Did WinCo Misclassify Their Janitors as Contractors?

In recent news, three janitors filed a lawsuit claiming WinCo misclassified them as independent contractors when they should have been treated as WinCo Foods employees. The proposed class action (filed in Los Angeles County, July 2026 and later removed to federal court) asks a court to decide whether WinCo Foods and its cleaning subcontractor, TEC Services, owe the janitors the wages, breaks, and paid sick leave California law guarantees employees.

Case: Delgadillo et al. v. WinCo Foods, LLC, et al.

Original Court: Los Angeles County Superior Court

Original Case No.: 26STCV23144

Current Court: U.S. District Court for the Central District of California

Federal Case No.: 2:26-cv-09736

While no court has yet adjudicated the plaintiffs’ claims in this lawsuit, the case raises a question thousands of California workers face every year: what happens when a company calls you a contractor? And pays you like one?

What Is the WinCo Janitor Lawsuit About?

The lawsuit names two defendants, WinCo Foods and TEC Services, a company that, according to its website, provides janitorial cleaning to more than 1,000 supermarkets in 30 states. According to Supermarket News, which obtained a copy of the complaint, the janitors allege they were classified as independent contractors instead of employees. The suit claims they were not paid minimum wage or overtime, were denied sick leave, and did not receive meal and rest breaks.

The complaint also alleges the companies failed to keep accurate time and payroll records and never gave the workers itemized wage statements. Instead of pay stubs, the workers reportedly received a direct deposit every two weeks.

The suit follows a year-long investigation by the Maintenance Cooperation Trust Fund, a watchdog group. One of its findings was that janitors often stayed past their scheduled shifts to finish assigned tasks but were paid only for the hours on the schedule.

Who Filed the Lawsuit Against WinCo and TEC Services?

Rita Delgadillo, Efigenia Preciado, and Gloria Flores brought the case on behalf of themselves and other cleaning workers. They want to represent anyone who has worked as a janitor at a WinCo store in California during the past four years. Their attorneys say they believe at least 40 people in Southern California belong to that group, with more elsewhere in the state.

The plaintiffs are asking for damages, restitution, an accounting of what they were owed, statutory penalties, declaratory and injunctive relief, and attorneys’ fees and costs.

How Are WinCo and TEC Services Responding?

WinCo told Supermarket News that it is committed to fair and lawful treatment of workers in its stores and that it intended to address the allegations through the legal process. The publicly available reporting reviewed for this article does not include a substantive response from TEC Services.

The plaintiffs’ legal argument rests on California’s legal definition of employee and contractor. For most California worker-classification questions, the ABC test starts with the presumption that a worker is an employee unless the hiring entity can establish all three required conditions making them an independent contractor. Under that rule, a company can treat someone as a contractor only if it shows the worker is 1) free from the company’s control, 2) does work outside the company’s usual business, and 3) is independently in business offering similar services to others. The janitors say they meet none of those conditions: the company controls the work, cleaning is part of routine store operations, and the janitors do not provide similar services to other companies. WinCo initially responded to the suit by reiterating its policy to treat employees lawfully and fairly, but didn’t discuss any specific allegations because the case was still pending. However, they have since filed an answer to the complaint and, on August 31, 2026, removed the case from Los Angeles County Superior Court to the U.S. District Court for the Central District of California. 

What Has the Court Decided So Far?

The case remains at an early stage. The court has not certified a class or decided whether the plaintiffs or other janitors were misclassified. The litigation may involve jurisdictional issues, discovery, class-certification proceedings, motions addressing the merits, trial, or settlement before those questions are ultimately resolved.

Why Does the WinCo Case Matter to California Employees?

This case was filed in California, and many workers across the state face similar situations. Janitorial work is particularly relevant to this issue because California regulators have repeatedly investigated subcontracting arrangements in the industry for alleged misclassification and wage-and-hour violations. California has also adopted laws that can impose wage liability on qualifying businesses that obtain workers through labor contractors.

Another common issue is time worked past the end of a scheduled shift. California requires employers to pay for all hours worked, and a posted schedule is not a substitute for a real-time record. A worker who finishes assigned tasks after the shift ends is owed pay for that time.

The suit also names both a store operator and its cleaning contractor. Workers placed through a third party sometimes assume no one is responsible when their pay comes up short. Note: In some situations, California law can hold more than one company responsible for unpaid wages.

Frequently asked questions:

Q: What does it mean to be misclassified as an independent contractor?

A: Being misclassified as an independent contractor means a company designates a worker as a separate business owner rather than an employee. Nonexempt employees generally receive protections including minimum wage, overtime where applicable, meal and rest periods, and wage statements, and eligible California employees may also be entitled to paid sick leave. If someone is labeled a contractor but legally qualifies as an employee, misclassification can result in those protections being denied.

Q: How does California decide whether someone is an employee or a contractor?

A: In California, the law presumes workers are employees and expects the hiring entity to prove otherwise. To prove a worker is not an employee, the company must show the worker is free from the employer’s control, performs work outside the company’s usual business, and is independently established in that kind of work. A job title or a signed contractor agreement does not settle the question.

Q: Do I have to be paid for work I finish after my scheduled shift?

A: Yes, California requires employers to pay for all hours worked, including time spent finishing assigned tasks after a scheduled shift ends.

Q: Does this lawsuit mean WinCo broke the law?

A: The question has not yet been decided as of the writing of this article. The lawsuit contains allegations, and WinCo has said it will review the claims and respond through the legal process. The plaintiffs will need to prove their claims in court unless the case is resolved by a settlement agreement before the court makes a finding.

Do you have questions about filing a California class action or an independent contractor misclassification claim? Please contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Knowledgeable employment law attorneys are ready to assist you in various law firm offices in Riverside, San Francisco, Sacramento, San Diego, and Los Angeles.

Can a Staffing App Be Your Joint Employer in California?

Felipe Rangel worked banquet shifts at San Diego venues (the USS Midway, Estancia La Jolla, Continental Catering) through app-based staffing platforms that promised flexible work in the hospitality industry. According to his lawsuit, those platforms and the company behind them failed to pay him for all hours worked, denied him proper breaks, stripped him of tip money he was owed, and refused to give him his employment records when he asked. The result is a PAGA representative action that puts the joint employer liability of three companies squarely before the court.

Case: Felipe Rangel v. Labor Force Group LLC, Qwick, Inc., and GigPro Inc.

Court: Superior Court of California, County of San Diego, North County Division

Case No.: 26CU029294N

Get to Know the Plaintiff: Rangel v. Labor Force Group

Felipe Rangel worked as a banquet server through the defendants' gig staffing platforms from September 2024 to November 2025, picking up shifts at various San Diego-area hospitality venues. His paystubs (attached to the LWDA notice included with the complaint) show wages issued through the Qwick platform under the legal employer name Labor Force Group LLC, at hourly rates of approximately $21 to $22 per hour. Rangel brings this action in his representative capacity as a private attorney general under California's PAGA on behalf of himself and all other current and former aggrieved employees who worked for the defendants in California during the PAGA period, which begins March 20, 2025.

