As of October 1, 2025, California’s Civil Rights Council regulations under FEHA hold employers liable for discrimination arising from the use of automated decision systems (ADS) in hiring.  The use of AI or other automated tools does not shield employers from liability; decisions made through such systems are treated as the employer’s own actions.  Employers must now treat software used in the hiring process like any other component of their hiring process: subject to bias scrutiny, oversight, and documentation. We broke down what these regulations mean for California employers in an earlier post — you can read it here.

Here are five key issues employers using AI or other software for the recruiting and hiring process need to understand:

1. Inventory & classify all ADS tools in your hiring stack

What to do now:

  • Map every AI, algorithmic, or rule-based tool used in recruitment (resume filters, profile matching, assessment tests, video interview scoring, targeted job ad delivery, etc.).
  • For each, document the vendor, version, data sources, update frequency, logic (if available), and how it integrates with your human decision steps.
  • Ask vendors for their anti-bias testing protocols and any audit or validation data. Confirm whether they (or you) will carry forward the onus of proof under FEHA if a disparate impact claim arises.
  • Classify tools by risk: e.g. tools that reject candidates vs. tools that rank, suggest, or surface candidates.

Why this matters:
Under the new rules, “ADS” is broadly defined — it includes any computational process that “makes or facilitates human decision making regarding an employment benefit.” Even tools that may seem benign (e.g. targeted job ads) can be covered by the new regulations.  An employer that lacks a clear inventory of its automated systems cannot credibly demonstrate oversight or accountability in an audit.

2. Conduct (or plan) bias testing + human review overlay

What to do now:

  • For each ADS, run bias/disparate impact analyses. Examine whether outcomes differ systematically by protected class (race, gender, disability, etc.).
  • Document the testing methodology (quality, efficacy, recency, scope) and your corrective actions. The regulations treat this as relevant evidence or defense in discrimination claims.
  • Ensure every ADS-enabled “decision” has a human in the loop — that is, a trained reviewer who can override, audit, or interpret algorithmic recommendations.
  • Maintain a process for reasonable accommodations when an ADS evaluation could disproportionately affect a protected group (e.g. an assessment that measures reaction time may disadvantage applicants with certain disabilities).
  • If an ADS asks puzzle/games or challenges likely to elicit disability information, evaluate whether it constitutes a “medical or psychological inquiry” (now prohibited in that context).

Why this matters:
Employers will not get a carve-out by saying AI made the decision.  If an algorithm produces adverse impact and you do not have bias testing or human intervention documented, courts or regulators may view you as negligent.  The regulations do not require mandatory testing, but lack of testing is a gap in your defense.

3. Retain audit-ready records for at least four years

What to do now:

  • Update your document retention policies: You must preserve “ADS-related records” including inputs, outputs (scores/ranks), selection criteria, audit results, vendor documentation, override logs, etc.
  • Ensure retention is for at least four years from creation or from the personnel action date — whichever is later.
  • Consider requiring vendors to supply you with audit logs, decision rationale, and transparency into their data pipeline, with contractual obligations.
  • Secure the stored data (both to protect privacy and guard against tampering) — chain of custody matters.
  • If a complaint or investigation emerges, make sure your preservation kicks in immediately (i.e. do not auto-purge relevant records).

Why this matters:
Without comprehensive, tamper-evident documentation, your risk increases significantly.

4: Revisit vendor contracts & liability allocation

What to do now:

  • Consider adding contractual clauses requiring transparency, audit rights, notification of updates, liability limitations, indemnification regarding bias or discriminatory outcomes.
  • Review if vendors represent their models have undergone anti-bias testing.
  • Understand that under FEHA’s new rules, your vendor may be treated as an “agent” whose discriminatory outputs can be attributed to you.
  • Understand contractual access to raw data, pipeline architecture, and change logs so your team (or auditors) can evaluate future risks.

Why this matters:
Employer will not be able to use a defense that “the AI vendor mishandled it.” The law contemplates third-party accountability.

5: Train and communicate internally

What to do now:

  • Train your HR, recruiting, and decision-makers on the new definitions (ADS, proxy, agent) and implications under FEHA.
  • Update your hiring policies to include steps involving ADS review, override authority, recordkeeping, and accommodation paths.
  • Consider a transparency notice for applicants (though not yet mandated under these rules) explaining that algorithmic tools may assist in screening or evaluation.
  • Monitor developments in complementary state/federal AI/algorithm law (e.g. disclosure statutes, “right to explanation” bills).

Why this matters:
Compliance depends on execution. If your people don’t understand what to watch for or override, the best policies on paper may fail in practice.

As California’s 2025 legislative session comes to a close, employers are watching Sacramento with anticipation. Governor Gavin Newsom faces an October 13, 2025 deadline to either sign into law or veto dozens of bills passed by the Legislature. Many of these bills would impose new compliance obligations on California employers, expand employee rights, and create fresh enforcement tools for state regulators.

