Breaking News: DOL Issues Model COBRA Subsidy Notices
As we reported last month, the new stimulus package includes 65%
COBRA subsidies for certain workers laid-off or terminated since
September 1, 2008. The U.S. Department of Labor (DOL) has issued model
subsidy notices for employers to use when notifying employees.
Next week we’ll provide you with you with the highlights of how
these notices should be used, and will have fill-in model notices for
tailored California employers that our CEA Online subscribers can download. Stay tuned!
California Courts Throw Out Arbitration Agreements
Two decisions delivered this month by California Courts of Appeal
serve as a good reminder to review your arbitration agreements and make
sure they’re up to date with current law. You, like many employers, may
require employees to sign agreements to arbitrate employment related
claims, rather than go to court. But be careful—if the arbitration
agreements contain invalid clauses, they won’t keep you out of court.
The first decision, in Franco v. Athens Disposal Company, Inc.
involved a truck driver who filed a class action lawsuit against his
employer. Franco, the employee, claimed Athens didn’t properly pay
overtime or provide meal periods. At the start of his employment,
however, he had signed an arbitration agreement which stated that he
agreed not to participate in any class action or act as a “private
attorney general” to represent anyone other than himself. Athens
therefore argued that he could not bring a class action.
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The Court disagreed with Athens and reversed the decision of the
lower court, and declared the arbitration agreement’s class action
waiver invalid. The Court also said Franco could not be prohibited from
acting as a private attorney general under California’s Private
Attorneys General Act (PAGA). As a result of this decision, Franco can
go forward with his class action lawsuit instead of being required to
arbitrate his claims as an individual.
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In a similar case, another employer’s arbitration agreement was thrown out because of a class action waiver in Sanchez v. Western Pizza.
In this case, another Court of Appeals said the class action waiver was
invalid because it was against public policy. The Court also said the
agreement signed by the employee, a pizza delivery person, was no good
because it was oppressive, and did not sufficiently inform employees of
what was involved in arbitrating their claims.
We will have the full story on these two cases, and provide
practical guidance on how to draft enforceable arbitration agreements,
in an upcoming issue of CEA. Don’t miss out! Sign up for a free 3-month trial subscription.*
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