Get to Know the Defendants: Rangel v. Labor Force Group

Labor Force Group LLC is a Delaware limited liability company that serves as the legal employer entity behind the Qwick and GigPro platforms, staffing workers to various employers in California's hospitality industry, including in San Diego County. Qwick, Inc. and GigPro Inc. are Delaware corporations that operate app-based platforms connecting gig workers with hospitality shifts. The complaint alleges that all three companies functioned as joint employers of Rangel and other aggrieved employees, collectively controlling their schedules, pay, work assignments, and conditions of employment.

What Are the Allegations in the Complaint?

This is a PAGA-only representative action; meaning Rangel seeks civil penalties on behalf of the State of California and all aggrieved employees, not individual damages for himself. According to the complaint and the LWDA notice included as Exhibit 1, the alleged violations include:

● Defendants required Rangel to work while clocked out during meal breaks; on many days he received no meal break at all, and when breaks were provided, he was required to remain on duty or on call

● Defendants required Rangel to work more than four hours without a 10-minute rest period; when rest breaks were given, he was required to remain on premises, on duty, and on call, and was not paid premium wages for missed breaks

● Defendants required pre-shift and post-shift work (including sending and receiving work-related communications) for which Rangel was not paid

● Defendants failed to include non-discretionary performance bonuses in the regular rate of pay when calculating overtime, double time, meal and rest period premiums, and sick pay

● Defendants manipulated the timekeeping system to record fictitious 30-minute meal breaks, creating the appearance that breaks were provided when they were not, and also engaged in unlawful rounding of time records to avoid paying all hours worked

● Defendants failed to reimburse Rangel and other workers for required use of their personal cell phones for work-related tasks

● Defendants issued inaccurate itemized wage statements that failed to reflect total hours worked, applicable hourly rates, overtime hours, and premium pay, in violation of California Labor Code Section 226

● Defendants failed to timely pay wages during employment and failed to pay all final wages upon separation

● Defendants made unlawful deductions from pay without authorization or notice to employees

● Defendants sent workers home with less than half their scheduled shift without paying required reporting time pay under IWC Wage Order regulations

● Defendants required workers in the chain of service to forfeit portions of their gratuities to managers and non-service employees who had no role in earning the tip, in violation of California Labor Code Section 351

● Defendants failed to produce personnel and payroll records in response to two certified mail requests Rangel sent in December 2025 and February 2026

What Was the Main Question in the Case?

Two central legal questions drive this case. The first is whether Labor Force Group, Qwick, and GigPro are joint employers of the workers who accept shifts through their platforms, meaning all three companies share liability for the alleged wage and hour violations. The second is whether the defendants' systematic practices (including timekeeping manipulation, failure to include bonuses in the regular rate of pay, and improper handling of gratuities) constitute willful and knowing violations of the California Labor Code that support the assessment of PAGA civil penalties across an entire workforce of aggrieved employees.

Why Does the Case Matter to California Employees?

This is a California case, filed in San Diego County under California law, and its outcome directly affects California workers; particularly those in the hospitality sector who work through gig economy staffing platforms.

● California's PAGA allows a single aggrieved employee to act as a private attorney general and seek civil penalties on behalf of the state and all other workers who suffered similar violations — this case shows how one banquet server's complaint can create legal accountability for an entire workforce

● The joint employer theory at the heart of this case is significant: app-based platforms that control workers' schedules, pay, and assignments cannot necessarily escape California's wage and hour laws by pointing to a separate legal entity that issues the paycheck

● The tip pooling allegations directly affect thousands of California hospitality workers; under Labor Code Section 351 gratuities belong solely to the service employees who earned them, and employers are prohibited from routing any portion to managers or non-service staff

● The regular rate of pay violations (specifically, excluding non-discretionary bonuses from overtime and premium pay calculations) mirror the exact theory at issue in Martinez v. Sierra Lifestar (F089576), a 2026 California appellate decision confirming that employers must include nondiscretionary bonuses when calculating overtime

A Brief Overview of the Case

● September 2024: Felipe Rangel begins working as a banquet server through the defendants' Qwick and GigPro platforms at San Diego-area hospitality venues

● November 2025: Rangel's employment with the defendants ends

● December 23, 2025: Rangel's counsel sends the first certified mail request to defendants for personnel and payroll records; defendants do not respond within the required 30 days

● February 24, 2026: A second certified mail request is sent; defendants still fail to provide the records or pay the $750 statutory penalty

● March 20, 2026: Rangel's counsel files the required PAGA notice with the Labor and Workforce Development Agency and serves defendants by certified mail, detailing all alleged Labor Code violations

● May 26, 2026: After 65 days pass without the LWDA notifying Rangel of intent to investigate, Rangel files the representative action complaint in San Diego Superior Court, North County Division (Case No. 26CU029294N)

● Ongoing: The case is in active litigation in San Diego Superior Court

FAQs: Rangel v. Labor Force Group

Q: What is PAGA, and how is it different from a class action lawsuit?

A: California's Private Attorneys General Act allows an aggrieved employee to file a representative lawsuit on behalf of the state to seek civil penalties for Labor Code violations. Unlike a class action, which seeks damages for individual workers, PAGA actions seek civil penalties — 35% distributed to affected workers and 65% paid to the state. Importantly, PAGA claims generally cannot be compelled to private arbitration.

Q: What does "joint employer" mean, and why does it matter in a gig economy case?

A: When two or more companies jointly control a worker's schedule, wages, duties, and working conditions, California law can hold all of them responsible as joint employers for wage violations. In this case, Rangel alleges that Labor Force Group, Qwick, and GigPro each exercised control over his employment, making all three jointly liable for the alleged violations — regardless of which company's name appeared on his paycheck.

Q: Can a gig economy app be held responsible for California wage violations?

A: It can, depending on the degree of control the platform exercises over the worker. California courts look at the economic reality of the working relationship — if a platform controls schedules, pay rates, assignments, and work conditions, it may be found to be an employer regardless of how the relationship is labeled on paper.

Q: Are tips and gratuities protected under California law?

A: Yes. California Labor Code Section 351 provides that gratuities paid by customers are the sole property of the employees who earned them. Employers are prohibited from keeping any portion of a gratuity, and tip pools may only distribute tips among employees who are actually in the chain of service that produced the gratuity. Routing tips to managers or non-service employees violates California law.

Q: What is a PAGA notice, and why must it be filed before a lawsuit?

A: Before filing a PAGA action, the employee must send written notice to the LWDA and to the employer describing the specific Labor Code violations and the facts supporting them. The LWDA has 65 days to notify the employee whether it plans to investigate. If no notice of investigation is received within that window, the employee may file suit. This step ensures the state has an opportunity to enforce the law before private enforcement begins.

