Education Matters
Education
Appellate Court Affirms Legislature’s Authority To Rename UC Hastings And Eliminate The Hastings Family Board Seat.
Serranus Clinton Hastings (S.C. Hastings) was the first Chief Justice of California and California’s third Attorney General. In 1878, S.C. Hastings sought to establish the first law school on the West Coast, and the California Legislature enacted “An Act to Create Hastings’ College of the Law, in the University of the State of California.” The Act provided that the College would be governed by an independent board of directors and that the directors would always provide a seat for an heir or representative of S.C. Hastings.
In 2017, allegations that S.C. Hastings engaged in fomenting violence and atrocities against Native Americans living in present-day Mendocino County began to emerge.
On January 1, 2023, California Assembly Bill No. 1936 went into effect, changing the name of what was formerly known as UC Hastings College of the Law to UC College of the Law San Francisco. AB 1936 also deleted section 92204 of the Education Code that previously required one member of the College’s board of directors to be an heir or representative of S.C. Hastings.
The Hastings College Conservation Committee and various individual descendants of S.C. Hastings sued the State of California and the College’s dean and directors, challenging AB 1936. The complaint sought clarification on whether the legislature had the authority to change the name of the College and remove its hereditary board seat. The Plaintiffs alleged that AB 1936 contained multiple unconstitutional provisions and breached the agreement between the State of California and S.C. Hastings and his descendants in the Act. The Plaintiffs therefore also sought injunctive relief to stop the legislature and College from implementing the alleged unconstitutional provisions of the bill, including spending taxpayer funds to change the College’s name or to eliminate the hereditary board seat.
The trial court dismissed the case. Plaintiffs appealed the decision. On appeal, Plaintiffs argued that the State entered into a complete contract with S.C. Hasting concerning the College’s establishment, name, funding, and governance; that the California Legislature set forth these terms in an agreement in its 1878 Act; and that the enactment of AB 1936 impermissibly impaired the State’s obligation under the agreement. Defendants countered that the Act was not a contract.
The appellate court first reviewed the reserved powers doctrine. The reserved powers doctrine holds that a state government may not contract away a power that is inherent to a state simply by virtue of being a sovereign. The legislative power of a state is an essential attribute. Therefore, the United States Supreme Court has held that when a state is enacting legislation that involves the public interest, its power is absolute. A state cannot contract away its right to enact legislation. Here, the court found that the college was a public institution, and the management of the school was a matter of public interest. The court therefore determined the State could not have contracted away sovereign authority to change the name of the college or to remove the hereditary board seat. The 1878 Act did not, and could not, contractually obligate the state to provide a hereditary board seat.
The Plaintiffs also alleged that by changing the College’s name and eliminating the hereditary board seat, AB 1936 constituted a “bill of attainder” and an “ex post facto” law.
A bill of attainder is “punishment” directly inflicted by the legislature on a person or specified class for an action or status taken or existing before the date of enactment. The United States Constitution prohibits bills of attainder. The appellate court found that the trial court properly dismissed the case because the bill does not punish plaintiffs, as AB 1936 did not take their property, interfere with their rights, or damage their property.
An ex-post facto law is one that retroactively alters the definition of crimes or increases the punishment for criminal acts. and is prohibited by the United States and California Constitutions. Generally, prohibitions on ex
post facto laws apply only to criminal statutes. Here, as AB 1936 is a civil law, the court found that the trial court again properly dismissed the case.
Finally, the court found that the State did not violate Article IX Section 9 of the California Constitution, requiring that the UC system be entirely independent of all political or sectarian influence, because the College’s Board invited this change and nothing in the provision prohibits the Board from requesting Legislative changes to the Act.
The appellate court held plaintiffs failed to show that AB 1936 unconstitutionally gave away power, nor that the bill imposed a punishment historically associated with a bill of attainder.
Hastings College Conservation Committee v. State of California, (Oct. 15, 2025, No. A170255) 115 Cal. App. 5th 272 [2025 Cal. App. LEXIS 665].
