California employers head into 2026 with a full plate. A new “stay-or-pay” ban and repayment rules (AB 692), an expanded PERB backstop for NLRA-covered workers (AB 288), new law-enforcement and bias-training notice requirements (SB 294, SB 303), and expanded pay data and equal-pay exposure (SB 464, SB 642). On the litigation side, the California Supreme Court has narrowed arbitration-fee forfeiture (Hohenshelt), clarified liquidated-damages “good faith” and Berman appeals (Iloff), and tightened 1102.5’s scope (Brown). Federal developments layer on top of this with new Title VII and FLSA burden rulings (Ames, E.M.D. Sales), the effective demise of the 2024 DOL overtime rule, ongoing non-compete and NLRB turmoil, and a growing circuit split on NLRA remedies. This update is designed to help California employers prioritize what to fix now, what to monitor at the Supreme Court, and where to invest in compliance infrastructure for 2026–2028.

Executive Takeaways

Arbitration fee defaults are no longer “automatic death penalties,” but the timing rules still matter. The California Supreme Court rejected a rigid, automatic-forfeiture reading of Code of Civil Procedure section 1281.98 and held that relief from forfeiture is available where late payment stems from good-faith mistake, inadvertence, or other excusable neglect; forfeiture is reserved for willful or otherwise inexcusable nonpayment. Employers still need disciplined calendaring and payment protocols, but Hohenshelt creates arguments to save an agreement when a payment glitch is genuinely excusable. (Hohenshelt v. Superior Court (2025) 18 Cal.5th 310, 310–12.)

“Stay-or-pay” and clawback structures must be rebuilt for 2026. AB 692 adds Business and Professions Code section 16608 and Labor Code section 926 to broadly prohibit employment-contingent repayment provisions triggered by separation, with narrow, highly structured exceptions for certain tuition-repayment and upfront discretionary bonus arrangements, and a private right of action with a $5,000 floor per worker. Employers should assume that most legacy repayment, relocation, sign-on bonus, training-cost and mobility-related “clawback” language will need to be rewritten — or retired — before January 1, 2026. (Bus. & Prof. Code, § 16608; Lab. Code, § 926.)

Labor relations risk is shifting toward a PERB/NLRB two-track regime. AB 288 gives PERB authority to process unfair labor practice charges and order relief for NLRA-covered workers when the NLRB cannot or will not act, while loosening ALRB’s obligation to follow NLRB precedent. At the same time, federal law is in flux: the D.C. Circuit has upheld at-will presidential removal of Board members, and the Ninth and Fifth Circuits have split over the scope of Thryv-style “foreseeable pecuniary harms” as an NLRA remedy. Employers operating in California should expect more aggressive make-whole theories in Ninth Circuit venues and a higher likelihood of state-level backstops if the federal Board stalls. (Lab. Code, §§ 923.1, 1140.6–1148; NLRB v. N. Mountain Foothills Apartments, LLC (9th Cir. Oct. 28, 2025) No. 23-70319; Hiran Mgmt. v. NLRB (5th Cir. Oct. 31, 2025) No. 24-60189.)

Wage floors and pay-equity rules are driving multi-year compensation strategy, not just January 1 compliance. The state minimum wage increase to $16.90 on January 1, 2026, raises the standard exempt salary threshold to $70,304 and effectively raises the price of many CBA-based carve-outs that require 30% above minimum wage. Sector-specific wages (fast food, health care) and local ordinances further complicate rate setting. At the same time, SB 642 extends equal-pay limitations periods and clarifies when pay-discrimination claims “occur,” and SB 464 will expand pay data reporting categories and harden penalty exposure, requiring employers to tighten both their pay-equity analytics and their pay-scale disclosures. (Lab. Code, §§ 432.3, 1197.5; Gov. Code, § 12999.)

Compliance infrastructure around AI, notices, and records needs to catch up. New FEHA regulations on Automated Decision Systems require employers using AI-driven screening or decision tools, whether in-house or through vendors, to build in FEHA-compliant anti-discrimination controls, give clear pre- and post-use notices, and maintain four years of ADS-related records, with no safe harbor simply because a third party runs the tool. SB 294 adds annual law-enforcement-contact notices and “designated person” arrest/detention notice obligations, while SB 513 requires tracking and producing detailed training records as “personnel records.” Together, these changes reward employers who centralize policy management, vendor oversight, and recordkeeping rather than treating each obligation as a stand-alone fix. (2 Cal. Code Regs., tit. 2, §§ 11008.1–11008.4; Lab. Code, §§ 1198.5, 1550–1559.)

Federal baseline rules are shifting around burdens, exemptions, and post-Thryv remedies. The U.S. Supreme Court has clarified that majority-group plaintiffs are subject to the same Title VII standard (no special “background circumstances” hurdle) and that employers must prove FLSA exemptions by a preponderance of the evidence, not by clear and convincing proof. The 2024 DOL overtime rule has been vacated nationwide and is on ice while DOL reconsiders, and the FTC’s broad non-compete rule has been set aside, leaving California’s long-standing non-compete bans as the practical default for multistate employers. Against that backdrop, the growing split over NLRB “foreseeable pecuniary harms” heightens the stakes of unfair labor practice findings in Ninth Circuit venues. (Ames v. Ohio Dep’t of Youth Servs., No. 23-1039, slip op. at 1–2 (U.S. June 5, 2025); E.M.D. Sales, Inc. v. Carrera, No. 23-217, slip op. at 5–7 (U.S. Apr. 15, 2025); N. Mountain Foothills, supra; Hiran Mgmt., supra.)

New California statutes

Hiring and Separation

AB 858 extends COVID recall and reinstatement rights for covered hospitality and business-services employers by moving the sunset to January 1, 2027. (Labor Code, § 2810.8). The protections apply to the following industries: hotels, private clubs, event centers, airport hospitality operations, airport service providers, building services to office, retail, or other commercial buildings.

AB 692 bans “stay-or-pay” provisions and many separation-triggered repayment schemes (with limited enumerated exceptions). (Bus. & Prof. Code, § 16608; Labor Code § 926.) Under AB 692, all employers are prohibited from requiring a worker to agree to any of the following as a condition of employment: (1) debt repayment (including but not limited to debt for employment-related costs, education-related costs, or consumer financial product or services) if employment ends; (2) debt collection or end forbearance on a debt if employment ends; or (3) imposes any penalty, fee, or cost if employment ends. It is enforced through a private right of action for actual damages or $5,000 (whichever is greater), injunctive relief, and attorneys’ fees and costs. AB 692 applies only to agreements created on or after 1/1/26.