Q: What should I do if I work through a gig staffing app and believe my employer violated California wage laws?

A: Keep records of your shifts, hours worked, pay received, any tips you were required to share, and any missed or interrupted breaks. Document any off-the-clock work, including pre- and post-shift communications. Then speak with a California employment attorney as soon as possible to evaluate whether you may have a PAGA or other wage claim — and whether your staffing platform may share responsibility as a joint employer.

Are You a Hospitality or Gig Worker Whose Wages May Have Been Shorted?

Rangel v. Labor Force Group LLC raises critical questions about wage accountability in California's growing gig economy hospitality workforce, where app-based platforms may be blurring the lines of employer responsibility. If you believe you have experienced unpaid wages, missed breaks, tip pooling abuse, off-the-clock work, or other wage violations through a gig staffing platform or otherwise, contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Knowledgeable employment law attorneys are ready to assist you in law firm offices located in Riverside, San Francisco, Sacramento, San Diego, Los Angeles, and Chicago.

Can California Truck Drivers Sue for Retaliation After Reporting Food Safety and Workplace Safety Violations to Cal/OSHA?

Yes — and a $52 million jury verdict against Sysco Riverside sends a clear message that California employers who punish workers for reporting dangerous conditions do so at extraordinary financial risk. Five former Sysco drivers and yard workers spent years raising safety concerns their supervisors dismissed. When those workers were pushed out or fired, they took their case to a Los Angeles jury — and won.

Case: Williams, et al. v. Sysco Riverside, Inc.

Court: Superior Court of California, County of Los Angeles

Case No.: 20STCV18692

Get to Know the Plaintiffs: Williams v. Sysco Riverside

The five plaintiffs in this case are former employees of Sysco Riverside, Inc. who worked primarily as drivers and yard personnel — also called spotters — at Sysco's food distribution facility in Riverside, California. Several had worked there for years; a few for decades. Over the course of their employment, they raised concerns about what they believed were dangerous and illegal practices at the Riverside facility. Those concerns included workplace safety issues in the yard, food safety violations in how perishable products were handled, and time and record-keeping practices they believed were unlawful. After raising those concerns (including reports to Cal/OSHA and the California Labor Commissioner) the plaintiffs allege they were subjected to a campaign of hostility and retaliation that ultimately ended their employment.

Get to Know the Defendant: Williams v. Sysco Riverside

Sysco Riverside, Inc. is a subsidiary of Sysco Corp. (NYSE: SYY), one of the nation's largest food distribution companies, which sells and delivers food products to restaurants, healthcare facilities, stadiums, and other commercial operations throughout the country. The Riverside facility where the plaintiffs worked serves customers throughout the Southern California region. Sysco maintained at trial that the plaintiffs' terminations or departures were based on legitimate performance-related reasons, including alleged misconduct, poor performance, sleeping on the job, and theft of company time. The jury rejected that defense.

What Are the Allegations in the Complaint?

The plaintiffs' complaint, filed in Los Angeles County Superior Court in May 2020, alleged whistleblower retaliation and wrongful termination under California Labor Code Section 1102.5. According to the complaint and trial testimony:

● Managers required drivers to speed through the yard at unsafe speeds, creating dangerous conditions for workers on foot

● Perishable food products were being loaded into trailers at temperatures of up to 70 degrees — well above the required safe threshold of 40 degrees — creating food safety risks for consumers and legal violations

● Pre-trip safety inspections were required to be completed in 20 minutes, which the plaintiffs said was impossible without bypassing actual safety checks, forcing them to use "cheat sheets" to create the appearance of compliance

● Workers reported these concerns internally and also reached out to regulators including Cal/OSHA and the California Labor Commissioner

● After raising these concerns, the plaintiffs were subjected to what they described as a culture of intimidation: increased scrutiny, hostile treatment by supervisors, and adverse employment actions

● Workers who didn't resign under the pressure were eventually fired — for reasons the plaintiffs say were manufactured

● The jury agreed with the plaintiffs on all counts, returning a verdict of $31 million in compensatory damages and $21 million in punitive damages — a total of $52 million — in favor of all five plaintiffs

What Was the Main Question in the Case?

The central legal question was whether the plaintiffs were terminated or forced out because they reported illegal and dangerous practices or whether the terminations were based on the legitimate performance and misconduct reasons Sysco asserted. The jury sided entirely with the plaintiffs, finding that the workers' safety reports (not their performance) were the real reason Sysco pushed them out. The $21 million punitive damages award reflected the jury's finding that Sysco's conduct warranted punishment beyond compensatory damages; though Sysco announced plans to challenge the verdict.

Why Does the Case Matter to California Employees?

This is a California case decided by a California jury under California law, and it stands as one of the most significant whistleblower verdicts in the state's recent history.

● California Labor Code Section 1102.5 protects employees who report what they reasonably believe are violations of law to supervisors, coworkers with investigative authority, or external agencies — including Cal/OSHA and the Labor Commissioner

● The verdict demonstrates that California juries take whistleblower retaliation seriously, particularly when the safety concerns involve risks to both workers and the public

● Workers in transportation, food distribution, logistics, and related industries should know that reporting violations to regulators is legally protected activity — and that retaliation for those reports can result in substantial liability for the employer

● The case also illustrates the importance of documenting safety concerns in writing before they escalate: written reports to supervisors, Cal/OSHA, and the Labor Commissioner create a clear record that protected activity occurred

A Brief Overview of the Case

● Over multiple years during employment: Five Sysco Riverside drivers and yard workers raise concerns about unsafe yard conditions, food safety violations, and falsified safety records; concerns are raised internally and reported to Cal/OSHA and the California Labor Commissioner

● After reporting: Plaintiffs allege a culture of retaliation develops — hostile treatment from supervisors, increased scrutiny, and adverse employment actions

● Some plaintiffs resign under pressure; others are terminated for reasons they characterize as pretextual

● May 15, 2020: Plaintiffs file their lawsuit in Los Angeles County Superior Court (Case No. 20STCV18692) alleging whistleblower retaliation and wrongful termination

● November 2025: Case proceeds to jury trial before a Santa Monica Superior Court jury

● February 2026: Jury returns a unanimous verdict of $31 million in compensatory damages and $21 million in punitive damages — a total of $52 million — in favor of all five plaintiffs; Sysco announces plans to challenge the verdict

FAQs: Williams v. Sysco Riverside

Q: What is Labor Code Section 1102.5 and what does it protect?

A: California Labor Code Section 1102.5 is the state's primary whistleblower protection law. It prohibits employers from retaliating against employees who disclose information about what they reasonably believe is a violation of state or federal law, or a violation of or noncompliance with a local, state, or federal rule or regulation.

Q: Can I report safety concerns to Cal/OSHA and be protected from retaliation?

