California Employment Law Court Decisions: August and September 2026 Roundup
By Aidin Ghavimi, Managing Attorney ·
A plain-English roundup of 11 California and Ninth Circuit employment decisions from August and September 2026, covering arbitration, sexual harassment, whistleblowers, and background checks.
Employment Law
5 min read
California employment law is shaped as much by court decisions as by statutes. In August and September 2026, the California Courts of Appeal, the Ninth Circuit, and the California Supreme Court issued a series of rulings that affect workers' rights, especially when employers try to move cases into arbitration. Here is a plain-English summary of eleven decisions, with links to our more detailed guides.
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Arbitration Decisions
Morales v. Superior Court (Fourth Dist., Div. One, Aug. 3, 2026)
An employee's claims for disability discrimination, failure to accommodate, failure to engage in the interactive process, FEHA and CFRA retaliation, and wrongful termination were not covered by an arbitration clause limited to disputes about the employment agreement. Because those rights exist independently of the contract and cannot be waived, the court directed the trial court to deny arbitration.
Cluck v. GEO Secure Services (Fourth Dist., Div. One, Aug. 3, 2026)
Reading an arbitration agreement together with a confidentiality agreement signed at hiring, the court found the arrangement unconscionable: the employee's likely claims went to arbitration while the employer could take its likely claims to court in Florida. The court refused to sever the unfair terms because the lack of mutuality was central to the agreement.
Mitchell v. Lilac Solutions, Inc. (First Dist., Div. Four, Aug. 20, 2026)
Defendants who filed cross-claims and pursued extensive discovery before moving to compel arbitration waived their right to arbitrate. Applying the California Supreme Court's 2024 Quach decision, the court focused only on the defendants' conduct, and rejected their argument that a pending sexual harassment claim justified the delay.
Hickenbottom v. Medical Solutions (Fourth Dist., Div. One, Aug. 26, 2026)
After its first motion to compel arbitration failed because it relied on a superseded agreement, the employer filed a second motion based on a different agreement without the declaration that Code of Civil Procedure section 1008(b) requires for renewed motions. The trial court properly refused to hear it, and the appeal was dismissed because the denial of a renewed motion is not appealable.
Read more: Can your employer force you into arbitration in California?
Sexual Harassment and the EFAA
Ding v. Structure Therapeutics, Inc. (9th Cir., Aug. 19, 2026)
An employee who discovered a basis for a sexual harassment claim during arbitration could leave arbitration and file in court under the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. The Ninth Circuit found no waiver because she did not know of the claim when she started arbitration, and held that a sex-based hostile work environment claim under FEHA can qualify even when the harassment is not sexual in nature. One judge dissented.
Read more: Sexual harassment and forced arbitration in California
Discrimination Investigations
Civil Rights Dept. v. Space Exploration Technologies (Second Dist., Div. Three, Sept. 9, 2026)
The court ordered SpaceX to comply with a Civil Rights Department subpoena investigating sex discrimination and retaliation claims by a former employee who lived and worked in Washington. The CRD's power to investigate is separate from whether FEHA ultimately applies, and the court rejected a categorical rule that FEHA can never cover employees working outside California.
Read more: Does California employment law protect workers outside California?
Whistleblower Retaliation
Chaudhry v. State of California (First Dist., Div. Four, Sept. 28, 2026)
In a question of first impression, the court held that individual supervisors are not personally liable for retaliation under Labor Code section 1102.5. The employee's complaint adequately alleged compliance with the Government Claims Act for one theory of her section 1102.5 claim, but her California Whistleblower Protection Act claim failed for lack of administrative exhaustion.
Read more: Can you sue your supervisor for whistleblower retaliation?
Public Employee Discipline
Cal. Highway Patrol v. Cal. State Personnel Bd. (Second Dist., Div. Eight, Aug. 5, 2026)
The State Personnel Board reduced a CHP officer's dismissal to a one-year unpaid suspension after sustaining charges that included dishonesty over several hours of unearned overtime and incomplete vehicle records. The courts upheld the Board's penalty. Judges reviewing administrative discipline cannot substitute their own judgment, and a reasonable decision-maker could conclude the misconduct, while serious, did not show a propensity for dishonesty.
Erwine v. Westbrook (9th Cir., Sept. 11, 2026)
A former tribal police officer could pursue federal civil rights and state tort claims against tribal officials over his termination. Tribal sovereign immunity did not apply because he sued the officials in their individual capacities for damages paid by them personally. The officials were not entitled to absolute immunity for supervision and termination decisions, which are administrative functions, and the tribe was not a required party. The case returns to the district court to consider qualified immunity.
Background Checks
Askins v. CRST Expedited, Inc. (Review Granted, Sept. 2026)
The California Supreme Court granted review of a First District decision holding that FCRA plaintiffs in California state court can recover statutory damages for willful violations without proving a concrete injury. That decision conflicts with the Fifth District's Limon v. Circle K Stores, and the Supreme Court will resolve the split.
Read more: Employment background check rights in California
What These Decisions Mean for California Workers
- An arbitration agreement is not the end of the story. Its scope, its fairness, and the employer's own conduct all matter.
- Sexual harassment claims, including sex-based hostility that is not sexual in nature, may stay in court under the EFAA, but the right should be raised promptly.
- Working outside California does not automatically remove FEHA protection when the employer and its decisions are tied to California.
- Whistleblower retaliation claims under section 1102.5 run against the employer, and public employees must satisfy claim-filing and exhaustion requirements.
This roundup is general information, not legal advice about your situation. Several of these cases may be subject to further review.
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