The measures touch nearly every corner of the workplace—from wage equity and paid family leave, to AI in hiring, to industry-specific protections for hospitality, trucking, and chain restaurants. In short, the Governor’s decisions will shape how employers operate in 2026 and beyond.

The Top Five Bills We Are Watching Most Closely

1. SB 642 – Wage Equity: Would clarify the term “pay scale” to mean “the salary or hourly wage range that the employer reasonably expects to pay for the position up to hire.” It would also set the statute of limitations for Labor Code 1197.5 claims to three years and allow workers to recover wages for up to six years in pay equity claims, while extending the statute of limitations.

2. SB 590 – Paid Family Leave – Designated Person: Would allow that, starting July 1, 2028, employees to take Paid Family Leave to care for a “designated person,” defined as someone related by blood or with a family-like relationship.

3. SB 7 – No Robo Bosses Act: Would require employers using an “automated decision system” (ADS) in employment decisions to notify workers before and after use, would ban sole reliance on ADS for adverse actions, and would mandate human review in such cases. Would apply broadly and become enforceable in 2026, with civil penalties for violations.

4. AB 250 – Extended Statute of Limitations for Sexual Assault / Harassment Claims: Would allow certain sexual assault claims previously time-barred to be filed from Jan 1, 2026 to Dec 31, 2027 if a “cover-up” by an employer is alleged.

5. AB 692 – Employment Restraint of Trade Contracts: Would ban many “stay-or-pay” contracts with workers, including training repayment agreements.

Full Watch List: Other Employment (and some food-industry related) Bills Awaiting Governor Newsom’s Decision:

SB 261 – Labor Commissioner Penalties and Collections: Would require that the Labor Commissioner post on its website any unsatisfied awards against employers and would establish a civil penalty for employers that fail to pay a court judgment awarded for nonpayment of work performed.

SB 809 – Independent Contractors and Employee Vehicle Business Expense: Would clarify that owning a vehicle does not make a worker an independent contractor and would reiterate that employers must reimburse employees for using personal vehicles for work, and create a limited amnesty program for misclassified construction trucking employers.

AB 858 – Rehiring and Retention of Displaced Workers: Would extend COVID-era right-to-rehire protections for hospitality workers to Jan 1, 2027, with DLSE enforcement extended beyond 2026 for prior violations.

SB 703 – Ports: Truck Driver Independent Contractors: Would require trucking companies at the Ports of LA and Long Beach to certify compliance with tax and classification laws for employees and would mandate a reporting when 50% or more employees are replaced by independent contractors, with steep penalties for noncompliance or misrepresentation.

SB 464 – Employer Pay Data Reporting: Would increase the number of job categories (from 10 to 23) required in employer pay data reports starting in 2027, would mandate separate storage of demographic data with penalties for non-filing, and would create a civil penalty for employers who fail to submit reports to the California Civil Rights Department.

AB 1136 – Immigration and Work Authorization: Would require 5 days unpaid leave and reinstatement rights for employees involved in immigration proceedings or detention and would ban adverse actions based solely on immigration status or having been subject to immigration proceedings.

SB 294 – The Workplace Know Your Rights Act: Would require a new annual written notice (starting February 1, 2026) informing workers of their rights, including around immigration and law enforcement, and would require that an employer notify an employee’s emergency contact if arrested or detained while at work.

AB 1326 – Right to Wear A Mask: Would grant individuals the right to wear a medical-grade mask in public or at work for health-related reasons, with exceptions for safety, security, or emergency protocols.

SB 513 – Personnel Records: Would expand the definition of personnel records to include training details (e.g. certifications, skills, provider, and duration) and would require employers to track and retain them.

SB 355 – Judgment Debtor Employers: Would require, within 60 days of a final judgment being entered against an employer requiring payment to an employee or to the state, the judgment debtor employer to provide documentation to the Labor Commissioner that the judgment is fully satisfied, a certain bond has been posted, or the judgment debtor entered into an agreement for the judgment to be paid in installments and is in compliance with that agreement, with civil penalties for non-compliance.

SB 764 – Chain Restaurants: Children’s Meals: Would require that chain restaurants (20+ locations under the same name) meet certain nutritional standards (calories, sodium, fruit/veg portions, etc.), and mark healthier options plainly.

SB 68 – Food Allergens Disclosures: Would require restaurants to have written labeling under or next to each item on the menu that contains any of the top 9 allergens.

Already signed by the Governor: SB 648 – Tip Theft: Authorizes the Labor Commissioner to investigate and issue a citation or file a civil action for gratuities taken or withheld in violation of the Labor Code. This bill was signed by the Governor on July 30, 2025.

Our 4th Annual “Sign or Veto” Contest

To make this season of legislative suspense a little more fun, we invite you to participate in the 4th Annual Zaller Law Group “Sign or Veto” Contest. Here’s your chance to test your knowledge of California politics and workplace trends:

  • Review the list of key employment bills we’ve picked (with a few non-employment curveballs included).
  • Make your picks: Will Governor Newsom sign the bill into law, or exercise his veto power?
  • Submit your entry before Friday, October 10 at midnight.