GOVERNMENT CLAIMS ACT
Court Holds Legislature May Extend Statute Of Limitations For Childhood Sexual Assault Suits Against Public Schools.
In 2019, the California Legislature passed AB 218, which expanded the definition of childhood sexual abuse and extended the statute of limitations for commencing civil suits. The law extended the statute of limitations by 14 years, allowing a plaintiff to bring actions within 22 years of reaching the age of majority. The bill thereby opened a window allowing plaintiffs to make claims for abuse from the 1960s, as was the case in R.L. v. Merced City School District.
Plaintiff R.L. sued Merced City School District, claiming that the District’s and its employees’ negligent acts and or omissions proximately caused his childhood sexual assault and resulted in injuries.
R.L. attended an elementary school within the Merced City School District from 1964 to 1970. R.L. alleged that during his time as an elementary school student, the District employed the perpetrator as the principal and allowed the perpetrator to have regular unsupervised contact with R.L. and his minor peers. Specifically, R.L. alleged that the perpetrator used his position to groom R.L. and his peers. He bought R.L. gifts, including a bike and clothing, and drove R.L. to school. R.L. alleged that at age seven, when R.L. was in first or second grade, the perpetrator began to sexually assault him at school.
R.L. alleged that the perpetrator would lock his office door and sexually assault R.L. in his office. R.L. further alleged that the faculty, and in particular the secretaries and administrative office staff, either knew or suspected the perpetrator’s sexual assault of minor students.
R.L. raised four causes of action: (1) negligence; (2) negligent hiring, retention, and supervision of an unfit employee; (3) negligent supervision of a minor; and (4) negligent failure to warn, train, and educate.
The District filed a demurrer, arguing that R.L.’s causes of action must be dismissed for failure to comply with the Government Claim Requirement of Government Code sections 911.2 and 945.4. The District further argued that AB 218’s significant changes to Government Code section 905 violated the gift clause.
The superior court entered an order sustaining the District’s challenge to the sufficiency of the complaint without leave to amend the complaint. The order states that R.L.’s causes of action failed to comply with the Government Claim Requirements. The District Court further stated that “legislation changing the statute of limitation for an offense did not alter the deadline for filing a claim against a public entity.”
R.L. appealed the superior court’s decision, arguing that it erroneously sustained the District’s demurrer in light of AB 218, which revives claims that did not satisfy the Government Claims Act. The District argued that AB 218’s retroactive waiver of the claims presentation
requirement for these claims violated Article XVI, section 6 of the California Constitution, more commonly known as the gift clause.
The gift clause states that “the legislature shall have no power … to make any gift or authorize the making of any gift, or any public money or thing of value to any individual.” The gift clause denies the legislature the right to make direct appropriations of public money for private purposes. This prevents the legislature from giving public money to individuals from general considerations of charity or “some moral or equitable obligation.” However, if the money is for a public purpose, the appropriation is not a gift even though private persons are benefited.
The gift clause prohibits the legislature from creating any liability or cause of action where none existed before. The appellate court, therefore, had to determine if the defendant’s alleged acts or omissions violated a duty or obligation that was already imposed by a preexisting law.
The Government Claims Act, which established procedures to sue the government for tort claims and extended vicarious liability to public entities, was enacted
in 1963. R.L. alleged he was sexually assaulted at his elementary school by his principal on a continuous basis (and that the faculty was aware of these incidents) between 1965–1969. Therefore, the appellate court determined that the statutory provisions imposing vicarious public entity liability for a public employee’s negligence existed at the time of the alleged assault.
Furthermore, the appellate court decided that AB 218’s retroactive waiving of the claim presentation requirement, which extended the timely presentation of a claim, and the statute of limitations did not create a new liability or cause of action but simply removed an obstacle to recovery imposed by the state.
