2012 CELA Bulletins - California Employment Lawyers Association

Transcription

CALIFORNIA EMPLOYMENT LAWYERS ASSOCIATION
Published
Monthly
BULLETIN
EDITOR: CHRISTOPHER BELLO
RECENT EMPLOYMENT LAW DECISIONS
NATIONAL LABOR
RELATIONS BOARD
EMPLOYER ENGAGED IN
UNFAIR LABOR PRACTICES BY
REQUIRING EMPLOYEES TO
SIGN MANDATORY ARBITRATION
PROVISION THAT WAIVES RIGHT
TO MAINTAIN CLASS OR
COLLECTIVE ACTIONS IN ALL
FORUMS
D. R. HORTON, INC. AND MICHAEL
CUDA. “In this case,” the NLRB began
in a Decision and Order filed on January 3 relative to misclassification claims
by a class of a home builder’s superintendents, “we consider whether an
employer violates Section 8(a)(1) of
the National Labor Relations Act when
it requires employees covered by the
Act, as a condition of their employment, to sign an agreement that precludes them from filing joint, class, or
collective claims addressing their
wages, hours or other working conditions against the employer in any forum, arbitral or judicial. For the reasons
stated below, we find that such an
agreement unlawfully restricts employees’ Section 7 right to engage in concerted action for mutual aid or protection, notwithstanding the [FAA], which
generally makes employment-related
arbitration agreements judicially enforceable. In the circumstances presented here, there is no conflict between Federal labor law and policy, on
the one hand, and the FAA and its
policies, on the other.
(Cont'd on Page 2, DECISIONS)
A NEW YEAR’S MESSAGE FROM THE CELA CHAIR
by Toni Jaramilla
As we begin the Year of the Dragon on
the Chinese lunar calendar, I feel energized and excited to be serving as
Chair of CELA. The dragon is the most
auspicious and powerful animal in the
Chinese zodiac, making the year 2012
a lucky year, bringing success and
happiness.
Numerology describes 2012 as a “five”
year, (2+0+1+2=5), which is supposed
to bring change of an unexpected nature, making it wise to adopt a flexible
stance. There are two number two’s in
the year, bringing the need for gentleness, tact, diplomacy, and peace. The
zero digit in 2012 suggests a year of
raw potential, in which anything can be
accomplished. The number one is assertive, aggressive, and ambitious.
And the Mayan long count calendar
finishes on December 21, 2012. Although some think that’s a prediction of
the end, archeologists and astronomers believe that the ancient Mayans
were not, in fact, predicting doomsday—only the beginning of a new cycle.
I prefer to accept the idea of a new
beginning and a fresh start, while continuing to build upon the accomplishments of the past.
Regardless of all that, I can confidently
(Cont'd on Page 18, CHAIR MESSAGE)
January 2012
Vol. 26, No. 1
LEGISLATIVE UPDATE
by Mariko Yoshihara
CELA’s Political Director
2012 Legislative Session begins
January marks the beginning of the
second year of our two-year legislative
session, and of what will be an exciting
and unpredictable election year. Most
legislators are already campaigning in
newly drawn legislative districts in a
new open primary system, in which the
top two vote-getters advance to the
general election regardless of party.
Aside from campaigning, legislators
are back at work facing a deadline of
February 24th to introduce new bills for
the year. CELA is working on potential
bill proposals, but our main focus this
year will be educating legislators and
the public on our work and our mission,
and gearing up for a legislative push
next year, when the political climate
will hopefully be a bit less contentious.
We are organizing outreach strategies,
working with policy committees on informational hearings, and with news
media on investigative pieces.
As part of this effort, we are looking in
particular for CELA members’ stories
about arbitrator misconduct, and about
employers’ use of Chindarah wage releases to pick off class members. If you
have such a story, please email me at
mariko@cela.org.
Our Legislative Committee will also be
compiling a list of “workplace horrors,”
in response to the Chamber of
Commerce’s annual list of litigation
horrors. If you have a good shock-theconscience workplace horror story from
your practice, please email me at
(Cont'd on Page 19, LEGISLATION)
DECISIONS
(From Page 1)
“[C]ollective efforts to redress workplace
wrongs or improve workplace conditions are at the core of what Congress
intended to protect by adopting the
broad language of Section 7. Such conduct is not peripheral but central to the
Act’s purposes. After all, if the
Respondent’s employees struck in order to induce the Respondent to comply
with the FLSA, that form of concerted
activity would clearly have been protected... Surely an Act expressly stating that ‘industrial strife’ can be ‘avoided
or substantially minimized if employers, employees, and labor organizations each recognize under law one
another’s legitimate rights in relations
with one another,’ equally protects the
concerted pursuit of workplace grievances in court or arbitration...
“Our analysis does not end, however,
with the conclusion that the MAA restricts the exercise of rights protected
by Federal labor law. The principal argument made by the Respondent and
supporting amici is that finding the restriction on class or collective actions
unlawful under the NLRA would conflict
with the [FAA]... [¶] This is an issue of
first impression for the Board...
“For the reasons that follow, we conclude that finding the MAA unlawful,
consistent with the well-established interpretation of the NLRA and with core
principles of Federal labor policy, does
not conflict with the letter or interfere
with the policies underlying the FAA
and, even if it did, that the finding represents an appropriate accommodation
of the policies underlying the two statutes.