There are two primary exceptions to AB 692. First, Tuition Repayment agreements are permitted where: (1) the agreement is offered separately from any employment contract; (2) does not require the credential as a condition of employment; (3) specifies the repayment amount before worker agrees to the contract, and the repayment amount must not exceed employer’s cost; (4) allows prorated repayment over the required employment period, with no accelerated repayment on early exit; and (5) does not require repayment if the worker is terminated, unless for misconduct. For purposes of AB 692, “Transferable credential” means a degree from an accredited, state-authorized institution that isn’t required for the worker’s current job but is useful for future employment.

The second exception is for upfront discretionary bonuses (e.g., signing bonuses and relocation agreements). These agreements are permitted where: (1) repayment terms exist in a separate agreement from the employment contract; (2) the employee is informed of the right to consult an attorney and given 5 business days to do so; (3) repayment for early exit is interest-free, prorated, and tied to a retention period not exceeding two years; (4) the worker may defer receipt of the payment until completing the full retention period to avoid repayment; and (5) early separation must be voluntary, or due to employee misconduct.

SB 617 adjusts Cal-WARN implementation to require additional information on Cal-WARN notices. (Labor Code, §§ 1400–1408.) Starting 1/1/26, employers must include: (1) their own contact information (including a functional email and telephone number); (2) a description of the CalFresh program, benefits hotline, and link to the website; and (3) whether the employer plans to coordinate benefits for affected employees through the local workforce development board (LWDB), another entity, or no entity at all. Regardless of coordination, the notice must also include the email and phone number for the relevant LWDB, and the following required statement: “Local Workforce Development Boards and their partners help laid off workers find new jobs. Visit an America’s Job Center of California location near you. You can get help with your resume, practice interviewing, search for jobs, and more. You can also learn about training programs to help start a new career.” If the employer is coordinating through the LWDB, coordination must be arranged within 30 days of the date of Cal-WARN Notice.

FEHA Regulations regarding use of AI in employment. The CRD implemented final FEHA regulations effective 10/1/25 regarding the use of AI in employment. The regulations prohibit employers with 5 or more employees from using Automated Decision Systems (ADS) in a way that results in discrimination against applicants or employees, even for conduct from third-party vendors. Employers can point to anti-bias testing, audits, and other measures, but employers remain liable even if the ADS is run by a third-party vendor. Employers must provide notices describing when and how ADS tools are used and inform applicants and employees of their rights to request reasonable accommodation or human review where required by FEHA. The regulations implement a four-year record-keeping obligation.

Training, Notices, and Records

SB 513 expands the type of personnel records subject to production in response to employee requests to now include records pertaining to education and training received by the employee. (Labor Code, § 1198.5) Employers must ensure that the records include: (1) the name of the employee; (2) the name of the training provider; (3) the duration and date of the training; (4) the core competencies of the training, including skills in equipment or software; and (5) the resulting certification or qualification.

SB 303 declares that an employee’s assessment, testing, admission, or acknowledgment of their own personal bias, when made in good faith and solicited or required as part of a bias mitigation training, does not, by itself, constitute unlawful discrimination. (Gov’t Code, § 12940.2.) The stated purpose of the law is to encourage employers to conduct bias mitigation training and to affirm that conducting such training does not, by itself, constitute unlawful discrimination. But the law doesn’t make such evidence inadmissible and the phrase “by itself” suggests the evidence can be considered.

SB 294 mandates a standalone written notice to each employee advising of specific constitutional rights when interacting with law enforcement at work by Feb. 1, 2026, and annually thereafter. (Labor Code, §§ 1550-1559.) SB 294 also requires employers to notify the employee’s “designated person” if the employee is arrested or detained at work. The Labor Commissioner is charged with preparing a standard notice by January 1, 2026. SB 294 authorizes Labor Commissioner enforcement with a $500 penalty per employee for each violation, up to $10,000 per employee.

SB 464 expands current pay data reporting rules. (Government Code, § 12999.) Currently, private employers with 100 or more employees (including staffing employees) must submit pay data to the CRD covering (1) employee counts by race, ethnicity, and sex across 10 job categories; (2) employee earnings within pay bands; (3) mean and median hourly pay rates by race, ethnicity, and sex. Penalties are $100 per employee ($200 for repeat violations), at the court’s discretion. SB 464 makes the penalty mandatory as of 1/1/26. Starting 1/1/27, the number of job categories expands to 23.

AB 250 revives previously time-barred sexual assault claims against an entity or person where the plaintiff alleges sexual assault and that (1) the entity or person is legally responsible for damages arising out of sexual assault against the plaintiff, and (2) the entity or person engaged in a cover up or attempted a cover up of a previous instance or allegations of sexual assault by an alleged perpetrator. (Code Civ. Proc., § 340.16.) AB 250 permits such time-barred claims to be filed between January 1, 2026, and December 31, 2027. AB 250 exempts public entities.

Labor

AB 288 creates a PERB “backstop” to handle Unfair Labor Practices (and order relief) for any worker covered by the NLRA if the NLRB is unable to act or has ceded jurisdiction. (Labor Code, §§ 923.1, 1140.6-1148.) Additionally, AB 288 loosens the ties between the NLRB and the ALRB by declaring that the ALRB “may follow” applicable NLRB precedents as “persuasive authority,” but shall not be obligated to follow those precedents where the ALRB deems it inappropriate to do so. The NLRB filed suit to enjoin AB 288, which is pending as of this publication.

AB 1340 states drivers for a Transportation Network Company (i.e., rideshare companies) have the right to form, join, and participate in the activities of TNC driver organizations, to bargain through representatives of their own choosing, to engage in concerted activities for the purpose of bargaining or other mutual aid or protection, and to refrain from such activities. (Business & Professions Code, §§ 7470-7470-21 and Government Code, § 7927.710.) AB 1340 creates the possibility of sectoral bargaining administered by PERB, subject to specific reporting and procedural rules set forth in the statute.

AB 339 requires public agencies to give at least 45 days’ written notice to recognized employee organizations before issuing requests for proposals/quotes, or renewing/extending any contract for services performed by bargaining‑unit employees. The notice must include key details such as contract duration, scope, costs, and draft solicitation materials, so that unions have a meaningful opportunity to request bargaining. Certain public-works-related contracts are exempted from the new requirement, which is largely a codification and expansion of pre-existing bargaining requirements.

Minimum Wages

California’s state minimum wage increases to $16.90 on January 1, 2026, driving the white-collar exempt salary threshold statewide to $70,304 ($1,352 per week). Updated thresholds for other exemptions likewise increase, such as the computer software exemption ($58.85 per hour) and the physician minimum wage ($107.17 per hour).