A: Yes. Reporting workplace safety concerns to Cal/OSHA is a protected activity under California law, and an employer may not retaliate against you for making that report. If you experience adverse employment actions after reporting to Cal/OSHA, you may have a claim for whistleblower retaliation.

Q: What counts as retaliation under California whistleblower law?

A: Retaliation includes any adverse employment action taken because you engaged in protected activity: reporting a violation, cooperating with an investigation, or refusing to participate in conduct you believe is illegal. Adverse actions include termination, demotion, reduced hours, hostile treatment, and constructive discharge.

Q: What is constructive discharge?

A: Constructive discharge occurs when an employer makes working conditions so intolerable — often through sustained hostility or retaliation — that a reasonable employee would feel compelled to resign. In California, constructive discharge can be treated the same as wrongful termination for purposes of retaliation claims.

Q: Do I need to prove the safety violations actually existed to win a whistleblower retaliation claim?

A: Not necessarily. Under California law, you generally need to show that you had a reasonable belief that a violation occurred and that you reported it in good faith — not that the violation was ultimately proven. The focus is on your protected activity and the employer's retaliatory response.

Q: What should I do if I have reported a safety concern at work and believe I am facing retaliation?

A: Document everything: when you made the report, who received it, any written communications, and the timing and nature of any adverse treatment that followed. File your reports in writing whenever possible so you have a paper trail. Filing deadlines for retaliation claims apply, so getting legal advice sooner rather than later can make a real difference.

Were You Retaliated Against for Reporting a Safety or Legal Violation at Work?

Williams v. Sysco Riverside demonstrates that California workers who speak up about dangerous conditions have powerful legal protections — and that juries will hold employers accountable when they choose retaliation over responsibility. If you were terminated, pushed out, or treated adversely after reporting a workplace safety or legal violation, contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Knowledgeable employment law attorneys are ready to assist you in law firm offices located in Riverside, San Francisco, Sacramento, San Diego, Los Angeles, and Chicago.

What Happens in California When Your Employer Fails to Pay Arbitration Fees on Time?

It depends on why the payment was late — and the California Supreme Court's answer to that question in Hohenshelt v. Superior Court now governs one of the most important employee protections in California arbitration law. The ruling preserves the right of employees to exit arbitration when employers willfully or grossly negligently fail to pay required fees on time, while narrowing the circumstances under which a genuinely inadvertent delay triggers that same consequence.

Case: Hohenshelt v. Superior Court of Los Angeles County (Golden State Foods Corp., Real Party in Interest)

Court: Supreme Court of California

Case No.: S284498

Get to Know the Plaintiff: Hohenshelt v. Superior Court

Dana Hohenshelt was a former employee of Golden State Foods Corp. who sued his employer for discriminatory retaliation, failure to prevent discrimination, and related employment claims under California law. Like many California employees, Hohenshelt was subject to a mandatory arbitration agreement as a condition of his employment, and the dispute was compelled to private arbitration before JAMS (the Judicial Arbitration and Mediation Service). For more than a year, the parties arbitrated the case: conducting discovery, taking depositions, submitting dispositive motions, and preparing for a hearing. As the hearing date approached, JAMS issued invoices to Golden State Foods for arbitration fees. Those fees were not paid within the 30-day window California law requires.

Get to Know the Defendant: Hohenshelt v. Superior Court

Golden State Foods Corp. is a food service distribution company. As the employer and the drafter of the arbitration agreement, it bore the legal obligation under California Code of Civil Procedure Section 1281.98 to pay arbitration fees within 30 days of the invoice due date. When Golden State failed to meet that deadline — even by a short window — Hohenshelt argued the company had materially breached the arbitration agreement and that he was entitled to withdraw from arbitration and pursue his claims in court instead.

What Are the Allegations in the Complaint?

Hohenshelt's underlying employment claims allege discriminatory retaliation and related violations of California law during his employment with Golden State Foods. The case reached the California Supreme Court not on those underlying merits, but on the critical procedural question of what happens when an employer fails to timely pay arbitration fees under California law. According to the case record:

● JAMS issued invoices to Golden State Foods in July and August 2022 for arbitration fees

● On September 30, 2022, JAMS notified the parties that all fees had to be paid by October 28, 2022, or the scheduled hearing might be cancelled

● Hohenshelt immediately filed a letter with JAMS stating he was withdrawing from arbitration under Section 1281.98, citing Golden State's failure to pay within 30 days of the original invoice date

● Golden State Foods paid all outstanding fees by October 5, 2022; before the October 28 JAMS deadline, but after the 30-day window measured from the original invoice dates

● The trial court found the payment timely because it fell within the arbitrator's extended deadline; the Court of Appeal reversed, finding any late payment triggers Section 1281.98 automatically; the California Supreme Court took up the case to clarify the law

What Was the Main Question in the Case?

Two central legal questions were resolved. First: is California Code of Civil Procedure Section 1281.98; which requires employers to pay arbitration fees within 30 days or face forfeiture of the right to arbitrate — preempted by the Federal Arbitration Act? The Supreme Court said no: the statute is not preempted and remains valid California law. Second: does any late payment by the employer automatically constitute a "material breach" triggering the employee's right to exit arbitration? The Supreme Court said no to this as well — rejecting what it called the "rigid construction" that many courts had applied and replacing it with a more nuanced standard. A late payment triggers forfeiture of arbitration rights only when it was willful, grossly negligent, or fraudulent. A genuinely inadvertent or mistaken delay may be excused. The case was remanded for fact-finding on whether Golden State's late payment met that standard.

Why Does the Case Matter to California Employees?

This ruling is directly relevant to every California employee who is currently subject to a mandatory arbitration agreement — which encompasses millions of workers across the state.

● California law gives employees a meaningful protection when employers drag their feet on paying arbitration fees: if the employer's failure to pay was willful or grossly negligent, the employee can exit arbitration and take their case to court

● The Supreme Court's ruling confirms that this protection survives federal preemption challenges — employers cannot use the Federal Arbitration Act to strip employees of this right

● For employees in active arbitration, this case is a reminder to track arbitration fee invoices and payment deadlines carefully — if your employer misses a payment deadline, you may have the right to move to court, but acting promptly and getting legal advice before taking that step is essential

● The ruling also serves as a warning to employers: intentional or grossly negligent non-payment of arbitration fees is a serious violation with significant consequences, including the complete loss of the right to arbitrate

A Brief Overview of the Case

● November 2020: Dana Hohenshelt files suit against Golden State Foods Corp. in Los Angeles County Superior Court for discriminatory retaliation and related claims

● Compelled to arbitration: The trial court sends the case to JAMS arbitration pursuant to the parties' arbitration agreement

● Over one year: The parties conduct discovery, depositions, and briefing in anticipation of the arbitration hearing

● July–August 2022: JAMS issues arbitration fee invoices to Golden State Foods; the fees are not paid within 30 days of the invoice date

● September 30, 2022: JAMS notifies parties all fees must be paid by October 28, 2022

● Shortly after: Hohenshelt files a letter withdrawing from arbitration under Section 1281.98; Golden State pays all fees by October 5 — before the JAMS deadline but after the 30-day statutory window from the original invoices

● Trial court: Finds payment timely under the arbitrator's extended deadline; denies Hohenshelt's motion to exit arbitration

● Court of Appeal: Reverses — holds Section 1281.98 is not preempted by the FAA; any late payment triggers forfeiture; Hohenshelt may exit arbitration

● August 11, 2025: California Supreme Court (Case No. S284498) issues its decision: confirms Section 1281.98 is not preempted by the FAA; rejects rigid automatic forfeiture rule; holds forfeiture applies only to willful, grossly negligent, or fraudulent non-payment; case remanded for further fact-finding

FAQs: Hohenshelt v. Superior Court

Q: What is California Code of Civil Procedure Section 1281.98 and what does it require?

