833 (9th Cir. 2024)Tayo Daramola is a Canadian citizen who resided in Montreal at all relevant times and who worked for Oracle Canada, a wholly owned subsidiary of Oracle Corporation (a California‑based company). Daramola’s employment agreement stated that it was governed by Canadian law. During his employment, Daramola, who worked remotely, conducted business and collaborated with colleagues in Canada and the United States and was assigned as lead project manager for the implementation of an Oracle product at institutions of higher education in Texas, Utah, and Washington. In time, Daramola came to believe that by offering this product, Oracle was committing fraud, and he reported same to Oracle and the SEC. Eventually, Daramola resigned his employment based upon his “unwillingness to take part in fraud.” He then filed a lawsuit in federal court in California, claiming violations of the Sarbanes‑Oxley Act and the Dodd‑Frank Act, as well as the California whistleblower protection act, Cal. Lab. Code § 1102.5. The district court dismissed the lawsuit after twice giving Daramola leave to amend his complaint. The Ninth Circuit affirmed dismissal of the action, holding that the anti‑retaliation provisions of the state and federal statutes at issue did not apply to Daramola, a Canadian citizen working out of Canada for a Canadian subsidiary of a U.S.‑based parent company.[View source.]

Earlier this month, the Supreme Court unanimously reversed the Second Circuit’s decision in Murray v. UBS and resolved a circuit split in favor of employees, holding that although intent is an element of a Sarbanes-Oxley (“SOX”) whistleblower case, a SOX plaintiff does not have to prove retaliatory intent or animus to prevail. The decision, which addressed the meaning of the contributing-factor standard, leaves SOX as one of the, if not the, most protective whistleblower statutes in the country and may extend well beyond the statute itself. As we have discussed previously, the same standard is used for not only a dozen or so other federal whistleblower statutes, but also California’s general whistleblower law, California Labor Code Sec. 1102.5. The article below provides a brief background on SOX’s contributing-factor standard, the facts of the case, an overview of the decision, and some practical takeaways.BackgroundSOX prohibits publicly traded companies and their contractors from “discharge[ing], demot[ing], suspend[ing], threaten[ing], harass[ing], or in any other manner discriminat[ing] against an employee in the terms and conditions of employment because of any lawful act done by the employee” under 18 U.S.C. § 1514A(a). Any civil action to enforce this prohibition is governed by the burden-shifting framework in 49 U.S.C. § 42121(b). Under this framework, a plaintiff must first show that the protected activity “was a contributing factor in the unfavorable personnel action alleged in the complaint” (“Contributing Factor Standard”). If the plaintiff meets this burden, the employer can still avoid liability if it demonstrates, by clear and convincing evidence, that it would have taken the same unfavorable personnel actio

belonged to Garrabrants. At trial, a jury awarded Garrabrants $1,502 on his claims against Erhart for invasion of privacy, receiving stolen property and unauthorized access to computer data in violation of Penal Code § 502. The trial court awarded Garrabrants more than $65,000 in costs and more than $1.3 million in attorney’s fees as the prevailing party. The Court of Appeal reversed the judgment, holding that the trial court erroneously instructed the jury that bank customers have an unqualified reasonable expectation of privacy in financial documents disclosed to banks; that Erhart needed to believe the documents may have been lost or destroyed had he not removed them; and other instructional errors regarding the Penal Code claims. See City of Whittier v. Everest Nat’l Ins. Co., 97 Cal. App. 5th 895 (2023) (Cal. Ins. Code § 533 barring insurer liability for a loss caused by the wilful act of the insured does not preclude insurer indemnification of whistleblower claims arising under Cal. Lab. Code § 1102.5).Health Care “Opt-Out Credits” Do Not Count Towards Calculation Of FLSA Regular Rate of PaySanders v. County of Ventura, 87 F.4th 434 (9th Cir. 2023)The Ninth Circuit affirmed the district court’s grant of summary judgment in favor of the employer (Ventura County) in this putative class action arising under the federal Fair Labor Standards Act (“FLSA”), brought by county firefighters and police officers who opted out of their union- and employer-sponsored health plans. The employees who opted out of these health plans received monetary compensation in return, however part of the compensation was deducted as a fee that was then used to fund the plans from which they had opted out. The employees argued that this opt-out fee should count as part of their “regular rate” of pay for purposes of calculating overtime compensation under the FLSA.The Court held that these opt-out fees should not be considered part of the employees’ “regular rate” of pay. Instead, the fees should be exempted as