The appellate court therefore concluded that AB 218’s retroactive waiver of the Government Claims Act’s claim presentation requirement does not violate the gift clause and reversed the judgment of dismissal.
R.L. v. Merced City School Dist. (2025) 114 Cal.App.5th 89.
LCW In The News
Constitutional Law
Ninth Circuit Reinstates Procedural Due Process Claim Over Degree Revocation At Boise State.
Chelsey Dudley earned a bachelor’s degree in social work from Boise State University (BSU) in May 2022 after completing all program requirements, including a spring internship with the Idaho Department of Health and Welfare (IDHW). That summer, she passed the state licensing exam and became a licensed social worker. Months later, BSU retroactively invalidated her degree and expelled her after receiving information from IDHW that Dudley had improperly accessed confidential records related to the father of her child and other individuals. Dudley acknowledged accessing the database but explained that it was incidental or related to her training. Nonetheless, BSU informed her in November 2022, without a hearing, that it was changing her internship grade to a fail and rescinding her degree.
Following this revocation, Dudley was notified that she would face a student conduct hearing, initially scheduled for December 2022 but postponed following a temporary restraining order. A revised hearing was held in February 2023 before a five-member conduct board. The panel considered written statements from BSU and IDHW staff but did not allow live testimony or cross-examination of adverse witnesses. Dudley was given 25 minutes to present her case, though she had initially been told she would only have 10 minutes. She was not permitted to cross-examine the University’s lead investigator, and she alleged that the investigator remained with the panel during deliberations. After the hearing, BSU again revoked her degree and expelled her.
Dudley filed suit against BSU and several administrators, asserting claims under the Fourteenth Amendment for both procedural and substantive due process violations. She also sought injunctive relief to prevent the revocation and expulsion. The trial court dismissed the case, holding that Dudley lacked a protected property interest in her degree and that, even if she had one, BSU’s procedures were constitutionally adequate.
On appeal, the Ninth Circuit reversed in part. The Court first held that Dudley had a constitutionally protected property interest in her conferred degree. Drawing on Idaho law and policies of the Idaho State Board of Education, the Court emphasized that students who complete their coursework are entitled to their degrees, and that a diploma carries significant value, both symbolically and practically, particularly in fields like social work, where a degree is a prerequisite to licensure. The Court found that BSU’s summary revocation in November 2022, without prior notice or a hearing, violated due process. Although a later hearing was held, the Court determined that certain procedures used at that hearing were also deficient.
Specifically, the Court found that Dudley had plausibly alleged due process violations based on the limited time she was given to present her case and the inability to cross-examine key University-affiliated witnesses, including the lead investigator. The Court emphasized that cross-examination is especially important where the outcome turns on credibility and factual disputes, and that allowing the investigator to remain in the deliberation room may have undermined the Board’s neutrality. However, the Court rejected claims that Dudley was not given adequate notice of the charges or that the presence of the investigator during deliberations alone constituted a due process violation.
The Court affirmed dismissal of Dudley’s substantive due process claim, holding that she had not shown a complete bar to pursuing her chosen profession. While the degree revocation may disrupt her career, the Court explained that she could still pursue the social work profession without a license or degree, she could pursue a social work education elsewhere, and she had not been formally blacklisted from employment in the social work field.
Accordingly, the Ninth Circuit reinstated Dudley’s procedural due process claim and remanded the case for further proceedings. The panel affirmed the dismissal of the substantive due process claims and dismissed the appeal from the denial of a preliminary injunction as moot.
Dudley v. Boise State Univ. (9th Cir. 2025) 152 F.4th 981.
Employment Law
Effective Notice Required: Ninth Circuit Rules 90-Day Filing Period Begins Only When FAD Is Accessible To Counsel.
Rodolfo Asuncion worked as a civilian Electronic Duplicating System Technician for the Defense Logistics Agency (DLA) in Pearl Harbor, Hawaii, for 30 years. Asuncion argued that he developed post-traumatic stress disorder, which made it difficult and burdensome to complete his work tasks without reasonable accommodation. After a series of incidents in which Asuncion made threatening statements in the workplace, Asuncion was indefinitely suspended without pay on April 21, 2021, based on a determination that he should no longer be permitted to access classified information.