A: Section 1281.98 requires the party that drafted an employment or consumer arbitration agreement — typically the employer — to pay any required arbitration fees within 30 days of the invoice due date. If that deadline is missed, the drafting party is deemed to have materially breached the agreement, and the employee may elect to withdraw from arbitration and pursue their claims in court.

Q: What happens if an employer misses the 30-day arbitration fee deadline?

A: Under the Supreme Court's ruling in Hohenshelt, the employee may be able to exit arbitration and proceed in court — but only if the employer's failure to pay was willful, grossly negligent, or fraudulent. A genuinely inadvertent or mistaken late payment may be excused by the court.

Q: What should I do if my employer misses an arbitration fee payment deadline?

A: Act promptly and speak with an employment attorney before taking any steps. The right to exit arbitration under Section 1281.98 is an election that must be made carefully, and your attorney can evaluate whether the circumstances of the late payment support a motion to withdraw.

Q: Does the Federal Arbitration Act override California's arbitration fee payment rules?

A: No. The California Supreme Court held in Hohenshelt that Section 1281.98 is not preempted by the FAA. California's arbitration fee payment protections remain valid and enforceable.

Q: If I am compelled to arbitration, how do I track whether my employer is paying fees on time?

A: Once arbitration begins, request confirmation from the arbitration service provider (such as JAMS or AAA) when invoices are sent and when payments are received. Keep copies of all invoices and payment confirmations. If you receive notice that fees have not been paid, get legal advice immediately.

Q: Can an employer agree to an extended payment deadline with the arbitration provider to avoid the 30-day rule?

A: The JAMS rules and similar provider rules may allow for administrative extensions, but under California law, the 30-day statutory clock generally runs from the original invoice due date regardless of any administrative extension the arbitration provider sets. Whether a mutually agreed extension would be recognized by a California court is a fact-specific question an employment attorney can help evaluate.

Have Questions About Your Rights Under an Arbitration Agreement?

Hohenshelt v. Superior Court is a landmark ruling that preserves an important employee protection while clarifying when and how it applies. If you are in arbitration with your employer, have concerns about how your arbitration agreement operates, or want to understand your rights if fees go unpaid, contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Knowledgeable employment law attorneys are ready to assist you in law firm offices located in Riverside, San Francisco, Sacramento, San Diego, Los Angeles, and Chicago.

Does California's Whistleblower Law Protect Workers Who Reported a Violation They Didn't Fully Understand?

Yes — and a California appeals court ruling in a produce company case makes that protection explicit. An employee who acted on a good-faith, reasonable belief that his employer was breaking the law is protected from retaliation under Labor Code Section 1102.5, even if his understanding of the law turned out to be mistaken. The decision is a significant win for California workers without formal legal training who speak up about workplace violations.

Case: Contreras v. Green Thumb Produce, Inc.

Court: California Court of Appeal, Fourth Appellate District, Division One

Case No.: D085440

Get to Know the Plaintiff: Contreras v. Green Thumb Produce

Manuel Contreras worked in the sanitation department at Green Thumb Produce, Inc. While employed there, Contreras noticed that he was being paid less than coworkers who he believed were performing similar duties. Unsure of his legal rights, he took a step that most employers should applaud: he researched the issue. He contacted the California Labor Commissioner's Office, where he spoke with a deputy labor commissioner who told him there might be a violation of the California Equal Pay Act and directed him to the Labor Commissioner's website for additional information. Contreras reviewed the FAQ document posted there — which was itself incomplete and ambiguous — and formed the belief that his employer was breaking the law. He printed out the Labor Commissioner's FAQ and brought it, along with his concerns, to his employer's human resources department. Shortly after that meeting, Green Thumb terminated him, citing violations of company policy.

Get to Know the Defendant: Contreras v. Green Thumb Produce

Green Thumb Produce, Inc. is a produce company operating in California whose sanitation and production employees are subject to California's Labor Code wage and hour requirements. After Contreras reported his pay concerns to HR, the company terminated his employment. At trial, Green Thumb argued that Contreras's protection under Labor Code Section 1102.5 should not apply because his belief that the Equal Pay Act was being violated was legally mistaken — the EPA only prohibits pay disparities based on sex, race, or ethnicity, and Contreras had not alleged that his lower pay was based on any of those protected characteristics.

What Are the Allegations in the Complaint?

Contreras filed suit in Riverside County Superior Court alleging whistleblower retaliation under Labor Code Section 1102.5(b), along with additional claims. According to the complaint and subsequent proceedings:

● Contreras noticed he was paid less than coworkers performing similar work and, in good faith, believed this constituted a violation of the California Equal Pay Act

● After receiving guidance from a deputy labor commissioner suggesting a potential violation existed, Contreras presented his concerns — along with the official FAQ — to human resources

● Green Thumb terminated his employment shortly after he raised the concern, citing a company policy violation

● A jury found in Contreras's favor on all claims, awarding more than $182,000 in damages

● The trial court then granted Green Thumb's motion for judgment notwithstanding the verdict on the whistleblower claim, reasoning that because Contreras had misunderstood the EPA, he lacked a legally sound basis for his report

● The Court of Appeal reversed the trial court's ruling and restored the jury's verdict

What Was the Main Question in the Case?

The central legal question was whether Labor Code Section 1102.5(b) requires an employee to be legally correct about the alleged violation they report — or whether a reasonable, good-faith belief that the law was being broken is sufficient. The Court of Appeal held clearly that a reasonable belief is enough, and that whether a belief was objectively reasonable is a question for a jury to decide, not a matter for a judge to resolve as a question of law. The court emphasized that Contreras — a worker with a 10th-grade education — had not simply invented a concern: he had been told by a government official that there might be a violation, and he had reviewed an official government FAQ that was itself incomplete and ambiguous. A jury of his peers reviewed all of this and found his belief was reasonable. The Court of Appeal restored the jury's verdict.