nd provide training on the employer's plan, 5) procedures to correct workplace violence hazards in a timely manner, 6) procedures for post-incident response and investigation, and 7) procedures for the employer to review and update the plan for effectiveness at least annually, or when a deficiency is observed, or after an incident of violence. Covered employers must also maintain detailed records regarding the workplace violence hazard identification, evaluation and correction, the employer's investigations and a detailed violent incident log. Given the extensive requirements under Labor Code Section 6401.9 and the assessment of monetary penalties for noncompliance, covered employers should take active steps to ensure they have a compliant workplace violence prevention plan in place before July 1, 2024.SB 497(New 90-Day Rebuttable Presumption for Workplace Retaliation): SB 497, also known as the Equal Pay and Anti-Retaliation Protection Act, amends California Labor Code Sections 98.6, 1102.5 and 1197.5 by creating a rebuttable presumption of retaliation in favor of an employee's workplace retaliation claim. The new presumption applies if an employer takes adverse action (such as discharge, discipline, demotion or threat of discharge or demotion) against an employee within 90 days of the employee engaging in certain protected activity. This presumption ultimately makes it easier for employees to establish a prima facie case of retaliation. Under the current law, employees must establish a prima facie case of retaliation by showing: 1) they engaged in a protected activity, 2) their employer took an adverse action against them and 3) there was a casual nexus between the employee's protected activities. Under SB 497, however, if the 90-day presumption applies, the burden shifts to the employer to articulate a legitimate, nonretaliatory reason for the alleged retaliation. If the employer is able to do so, the burden shifts back to the employee to demonstrate that, despite the

I have often said to clients that retaliation claims in California are the easiest claims to allege and the hardest claims to defend. Regardless of the statute, a retaliation claim is essentially three things:Employee engages in a protected activity.Employee suffers an adverse action.There is a causal connection between the protected activity and the adverse action (or put another way, but for the protected activity, the adverse action would not have occurred).In the past, attorneys relied on case law to determine if the employee met the initial burden of showing the causal connection. With the passage of SB 497 (aka the Equal Pay and Anti-Retaliation Protection Act), as of January 1, 2024, there is a rebuttable presumption of a causal connection if there is an adverse action within 90 days of any protected activity under California Labor Code Sections 98.6, 1102.5 and 1197.5. Yes, the employer can put forth evidence to rebut it, but the burden is on the employer to show a legitimate business reason that is unrelated to the protected activity. And an employer who fails to do so is also on the hook for an additional $10,000 civil penalty.How does an employer rebut the presumption? How can you prove that the adverse action, whether it be termination, demotion, transfer, or something less (like inconsistent enforcement of policies), is unrelated to some sort of protected activity (such as making a complaint about some workplace issue)? The answer is simple:Documentation. That is why my prior post on how to prepare good documentation and “tie it with a bow” is still super relevant today, and worth another read. With good contemporaneous documentation, the employer can prove that the issue was addressed before the protected activity and not just after. Without contemporaneous documentation, rebutting the presumption is much more challenging.Be prepar

[co-author: Wolfram Ott*]On October 8, 2023, California Governor Gavin Newsom signed into law Senate Bill No. 497, the “Equal Pay and Anti-Retaliation Protection Act.” The new law amends California Labor Code sections 98.6, 1102.5, and 1197.5 to create a “rebuttable presumption of retaliation” if an employee experiences an adverse employment action within 90 days of engaging in any protected activity covered by the specified sections. This new law, which will become effective on January 1, 2024, also entitles a prevailing plaintiff civil penalties for each violation.Section 98.6 concerns the exercise of employee rights afforded under the Labor Code, including engaging in protected conduct related to wage claims, claims arising from violations of the employee’s political and civic rights, claims for recovery via the Private Attorneys General Act (PAGA), and filing a claim or participating in a proceeding relating to employee rights that are under the jurisdiction of the Labor Commissioner. Section 1102.5 concerns certain whistleblower activity and an employee’s right to refuse to participate in conduct that would result in a violation of state or federal laws or regulations. Section 1197.5 concerns protected act

SB 497 (the Equal Pay and Anti-Retaliation Act) goes into effect on January 1, 2024. The new law amends California Labor Code Sections 98.6, 1102.5, and 1197.5 to create a rebuttable presumption of retaliation if an employer takes an adverse action against an employee within 90 days of the employee engaging in certain protected activity.An employee must first establish a prima facie case of retaliation by demonstrating that: (1) the employee engaged in a protected activity; (2) the employer engaged in an adverse action against the employee (such as a discharge, demotion, threat of discharge or demotion, suspension, pay cut, or reduced hours); and (3) a causal nexus between the protected activity and adverse action. The burden then shifts to the employer to identify a legitimate, non-retaliatory reason for the action. Thereafter, the burden shifts back to the employee to show that the employer’s non-retaliatory reason was merely a pretext for retaliation.Now, SB 497 makes it easier for employees to satisfy their initial burden if the adverse action occurs within 90 days of the employee engaging in protected activity. As an example