Prizes:

  • Champion: Zaller Law Group Yeti cooler backpack
  • 2nd & 3rd place: Exclusive Zaller Law swag
  • All participants: Bragging rights for your California political and employment law expertise

How to Play:

  1. Register your predictions here.
  2. Submit your entry by October 10, 2025.
  3. If there are any ties, the order will be determined by time of entry with the earliest entry wining.

Winners will be announced after the Governor’s October 13 deadline!

Save the Date: Webinar on the New Laws – October 30, 2025

When: Thursday, October 30, 2025, at 10:00 a.m. PT
What: Zaller Law Group attorneys will review which new Governor Newsom signed into law, and other key employment law updates for California employers in 2026.

Register here: Click to Register for the Webinar

Quick Story:
An HR lead recently ran a simple 30-minute spot audit and uncovered two issues—meal breaks were routinely starting late at one location, and a manager at another location was unsure whether employees needed to record 10-minute rest breaks. Small corrections, but they prevented what could have escalated into a costly PAGA claim, potentially putting millions of dollars at risk in litigation.

If you haven’t pressure-tested your 2025 payroll yet, here’s a fast, focused audit you can run this week:

Your 30-Minute Payroll Spot Audit

1. Meal/Rest Timing Sweep (10 min)
Pull a week of timecards. Run a quick check and at least confirm that meal periods start no later than the end of the 5th hour. Flag any late, short, or missed breaks.
Resource for more information: Five Compliance Reminders on Meal and Rest Breaks

2. Premium Pay Check (5 min)
For each non-compliant meal or rest break, make sure a premium payment is made to the employee and that it is recorded properly on their wage statement.
Resource for more information: Five Reasons Employers Consider Voluntarily Making Premium Payments

3. Expense Reimbursements (5 min)
Spot-check mileage logs and mobile stipends. Anyone using personal phones or vehicles for work should have proper reimbursements.
Resource for more information on personal cell phones: Five Lessons from Cochran v. Schwan’s Home Services

Resource for more information on mileage reimbursement: Mileage Reimbursement Considerations

4. Wage Statement Scan (5 min)
Review paystubs for required details: gross/net wages, legal entity name, total hours and rates, overtime, and other required information under Labor Code section 226.
Resource for more information: Wage Statements: Five Issues Employers Need to Review on a Regular Basis

5. Document the Fix (5 min)
Write down what you reviewed, what you found, and what you corrected. Even a brief note in Excel or your payroll system is enough to show good faith. This log matters for demonstrating “reasonable steps” if a PAGA claim ever comes your way.

Bottom Line

Thirty minutes this week could save you from a million-dollar headache next year. Don’t wait for a claim to force your audit—get ahead now.

California employers continue to face heavy scrutiny and litigation regarding their meal and rest break practices. Since the Brinker Restaurant Group v. Superior Court decision in 2012, courts have reaffirmed that compliance is measured by strict timing rules, not just having written policies in place. Here are five key reminders on the timing requirements and related obligations for meal and rest breaks in California:

1. Timing of Breaks

Meal Breaks
The Brinker decision makes it clear:

  • First meal break must begin no later than the end of the fifth hour of work (for example, 4 hours and 59 minutes into the shift).
  • Second meal break must begin no later than the end of the tenth hour of work.

Rest Breaks

  • 10 minutes rest for shifts from 3.5 to 6 hours
  • 20 minutes for shifts of more than 6 up to 10 hours
  • 30 minutes for shifts of more than 10 up to 14 hours, and so on.

Rest breaks should generally fall near the middle of work periods “insofar as practicable.” Employers should only deviate from this principle after carefully analyzing operational needs and documenting the rationale.

2. Rules Regarding Waiver of Breaks

Meal Breaks

  • Can generally only be waived if the shift is less than 6 hours (but employers need to be careful about permitting employees to waive breaks)
  • However, as long as employers effectively allow an employee to take a full 30-minute meal break, the employee can voluntarily choose not to take the break and this would not result in a violation (but again, employers must be able to establish that the employee voluntarily waived their break, which can be difficult without the proper documentation). The Supreme Court explained in Brinker, “The employer that refuses to relinquish control over employees during an owed meal period violates the duty to provide the meal period and owes compensation [and premium pay] for hours worked. The employer that relinquishes control but nonetheless knows or has reason to know that the employee is performing work during the meal period, has not violated its meal period obligations [and owes no premium pay], but nonetheless owes regular compensation to its employees for time worked.”

Rest Breaks

  • Employees may voluntarily skip rest breaks only if they were properly authorized and permitted to take them.
  • Employers must not pressure or discourage employees from taking rest breaks.

3. Timekeeping Requirements

  • Employers must record all meal periods taken.
  • Employers are not required to record rest breaks, but must still ensure they are authorized and permitted.