For a unionized employer seeking shelter under various exemptions to overtime laws, sick leave provisions, etc., most exemptions require the employees to be paid 30% above the minimum wage. That number is now at least $21.97.

The minimum wage for fast food workers is $20 per hour in 2026.

The minimum wage for health care workers ranges from $18.63 to $24 per hour, depending on the facility type. These minimum wages are scheduled to increase on July 1, 2026, ranging from $19.28 to $25.

As always, employers must consult with any city and county minimum wages for 2026. Examples include San Francisco ($19.18), Los Angeles – City ($17.87), Los Angeles – County ($17.81), San Diego ($17.75), and San Jose ($18.45).

Wage and Hour

SB 642 significantly extends the limitations for an equal pay claim to 3 years (permitting relief up to 6 years) and specifies that a cause of action occurs when an alleged unlawful compensation decision or practice is adopted, when an individual becomes subject to the decision or practice, or when an individual is affected by the application of the decision or practice. (Lab. Code, §§ 432.3, 1197.5.) SB 642 also amends the definition of “pay scale” to mean an estimate of the expected wage range that an employer reasonably expects to pay for the position upon hire and is made in good faith.

SB 648 authorizes the Labor Commissioner to investigate, cite, and file civil suits for violations of existing prohibitions against employers from withholding gratuities, including processing-fee deductions from credit-card tips. (Labor Code, § 351.)

SB 693 creates an exemption from meal period requirements for employees of a water corporation. (Labor Code, § 512.) “Water corporation” is defined as “every corporation or person owning, controlling, operating, or managing any water system for compensation within this State.”

SB 809 is an explicit declaration of law that merely owning a vehicle used for labor or services does not create an independent contractor relationship. (Labor Code, §§ 2750.9, 2775.5, and 2802.2.) SB 809 declares the duty of an employer to indemnify their employee for all necessary expenses or losses applies to the use of a vehicle owned by an employee and used by that employee in the discharge of their duties. With respect to construction trucking, a commercial motor vehicle driver who owns the truck, tractor, trailer, or other commercial vehicle that they use in the discharge of their duties as an employee working for an employer would be entitled to reimbursement for the use, upkeep, and depreciation of that truck, tractor, trailer, or other commercial vehicle, as provided. Finally, SB 809 creates the Construction Trucking Employer Amnesty Program that will relieve construction contractors of liability for statutory or civil penalties (subject to exceptions) associated with the misclassification of construction drivers as independent contractors, if the eligible construction contractor executes a settlement agreement negotiated with, or approved by, the commissioner prior to January 1, 2029.

AB 751 extends indefinitely the rest period exemption for employees holding safety-sensitive positions at certain petroleum facilities. (Labor Code, § 226.75.) The exemption applies to employees required to carry and monitor a communication device, such as a radio, pager, or other form of instant communication, and to respond to emergencies, or is required to remain on employer premises to monitor the premises and respond to emergencies.

AB 774 modifies the obligations for employers receiving garnishment orders. (Code Civ. Proc., §§ 706.021-022, 706.105, 706.12.) In addition to existing obligations, AB 774 requires employers to include information setting forth (1) the date on which the employer provided the judgment debtor with the earnings withholding order and the notice of earnings withholding order, (2) the name and title of the person who provided the order and notice, and (3) a short description of the manner in which the order and notice were provided.

AB 1514 extends existing exemptions to the “ABC test” contained in AB-5 for manicurists (to 1/1/29) and commercial fishers (to 1/1/31). (Labor Code, §§ 2778 and 2783.) AB 1514 instead holds that these occupations are governed by the Borello standard. It also requires the EDD and Labor Commissioner to report to the Legislature the number of misclassification allegations involving licensed manicurists.

Leaves of Absence

SB 590 expands eligibility for Paid Family Leave benefits to include individuals who take time off work to care for a seriously ill “designated person.” (Unemployment Insurance Code, § 3301-3303.) It defines “designated person” to mean someone related by blood or whose association with the individual is the equivalent of a family relationship. The first time benefits are used to care for a designated person, the employee must attest under penalty of perjury to how the employee is related by blood to the designated person, or how the employee’s association with the designated person is the equivalent of a family relationship. SB 590 is effective 7/1/28.

AB 406 changes the permitted uses of California Paid Sick Leave to include jury duty and appearing in Court as a witness under a subpoena. (Labor Code, §§ 230.2, 230.5, and 246.5.) Moreover, Government Code § 12945.8 permits employees who are victims (or whose family member is a victim) of certain serious crimes to take unpaid leave to attend judicial proceedings related to that crime, such as a delinquency proceeding, a post-arrest release decision, plea, sentencing, postconviction release decision, or those against whom specific crimes were committed, including violent felonies, serious felonies, vehicular manslaughter while intoxicated, felony child abuse, felony domestic violence, felony stalking, solicitation for murder, hit-and-run causing death or injury, felony DUI causing injury, and sexual assault. The employee is required to give reasonable notice, unless reasonable notice is not feasible, and then in such circumstances, within a reasonable time after the absence.

Litigation and Enforcement

SB 66 removes the January 1, 2027, sunset day on the obligation to provide initial disclosures in certain civil lawsuits within 60 days of a request. (Code. Civ. Proc., § 2016.090.)

SB 261 significantly expands the Labor Commissioner’s ability to adjudicate wage and hour claims. (Labor Code, §§ 96, 98.) The Labor Commissioner can already adjudicate wage claims and issue orders, decisions, or awards regarding unpaid wages. SB 261 creates a new civil penalty up to 3 times the outstanding judgment amount if the final judgment remains unpaid for more than 180 days. SB 261 also requires courts to award prevailing plaintiffs reasonable attorneys’ fees and costs in enforcement actions, whether initiated by the employee, the Labor Commissioner, or a public prosecutor. Finally, SB 261 makes successor employers jointly and severally liable for these penalties.

SB 477 codifies the definition of a “group or class complaint” within FEHA to mean any complaint alleging a pattern or practice of conduct. (Government Code, §§ 12926, 12960, 12965, and 12981.) SB 477 also expands the statutory filing periods for some claims: (1) one year after the CRD provides written notice that the appeal has been resolved during any appeal; (2) during the pendency of any petition to compel CRD action; and (3) for the period of time specified in a written agreement with the CRD, so long as the agreement was executed before the expiration of the applicable deadline. SB 477 also requires the CRD to defer issuing any right-to-sue notice until the CRD disposes of any related group or class complaint. Finally, SB 477 removes the requirement that claims for specified violations relating to housing discrimination be filed in any county where the unlawful practice is alleged to have been committed, the records relevant to that practice are maintained and administered, the aggrieved party would have resided, or the defendant’s residence or principal office is located.