Asuncion filed an Equal Employment Opportunity claim with DLA’s Office of Equal Employment Opportunity and Diversity in December 2019. He filed a formal complaint in December 2020. The agency did not, however, receive a hard copy until September 2021 because of the COVID-19 pandemic. The office issued its final agency decision (FAD) regarding his complaint on November 4, 2022. In the FAD, DLA concluded that Asuncion failed to establish that he was subjected to disparate treatment and harassment based on disability and notified Asuncion about his right to file a civil action within 90 calendar days of receipt of the final agency decision.
The DLA Case Number assigned to the FAD was “DLAF20-0424.” The correct case number appeared on the letter enclosing the FAD and on every page of the FAD. However, a different, incorrect case number, DLAF-210424, appeared once on the first page of the FAD.
DLA’s EEO office transmits FADs using the Department of Defense’s Secure Access File Exchange (DoD SAFE).
On November 8, 2022, Asuncion’s FAD and a certificate of service were dropped off at DoD SAFE. The certificate of service stated that, for timeliness purposes, it shall be presumed that the parties received the foregoing DLA final agency decision dated November 4, 2022, for DLA Case Number DLAN-22-0051 within five calendar days after it was mailed. It is undisputed that the service contained the wrong case number and did not indicate the substance of the final agency decision.
On November 11, 2022, Asuncion’s lawyer, Shawn Luiz, replied to the November 4 email that he could not access the file. On November 14, Luiz was informed that the file had expired and a new file would be sent to him. Luiz received a new file; however, the passphrase to access the email was incorrect. Luiz responded the following day that he still did not have access to the file. On November 21, Luiz requested that the file be mailed via U.S. Mail.
On December 5, after more back and forth, Luiz was finally emailed a decrypted PDF copy of the FAD. Luiz confirmed his receipt by email and asked for confirmation that his time to respond to the timelines triggered by the FAD began on December 5. Luiz filed the complaint on Asuncion’s behalf on March 3, 2023. That was 88 days after Luiz received the decrypted PDF and 115 days since the FAD was first dropped off into the DoD SAFE link.
The government moved to dismiss the complaint or, in the alternative, for summary judgment because Asuncion’s complaint was untimely as it was not filed within 90 days of receipt of the FAD. The district court agreed that the complaint was untimely and granted summary judgment. The court further denied Asuncion’s motion for reconsideration.
The 9th Circuit Court of Appeals reviewed de novo. The court first addressed whether Asuncion’s complaint was filed timely. The court held that claims brought under the Rehabilitation Act are governed by the same “remedies, procedures, and rights” applicable to Title VII employment discrimination claims brought by federal employees against federal defendants.
Under Title VII, civil actions brought by federal employees must be brought within 90 days of receipt of notice of final agency action. The court determined that when a document is electronically sent, the 90-day limitation period does not begin until the lawyer can realistically be held responsible for having access to the FAD and learning what the agency had decided.
Here, the court held that Luiz did not have effective notice of the nature of the agency’s final decision until December 5, the day he received by email a decrypted copy of the decision. Therefore, as he filed suit in the district court within 90 days of receiving the accessible FAD his complaint was timely. The court also held that,
alternatively, Asuncion was entitled to equitable tolling as his lawyer was pursuing his rights diligently and because extraordinary circumstances stood in his way and prevented timely filing.
Asuncion v. Hegseth, 150 F.4th 1252
Legal Updates
Governor Newsom Signed SB 707 Into Law In October 2025, Implementing Extensive Updates To The Ralph M. Brown Act.
