Legislation and Contract Law in the Classroom

My impression is that most non-lawyers think that “the law” is legislation so law students are often surprised at the first-year curriculum which is mostly focused on common law.  Most 1L contracts courses pay scant attention to how contracts (and the drafting of contracts) are affected by legislation (other than the UCC, of course).  But when law students become lawyers, they must pay attention to legislative changes and may be required to change their clients’ contracts to conform to changes in the law.

Along those lines, there are several new laws that might be of interest to readers of this blog.  Not only should they prompt lawyers to revisit their existing contracts, they might freshen the usual classroom discussion and provide some more context to the role of the common law and its relationship with contract doctrine.  I plan to discuss the new laws in the classroom as part of a focus on “practical lawyering skills” (or, my take on it, which is, what a lawyer should do with the knowledge learned in law school).

                Privacy policies - The California Consumer Privacy Act officially became effective January 1^st   but there was a six-month grace period that expired on July 1.  The Act gives consumers more power over their data and how it is used, including the right to opt-out of data collection.  In my experience, some companies, especially the credit agencies, need to do a lot more to make it easier to opt-out. Some companies make it very easy – just a click on their website – but the ones that should make it easy, such as the big three credit reporting agencies, make it very difficult by asking for a mailed-in request and all your personal information, including SSN.  Companies should revisit their TOS and privacy policies to make sure that they comply with the act – and preferably, make it easy for consumers to opt-out and/or request what data the company is collecting.

                Employment Contracts and Handbooks – I like to discuss how lawyers often ignore their standard form contracts and policies, and how doing so may affect enforceability and interact with interpretation, illegality, bad faith, and unconscionability (especially when they conflict with legislative changes).  For example, lawyers should revisit and consider whether to update their contracts and handbooks in light of these recent changes:

                Minimum wage - California’s minimum wage is currently $12/hour (for employers with 25 or fewer employees) and $13/hour (for employers with 26 or more employees), eventually reaching $15/hour by 2022; effective July 1, 2020, some counties and cities are moving toward that goal more quickly, including Berkeley and San Francisco ($16.07/hour) and Los Angeles ($14.25 or $15.00/hour). 

                Family Leave – Unlike the federal government, California has a paid family leave which Gov. Newsom extended from six to eight weeks, effective July 1, 2020. 

                Gig workers – Under a recently enacted law, the test for determining whether a worker is an independent contractor or an employer broadens the requirement of “independence” for the independent contractor so that the worker is both free to figure out how to do the work as well as not economically dependent upon the company for a paycheck – and the employer is not dependent upon the worker for survival (okay, that’s just my super quick description of the “ABC” test).  Earlier this pandemic season, the California Attorney General, Xavier Becerra, and the City Attorneys of Los Angeles, San Diego and San Francisco sued Uber and Lyft for misclassifying their drivers as independent contractors instead of employees. It always bears repeating to students (and clients) that a contract can only allocate rights that the parties have – it can’t attempt to change definitions that are defined by the law, meaning that even if the  agreement is titled “Independent Contractor Agreement” doesn’t mean that the relationship is one between an independent contractor and a company.

                One law that California has not enacted, but which has been enacted in other states (Kansas, Louisiana, Oklahoma) according to law firm Littler, is legislation protecting employers from liability if they act in good faith and their employees or customers are exposed to COVID-19.  These are typically pretty limited in scope and generally do not protect employers from intentional or reckless negligence.  The whole issue of waivers in the employment context is a live one that this blog will be keeping an eye on in the weeks to follow….