4. Complaint Procedure for Missed Breaks

Even with compliant policies, employers can still be liable if they knew or should have known that employees were missing breaks.

  • Have a clear and accessible reporting procedure for employees to notify the company if they could not take a meal or rest break.
  • A documented, effective complaint process can be critical in defending against claims that breaks were not provided.

5. No Rounding Meal Periods

In Donohue v. AMN Services LLC, the California Supreme Court held:

  • Time rounding is not allowed for meal periods.
  • Meal period records must show actual, precise time taken.

Even small amounts of rounding could cut into the guaranteed 30 minutes. The Court also held that time records that show a missed, short, or late meal break create a rebuttable presumption of a meal period violation. The court explained that, “Employers can rebut the presumption by presenting evidence that employees were compensated for noncompliant meal period or that they had in fact been provided compliant meal periods during which they chose to work.”

Looking Ahead: AI-Powered Compliance Tools

The attorneys at Zaller Law Group are currently developing AI-powered compliance software designed to help employers track and enforce wage and hour compliance—with a special focus on meal and rest break rules.

This ties directly into Private Attorneys General Act (PAGA)’s 2024 reforms, which now reduce penalties for employers who can show they took “reasonable steps to comply” with the law:

  • 15% of the applicable penalties if reasonable steps were taken before receiving a PAGA notice or request for employment records
  • 30% of the applicable penalties if reasonable steps were taken within 60 days after receiving a PAGA notice

We are currently testing the software, but if you would like to join a waitlist to learn more when the software is available, submit your information here. 

Recently, while recording a podcast, I found myself talking about something I’ve been thinking about for a long time: how much harder HR is than people give it credit for.

We tend to see HR as “soft” compared to the other seats in the C-suite. CFOs, COOs, and CTOs have hard numbers and clear metrics. They work in a world where things are either right or wrong. But HR? HR lives in the gray.

And I’ve come to believe this: HR is more art than science.
That’s exactly what makes it so hard—and so undervalued.  This week’s Friday’s Five, explains why HR is so difficult (and undervalued):

1. HR Operates in the Messy Human World

Accounting and finance are governed by rules and logic. HR deals with human beings, which means emotions, personalities, conflicts, potential, and fear. There’s no formula for managing people. What worked brilliantly with one person may fail with another. It’s more like painting or composing music than solving math equations.

2. Hiring Is One of the Hardest—and Riskiest—Skills

It is widely known that highly experienced leaders are only about 50/50 when it comes to making successful hires. Why? Because interviews are theater. Candidates put forward their best selves, and your job is to see through the performance and predict how they will act under real pressure, on real teams, over real time.

That’s not a science. That’s pattern recognition, intuition, and sometimes luck—the hallmarks of art.

3. HR’s Wins Are Invisible

When HR does its job well, nothing dramatic happens. Culture is stable. People work well together. Turnover stays low. But these wins rarely show up on spreadsheets. Unlike revenue or expenses, you can’t point to a single line item that says “HR succeeded.”

HR’s impact is critical on an organization, but often invisible until it’s gone.

4. Finding the “Obvious” Is an Art

In Obvious Adams by Robert R. Updegraff, Adams becomes legendary not because he’s more analytical than everyone else, but because he sees what others overlook.

As he explains:

“Picking out the obvious thing pre-supposes analysis, and analysis pre-supposes thinking… They don’t gather all the facts and then analyze them before deciding what really is the obvious thing.”

And:

“I never stopped to think in those days whether a thing was obvious or not. I just did what occurred to me naturally after I had thought things over.”

That’s what makes it art.

It looks simple only after he says it — but seeing it requires a cultivated instinct. HR works the same way. The best people decisions rarely come from spreadsheets. They come from the hard, quiet work of observing patterns, understanding human behavior, and having the courage to trust your judgment.

5. HR Shapes the System Everyone Else Operates In

Every other C-suite role relies on having the right people in the right seats. HR creates that system. They build the culture that makes execution possible. They influence the trajectory of every hire, every promotion, every leader.

And yet—because their work is hard to quantify—they often don’t get the credit. They are judged on lagging indicators, which are often not valued until they are missing from the organization.

The Takeaway

We undervalue HR because we expect it to behave like a science, when it’s actually an art.And art is harder.

If you lead in HR—or support those who do—remember: you’re doing one of the hardest jobs in business. Just because it’s hard to measure doesn’t mean it’s not the most important.

And if you want a quick, powerful reminder of how to see the truths others miss, I highly recommend reading Obvious Adams — it’s one of the best short business books I’ve ever read, and I think every business executive should read it.

The City of Long Beach recently passed an ordinance that imposes new staffing and operational requirements on grocery and drug stores using self-service checkout (“SCO”) systems. The law, Ordinance No. ORD-25-0010, was approved on August 21, 2025, and goes into effect September 21, 2025.