The existing emergency teleconference rules are expiring. On October 3, 2025, the Governor signed Senate Bill 707, which, among other revisions to the Ralph M. Brown Act, extends and expands the teleconference rules. Key provisions are the standardization of audio and visual teleconferencing rules. Each legislative body that uses teleconferencing will need to provide two-way audiovisual or telephonic access and a live webcast that lets the public both see and hear the meeting. It also requires that a legislative body record in its minutes the names of members who participate remotely and the specific law that authorizes each member’s remote participation. Each local agency must identify and make available meeting locations for use by legislative bodies. It also clarifies that members with disabilities may participate remotely as a reasonable accommodation and do not have to have their camera on if their disability does not allow them to. Additionally, for purposes of meeting the quorum requirements, a member participating via teleconference as a reasonable accommodation is considered to participate within the legislative body’s jurisdiction.
SB 707 redefines “teleconference” to exclude situations where members only watch or listen through noninteractive media. SB 707 requires all legislative bodies to post special meeting notices on their websites and establishes uniform emergency meeting procedures across all local agencies. It also expands the definition of “just cause” to include child care and military service amongst the qualifying reasons. The bill applies these provisions to neighborhood councils, student body associations, student-run community college organizations, and certain subsidiary or multijurisdictional bodies. These bodies must maintain at least one (1) physical location where the public can attend, observe, and participate. Presiding officers will have the authority to remove disruptive individuals from both in-person and teleconferenced meetings.
California Community Colleges Chancellor’s
Office Issues Notice Of Proposed Rulemaking Titled “CPL & High School Course Articulation.”
The California Community Colleges, Chancellor’s office has issued a notice of proposed rulemaking titled “CPL & High School Course Articulation.” Comments must be received by the Regulations Coordinator before 4:00 p.m. December 20, 2025. As stated in the notice, please email any comments to the regulations email account, regcomments@cccco.edu.
The notice and proposed text are available on the Office of General Counsel page of the Chancellor’s website of Office of the General Counsel – Pending Regulatory Action.
California Community Colleges, Chancellor’s Office 15-Day ReNotice Of Proposed Rulemaking Titled “Academic Progress Notice And Pause And Academic Renewal.”
The California Community Colleges, Chancellor’s office issued a 15-day re-notice of proposed rulemaking titled “Academic Progress Notice and Pause and Academic Renewal” on October 29, 2025. The Comment period closed on November 13, 2025. The proposed regulatory action would change existing naming conventions for academic probation and dismissal and revise and standardize academic renewal standards within the California community college system.
The notice and proposed text are available on the Office of General Counsel page of the Chancellor’s website of Office of the General Counsel – Pending Regulatory Action.
U.S. Department Of Education
Issues Final Rule On PSLF Regulations To Exclude Employers Engaged In A Substantial Illegal Purpose.
On October 31, 2025, the U.S. Department of Education issued its final rule amending the Public Service Loan Forgiveness (PSLF) regulations. The final rule amends the definition of a “qualifying employer” to exclude employers that participate in illegal activities such that they have a substantial illegal purpose. The rule defines these illegal activities to include, “aiding and abetting violations of Federal immigration laws, supporting terrorism or engaging in violence for the purpose of obstructing or influencing Federal Government policy, engaging in the chemical and surgical castration or mutilation of children in violation of Federal or State law, engaging in the trafficking of children to States for purposes of emancipation from their lawful parents in violation of Federal or State law, engaging in a pattern of aiding and abetting illegal discrimination, and engaging in a pattern of violating State laws.”
Under this new rule, the Secretary will determine if an employer has engaged in illegal activities such that the organization has a substantial illegal purpose by considering the materiality of any illegal activities or actions.
The final rule outlines specific evidence that the Secretary may find is conclusive when deciding, and an employer’s
opportunity to respond and rebut the Department’s finding. Qualifying employers that undergo review because they may have a substantial illegal purpose will maintain qualifying employer status until a final determination is made by the Secretary. An employer that loses eligibility can regain PSLF status either after ten years from the Secretary’s determination or sooner if the Secretary approves a corrective action plan. Borrowers do not have a right to appeal a determination against an employer.