AB 1523 expands eligibility for court-ordered mediation of any civil action by raising the amount-in-controversy ceiling to $75,000 from $50,000. (Code Civ. Proc., § 1775.) AB 1523 is effective 1/1/27.

Key California Cases

California Supreme Court

Arbitration fee timing: California Supreme Court narrows forfeiture-by-default. Code of Civil Procedure § 1281.98 is not FAA-preempted as properly construed. Courts of Appeal had read it rigidly, but the Supreme Court rejected an “inflexible” construction and aligned the statute with generally applicable contract and forfeiture principles, reserving forfeiture for willful or otherwise inexcusable nonpayment, and allowing relief where the delay stems from good-faith mistake, inadvertence, or other excusable neglect. (Hohenshelt v. Superior Court (2025) 18 Cal.5th 310, 310–12.)

Good-faith defense to liquidated damages, defined and expanded scope of Berman appeals. California Supreme Court held that employers cannot avoid minimum-wage liquidated damages merely by showing ignorance of the law. To establish “good faith,” the employer must show it made an affirmative attempt to determine and comply with legal requirements (borrowing from FLSA jurisprudence). The Court clarified that in a Berman appeal under Labor Code section 98.2, the trial court has discretion to adjudicate additional wage-related claims (e.g., Paid Sick Leave penalties) even if they were not raised before the Labor Commissioner. (Iloff v. LaPaille (2025) 18 Cal.5th 551.)

Elected Officials are not employees under Labor Code section 1102.5. California Supreme Court Holds that an elected city treasurer is not an “employee” entitled to whistleblower protection under Labor Code section 1102.5. The Court focused on statutory context and related whistleblower statutes to conclude the Legislature intended section 1102.5 to protect rank-and-file employees, not elected officials who answer to the electorate rather than a supervisor. For public entities, the decision narrows potential section 1102.5 exposure vis-à-vis elected officials. For private employers, reinforces the Court’s textualist approach to the statute’s scope. (Brown v. City of Inglewood (2025) 18 Cal.5th 33.)

Appellate Courts

Arbitration

Delegation and Labor Code § 229 limits when FAA is inapplicable. A transportation-worker plaintiff fell under the FAA § 1 exemption, so the California Arbitration Act (CAA), not the FAA, governed. The Court held that generic incorporation of AAA rules is not “clear and unmistakable” delegation of arbitrability in a mandatory employment agreement where an hourly worker must navigate multiple layers of documents to find a delegation clause. Applying California law, the Court also held that when the CAA governs, Labor Code § 229 bars arbitration of minimum-wage claims and associated waiting-time penalties under Labor Code § 203, while leaving other wage theories (overtime, meal and rest, etc.) to arbitration. Because the FAA did not apply, Viking River preemption defenses were unavailable, and the entire PAGA claim remained in court. (Villalobos v. Maersk, Inc. (2025) 114 Cal.App.5th 1170.)

Pre-certification conduct can waive arbitration rights. The Court affirmed denial of an employer’s motion to compel arbitration in coordinated wage/hour cases, emphasizing waiver of arbitration rights based on the totality of pre- and post-certification litigation conduct. The Court considered years of active participation in class litigation as inconsistent with preserving a right to arbitrate, even where formal enforcement rights ripened later (such as where the putative class had arbitration agreements, but not the named Plaintiffs). The Court pushes California law toward a broad, conduct-based concept of waiver of arbitral rights in complex wage/hour class actions. (Sierra Pacific Industries Wage and Hour Cases, C099436 (Cal. Ct. App. 3d Dist. Dec. 9, 2025).)

Contemporaneous onboarding documents can make a “clean” arbitration agreement unconscionable. The Court held that an arbitration agreement and a simultaneously executed employment agreement had to be read together under Civil Code § 1642. Taken as a single transaction, the agreements compelled employees to arbitrate their claims while preserving broad judicial remedies for the employer (e.g., nonmutual injunctive-relief carve-outs and litigation rights tied to restrictive covenants). Applying Ramirez’s unconscionability/severance framework, the Court found that these one-sided features rendered the arbitration arrangement substantively unconscionable and that unconscionability permeated the agreement, so severance would not “further the interests of justice.” (Silva v. Cross Country Healthcare, Inc. (2025) 111 Cal.App.5th 1311.)

Severe procedural unconscionability can be outcome-determinative. The Court affirmed denial of a motion to compel arbitration based primarily on extreme procedural unconscionability: the employer presented the agreement in a high-pressure group meeting, made express misrepresentations about its effect, and failed to ensure understanding by workers with limited English proficiency. Given this level of oppression and surprise, the Court held the agreement unenforceable without needing to rest heavily on a separate catalogue of substantively unconscionable terms, illustrating that egregious procurement conduct alone can doom an arbitration agreement. (Velarde v. Monroe Operations, LLC (2025) 111 Cal.App.5th 1009.)

EFAA preempts state-law efforts to compel arbitration of sexual-harassment cases, and choice-of-law clauses can’t dodge it. The Court reversed an order compelling arbitration, holding that the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), 9 U.S.C. §§ 401–402, preempts state-law efforts to compel arbitration of a “case” relating to a sexual-harassment dispute. The Court held the employer could not contract around the EFAA via a California choice-of-law clause, finding that once one covered sexual-harassment claim was pled, the entire action – including FEHA discrimination/retaliation and wage-hour causes – was non-arbitrable. (Casey v. Superior Court (D.R. Horton Los Angeles Holding Co.) (2025) 108 Cal.App.5th 575.)

No severance where multiple unconscionable terms show a scheme to tilt the forum. The Court of Appeal again refused to enforce the employment arbitration agreement, holding that multiple substantively unconscionable provisions (lack of mutuality in covered/excluded claims, shortened limitations, and one-sided fee shifting) reflected a systematic effort to secure a pro-employer forum. Applying Civil Code § 1670.5 and the Supreme Court’s severance framework, the Court held that curing the defects would require rewriting, not merely deleting, terms and that severance would not “further the interests of justice.” The court also reiterated that parties cannot divest trial courts of severance discretion by including a severability clause. (Ramirez v. Charter Communications, Inc. (2025) 108 Cal.App.5th 1297.)

