San Francisco Employment Law Firm Blog

Binding arbitration is the most common type of resolution procedure or employment disputes between employees and employers in California. Contractual arbitration is a process in which the employee and the employer agree to submit their disputes to binding resolution by one or more impartial third persons.

The common perception is that contractual arbitration is better for employers than employees. The theory is that arbitrators are likely to be conservative professionals who will not be influenced by emotional considerations that could sway a jury. In fact, this perception is particularly strong among employment lawyers in San Francisco and Alameda counties where the juries are notoriously liberal and are likely to award significant verdicts, which makes trials of employment cases in San Francisco and surrounding counties particularly desirable to employees their attorneys. Thus, employment lawyers practicing in the San Francisco area study their clients’ arbitration agreements carefully to attempt to find a way to dismiss agreements to arbitrate as unenforceable due to duress, unconscionability and other reasons, in order to avoid arbitration and have a jury trial.

But the perception that arbitrating an employment dispute is better for employers is not always true. Employers with strong legal defenses may do better before a judge than an arbitrator. Where critical facts to a case are in dispute, especially in discrimination and harassment cases, employers with strong witnesses may do better before a jury than an arbitrator, especially if an employee is a poor witnesses and has been already shown to a jury to exaggerate his claims and to be inconsistent about his complaints of discrimination and/or harassment.

At the conclusion of leave under Family Medical Leave Act (FMLA) or California Family Rights Act (CFRA), an employer must reinstate an employee to the same or an equivalent job, unless he or she is a “key employee” who is given appropriate notification. One main limitation on this rules is that the employee returning to work is not entitled to reinstatement if unable to perform an essential function of the position because of physical or mental condition, including the continuation of a serious health condition.

In order to be deem equivalent, the alternate position must be virtually identical to the prior position in terms of pay, benefits, and working conditions, and involve substantially similar duties and responsibilities. In one case, a nurse who formerly worked a day shift was offered a full-time night shift position with the same duties and benefits, or a part-time day position with reduced benefits. As a matter of law, that offer was not an offer of an equivalent position. Hunt v. Rapides Healthcare System LLC (2001). An employee returning after FMLA leave may not be disqualified from bonuses which are not related to performance, but need not be credited with time spent on FMLA leave when the bonus is based on employee’s total performance or production.

If a salaried employee is deemed a “key employee” and reinstatment would result in substantial and griveous economic injury to an employer, the employer may deny reinstatement after propery notifing the employe and affording that employee an opportunity to forgo the leave or return from leave. 29 USC 2614(b)(2).

No matter what side of the workplace dispute you are on – whether you are an employee, a supervisor or the employer, it is important to remember one fundamental fact about California employment law: not every conduct which seems unfair is actually illegal, and not every violation of the law is worth pursuing through court or other enforcement bodies. Failure to take this very practical reality into consideration leads many employees, companies and attorneys to waste a lot of time, money, energy, and emotions. An aggrieved employee who believes that he was wrongfully terminated and discriminated will usually not bother to actually look up or inquire about the law and find out whether what happened to him was actually discrimination and what exactly makes his termination wrongful. An employee would rely on his anger and pure gut feeling in pursuing legal action without even knowing whether the employer who mistreated him or her actually violated the law.

This employee will likely not listen to the words of a seasoned employment lawyer who would explain to him why he shouldn’t be pursuing the claim, and will continue to look for an attorney to take his “case” until he finds one whose lack of experience in distinguishing meritorious claims from all the others and his possible need for more business will cause him to actually take the case and pursue it toward a dead end.

Employers, especially smaller companies who don’t even have a well-trained human resources department often fall victims to their ignorance of the law as well. They believe that they can avoid liability by simply relying in their actions and relationship with employees on what they think is fair. A common trap into which such employers fall is believing that the at-will employment doctrine gives them more protection when terminating employees than it actually does under the law. In one case, one of my clients was an at-will employee in San Francisco who was terminated two days after notifying his supervisor that he has a disability. When I contacted the owner of the company, he arrogantly told me that I was wasting my time and that he did everything right – according to him, my client was an at-will employee who could have been discharged for any reason or no reason. While this is in part true, his employer didn’t know and didn’t bother to find out that there are quite a few significant limitations on at-will employment doctrine in California. If he did, he would probably recognize that his actions were illegal, and he would opt to engage in settlement negotiations. Instead, he brushed me off. Many months and thousands of dollars in attorneys fees later, he was facing a far greater liability to my client, eventually paying more than twice as much as he could have settled for at the outset of my representation.

Your employer has the right to the undivided loyalty of its employees. The duty of loyalty is breached and may give rise to the employee’s liability in a civil suit for unfair competition when the employees takes action adverse to the employer’s best business interests. Stokes v. Dole Nut Co. (1995). For example, employees who take for themselves, against their employer’s interests and to the employer’s loss, business opportunities in the employer’s line of business may be subjected to liability.

Normally, the unfair competition actions are governed by California Labor Code 2860, which states that “Everything which an employee acquires by virtue of his employment, except the compensation which is due to him from his employer, belongs to the employer, whether acquired lawfully or unlawfully, or during or after the expiration of the term of his employment. In one case, while still employed, several employees of a company attempted to divert business to their newly formed company by using confidential client information. The court found that their conduct constituted misappropriation of employer’s trade secrets. Courtesy Temporary Service, Inc. v. Camacho (1990).

However, an employee may announce a change of his or her employment to the current employer’s customers, if no solicitation of customers to switch vendors / service provides takes place. “Solicit” implies “personal petition to a particular individual to do a particular thing” which in the context of employment and unfair competition means personal petition to customers to change the way they conduct business.