This final rule will be effective on July 1, 2026.
US Department Of Education Released Seven Priorities Under The Fund For The Improvement Of Postsecondary Education.
On November 10, 2025, the U.S. Department of Education unveiled seven priorities under the Fund for the Improvement of Postsecondary Education (FIPSE) for the FY 2025 competition. The Department has focused its priorities on supporting four areas of identified national need, which include: expanding the use of artificial intelligence (AI), protecting and promoting civil discourse on college and university campuses, encouraging accreditation reform, and building capacity for highquality short-term programs.
The Notice Inviting Applications for the FIPSE competition has been published in the Federal Register. The Department expects to make awards by December 31, 2025.
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Talin Derohanessian's broad experience across legal operations positions her to play a meaningful role at LCW as she joins the firm’s management team as the Executive Operations manger.
Riley Jacobs is an Associate in the San Diego office of Liebert Cassidy Whitmore, where she advises clients on a variety of labor and employment and educational matters.
Meg Berkowitz joins our Los Angeles office, bringing extensive experience in complex litigation and regulatory matters. She has successfully led pre-suit investigations, negotiated settlements, and managed litigation.
Firm Victories
Partner Eileen O’Hare-Anderson And Associate Attorney Yesenia Carrillo Convince ALJ To Uphold Termination Decision Of Faculty Member Who Was Unfit To Teach After Making A Threat In Class.
The firm successfully represented a community college district in a faculty termination matter before the Office of Administrative Hearings. After an eight-day hearing, the Administrative Law Judge upheld the District’s decision to terminate the faculty member.
Eileen O’Hare-Anderson, partner, and Yesenia Carrillo, associate, both of the Fresno Office, presented compelling testimony from students who credibly confirmed that the faculty member made a threat in class, as well as testimony from affected employees, including the CEO.
The ALJ found that the faculty member had indeed made a serious threat and concluded that he engaged in immoral conduct, dishonesty, and was unfit to teach, affirming the District’s decision and resulting in a complete victory for the client.
BUSINESS AND FACILITIES
Enforcing Arbitration Agreements: California Court Interprets Net Effect Of Onboarding Documents And Finds Arbitration Agreement Unconscionable.
In Gurganus v. IGS Solutions LLC (2025), the California Court of Appeal affirmed a trial court’s denial of an employer’s attempt to force an employee into arbitration. The court ruled that an employer’s arbitration agreement was unconscionable after determining that the trial court could look beyond the arbitration agreement and consider it together with the employer’s confidentiality and nondisclosure agreement to determine the net effect of both agreements.
When the employee initially completed onboarding documents, they did not include an agreement to arbitrate or mention arbitration. About five months later, the employer asked the employee to sign several additional employment documents, including an arbitration agreement and a confidentiality and non-disclosure agreement.
The arbitration agreement contained a broad confidentiality provision that prohibited a party from disclosing any information in the arbitration to any person not involved in the arbitration. The agreement also
stated that it was not a required condition of employment and that the employee could opt out. The confidentiality and non-disclosure agreement, signed by the employee at the same time, permitted the employer alone to bring disputes to court and seek injunctive relief without a bond or proof of actual damages. In contrast to the arbitration agreement, the confidentiality and non-disclosure agreement did not say that the employee could opt out or that it was not a condition of employment.
The court interpreted the arbitration agreement and the confidentiality and non-disclosure agreement together to determine whether the arbitration agreement was unconscionable. It was determined that there was a lack of mutuality that was substantively unconscionable because the arbitration agreement required arbitration of any employment-related dispute, which is more likely to be brought by an employee, while expressly excluding from arbitration claims that are more likely to be brought by the employer against its employees. The court also concluded that the arbitration agreement’s confidentiality clause was substantively unconscionable because it was so broad that it could hamper the employee’s ability to investigate or interview witnesses as part of their informal discovery.