Arbitration agreements define who must initiate arbitration. The Court held that a post-order ruling lifting an arbitration stay and finding waiver is immediately appealable as the functional equivalent of denying a petition to compel under Code of Civil Procedure § 1294(a). On the merits, the Court reversed, holding that under the parties’ arbitration agreement and incorporated AAA rules, the plaintiffs, not the employer, were required to initiate arbitration by filing a demand, so the employer neither breached the agreement nor waived arbitration by failing to start the AAA case itself. (Arzate v. ACE Am. Ins. Co. (2025) 108 Cal.App.5th 1191.)

Not substantively unconscionable to incorporate JAMS rules. The Court reversed the order denying petition to compel arbitration of employees’ FEHA claims. The trial court denied the employer’s petition to compel arbitration, finding the agreement unconscionable because it supposedly barred pre-hearing third-party discovery under Aixtron and did not incorporate CAA discovery provisions. The Court of Appeal reversed, holding there was only minimal procedural unconscionability (adhesion) and, applying Ramirez’s five-factor framework, found no substantive unconscionability because the incorporated JAMS Rule 17 gives the arbitrator authority to expand discovery, including necessary non-party discovery, to ensure a fair arbitration. The Court disapproved Aixtron’s narrow reading of the JAMS rules for unconscionability purposes and directed the trial court to compel arbitration and stay the case. (Vo v. Tech. Credit Union (2025) 108 Cal.App.5th 632.)

Wage and Hour Cases

FLSA retaliation is broad. The Ninth Circuit held that an FLSA retaliation claim can proceed against a non-employer who “indirectly” acts in the interest of the employer, even where the alleged retaliation happens in a different business and the underlying wage claims are time-barred. The Court’s decision relies on and then expands its prior holding in Arias v. Raimondo, where it held that an employer’s outside attorney could be sued for FLSA retaliation after he reported to ICE a former employee who had filed wage claims, because the lawyer was “acting in the interest of” the employer. Hollis takes that framework and pushes it further. Instead of an attorney acting on behalf of the employer, the retaliator is an owner-operator using a separate, affiliated business to cut off work opportunities. The Court still treated him as a potential “employer” under the FLSA’s broad “directly or indirectly” language. Anyone with practical power over a worker’s opportunities because the worker asserted FLSA rights is now squarely in the retaliation risk zone. (Hollis v. R&R Restaurants, Inc., No. 24-2464 (9th Cir. Nov. 18, 2025).)

Court approves hourly plus incentive pay plan. Employer paid truck driving employees under a pay plan that combined hourly wages and a bonus based on certain activities. Employees alleged that the pay plan violated California’s requirement for separate compensation for non-productive time for piece-rate employees. The Ninth Circuit affirmed summary judgment for the employer, finding that the employer’s pay plan met the requirements of Labor Code section 226.2(a)(7). (Williams v. J.B. Hunt Transp., Inc., No. 24-933 (9th Cir. Aug. 12, 2025).)

Flag bonus pay plan approved. The Court of Appeals held that the employer’s plan of paying technicians at least double the minimum wage for all hours on a biometric clock, plus a potential “flag bonus” when flat-rate hours exceed their hourly and overtime earnings, did not violate California’s “no borrowing” rule or Labor Code section 226.2. Because hourly wages covered all hours worked, and the flag component functioned as a true productivity bonus on top of that floor, the court distinguished the unlawful plan in Gonzalez v. Downtown LA Motors, LP, and aligned its analysis with the Supreme Court’s “no-borrowing” framework in Oman v. Delta Air Lines, Inc. (explaining employer must pay at least minimum wage for each hour while still honoring separate contractual units of pay). The court also cited the Ninth Circuit’s recent decision in Williams v. J.B. Hunt Transp., Inc., (upholding an hourly-plus-bonus structure where the employer always paid hourly wages and layered a piece-rate bonus on top) as correctly applying Gonzalez. (Mora v. C.E. Enterprises, Inc. (First Honda) B337830 (Cal. Nov. 18, 2025).)

Labor Code § 512.1 doesn’t apply to Charter Cities. Labor Code § 512.1 extends obligations to provide the opportunity to take meal and rest breaks to healthcare employees directly employed by specified public employers: the state, political subdivisions of the state, counties, municipalities, and the Regents of the University of California. The City and County of San Francisco demurred to meal and rest period claims brought by nurses it directly employed. The Court held the Legislature failed to provide a clear intention that the law applies to charter cities. (Levy v. City & County of San Francisco (2025) 114 Cal.App.5th 997.)

“Exempt employees” under Labor Code § 246(l)(3) means all exemptions. The Court held that the phrase “exempt employees” in Labor Code § 246(l)(3) (paid sick leave calculation) includes all exempt categories, including outside salespersons, not just administrative, executive, and professional exemptions. (Hirdman v. Charter Commc’ns, LLC (2025) 113 Cal.App.5th 376.)

“New evidence” supporting decertification can be generated in discovery. The Court affirmed decertification of a meal and rest period class, holding that “new evidence” supporting decertification can include post-certification declarations and expert analysis generated in discovery, not just facts arising later in time. The Court cited Donohue v. AMN Servs., LLC (2021) 11 Cal.5th 58 and found that the employer’s evidence of idiosyncratic reasons for non-compliant meals was sufficient to show that individualized issues predominate. (Allison v. Dignity Health (2025) 112 Cal.App.5th 192.)

Charter cities are not automatically immune from prevailing wage obligations. The Court held that a mixed public-private development project is not a “municipal affair” for prevailing wage purposes where a private entity provides the bulk of financing and control (the City funded 25% of the project). The City’s charter-city status does not exempt such projects from California prevailing wage laws. (Palm Springs Promenade, LLC v. Dep’t of Indus. Relations (2025) 111 Cal.App.5th 1294.)

Prospective meal-period waivers approved. The Court held that revocable, prospective waivers of first meal periods for shifts less than six hours are valid, so long as they meet Labor Code § 512 and Wage Order requirements, such as mutual consent and revocability. The Court rejected the argument that waivers must be executed contemporaneously with each shift or day, holding that written waivers obtained at hire can suffice. (Bradsbery v. Vicar Operating, Inc. (2025) 110 Cal.App.5th 899.)

Labor Code § 2802 doesn’t apply to public employers. Applies Stone v. Alameda Health Sys. (2024) 16 Cal.5th 1040 to hold that business expense requirements found in Labor Code § 2802 do not apply to public employers absent explicit inclusion. Instead, public employees must look to MOUs or other statutes (but not Labor Code § 2802) for reimbursement of work-related expenses, including remote-work costs. (Krug v. Bd. of Trs. of the Cal. State Univ. (2025) 110 Cal.App.5th 234.)

