California Legislature Passes Bill Protecting Employees’ Access to the Courts, Now on Governor’s Desk
August 26, 2015 by Teague Paterson
Both houses of the California legislature have passed AB-465, which would expand the types of contracts that are void and unenforceable under a new section 925 of the Labor Code. AB-465 would void agreements between employers and their employees that prohibit employees from enforcing their statutory employment rights, such as the right to sue in court rather than private arbitration, or the right to file a class action. Under AB-465, such agreements would be presumed void and unenforceable unless the employer could establish the agreement was freely and voluntarily entered into and not made a condition of hire.
But will the Governor sign AB-465? He has until October 11 to do so, or else AB-465 will not become law.
Longstanding state and federal laws prohibit “yellow-dog contracts,” which were common into the 1930’s before they were outlawed when F.D.R. signed the Norris-LaGuardia Act. A yellow-dog contract involves an employee’s pledge not to join or support a union or to act in “combination” with their co-workers, and were often made a precondition for being hired.
One hundred years later, employers are still trying to get around Norris-LaGuardia.
Waivers of an employees’ right to file a class-action against their employer to enforce labor and employment laws, or a waiver to have their cases heard in court under so-called arbitration agreements are the new yellow-dog contracts. As the NLRB held in DR Horton and more recently in Beyoglu, filing a class-action lawsuit is a labor right. Recent court rulings involving these heavy-handed employment arbitration agreements have severely limited workers’ access to the courts, juries and collective actions.
Individual employees, especially when they are hoping to be hired or retain their job, are in no position to negotiate on an equal basis a fair contract with their employer: That is why we have labor and employment laws in the first place. We applaud the Legislature for correcting this imbalance by passing AB-465 and placing this important law on the Governor’s desk.
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