tions or to mandate private arbitration shall have no effect. Any moneys recovered will go to the affected workers, and all civil penalties recovered under this section will be paid to the General Fund of California.What Should Employers Do?Due to the bevy of legislative changes on the horizon, both California-based employers and out-of-state-employers with employees in California should promptly review their policies, procedures, and practices to ensure compliance with these new laws. Generally, a law becomes “effective” on January 1 of the year following its enactment. Cal. Const., art IV, § 8, subd. (c)(1). AB 2188 was also discussed in last year’s update on new employment laws in California. See R. Bertrand et al., California Expands Employee Protections: A Dozen New Employment Laws Impacting Employers, Paul Hastings Client Alert (Oct. 10, 2022) (available at: https://www.paulhastings.com/insights/client-alerts/california-expands-employee-protections-a-dozen-new-employment-laws). Cal. Lab. Code § 1102.5(f)(2). See Cal. Civ. Code § 47. 44 Cal. 4th 937, 955 (2008). Cal. Bus. & Prof. Code § 16600.1(a). Id. Cal. Bus. & Prof. Code § 16600. Cal. Bus. & Prof. Code § 16600.5(a). Cal. Bus. & Prof. Code §§ 16600.5(b)-(d). Cal. Bus. & Prof. Code §§ 16600.5(e)(1)-(e)(2). New York, the Federal Trade Commission, and the Department of Labor are also passing laws and regulations impacting employee mobility and post-employment restrictive covenants. See J. Baldocchi et al., Developments in Employee Mobility: California’s SB 699, New York’s 203-f and FTC/DOL Collaboration, Paul Hastings Client Alert (Oct. 5, 2023) (available at: https://www.paulhastings.com/insights/client-alerts/developments-in-employee-mobility-californias-sb-699-new-yorks-203-f-and-ftc). The new law applies to “all employers, employees, places of employment, and employer-provided housing,” with a few specific exemptions: 1) health care facilities and employers covered by California’s existing workplace prevention standard for the healthc

d when the agreement was signed. AB 1076 buttresses SB 699’s prohibition by codifying Edwards v. Arthur Andersen LLP (2008) 44 Cal. 4th 937, to void even narrowly tailored non-compete agreements in the employment context. Together, under SB 699 and AB 1076, the only non-compete provisions that remain enforceable in California are those that concern the sale or dissolution of a corporation, partnership or limited liability corporation. These provisions go into effect January 1, 2024.AB 1076 further requires employers, by February 14, 2024, to notify all current and former employees hired after January 1, 2022, and who executed non-compete agreements void under this bill, that such agreements are void. Notice must be via a written individualized communication to the last known address and email address of the employee or former employee.Retaliation Rebuttable Presumption SB 497 makes it easier for employees to establish retaliation claims by amending California Labor Code Sections 98.6, 1102.5 and 1197.5 to create a rebuttable presumption of retaliation if an employee is subject to adverse action within 90 days of engaging in certain protected activity. Protected activity includes, but is not limited to, complaining about unpaid wages, reporting suspected unlawful activity in the workplace and complaining about equal pay violations.SB 497 specifies that employers are liable for a civil penalty of up to $10,000 per employee, per violation, which would be awarded to the employee who was retaliated against. SB 497 goes into effect on January 1, 2024.Employers Expanded Rights to Seek TROs on Behalf of Employees Under existing law, California employers are permitted to seek an injunction and temporary restraining order (TRO) on behalf of any employee who has suffered unlawful violence or a credible threat of violence from any individual that can reasonably be construed to be carried out or to have been carried out at the workplace.Starting January 1, 2025, AB 428 modifies Sectio

e of the limited exceptions set forth in California Government Code Section 12952(d) is met. Such exceptions include the following: (1) a position for which a state or local agency is otherwise required by law to conduct a conviction history background check; (2) a position with a criminal justice agency; (3) a position as a farm labor contractor; or (4) a position where an employer or agent thereof is required by state, federal, or local law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history.In sum: (a) employers can still prohibit employees from using or being impaired by cannabis at work, but cannot prohibit cannabis use away from work that does not affect their work; and (b) employers cannot ask applicants about their cannabis use or even check their criminal history for cannabis use (unless certain limited exceptions apply).Additional Whistleblower Protections (SB 497)SB 497 amends California Labor Code Sections 98.6, 1102.5, and 1197.5 to create a rebuttal presumption of retaliation if an employee is disciplined or discharged within 90 days of certain protected activity.Labor Code Section 98.6 prohibits an employer from taking adverse employment action against an employee because the employee has reported wage and hour violationsLabor Code Section 1102.5 prohibits an employer from taking adverse employment action against an employee who threatens to disclose, or discloses, information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of a state or federal statute, rule, or regulationLabor Code Section 1197.5 prohibits an employer from taking adverse employment action against an employee for reporting or attempting to enforce rights pertaining to equal paySB 497 does not change the substance of the retaliatory acts that are prohibited. But if an employer takes adverse action against an employee within 90 days after that