Before we break for the year, I wanted to pass along a wee bit of wisdom I have gleaned from some of my cases in 2025. After all, that is in part why I do these Briefings – to share the lessons I learn from the cases and situations I handle. It feels like the PAGA Reform is starting to push down the value of these cases, which is great. But that just means that employment lawyers are looking to other creative avenues to level up their lawsuit value. Let’s make resolutions for 2026 to thwart them.
This year has brought us some great results for our clients. In nearly all these cases, our clients did it right. They went above and beyond on their wage and hour compliance. They updated their employee handbook and kept the signed acknowledgments and arbitration agreements. They walked through sticky employee situations carefully, with our guidance, and documented each step. They managed their workforces with clarity and respect.
When you do your jobs, you make it easy, and frankly a pleasure, to do ours. But let’s break down a few examples where things didn’t go to plan this year and learn from them.
Conduct those Audits!
Knowing the rules won’t magically absolve you from litigation, but it goes a long way. If you don’t know the rules, it is liability waiting to happen. It is that sinkhole in the middle of the street that you don’t even know to avoid.
You need to conduct your own audits to confirm that your systems are running correctly, and your employees are operating within expected parameters. But before you can rely on those systems, you need to design them properly. And you don’t know what you all don’t know. Opposing counsel are starting to press more arcane issues, as employer compliance increases on the obvious ones.
For example, we are starting to see more opposing attorneys reviewing other company employment agreements to look for clauses inconsistent with arbitration. Many of your employees have signed NDAs or other agreements not drafted by us, which have standard clauses reserving your right to seek court action in California. I wrote about this a few months ago. Other attorneys include these clauses in agreements without thought, but they contravene our attempts to mandate arbitration. With the PAGA reform, opposing attorneys are trying harder than ever to get their class action lawsuits to stick. Throwing out an arbitration agreement is the best way to do that.
I have a seven-page checklist I review with my clients to examine every legal nook and cranny of your operations to ensure your compliance with these complicated federal and state laws. It only takes an hour or two to go through it. It’s cheap insurance.
Document, Document, Document!
I did an entire MMB just on this topic, but it’s always an issue. As I said above, as the benefits of the PAGA reform kick in, employee side attorneys are starting to pivot to other types of claims. In many cases, we are starting to see claims of wrongful termination, sexual harassment, or discrimination brought alongside PAGA suits or in place of them altogether.
For every actual lawsuit we handle, we probably receive 25 demands for personnel records from lawyers. It is not an exaggeration to say I am reviewing the contents of our clients’ personnel files daily. That allows me to see what you all are doing, or not doing, with respect to documenting personnel actions, including terminations.
In almost every case, you could all do better.
I don’t need fancy forms. I just need documentation. “Documentation” can include copies of text messages, emails, and memos of meetings. Ideally it would include warnings signed by the employee and a termination letter, restating the full context and reason for the termination. If the employee quit, write a letter confirming that and the reason that was provided you. If the employee is a no-show, no-call, document that. If the employee left after making a complaint and the investigation is still pending, document that, and then document the results TO the employee after their departure. The statute of limitations for discrimination and harassment claims is now three years, and we sometimes see lawsuits or document demands coming years after an employee action was taken. If there is nothing in the file to reflect that conversation your manager had with an employee back in 2022, it didn’t happen. And now that manager may well be gone. And now it is the former employee’s story against – silence.
Document it all. Now.
Be Cautious with Disability and Leave Issues
The federal and state laws surrounding disability and leaves of absence issues are the most complicated in the employment law arena. Often the lawyers, mediators, arbitrators, and judges don’t fully understand the nuances. We have even seen staffing companies get it wrong. But that does not help us. Just because they get confused does not mean we can. And these employees will ALL use ChatGPT to educate themselves, which may or may not be accurate. But it will be lengthy. And we will need to respond and DOCUMENT.
I’ve written several articles in the past several years regarding managing this challenging area of the law. I am not going to regurgitate all of that here. I strongly encourage you to at least glance at my past Briefings for the legal particulars.
But my messiest client lawsuits this year did not involve wage and hour claims. They focused on instances where employees were terminated for either taking off too much time or not returning after a leave. And more frequently, courts are handing us decisions which favor allowing the employee to stay out on leave, even well beyond the legal requirements.
I am considering holding a seminar just on these intricate issues next year. But in the meantime, let’s all be a little more careful and document that much better. And always reach out to us when addressing these circumstances.
Stop Losing Personnel Files and Signed Forms!
And now that you have gotten so good at documentation, please, don’t misplace it. I cannot tell you the number of lawsuits we have handled this year where clients lost entire files, misplaced signed arbitration agreements or meal waivers, or were missing records of texts between employees and managers.
It’s heartbreaking for me to work with you all and see you struggle so hard to comply with these rules and keep handbooks updated, only to be stuck with a class action or individual court claim because you lost the signed arbitration agreement. I can’t stress this enough because it keeps happening. I am up nights worrying about you all losing documents.
Let’s be better about this in 2026 so we all sleep better.
Be Careful with Remote Employees
We’ve also run into issues this year involving the conflict of laws which apply to out of state employees – either employers applying the wrong law or being stuck applying California law because they gave a California handbook to an out-of-state employee.
We can prepare out-of-state handbooks for your employees in other states. But we can’t do that unless we know where your employees are working. This is the time of year to fix all that. I attached yet another flyer and invoice for our handbook update program.
Conduct Manager Training and Reach Out Early and Often
You have all heard me say – you are only as strong as your weakest manager. These laws and rules are not intuitive. And we can’t expect your managers to know them unless we teach them. Train your managers. I can help with this as well. I conduct most manager meetings online and in about an hour. I know I am not cheap. But one lawsuit, even responding to one demand letter, will cost far more. Finally, reach out for help when you need. It’s what we do. It’s what I do, in particular. I no longer try cases so I can be available for those daily advice and counsel chats. I just passed my 40th anniversary of being admitted to the California bar. I have been practicing employment law all those 40 years. Make use of my old age and experience. Keeping you all on the right path is why I still practice law as I look to turn 66. I definitely don’t do it to fight with all these opposing attorneys.