Indemnity under Labor Code § 1781 attaches after arbitration. The Court held that a subcontractor can seek indemnity under Labor Code § 1781 from a higher-tier contractor for prevailing wage liability even when the underlying liability was established via arbitration, because a confirmed award has the same effect as a judgment. The Court further held that Labor Code § 1784, enacted in 2014 and effective January 1, 2015, does not apply retroactively to public works contracts executed before that date. (Nabors Corporate Servs., Inc. v. City of Long Beach (2025) 108 Cal.App.5th 540.)

Apprenticeship regulations upheld. The Court upheld DIR apprenticeship regulations requiring apprentices on public works to perform only work within their approved training program, and departs from Henson v. C. Overaa & Co. (2015) 238 Cal.App.4th 184 to the extent it suggests a contrary result. The Court confirmed the Apprenticeship Council’s authority to narrowly define permitted apprentice work and to enforce those limits, effectively increasing the risk for contractors who use apprentices flexibly on public works projects. (Associated Gen. Contractors of Cal. v. Dep’t of Indus. Relations (2025) 108 Cal.App.5th 243.)

Fee recovery permitted despite losing Berman hearing. The Court held that a plaintiff who loses at a Berman hearing but then prevails in the trial de novo is entitled to fees and costs under Labor Code §§ 218.5, 226, and 1194. The de novo proceeding is treated as an “action,” not just an administrative appeal governed by Labor Code § 98.2(c). The decision reinforces the risk of fee exposure for employers that insist on de novo trials after Berman proceedings. (Villalva v. Bombardier Mass Transit Corp. (2025) 108 Cal.App.5th 211.)

FMCSA preemption applies retroactively. The Court of Appeals acknowledges FMCSA preemption, expressly rejecting the Second District’s approach in Garcia v. Superior Court (2022) 80 Cal.App.5th 63, and instead aligning with the Ninth Circuit’s Valiente v. Swift Transp. Co. of Ariz., LLC (9th Cir. 2022) 54 F.4th 581, 584–87. The Court held that the FMCSA’s 2018 Preemption Decision under 49 U.S.C. § 31141 bars current enforcement of California meal and rest rules for property-carrying drivers subject to federal hours-of-service, regardless of when the underlying conduct occurred. In other words, courts may no longer enforce those rules in cases involving covered drivers. Whether the particular drivers here fall within the federal hours-of-service regime is a fact issue for the trial court on remand. (Dieves v. Butte Sand Trucking Co. (Dec. 11, 2025, C099631)..

PAGA Cases

Statute of limitations and individual violation requirement. The Court held that the one-year PAGA limitations period applies to the plaintiff’s own violations, which are a necessary component of any PAGA action. A plaintiff cannot rely solely on violations suffered by others within the limitations period. The Court followed Leeper v. Shipt, Inc. (2024) 107 Cal.App.5th 1001, and rejected Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533, deepening the split. (Williams v. Alacrity Solutions Grp., LLC (2025) 110 Cal.App.5th 932.)

Pre-Viking PAGA carve-outs defeat individual arbitration. The Court held that a pre-Viking River arbitration agreement carving out “representative PAGA claims” bars arbitration of all PAGA claims, including any “individual” component. The Court read the carve-out based on the parties’ understanding at the time (PAGA treated as indivisible) and follows Mondragon v. Sunrun Inc. (2024) 101 Cal.App.5th 592.) Employers cannot retroactively exploit Viking River through ambiguous carve-outs and must deploy clear drafting in future agreements. (Ford v. The Silver F, Inc. (2025) 110 Cal.App.5th 553..

No intervention right for competing PAGA plaintiffs. The Court applied Turrieta v. Lyft, Inc. (2024) 16 Cal.5th 664 to hold that a PAGA plaintiff with overlapping claims has no right to intervene or vacate another plaintiff’s PAGA settlement. The Court denied intervention under Code of Civil Procedure § 387 and motions to vacate under Code of Civil Procedure § 663. The case confirms that first-filed/first-settled PAGA actions have a powerful preclusive effect and that competing plaintiffs are essentially sidelined. (Moniz v. Adecco USA, Inc. (2025) 109 Cal.App.5th 317.)

Strategic pleading may avoid PAGA arbitration. The Court held that arbitration of an “individual” PAGA claim cannot be compelled where the complaint expressly pleads only a representative PAGA claim. There is nothing individual to send to arbitration. The Court expressly disagrees with and disapproves Leeper v. Shipt, Inc., deepening the split over whether every PAGA case inherently includes an arbitrable individual claim. (Rodriguez v. Packers Sanitation Servs. (2025) 109 Cal.App.5th 69.)

“Headless” PAGA allowed (now de-published). The Court described and allowed so-called “headless” PAGA claims where the representative plaintiff did not seek penalties for their own violations, only for co-workers, so long as the plaintiff was an “aggrieved employee.” The decision is no longer citable due to review and de-publication. The Supreme Court has deferred briefing pending Leeper. The case provides important context for where the Court may go on PAGA standing and “headless” configurations. (CRST Expedited, Inc. v. Superior Court (2025) 112 Cal.App.5th 872. review granted & opinion de-published, S292005 (Cal. Sept. 17, 2025).)

Prior PAGA Settlements have preclusive effects. The Court affirmed judgment on the pleadings dismissing a standalone PAGA case based on claim preclusion from a prior global PAGA settlement involving overlapping claims. The Court distinguishes LaCour v. Marshalls of Cal., LLC (2023) 94 Cal.App.5th 1172 and underscored that subsequent PAGA plaintiffs can be bound by earlier settlements if their claims fall within the prior release and agency notice. (Brown v. Dave & Buster’s of Cal., Inc. (Cal. Ct. App. 2d Dist. Nov. 19, 2025) 2025 Cal. App. LEXIS 750.)

FEHA Claims

Plaintiffs need not apply for position to state age discrimination claim. The Ninth Circuit reversed summary judgment on an ADEA/FEHA age discrimination claim, holding that older employees didn’t need to apply for an unadvertised promotion if the employer failed to post it, and that ageist comments and deviation from standard procedures could be evidence of pretext for discrimination. In reversing, the Court emphasized that skipping job postings and a relatively small age gap (around 9 years) could support a bias claim. (Caldrone v. Circle K, 24-1432 (9th Cir. Oct. 3, 2025).)