The court also stated that arbitration contracts are typically adhesive, as they are drafted by the party with greater bargaining strength and imposed upon the other party, usually on a “take it or leave it” basis. It also stated that the employer had failed to raise any specific
arguments in support of its claim that the arbitration agreement was not a contract of adhesion, and had therefore forfeited this claim.
Gurganus has implications for any employer seeking to enforce an arbitration agreement under California law. It highlights the importance of ensuring that contract terms are clear and consistent not only within the arbitration agreement, but also throughout all employment documents. In determining the enforceability of an arbitration agreement , courts can evaluate arbitration clauses in the context of all employment documents that an employee signed. Employers who wish to minimize legal challenges to compel arbitration should closely evaluate their arbitration agreements and other employment documents to ensure that they do not favor the employer’s interests to the extent that they lack mutuality, present them transparently at the start of employment with an opportunity to understand the documents, and maintain consistency across all onboarding documents so that the overall process appears fair and voluntary.
Gurganus v. IGS Solutions LLC, No. A170738.
Enforcing Arbitration Agreements: Court Declines To Enforce SignIn Wrap Arbitration Agreement That Was Visually Overshadowed By Other Elements On Checkout Page.
Leslie Cruz purchased merchandise through the Kate Spade Outlet website, which was operated by Kate Spade LLC and Coach Services, Inc., both subsidiaries of Tapestry, Inc. On February 2, 2024, she placed an online order for in-store pickup for a $79.00 pair of shoes. On March 4, 2024, she placed another order for home delivery of approximately $150.00 of merchandise.
On April 12, 2024, Cruz sued Tapestry, Kate Spade, and Coach in Los Angeles County Superior Court, claiming they engaged in false advertising and unfair competition under California Business and Professions Code sections 17200 et seq. and 17500 et seq. She alleged that the companies advertised “falsely inflated” discounts, displaying markdowns from prices at which the merchandise was never or almost never offered for sale. She alleged that her February 2, 2024 and March 4, 2024 purchases fell under this “false advertising scheme.” Cruz sought restitution and disgorgement of all unjust enrichment.
Tapestry and its affiliates responded by filing a motion to compel arbitration, arguing that Cruz had agreed to arbitrate her claims when she made her online purchases. They relied on an arbitration provision embedded in the website’s Terms of Use. During checkout, there was a large pink button that either said “PLACE MY ORDER” if a customer chose a pickup order, or “FINAL: PLACE ORDER” if they chose delivery. The trial court referred to these collectively as the “action button.” Underneath the action button, a sentence in smaller gray font read, “BY CLICKING SUBMIT YOUR ORDER, YOU ARE AGREEING TO OUR TERMS OF USE AND PRIVACY POLICY.” The words “Terms of Use” and “Privacy Policy” were underlined hyperlinks, but they were not a separate color. Customers were not required to click the links or check a box indicating that they had reviewed the Terms of Use or Privacy Policy.
The trial court denied Tapestry’s motion to compel arbitration. The trial court found that Cruz had not assented to the arbitration clause because the notice was too inconspicuous and overshadowed by more prominent elements on the checkout page, such as the large pink action button, advertisements, and payment fields. The trial court concluded that Cruz had no reason to expect that a one-time retail purchase would subject her to an ongoing contractual relationship governed by extensive terms. Tapestry appealed, contending that the trial court erred and that Cruz had implicitly agreed to arbitration by completing her purchases.
On appeal, the Second District Court of Appeal reviewed the order de novo. The appellate court explained that a party seeking to compel arbitration must show that the other party consented to the arbitration agreement. In an online setting, whether a consumer is bound by an arbitration agreement depends on notice. The business must show that its website presented the terms of the agreement in a way that would make a reasonably prudent user aware that they were agreeing to the terms.