Why Does the Case Matter to California Employees?

While this case was filed in Riverside County, it interprets a California statute that applies statewide — Labor Code Section 1102.5 — and its implications extend to workers across California in every industry.

● California whistleblower law is designed to encourage employees to report suspected violations without fear of retaliation — including employees who are not lawyers, who may not understand every detail of the law they believe is being broken

● The ruling confirms that the relevant standard is what a reasonable layperson in the employee's position would believe — not what a judge or attorney with legal training would conclude after careful review

● This is especially important for lower-wage workers, workers with limited English proficiency or formal education, and workers who rely on government agencies and official materials for guidance on their rights

● The decision also highlights a practical point: employees who receive incomplete or ambiguous guidance from official government sources — like the Labor Commissioner's FAQ in this case — cannot be penalized for relying on it in good faith

A Brief Overview of the Case

● During employment: Contreras notices he is being paid less than coworkers performing similar work; contacts the California Labor Commissioner's Office and is told by a deputy there may be a violation

● Contreras reports to HR: He brings his concerns and the Labor Commissioner's FAQ to Green Thumb's human resources department

● Shortly after: Green Thumb terminates Contreras's employment, citing a company policy violation

● Trial: Contreras files suit in Riverside County Superior Court; a jury finds in his favor on all claims and awards more than $182,000 in damages

● Post-trial: Green Thumb moves for judgment notwithstanding the verdict on the whistleblower claim; the trial court grants the motion, finding Contreras's legal interpretation was wrong and therefore he lacked "reasonable cause" to believe a violation occurred

● December 15, 2025: The California Court of Appeal, Fourth Appellate District, Division One (Case No. D085440), reverses the trial court, reinstates the jury's verdict, and holds that a good-faith, reasonable belief — even a legally mistaken one — is sufficient for whistleblower protection under Labor Code Section 1102.5(b)

FAQs: Contreras v. Green Thumb Produce

Q: What is Labor Code Section 1102.5 and who does it protect?

A: California Labor Code Section 1102.5 is the state's primary whistleblower protection statute. It prohibits employers from retaliating against employees who report, or who the employer believes may report, violations of state or federal law to a supervisor, another employee with authority to investigate, or a government agency. It applies to virtually all California employees regardless of industry or position.

Q: Does a California employee have to be right about the law to be protected as a whistleblower?

A: No. The Court of Appeal in Contreras made clear that Section 1102.5(b) protects employees who act on a reasonable, good-faith belief that a law was being violated — even if that belief turns out to be legally incorrect.

Q: What does "reasonable cause to believe" mean in the context of whistleblower law?

A: It means the employee's belief must be one that a reasonable person in the same circumstances — with the same information and the same level of legal knowledge — could have formed. It is not evaluated from the perspective of a lawyer or a judge. Whether a belief was reasonable is generally a question of fact for a jury to decide.

Q: Can I report a wage concern to HR and be protected from retaliation?

A: Yes. Reporting wage concerns to a supervisor or a human resources representative qualifies as protected activity under Labor Code Section 1102.5, as long as you have reasonable cause to believe a violation occurred. You do not need to report to an outside agency to be protected.

Q: What should I do if I was fired after reporting a wage or labor law concern at work?

A: Document the timeline of events: when you raised your concern, who you spoke to, what was said, and when the adverse action followed. The closer in time the termination follows the complaint, the stronger the circumstantial evidence of retaliation. Legal counsel can help you evaluate your options under Section 1102.5 and other applicable California protections.

Q: Is there a time limit for bringing a whistleblower retaliation claim in California?

A: Yes. California Labor Code Section 1102.5 claims generally have a three-year statute of limitations under Code of Civil Procedure Section 338. Other whistleblower statutes may have different time limits. Acting promptly after experiencing retaliation is important to preserve your rights.

Were You Fired for Reporting a Workplace Concern?

Contreras v. Green Thumb Produce shows that California's whistleblower protections are built for real workers — not just lawyers — and that good-faith reporting of suspected violations is protected even when the legal analysis is imperfect. If you were terminated or retaliated against after raising a concern about wages, safety, or any other workplace violation, contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Knowledgeable employment law attorneys are ready to assist you in law firm offices located in Riverside, San Francisco, Sacramento, San Diego, Los Angeles, and Chicago.

Can Your Employer Force You Into Arbitration If the Agreement Was Too Small and Blurry to Read When You Signed It?

The California Supreme Court addressed that question directly in a case involving a car dealership employee whose arbitration agreement was printed in font so small and blurry it was described as "nearly unreadable." The answer: not automatically — and the ruling reshapes how California courts evaluate the enforceability of arbitration agreements signed under rushed, high-pressure conditions.

Case: Fuentes v. Empire Nissan, Inc.
Court: Supreme Court of California
Case No.: S280256 (Los Angeles County Superior Court No. 20STCV35350)

Get to Know the Plaintiff: Fuentes v. Empire Nissan

Evangelina Yanez Fuentes applied for a job at Empire Nissan and, as part of the onboarding process, was handed an employment application packet. She was given approximately five minutes to review the entire packet before being sent to take a drug test. The packet included an "Applicant Statement and Agreement" containing a mandatory arbitration provision — approximately 900 words compressed into a few vertical inches of text in very small, blurry font, including one sentence that ran 214 words long. She was not given an opportunity to ask questions and did not receive a copy of the document after signing it. She also signed two confidentiality agreements that appeared to allow Empire Nissan to seek court remedies for certain claims, without mentioning arbitration.

After working at the dealership for approximately two and a half years, Fuentes requested an extension of her medical leave for cancer treatment. Empire Nissan terminated her employment. She filed suit for wrongful discharge and related claims. Empire Nissan moved to compel her into private arbitration based on the barely legible agreement she had signed on her first day.

Get to Know the Defendant: Fuentes v. Empire Nissan

Empire Nissan, Inc. is a California car dealership that required job applicants and employees to sign a mandatory arbitration agreement as a condition of employment. The arbitration provision at the center of this case was embedded in a multi-page onboarding packet, presented to Fuentes under time pressure, and formatted in text so small and broken that it was, in the California Supreme Court's words, "nearly unreadable." The accompanying confidentiality agreements also appeared to carve out certain claims — specifically those involving unfair competition and trade secrets — in a way that favored Empire Nissan's ability to seek judicial remedies while requiring employees to arbitrate.

What Are the Allegations in the Complaint?