For this week’s Friday’s Five, here are the five key points business owners should know and why employers need to understand the dynamics at issue here:

1. Who is Covered?

The ordinance applies to two types of retail establishments operating within the City of Long Beach:

Food Retail Establishments:

The ordinance defines Food Retail Establishments as:

“retail store that is either: (1) over fifteen thousand (15,000) square feet in size and sells primarily household foodstuff for offsite including fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods and/or prepared foods (other household supplies or products are secondary to the primary purpose of food sales); or (2) over eighty-five thousand (85,000) square feet and with ten percent (10%) of their sales floor area dedicated to the sale of non-taxable merchandise including the sale of fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods and/or prepared foods.”

Drug Retail Establishments:

The ordinance defines Drug Retail Establishments as:

“retail store that sells a variety of prescription and nonprescription medicines and miscellaneous items, including drugs, pharmaceuticals, sundries, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, prepared foods, and other merchandise.”

2. Checkout Requirements

  • If SCO stations are available, the store must also have at least one traditional staffed checkout station open at the same time.
  • SCO shall limit sales (and advertise this) to 15 items or fewer.
  • Certain items cannot be sold through SCO:
    • Alcohol and tobacco (anything requiring ID).
    • Items with theft-deterrent devices (tags, locked cases).

3. Staffing Ratios

The ordinance establishes strict staffing rules:

  • At least one dedicated employee must supervise SCO stations whenever they are in operation.
  • If more than one SCO station is open, the store must maintain a 1:3 ratio (one employee for every three SCO stations).
  • Supervising employees may not be assigned other tasks that interfere with SCO monitoring.

4. Enforcement and Penalties

  • Private right of action: Customers and employees can sue for violations.
  • Penalties start at $100 per employee, per day, escalating by $100 each day until cured, up to $1,000 per employee, per day.
  • Prevailing plaintiffs can also recover attorneys’ fees and costs.
  • The ordinance prohibits retaliation against employees who exercise their rights under this law.

5. Effective Date

The ordinance was adopted by the Long Beach City Council on August 12, 2025, approved by the Mayor on August 21, 2025, and becomes effective September 21, 2025.

My Take: A Dangerous Path for Regulating Automation

While the ordinance is framed as a measure to reduce retail theft and protect workers, it sets a troubling precedent. By mandating staffing ratios and limiting how self-checkouts may be used, the City of Long Beach is effectively regulating automation out of existence in grocery and drug retail stores.

This is dangerous for three reasons:

  1. Competitive Disadvantage: Other cities and states allow businesses to adopt new technologies to stay competitive. By imposing labor mandates on technology, Long Beach is tying the hands of local businesses while competitors in neighboring jurisdictions can modernize more freely.
  2. Policy Overreach: Instead of targeting criminal activity directly, the ordinance burdens employers with staffing requirements and liability exposure. The risk is that this type of regulation spreads to other municipalities or industries, making it harder for businesses to innovate and control costs. 
  3. May Create Additional Legal Obligations for The City: If businesses comply with these regulations but the City fails to provide adequate police presence to protect employees and property, employers may argue the City has created a legal burden for itself. Because the ordinance is explicitly tied to public safety and theft prevention, a lack of sufficient law enforcement could be framed as bad faith regulation or an unreasonable regulatory scheme, raising broader legal challenges. 

Employers should pay close attention—not only to compliance with this ordinance but also to the larger policy trend it represents.  While this ordinance currently targets grocery and drug stores, it sets a precedent for how local governments may regulate the use of automation more broadly. If this approach spreads, employers in retail, hospitality, manufacturing, and beyond could face similar mandates that drive up costs and restrict their ability to innovate.

This past week, we hosted the Prosper Forum in Amelia Island, Florida. The gathering brought together leaders from across the hospitality industry to share not only strategy and insight, but also wisdom about what it truly means to lead.

A handful of short quotes from the speakers stuck with me. They may sound simple at first, but each carries a depth that every leader—whether in hospitality, law, or any industry—can learn from.

1. “Actions speak louder than words.” – Greg Creed

It’s a cliché, but one that endures because it’s true. Teams don’t follow lofty mission statements or corporate slogans—they follow what leaders do day in and day out.

When a leader takes responsibility, shows respect, and demonstrates consistency, those actions cascade throughout the organization. On the other hand, when there’s a disconnect between what leaders say and what they do, the credibility gap grows fast. The Prosper Forum was a reminder that leadership is never abstract—it’s lived in the small, daily behaviors that set the tone for everyone else.

2. “Do the job that no one else wants to do.” – Greg Creed

This lesson resonates across industries. Leadership is often portrayed as glamorous—big speeches, important meetings, bold strategy. But the reality is that the best leaders are willing to step into the unglamorous tasks too.

When leaders roll up their sleeves—whether it’s cleaning up a mess, tackling a complex compliance issue, or handling a difficult conversation—they send a message: “I’m not above the hard work. I’m with you in it.” That kind of humility builds loyalty and trust, because teams see that leadership isn’t just about giving direction, but also about being part of the grind.