Employment decisions based on immigration must establish decision was necessary to comply with federal immigration law. In a writ proceeding challenging the University of California’s policy of refusing to hire undocumented students who lack federal work authorization, the Court of Appeal held the policy facially discriminates based on immigration status and violates FEHA, absent proof that such discrimination is required by federal immigration law. Relying on 2 Cal. Code Regs. § 11028(f)(3), the court rejected UC’s attempt to justify the policy solely on the basis of litigation and enforcement risk. (Munoz v. Regents of the Univ. of Cal. (2025) 113 Cal.App.5th 466.)

Participation in interactive process is not an admission that employee is disabled. The Court affirmed summary judgment for a school district in a COVID-era remote-work dispute, holding that its return-to-office, hybrid-work, and its COVID-related in-person work and vaccine-related decisions were discretionary disease-control measures immunized by Government Code § 855.4. The Court also held that the plaintiff failed to show a FEHA-qualifying disability or adverse employment action where she received multi-year hybrid accommodations and later voluntarily retired. The Court clarified that an employer’s participation in the interactive process is not an admission that the employee is disabled, because treating it as such would discourage employers from engaging in that process (Allos v. Poway Unified School District (2025) 112 Cal.App.5th 822.)

Denial of post-employment disability retirement benefits is not an adverse employment action. Harbor patrol officer injured on duty alleged FEHA disability discrimination based solely on the District’s denial of his CalPERS disability retirement application. The Court affirmed summary judgment for the District, holding that denial of post-employment disability retirement benefits is not an “adverse employment action” under FEHA because it does not materially affect job performance or opportunities for advancement. The Court also held that FEHA disability protections apply only to “qualified individuals” who can perform the essential functions of their job with or without accommodation. Because the plaintiff conceded he could not perform those functions, he could not prevail on his FEHA claim. The Court further indicated that challenges to disability-retirement determinations must proceed via administrative mandamus, and the unavailability of FEHA fee-shifting does not render mandamus an inadequate remedy. (Lowry v. Port San Luis Harbor Dist. (2025) 109 Cal.App.5th 56.)

No fees under Labor Code § 1102.5 after “same-decision” defense. Jury found that unlawful retaliation under Labor Code § 1102.5 was a contributing factor, but the County proved the same-decision defense under Labor Code § 1102.6, so the plaintiff recovered nothing. Reversing a substantial fee/cost award, the Court held that a whistleblower has not brought a “successful action” under Labor Code § 1102.5(j) when the employer establishes the same-decision defense and the plaintiff obtains no relief, and therefore is not entitled to attorney’s fees. The Court further held the County was the prevailing party under Code of Civil Procedure § 1032 because neither side obtained relief, so the plaintiff also could not recover costs. (Lampkin v. County of Los Angeles (2025) 112 Cal.App.5th 920.)

FEHA fee reductions and heightened scrutiny split (review granted). A Los Angeles County Fire Department captain prevailed at trial on FEHA retaliation and failure-to-prevent claims and a Labor Code § 1102.5 whistleblower claim after being removed as a training captain for complaining that a female recruit should have been terminated under academy standards. The jury awarded $450,000. Plaintiff sought $735,310 in attorney’s fees (including fees on fees), supported by detailed billing records. The trial court (1) reduced the lodestar to reflect lower associate/paralegal rates consistent with counsel’s declaration, and (2) then imposed a 30% across-the-board reduction on the adjusted lodestar, citing “unreasonable padding,” “duplicative” work, and unnecessary trial time caused by counsel’s questioning style, resulting in a fee award of $455,546. The Court of Appeal affirmed the 30% across-the-board reduction and the fee award under the traditional abuse-of-discretion standard, expressly rejecting “heightened scrutiny” for across-the-board percentage cuts that had been imported from federal § 1988 case law in Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24 and Snoeck v. ExakTime Innovations, Inc. (2023) 96 Cal.App.5th 908, and instead aligned with Morris v. Hyundai Motor America (2019) 41 Cal.App.5th 24 in holding that California appellate courts continue to give very deferential review to fee awards, including percentage “haircuts.” (Cash v. County of Los Angeles (2025) 111 Cal.App.5th 741, review granted, S291827 (Cal. Aug. 20, 2025).)

HR response to off-site allegations may trigger liability. The Court of Appeal held that a coworker’s off-site, off-hours sexual advances weren’t “work-related” enough to be imputed to the employer under FEHA. But the employer’s response was actionable: HR’s mockery and refusal to act could itself contribute to a hostile work environment. (Kruitbosch v. Bakersfield Recovery Services (Sep. 8, 2025) F087809.)

Labor

No Superior Court injunction to pause ALRB MSP certification proceedings. The employer sued in Kern County Superior Court seeking to stay ongoing ALRB Majority Support Petition (MSP) proceedings and mount a facial due-process challenge to Labor Code § 1156.37. The Regional Director concluded the UFW presented 327 valid authorization cards out of 640 employees and the Board certified the UFW, triggering a duty to bargain. The employer alleged union misconduct, including misrepresentations and tying signatures to a $600 payment already due. The trial court granted a preliminary injunction (and overruled demurrers), reasoning that “substantial” constitutional claims supported writ review. The Court held that certification isn’t a “final order” subject to immediate judicial review. Instead, the statute funnels review later through the ULP process. The “Leedom v. Kyne” pathway to earlier review remains extraordinarily narrow, largely limited to where the agency acts in excess of its delegated powers and contrary to a specific provision in the Act. The Court rejected the employer’s argument that “substantial constitutional claims” do not confer jurisdiction. The Court also rejected the employer’s position that the ALRA’s Mandatory Mediation and Conciliation scheme deprived employers of review of MSP certification, since the MMC statute specifically authorizes judicial review of a final order issued by the ALRB. (Wonderful Nurseries, LLC v. Agricultural Labor Relations Board F088515 (Cal. Nov. 25, 2025).)

SB 399 captive audience law enjoined. A federal district court preliminarily enjoined California’s “captive-audience” law, SB 399 (Lab. Code § 1137), holding it is preempted by the NLRA and is a content-based regulation of speech that can’t withstand strict scrutiny. (CalChamber v. Bonta, E.D. Cal. (Sept. 30, 2025).)

What we’re watching (California Supreme Court 2026)

“Headless” PAGA. Employers should track Leeper v. Shipt (published Court of Appeal opinion; review granted), addressing whether a plaintiff can maintain a representative PAGA case without pleading an individual Labor Code violation (and related arbitration sequencing). (Leeper v. Shipt, Inc., S289305 (review granted Apr. 16, 2025; 107 Cal.App.5th 1001).)

Following Leeper are a number of PAGA cases waiting for the outcome.

Williams v. Alacrity Solutions Group, LLC, S291199 (review granted Jul. 9, 2025; 110 Cal.App.5th 932). Court of Appeals held that the one-year PAGA limitations period must be satisfied as to the plaintiff’s own violations. Plaintiff cannot bootstrap timeliness solely off co-workers’ violations.