Fuentes's lawsuit arose from her termination following her request for extended medical leave for cancer treatment. According to the complaint and subsequent proceedings:

• Fuentes was terminated after requesting extended medical leave to continue cancer treatment, and alleges her termination constituted wrongful discharge and related violations of California law

• She argued the arbitration agreement was unenforceable both because it was procedurally unconscionable — presented in an illegible format under severe time pressure with no opportunity to review or negotiate — and because its terms were substantively unconscionable, particularly the confidentiality agreements' apparent one-sided carve-out allowing Empire Nissan to seek judicial remedies for its own claims while requiring employees to arbitrate theirs

• The trial court found a high degree of procedural unconscionability and a low-to-moderate degree of substantive unconscionability, and denied the motion to compel arbitration

• The Court of Appeal reversed, finding illegibility only affects procedural — not substantive — unconscionability, and finding no substantive unconscionability at all

• The California Supreme Court reversed the Court of Appeal and sent the case back to the trial court for re-evaluation

• What Was the Main Question in the Case?

The Supreme Court addressed two core questions. First: does a contract's illegibility or unreadable formatting affect substantive unconscionability — meaning, does it make the terms themselves unfair? The court answered no: illegibility generally affects how a contract was presented (procedural unconscionability), not the substance of its terms. Second — and more consequentially for employees — the court held that when a contract is marked by a high degree of procedural unconscionability, courts must closely scrutinize its terms for fairness or one-sidedness. The worse the conditions under which an employee was asked to sign, the more carefully a court must examine what that employee actually agreed to. The court also held that any ambiguities in the agreement must be construed against Empire Nissan as the drafting party. The case was remanded to the trial court to re-evaluate the agreement's enforceability under this correct framework.

Why Does the Case Matter to California Employees?

This is a landmark California Supreme Court ruling that directly affects the rights of the millions of California workers who have signed arbitration agreements as a condition of employment.

• The ruling confirms that employees who were handed an illegible, nearly unreadable arbitration agreement under time pressure — with no ability to review, negotiate, or ask questions — may have strong grounds to challenge it

• The higher the degree of procedural unconscionability (rushed presentation, fine print, no negotiation), the more carefully courts must examine whether the terms of the agreement are also one-sided or unfair

• Courts in California can no longer defer to a general presumption favoring arbitration when evaluating whether a rushed, illegible agreement is enforceable — fairness to the employee matters

• The decision is relevant to anyone who has signed an employment contract, arbitration agreement, or onboarding document in the car industry, retail, hospitality, or any other sector where take-it-or-leave-it agreements are common

A Brief Overview of the Case

• Application/onboarding: Fuentes is hired at Empire Nissan and given five minutes to review an onboarding packet containing a nearly unreadable mandatory arbitration clause; she signs without being able to review it and receives no copy

• After approximately 2.5 years: Fuentes requests extended medical leave for cancer treatment; Empire Nissan terminates her employment

• Fuentes files suit: Lawsuit filed in Los Angeles County Superior Court (Case No. 20STCV35350) for wrongful discharge and related claims; Empire Nissan moves to compel arbitration

• Trial court: Denies motion to compel arbitration, finding both procedural and substantive unconscionability

• Court of Appeal: Reverses, finding only procedural unconscionability (from illegibility) and no substantive unconscionability; orders arbitration

• February 2, 2026: California Supreme Court (Case No. S280256) reverses the Court of Appeal; holds that when there is a high degree of procedural unconscionability, courts must closely scrutinize the terms for substantive unfairness; ambiguities construed against the drafter; case remanded for re-evaluation under the correct framework

FAQs: Fuentes v. Empire Nissan

Q: What is unconscionability and how does it apply to arbitration agreements?
A: Unconscionability is a legal doctrine that allows courts to refuse to enforce a contract or a contract provision that is both procedurally unfair (in how it was presented) and substantively unfair (in its actual terms). California law requires both elements to be present to invalidate a contract as unconscionable.

Q: What is procedural unconscionability?
A: Procedural unconscionability focuses on how the contract was formed — specifically, whether the weaker party had a meaningful opportunity to understand and negotiate its terms. In employment contracts, this often involves high-pressure signing conditions, illegible formatting, no opportunity to ask questions, and the take-it-or-leave-it nature of a job offer.

Q: What is substantive unconscionability?
A: Substantive unconscionability focuses on the actual terms of the contract — whether they are unreasonably one-sided or unfair to one party. In employment arbitration agreements, this can include provisions that allow the employer to go to court for certain claims while requiring employees to arbitrate all of theirs.

Q: I signed an arbitration agreement without really reading it. Can I still challenge it?
A: Possibly, depending on the circumstances. The conditions under which you signed — including whether you had time to review it, whether it was legible, whether you had a chance to ask questions, and what the agreement's terms actually say — all factor into whether it can be challenged. A California employment attorney can evaluate your specific agreement.

Q: Does the Supreme Court's ruling mean Fuentes won her case?
A: Not yet. The ruling sent the case back to the trial court to re-evaluate the arbitration agreement under the correct legal framework. The ultimate question of whether she was wrongfully terminated has not been decided.

Q: What should I look for in an arbitration agreement before I sign it?
A: Key red flags include: one-sided provisions that allow the employer to go to court for its own claims while requiring you to arbitrate; very short review times; illegible or densely formatted text; no copy provided after signing; and class action waivers that prevent you from joining a group claim against the employer.

Did You Sign an Arbitration Agreement You Couldn't Read or Couldn't Fully Review?

Fuentes v. Empire Nissan is a powerful reminder that California courts will not simply rubber-stamp arbitration agreements that were rushed, illegible, or one-sided — and that employees have real rights to challenge those agreements. If you signed an employment agreement that you believe is unfair or unenforceable, contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Knowledgeable employment law attorneys are ready to assist you in law firm offices located in Riverside, San Francisco, Sacramento, San Diego, Los Angeles, and Chicago.

When the Boss Is the Harasser: What Can a California Employee Do After Years of Sexual Harassment by a Company Owner?

A California appeals court ruling in a storage company case puts a spotlight on one of the most difficult dynamics in employment law — what happens when the most senior company officer is also the harasser, and when the employee who finally takes action finds herself facing a lawsuit from the very person who harassed her. The underlying story of 14 years of alleged sexual harassment by a company's CEO toward his own COO is one that California employees in positions of trust and responsibility need to understand.

Case: Guardian Storage Centers, LLC v. Simpson
Court: California Court of Appeal, Fourth Appellate District, Division Three
Case No.: G064847

Get to Know the Plaintiff: Guardian Storage Centers v. Simpson

Julie Simpson served as the Chief Operating Officer of Guardian Storage Centers, LLC, a position she held while working alongside the company's CEO and co-owner, John Minar. Simpson alleges that Minar subjected her to sexual harassment over the course of 14 years of employment. According to her cross-complaint, the alleged harassment escalated in the weeks before her termination, during which she was also raising concerns about the company's direction and management. Simpson was terminated, and Minar immediately sued her for breach of contract, interference with prospective economic advantage, breach of fiduciary duty, and misuse of company property. Simpson cross-complained against Guardian and Minar, alleging wrongful termination, sexual harassment over 14 years, and retaliation.