3. “Embrace the detour.” – Greg Creed

Life and business rarely unfold in straight lines. Detours can be frustrating, but they often carry hidden opportunities.

A detour might force a team to slow down and see problems differently. It might lead to a new innovation or a stronger bond among colleagues. Leaders who embrace the detour cultivate resilience—not only in themselves but in their organizations. They show that setbacks are not roadblocks, but stepping stones.

4. “As a high-level executive, your decisions are 50/50.” – Christine Barone, CEO of Dutch Bros

This was one of the most powerful lessons reinforced at the Forum that Christine mention during a panel discussion in the general session.  Then, during a webinar I was hosting from the Forum, two stories brought it to life even more for me:

Reggie Stover shared a memory from his time in the Army. While in training, his squad was ambushed. In that moment, he froze. Afterward, his general asked him what he had done wrong. Reggie admitted he had made no decision at all. The general explained that the problem wasn’t whether the decision was “right” or “wrong”—it was that he hadn’t moved forward. Leaders must make decisions, even with imperfect information. Standing still is the greater risk.

Josh Halpern, CEO of Big Chicken, echoed this lesson with a story from earlier in his career. He was tasked with choosing between two advertising agencies. Torn between the options, he asked his boss which one he should hire. His boss replied, “If I had to make the decision, I wouldn’t need you.” Josh made the call, it worked out, and later he asked which agency his boss would have chosen. The boss laughed and admitted he would have gone with the other one. The point? Leadership isn’t about finding the perfect choice—it’s about owning the decision and leading forward.

Both stories drive home that high-level leadership is about decisiveness. In reality, most executive decisions are 50/50. The key is to make the call, own it, and keep moving.

5. “So goes the leader, so goes the rest.”  – Christine Baone & “Organizations can forget how to win.” – G.J. Hart, Former CEO of Red Robin

These two insights from Christine and G.J. go hand in hand.

Leaders set the tone—if they’re energized, committed, and resilient, their teams will be too. But if they are burned out or disengaged, the organization will reflect that. At the same time, companies can lose their edge when they drift from the fundamentals of discipline, execution, and celebrating wins.

Leaders have to guard against complacency, continually reminding their teams what “winning” looks like. And they must embody the mindset they want to see: sharp, hungry, focused, and optimistic.

Closing Thought

The Prosper Forum was a powerful reminder that leadership isn’t about theory—it’s about practice. These lessons are deceptively simple: lead with action, humility, resilience, decisiveness, and a contagious example. But simple doesn’t mean easy.

As I left Amelia Island, I kept coming back to one thought: the best leaders aren’t the ones with all the answers. They’re the ones who keep moving forward, bringing their teams with them, and teaching organizations how to win again and again.

Over the summer, I like to expand my reading list into different topics. This year I discovered Rory Sutherland and his book Alchemy: The Power of Ideas That Don’t Make Sense. Sutherland is a British marketing executive and vice chairman of Ogilvy, but his insights go far beyond advertising. His book weaves together ideas from economics, psychology, evolutionary biology, and philosophy. It’s packed with practical wisdom for personal growth as well as for running and marketing a business.

While the book is full of insights on nearly every page, here are five key takeaways that I found especially relevant for employers and business leaders.

1. “If you are wholly predictable, people learn to hack you.”

Sutherland argues that the best ideas often come from unexpected places. He urges readers not to rely solely on logic, but also to leave room for chance, counterintuitive thinking, and the quirks of human psychology.

One of his fascinating examples comes from bee colonies: roughly 20% of bees ignore the “waggle dance” instructions that tell them where to find pollen. Instead, they set off in random directions, often discovering new sources of food. Without these “adventurer bees”—which I like to think of as modern venture capitalists—the hive would eventually fail once its known sources ran dry.

Takeaway: There’s risk mitigation in being unpredictable. Businesses benefit when they experiment, explore new opportunities, and avoid becoming entirely predictable.

2. Psycho-logic

Sutherland introduces the idea of “psycho-logic”:

“Logic is what makes a successful engineer or mathematician, but psycho-logic is what has made us a successful breed of monkey, that has survived and flourished over time. This alternative logic emerges from a parallel operating system within the human mind, which often operates unconsciously, and is far more powerful and pervasive than you realize. Rather like gravity, it is a force that nobody noticed until someone put a name to it.”

He points out that strict logic always leads to the same place as your competitors. The problem is that business often underestimates—and even ignores—the role of psychology in determining whether a product or service succeeds.

Takeaway: Employers and business leaders should remember that psychology, not just logic, drives customer and employee behavior.

3. Rethinking Hiring

Sutherland makes an important observation:

“[W]e are much more likely to take risks when hiring ten people than when hiring one.”

This, he argues, can naturally lead to more diversity without imposing quotas. He even says he’d interview a candidate with a “rotten” degree if that person were also the reigning under-25 UK backgammon champion. Why? Because unusual achievements signal qualities you won’t uncover by applying identical hiring criteria across the board.

