FEHA will prohibit an employer from retaliating or otherwise discriminating against a person for requesting accommodation of his or her disability or religious beliefs, regardless of whether the accommodation request was granted.

Arbitration and Non-compete Covenants

In SingerLewak, LLP v. Gantman, plaintiff was a former partner at SingerLewak, LLP (“SingerLewak”).  The partners of SingerLewak, including plaintiff, had signed an arbitration agreement which included a provision allowing for damages as against any partner who provided services to any of SingerLewak’s clients after leaving the firm.  After plaintiff left the firm, a dispute arose between plaintiff and SingerLewak regarding this provision.  During the arbitration of the matter, the plaintiff argued that the provision was unenforceable as an illegal covenant-not-to-compete.  The arbitrator rejected this argument and ruled against plaintiff.  The Court of Appeal upheld the arbitrator’s ruling, despite California law, which generally holds that non-compete covenants are unenforceable.  The Court of Appeal explained that the arbitrator had acted within his power to make a ruling, and that his decision should therefore not be disturbed, even if the arbitrator had erred.

 

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