Other employees were also caught up in the fallout. Tracie Dotterer, Guardian's CFO, was terminated or constructively discharged after raising concerns about harassment and other issues at the company. Rhiana Davis and her boyfriend Gustavo Amezola also worked at the company in non-executive roles. Davis alleged she was harassed by another Guardian executive named Piccio; when Amezola complained on Davis's behalf about Piccio's conduct, he was terminated as well.

Get to Know the Defendant: Guardian Storage Centers v. Simpson

Guardian Storage Centers, LLC is a California storage company owned and operated by John Minar and his son Eric Minar. John Minar served as CEO and co-owner throughout the period at issue. The case reached the Court of Appeal not on the merits of the harassment and wrongful termination claims — those remain to be litigated — but on a significant discovery dispute involving privileged attorney-client communications that Simpson and other employees had taken from the company and shared with their lawyers.

What Are the Allegations in the Complaint?

The employment-side allegations in this case, as set out in Simpson's cross-complaint and the related complaints filed by Dotterer, Davis, and Amezola, include:

• John Minar subjected Simpson to sexual harassment over approximately 14 years of her employment as COO

• Simpson was terminated following the escalation of harassment and her raising of concerns about the company; Minar immediately filed suit against her

• Dotterer, the company's CFO, was terminated or constructively discharged after she reported harassment allegations and other employee complaints to the company's third-party payroll company, which indicated it would conduct its own investigation

• Davis alleged she was sexually harassed by Guardian executive Piccio; when Amezola complained about Piccio's treatment of Davis, Amezola was terminated

• The complaint against Guardian and its principals alleges wrongful termination, retaliation, sexual harassment, and failure to prevent harassment and retaliation

What Was the Main Question in the Case?

The Court of Appeal's published opinion focused on a critical discovery dispute: during litigation, Simpson produced emails that contained confidential attorney-client communications between Guardian's own legal counsel and company personnel. Simpson had taken these emails during her employment and shared them with her attorneys. When Guardian's counsel learned of the disclosure, they asked that the emails be returned and not used further. Instead of returning them, the employees' legal team reviewed them in depth, failed to notify Guardian initially, and indicated an intent to use them to support the employees' claims.

Guardian moved to disqualify the employees' attorneys. The trial court denied that motion, but the Court of Appeal reversed — holding the trial court abused its discretion by failing to appreciate the full scope of the prejudice caused by the disclosure and the employees' lawyers' use of the privileged communications. The attorneys were ordered disqualified from the case.

This ruling carries a vital secondary lesson for employees considering legal action: taking confidential company documents — even documents that might support your own claims — and sharing them with your attorneys can have serious legal consequences, including the disqualification of your own legal team.

Why Does the Case Matter to California Employees?

This is a California case involving California employees and California employment law, and it matters on two levels — the underlying harassment story and the practical lesson about handling employer documents.

• California law provides strong protections for employees who report and take action against sexual harassment, including at the most senior levels of a company — a CEO's rank does not exempt him from FEHA's prohibitions

• Retaliation against employees who raise harassment concerns — whether through termination, litigation, or other adverse action — is prohibited under California law regardless of the victim's position in the company

• This case illustrates that employer-initiated litigation against a former employee who filed harassment claims can itself constitute retaliation — a theory California courts take seriously

• On the document issue: employees who believe they have been harassed or wrongfully terminated should speak with an employment attorney before taking any company records, emails, or documents. Sharing privileged employer communications with your own lawyers can backfire severely, up to and including the loss of your legal team

A Brief Overview of the Case

• 14-year period: Simpson serves as Guardian's COO while allegedly enduring sexual harassment by CEO John Minar

• Approximately 6 weeks before termination: Events at Guardian escalate; Simpson raises concerns; other employees also report harassment and misconduct

• Simpson's termination: Guardian terminates Simpson; Minar immediately sues her for breach of contract and related claims

• Simpson cross-complains: Simpson files cross-complaint alleging wrongful termination, 14 years of sexual harassment, and retaliation

• Other employees sue: Dotterer, Davis, and Amezola file separate complaints alleging harassment, retaliation, and wrongful termination

• March 2024: Dotterer, Davis, and Amezola file their lawsuit following their terminations

• Discovery dispute: During litigation, Guardian learns Simpson produced privileged attorney-client emails to her lawyers; Guardian's counsel requests return; employees' attorneys decline and indicate intent to use the documents

• Trial court: Denies Guardian's motion to disqualify the employees' attorneys

• March 24, 2026: The Court of Appeal, Fourth Appellate District, Division Three, reverses the trial court, ordering disqualification of the employees' legal team; the underlying harassment and wrongful termination claims continue in the litigation

FAQs: Guardian Storage Centers v. Simpson

Q: Can an executive-level employee like a COO claim sexual harassment under California law?
A: Yes. California's Fair Employment and Housing Act protects all employees from sexual harassment regardless of their position in the company. A CEO, owner, or other high-ranking executive who harasses a subordinate — even a senior executive — is subject to liability under FEHA.

Q: Is it legal for an employer to sue a former employee who has filed a harassment complaint?
A: Employer-initiated litigation against a former employee can constitute retaliation under California law if it is filed in response to the employee's protected activity — including reporting harassment or filing a lawsuit. California courts have recognized retaliatory lawsuits as a form of adverse action subject to anti-retaliation protections.

Q: Why were the employees' lawyers disqualified in this case?
A: The Court of Appeal found that the employees' legal team received confidential attorney-client communications belonging to Guardian, reviewed them in depth without promptly notifying Guardian, and indicated an intent to use them. This conduct was found to constitute a breach of professional responsibility standards that warranted disqualification.

Q: Can I take my employer's documents or emails to support my harassment claim?
A: This is one of the most important practical questions in employment cases. California law does not give employees an unlimited right to take confidential employer documents, even if those documents would support a harassment or retaliation claim. Before taking any company records or sharing employer communications with your attorney, get legal advice about what is permissible in your specific situation.

Q: What should I do if my employer files a lawsuit against me after I report harassment?
A: Document the timeline carefully — particularly the relationship between your protected activity (the harassment report or complaint) and the timing of the employer's lawsuit. Contact an employment attorney immediately. Retaliatory litigation by an employer is prohibited under California law and may itself form the basis of additional legal claims.

Q: Do harassment protections apply when the harasser is also part-owner of the company?
A: Yes. Ownership of a company does not exempt an individual from personal liability for sexual harassment under California law. Harassers can be held individually liable alongside the company itself.

Facing Harassment or Retaliation From Someone in Power at Your Company?

Guardian Storage Centers v. Simpson is a reminder that no title or ownership stake places a person above California's prohibition on sexual harassment — and that employees at every level of a company deserve protection. If you have experienced sexual harassment, wrongful termination, or retaliation from a company owner, officer, or senior executive, contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Knowledgeable employment law attorneys are ready to assist you in law firm offices located in Riverside, San Francisco, Sacramento, San Diego, Los Angeles, and Chicago.