Takeaway: Be wary of hiring averages. Standardized criteria produce standardized hires. Employers who take calculated risks in hiring can uncover exceptional and unexpected talent.

4. Two Types of Businesses

Sutherland describes two business models:

  1. The tourist restaurant approach – focused on maximizing profit from a single transaction.
  2. The local pub approach – focused on cultivating long-term relationships and repeat visits.

The latter model is built on trust. For example, businesses that resolve customer problems at their own expense demonstrate they are invested in long-term relationships. On the other hand, businesses that squeeze for short-term profits often come across as untrustworthy.

Takeaway: Employers should ask themselves whether they’re building for one-time transactions—or building for loyalty.

5. Why Branding Matters

Sutherland explains:

“Without the feedback loop made possible by distinctive and distinguishable petals or brands, nothing can improve.”

His example comes from Soviet factories, which were once required to produce a quota of rivets each month. Since the rivets couldn’t be stamped with the factory’s name, no one could tell which factories were producing poor-quality rivets. Over time, the incentive to care about quality disappeared – and the factories found it was easier to hit monthly quotas of rivets of poor-quality. Without names, the rivets became commodities. Once factories were required to stamp their names on the rivets, quality improved dramatically.

Takeaway: Branding provides accountability, feedback, and differentiation. Without it, quality suffers and products become commodities.

Alchemy is filled with unconventional wisdom that challenges the way we think about business and human behavior. These five lessons only scratch the surface, but they highlight the importance of embracing unpredictability, understanding psychology, taking smart risks in hiring, building long-term trust, and valuing the power of branding.

For employers, Sutherland’s message is clear: the best solutions often don’t make sense at first glance—but that’s exactly what makes them powerful.

The recent California Court of Appeal decision in Allison v. Dignity Health (June 24, 2025), involving claims over meal and rest breaks, is a reminder that class certification in wage and hour cases is not the end of the story. Even after a class is certified, it can still be decertified if evidence shows that individual issues outweigh common ones. Here are five lessons California employers should take from this important case.

1. Class Certification Is Not Set in Stone

In Allison, two registered nurses sued Dignity Health alleging missed meal and rest breaks, unpaid work time, and related claims. The trial court initially certified the class based largely on time records and a survey showing a high rate of meal-period noncompliance.

But after 19 months of discovery, the employer successfully moved to decertify the class. The Court of Appeal affirmed the decertification, showing that certification can be revisited—and reversed—if new evidence reveals that common proof won’t work for the whole group.

2. Post-Certification Discovery Can Change the Case

What led to decertification? Discovery revealed significant variations in employee experiences:

  • Some nurses voluntarily skipped or shortened breaks.
  • Timesheet entries were inconsistent and sometimes inaccurate.
  • Many employees testified that they were able to take compliant breaks.

These differences meant that the court would have to assess individual reasons for missed breaks—making a class action unmanageable. Employers should understand that thorough discovery can uncover facts that undermine the “commonality” element required for class claims.

3. Time Records Alone Are Not Enough

The plaintiffs relied heavily on time records and an expert survey to prove widespread violations. The Court of Appeal emphasized that these data sources were not conclusive:

  • Time entries can reflect voluntary choices rather than employer-caused violations.
  • Statistical surveys can be challenged for accuracy, methodology, and reliability.

The Court explained: “In Donohue, the Supreme Court held that a rebuttable presumption of liability arises when an employer’s time records show employees suffered noncompliant meal periods…. [But] it does not result in ‘automatic liability’ for employers.”

4. Employee Declarations Can Make or Break the Case

The court emphasized that testimony from employees themselves could rebut the presumption of liability. As the opinion explained:

“None of plaintiffs’ authorities bar the use of anecdotal testimony to rebut the presumption of liability….Pointing to class members’ conflicting deposition testimony, Dignity argued ‘class member testimony show[ed] wide variation of relevant experiences’ regarding meal period compliance and premium requests. For example, one RN testified that she ‘sometimes chose not to request premiums’; another testified he may have clocked in early from lunch on occasion because he ‘lost track of time’; and another RN stated she did not take a meal period on days when she wanted to go home sooner. In sum, Dignity argued ‘[n]early all of [the deponents] agreed their records were not entirely reliable indicators of when breaks were missed, late, or short because they sometimes chose to skip, shorten, or delay a meal period, or because they simply made mistakes.’”

5. The Decision Affirms Employer’s Defenses to Class Certification and Offers Guidance for PAGA Cases

The Allison decision confirms that employers can—and should—seek decertification when discovery shows that individual issues predominate. This is particularly relevant in:

  • Industries with variable work patterns (healthcare, hospitality, retail, etc.),
  • Cases relying heavily on time records without context,
  • Situations where employee choice plays a role in break practices.

While Allison itself was not a PAGA case, its reasoning also provides a roadmap for employers facing PAGA claims, since courts are increasingly scrutinizing manageability when individualized issues predominate.  By proactively documenting break compliance, training supervisors, and preserving favorable employee testimony, employers can create the evidence needed to challenge certification.