Rodriguez v. Packers Sanitation Services, Ltd., S290182 (review granted May 14, 2025; 109 Cal.App.5th 69). Court of Appeals allowed a “representative-only” PAGA pleading to evade individual arbitration.

CRST Expedited, Inc. v. Superior Court, S292005 (review granted Sept. 17, 2025; 112 Cal.App.5th 872, depublished). Fifth District allowed “headless PAGA” (no penalties for the named plaintiff, only for co-workers).

Osuna v. Spectrum Security Services, Inc., S291614 (review granted Jul. 30, 2025; 111 Cal.App.5th 516). Another PAGA standing/pleading case.

Rounding. Are employers permitted to use neutral time-rounding practices to calculate employees’ work time for payroll purposes? See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889 holds that an employer may utilize a time rounding policy as long as it was “fair and neutral on its face” and was used in a way that did not result, over a period of time, “in failure to compensate the employees properly for all the time they have actually worked. Multiple California courts have cited See’s Candy favorably since Camp v. Home Depot U.S.A., Inc., S277518 (review granted Feb. 1, 2023; 84 Cal.App.5th 638)

Arbitration. Whether a form employment arbitration agreement required as a condition of hire is unenforceable due to unconscionability. (Fuentes v. Empire Nissan, Inc., S280256 (review granted Aug. 9, 2023; 90 Cal.App.5th 919).

Fuentes is the lead case for additional arbitration cases evaluating unconscionability.

Basith v. LAD Carson-NM LLC, S280258 (review granted Aug. 9, 2023; 90 Cal.App.5th 951).

Rodriguez v. Packers Sanitation Services, Ltd., S290182 (also above in the PAGA cluster). Likely sits at the intersection of PAGA arbitration sequencing and the “individual vs. non-individual” structure that Leeper will resolve.

Attorneys’ fees (FEHA). Does an across-the-board percentage “haircut” to a FEHA fee request trigger any form of heightened appellate scrutiny? Did the trial court commit reversible error by imposing a 30% across-the-board reduction after already adjusting rates? (Cash v. County of Los Angeles, S291827 (review granted Aug. 20, 2025; 111 Cal.App.5th 741.)

Wrongful termination / defamation. Whether a terminated employee may maintain a defamation claim against a former employer when the alleged defamation forms part of the reasons for the termination. (Hearn v. Pacific Gas & Electric Co., S289581 (review granted May 14, 2025; 108 Cal.App.5th 301)

Public Sector Retirement Benefits. Whether a CERL retirement board (LACERA) can create classifications and set salaries for its own staff, and whether the county board of supervisors must adopt those classifications/salaries in its ordinances, in light of Prop. 162 and CERL vs. county civil-service powers. (Los Angeles County Employees Retirement Assn. v. County of Los Angeles, S286264 (review granted Oct. 16, 2024; 102 Cal.App.5th 1167)

Whether accrued-leave cash-outs beyond annual caps are excluded from “compensation earnable” under CERL for purposes of calculating retirement benefits. (Ventura County Employees’ Retirement Assn. v. Criminal Justice Attorneys Assn. of Ventura County, S283978 (review granted Apr. 17, 2024; 98 Cal.App.5th 1119).

Key Federal Developments Affecting California Employers

Title VII: no “special” evidentiary hurdle for majority-group plaintiffs. The Supreme Court held Title VII does not impose a heightened “background circumstances” requirement on majority-group plaintiffs. (Ames v. Ohio Dep’t of Youth Servs. (U.S. June 5, 2025) No. 23-1039, slip op. at 1–2.)

FLSA exemptions: preponderance standard. The Supreme Court held the employer’s burden to prove an FLSA exemption is preponderance of the evidence (rejecting the clear-and-convincing standard). (E.M.D. Sales, Inc. v. Carrera (U.S. Apr. 15, 2025) No. 23-217, slip op. at 5–7..

Non-competes: federal rulemaking collapses, but California remains the main event. The FTC publicly stated that the federal noncompete rule is no longer in effect after being set aside by a federal court. Non-competes remain largely unenforceable in California, and employers were required to notify employees about void non-compete agreements by February 14, 2024.

DOL 2024 overtime final rule is dead. In 2024, a District Court in Texas vacated the DOL rule that would have increased the salary basis portion for the executive, administrative, and professional exemptions to $1,128 per week. The DOL initially appealed the decision, but on April 24, 2025, the DOL filed a motion to hold the pending appeals in abeyance, noting the agency is reconsidering the rule. California employers must still contend with the higher salary requirements under California law.

Continued NLRB instability. The D.C. Circuit held the President could remove members of the NLRB without cause, deepening governance uncertainty and quorum disruptions. This federal volatility is part of the practical backdrop for California’s AB 288 “PERB backstop” model.

Circuit Split on NLRA Remedies. The Ninth Circuit in NLRB v. North Mountain Foothills Apartments (Oct. 28, 2025) held employers have no Seventh Amendment jury right in ULP cases, even when the Board seeks Thryv make-whole, because the remedy is equitable and status-quo-restorative. Meanwhile, the Fifth Circuit in Hiran Management v. NLRB (Oct. 31, 2025) held that Thryv “foreseeable pecuniary harms” must be vacated as beyond § 10(c), which authorizes only equitable relief (cease-and-desist, reinstatement, back pay/restitution) and not full compensatory/consequential damages for “foreseeable” downstream losses. Until resolved, in Ninth Circuit venues, assume broad make-whole (plus reinstatement, back pay, tax gross-up, etc.)

Action Checklist

• Auditing policies and handbooks to address new notices, leave, bias training, and victim-protection requirements.
• Review contracts, offer letters, reimbursement, and mobility-related agreements for repayment and clawback triggers to align with the new stay-of-pay provision.
• Review and update arbitration agreements to ensure compliance with the newest developments.
• Update personnel and training record practices to capture the information now required under SB 513.
• Revisit pay transparency and pay equity practices to align with SB 642’s and prepare for broader pay data reporting under SB 464.
• Audit tip pools and credit-card tip practices for SB 648 timing/records and enforcement exposure.
• If using screening or interviewing ADS tools, meet with vendors to ensure compliance, implement notices and appeal paths, and set 4-year retention protocols.
• Refresh NLRA response playbooks in light of NLRB governance churn and California’s AB 288 overlay.
• Prepare to issue 45-day notices under AB 339 to public agency employee organizations before RFPs or renewing/extending contracts for services performed by bargaining units.