This last Sunday, Governor Jerry Brown signed into law S.B. 1241. This new law regulates an employer’s ability to choose where and under what law an employee can sue for employment-related disputes. In particular, it prohibits California employers from explicitly requiring that disputes be adjudicated in a forum other than California, and also prohibits employers from including any terms in their employment contracts that would “deprive the employee of the substantive protection of California law” with respect to a dispute arising in California.
Before this bill, California employers could freely evade California’s employee-friendly laws by drafting employment contracts that mandated dispute resolution outside of the state. S.B. 1241 now makes such a practice unlawful, and any California employment contracts that require litigation or arbitration to take place outside of the state are inconsistent with California law. An exception applies to employees who retain legal counsel and individually negotiate the terms of a choice-of-law clause in their employment contract, but those situations are few and far between – most employees don’t hire lawyers to negotiate employment contracts with their employers due to the expense.
This new law makes the expansive protection of California’s employment laws more widely available to California employees. California has some of the most protective employment laws in the nation, granting employees’ rights and benefits relating to wages, meal periods, and rest breaks beyond that granted by federal employment laws. Accordingly, Governor Brown’s signing of S.B. 1241 represents a welcome and significant expansion to the rights of California employees.
By signing S.B. 1241, Governor Brown has removed a hurdle that previously prevented California employees from holding employers accountable in California, under California law. If you are an employee or know of other employees who have been deprived of rights or benefits required under California law, such as meal periods, rest breaks, pay for on-call time, overtime pay, or minimum wages, please contact our office.