Final Thoughts

Allison v. Dignity Health is a timely reminder that wage and hour class actions cannot simply be determined based on a review of time records.  Courts will look closely at whether the plaintiff’s theory can truly be proven with common evidence—or if individual differences make a class unmanageable.

For California employers, the takeaway is clear: invest in compliance now, ensure accurate employment policies, train supervisors on wage and hour compliance, and don’t hesitate to revisit class certification if the facts support it. Allison also underscores the value of conducting robust discovery and developing evidence that highlights employee choice and variation — tools that can be decisive in defeating class certification.

Mediation is all about finding common ground. As I discussed in my prior article, Mediation in Litigation: Five Key Tips for Success, employers can approach mediation far more effectively when they understand not only what mediation is, but also the tools that may be used during the process. One of the most common — and often misunderstood — tools is called bracketing. This week’s Friday’s Five covers what bracketing is, why it’s used, and five key points for negotiating effectively with it.

1. What Bracketing Is (and Why It Matters)

Bracketing is when one party proposes a range of settlement numbers rather than a single offer.

Example: Instead of saying:

“We’ll offer $75,000,”

A party might say:

“We’ll move to a bracket of $50,000 to $150,000.”

The range itself is important, but often the midpoint is what the other side focuses on. For example, if you propose a bracket of $100,000–$200,000, the midpoint ($150,000) might be interpreted as the settlement zone you are signaling—whether you mean to send that message or not.

Bracketing can change the tone of the negotiation. Instead of fighting over whether the next offer should be $90,000 or $95,000, a bracket reframes the discussion to “are we negotiating in this general range?” That shift can open the door to resolution.

2. Why Mediators Use Bracketing

Mediators often suggest bracketing when the parties are far apart and traditional back-and-forth offers aren’t making progress. Common reasons include:

  • Signaling flexibility without commitment: Bracketing lets a party suggest a broader settlement zone without moving all the way to a specific number.
  • Resetting unrealistic expectations: If one side is anchored to an extreme number, a bracket can re-center the conversation toward a more reasonable range.
  • Testing the waters: Sometimes a mediator uses brackets to see if there’s overlap between what the parties might accept without forcing either side to commit yet.

By shifting from fixed offers to a flexible range, mediators can reduce tension and focus the discussion on zones of potential agreement rather than positional bargaining.

3. Strategies for Using Bracketing Effectively

If you decide to bracket, you need a plan. Here are some ways to use it to your advantage:

  • Control the midpoint narrative: Even though mediators sometimes say “don’t read too much into the midpoint,” experienced negotiators know that’s often exactly what the other side will do. Offer ranges that have a midpoint you can live with.
    • Example: If you want to settle around $125,000, offering a bracket of $100,000–$150,000 can steer discussions toward that zone.
  • Use bracketing to reset expectations: If negotiations are stuck in small moves, proposing a range can disrupt the “inch-by-inch” stalemate and invite more meaningful movement.
  • Make it conditional: To avoid giving away too much, you can make your bracket contingent on the other side offering their own bracket.
    • Example: “We’ll bracket at $80,000–$120,000 if you’ll come in at $100,000–$140,000.”
  • Communicate clearly with the mediator: Make sure they understand whether your bracket is a firm settlement zone or simply a testing range. Without clear communication, the mediator may present your bracket with more flexibility—or more rigidity—than you intend.

4. What to Watch Out For

While bracketing can be useful, it carries risks if not handled carefully:

  • Revealing your bottom line: If your bracket’s midpoint is close to your true walk-away number, you may tip your hand too early.
  • Perception of weakness: Offering a range that makes large concessions can signal desperation and invite the other side to push for even more.
  • Misinterpretation: Without clear framing, your bracket could be taken as your actual settlement zone, even if it was meant as a discussion tool.

Think ahead: if the midpoint becomes the focal point, are you prepared to defend or move from it?

5. When to Decline to Bracket

You’re never required to use bracketing just because a mediator suggests it. Situations where you might decline include:

  1. You’re near your last, best, and final offer. Bracketing could pressure you into revealing a range you’re not comfortable with.
  2. The facts or liability issues are still unsettled. If there’s a major dispute over legal or factual issues, negotiating numbers through a bracket may be premature.
  3. The other side is fishing for your number. If they won’t reciprocate with their own bracket, you may be giving away strategic information for free.
  4. The midpoint doesn’t work for you. If the mediator is pushing a midpoint that’s outside your acceptable range, it’s okay to walk away from the bracket discussion.

Final Thought

Bracketing can be a powerful settlement tool when it’s used strategically. The key is preparation:

  • Know your real settlement range before you start.
  • Work closely with your attorney to frame brackets that advance your position.
  • Understand that the midpoint will often be interpreted as your target—so choose carefully.

And remember: just because bracketing is offered doesn’t mean you have to use it. Only bracket when it serves your negotiation goals.