The appellate court agreed with the trial court that Tapestry’s checkout process used what is known as a “sign-in wrap” agreement. Sign-in wrap agreements include a textual notice indicating that the user will be bound by terms, but they do not require that the consumer review the terms or expressly manifest their assent by checking a box or clicking an “I agree” button. Instead, they are purportedly bound by the agreement when they click some other button that is needed to complete the transaction, such as a sign-in button or, in this case, a purchase button.
Because this type of assent is largely passive, the validity of the agreement turned on whether the website gave users reasonably conspicuous notice. The appellate court explained that in the context of online purchases, consumers would not typically expect that they are entering into an ongoing contractual relationship bound by extensive terms and conditions. The appellate court rejected Tapestry’s argument that the high dollar value of the goods should have alerted Cruz to look for contractual terms.
The appellate court conducted a detailed examination of the website’s checkout pages and concluded that Tapestry failed to provide reasonably conspicuous notice that submitting an order would bind a customer to its Terms of Use, which contained the arbitration clause. The checkout pages had a two-column layout with multiple visual elements. The appellate court found that the notice text was small, gray, and difficult to read against an off-white background. The notice text was in the left column and sat beneath a bright pink action button that drew the user’s focus. Meanwhile, the right column contained promotional messages and colorful graphics advertising gift wrap options, shipping
details, and customer support. The appellate court concluded that the combination of these design features drew the user’s attention away from the notice text. It noted that Tapestry could easily have required customers to affirmatively acknowledge the Terms of Use, such as by clicking a checkbox, but chose not to do so.
The appellate court affirmed the trial court’s denial of the motion to compel arbitration, concluding that Cruz never agreed to arbitrate her claims.
Note:
Public education agencies, such as community college districts and school districts, often collect online consents for policies, programs, or data use. Cruz v. Tapestry underscores that the enforceability of digital consent depends on whether users receive clear, conspicuous notice and actively agree to the terms. Districts should design online forms so that consent is intentional, such as requiring a checkbox, signature, or other affirmative acknowledgment, especially when parents, students, or employees are waiving rights.
Cruz v. Tapestry, Inc. (2025) 113 Cal.App.5th 943.
TIME TO UPDATE YOUR EEO PLANS (CCDs)
As we look ahead to the 2026 Equal Employment Opportunity (EEO) Plan cycle, now is the time for Community College Districts to begin reviewing and updating their existing EEO Plans. The California Community Colleges Chancellor’s Office requires districts to submit updated plans every three years, and summer 2025 provides an ideal window to begin this work.
Districts should ensure their plans align with the latest regulatory requirements, reflect current hiring practices,
and incorporate updated workforce data and analysis. Early preparation will support smoother approvals and demonstrate your district’s ongoing commitment to diversity, equity, and inclusion in employment practices.
Need assistance with your EEO Plan update? LCW is here to help you navigate the legal requirements and develop a plan that meets both state expectations and your institution’s goals!
Consortium Call Of The Month
Members of Liebert Cassidy Whitmore’s consortiums are able to speak directly to an LCW attorney free of charge to answer direct questions not requiring in-depth research, document review, written opinions or ongoing legal matters. Consortium calls run the full gamut of topics, from leaves of absence to employment applications, student concerns to disability accommodations, construction and facilities issues and more. Each month, we will feature a Consortium Call of the Month in our newsletter, describing an interesting call and how the issue was resolved. All identifiable details will be changed or omitted.
Question: Answer:
A Community College District client asked LCW if it was acceptable to require that candidates not use Artificial Intelligence (AI) tools during any stage of the interview process or the completion of the written exercise.
An LCW attorney explained that while there were no laws specifically prohibiting a proposed policy for AI use in the interview process, the client should be mindful of applicants using AI as part of an accommodation for the interview process. The attorney suggested in-person interviews or screen-sharing when candidates are preparing written responses to ensure that they are not using AI to generate responses. The attorney also advised that the client could include language in a proposed policy that states that the use of AI is prohibited when not for a reasonable accommodation.
Liebert Cassidy Whitmore