“Holding that the MAA violates the NLRA
does not conflict with the FAA or undermine the pro-arbitration policy underlying the FAA under the circumstances of
this case for several reasons... First...,
[t]o find that an arbitration agreement
must yield to the NLRA is to treat it no
worse than any other private contract
that conflicts with Federal labor law.
The MAA would equally violate the NLRA
if it said nothing about arbitration, but
merely required employees ... to agree
to pursue any claims in court against
the Respondent solely on an individual
basis...
“Second, the Supreme Court’s jurisprudence under the FAA, permitting enforcement of agreements to arbitrate
federal statutory claims, including employment claims, makes clear that the
agreement may not require a party to
‘forgo the substantive rights afforded by
the statute.’ Gilmer, supra at 26... [¶]
Any contention that the Section 7 right
to bring a class or collective action is
merely ‘procedural’ must fail. The right
to engage in collective action—including collective legal action—is the core
substantive right protected by the NLRA
and is the foundation on which the Act
and Federal labor law rest...
“Accordingly, finding the MAA’s classaction waiver unlawful does not conflict
with the FAA, because the waiver interferes with substantive statutory rights
under the NLRA, and the intent of the
FAA was to leave substantive rights
undisturbed. Stated another way, under
Gilmer, there is an inherent conflict
between the NLRA and the MAA’s waiver
of the right to proceed collectively in any
forum.
“Third, nothing in the text of the FAA
suggests that an arbitration agreement
that is inconsistent with the NLRA is
nonetheless enforceable...
“[T]he weight of the countervailing consideration [the advantages of arbitration’s
informality] was considerably greater in
the context of AT& T Mobility [v
Concepcion] than it is here for several
reasons. AT&T Mobility involved the
claim that a class-action waiver in an
arbitration clause of any contract of
adhesion in the State of California was
unconscionable. Here, in contrast, only
agreements between employrs and their
own employees are at stake. As the
Court pointed out in AT&T Mobility,
such contracts of adhesion in the retail
and service industries might cover ‘tens
of thousands of potential claimants.’ Id.
at 1752. The average number of employees employed by a single employer, in
contrast, is 20, and most class-wide
employment litigation, like the case at
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
The CELA Bulletin is published monthly
for CELA members. Send membership
inquiries and changes of address to
office of Executive Board Chair:
Toni Jaramilla
10100 Santa Monica Blvd.
Suite. 300
Los Angeles CA 90067
Tel: (310) 551-3020
E-mail: toni@tjjlaw.com
For help with the CELA List, the CELA
Website, and other administrative
matters, contact CELA's Administrative
Director:
Christina Krasomil
16133 Ventura Blvd., Suite 625
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
E-mail: christina@cela.org
Concerning state legislative matters,
contact CELA’s Political Director:
Mariko Yoshihara
Tel: (916) 442-5788
E-Mail: mariko@cela.org
EXECUTIVE BOARD
J. Bernard Alexander III
(Santa Monica)
Virginia Keeny
(Pasadena)
Scot Bernstein
(Folsom)
Noah Lebowitz
(San Francisco)
David DeRubertis
(Studio City)
Cynthia Rice
(San Francisco)
Maria Diaz
(Fresno)
Mika Spencer
(San Diego)
David Duchrow
(Santa Monica)
James P. Stoneman
(Claremont)
Wilmer Harris
(Pasadena)
Deborah Vierra
(Ventura)
Phil Horowitz
(San Francisco)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Jeffrey Winikow
(Los Angeles)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
E-mail: cmbello@charter.net
DECISIONS
(From Page 2)
issue here, involves only a specific
subset of an employer’s employees...
“Finally, even if there were a direct
conflict between the NLRA and the
FAA, there are strong indications that
the FAA would have to yield under the
terms of the Norris-LaGuardia Act...
“The Respondent and some amici further argue that holding that the MAA
violates the NLRA would be inconsistent with two recent Supreme Court
decisions stating that a party cannot be
required, without his consent, to submit
to arbitration on a classwide basis. See
Stolt-Nielsen S.A. v. AnimalFeeds Int’l
Corp., 130 S.Ct. 1758, 1775-1776
(2010)...; AT&T Mobility v Concepcion,
131 S.Ct. 1740, 1751-1753 (2011)...
Neither case is controlling here. Neither
involved the waiver of rights protected by
the NLRA, or even employment agreements. Further, AT&T Mobility involved
a conflict between the FAA and state
law, which is governed by the Supremacy
Clause, whereas the present case involves the argument that two federal
statutes conflict...
“We need not and do not mandate class
arbitration in order to protect employees’ rights under the NLRA. Rather, we
hold only that employers may not compel employees to waive their NLRA right
to collectively pursue litigation of employment claims in all forums, arbitral or
judicial. So long as the employer leaves
open a judicial forum for class and
collective claims, employees’ NLRA
rights are preserved without requiring
the availability of classwide arbitration.
Employers remain free to insist that
arbitral proceedings be conducted on
an individual basis...
“By maintaining a mandatory arbitration
agreement provision that waives the
right to maintain class or collective
actions in all forums, whether arbitral or
judicial, and that employees reasonably could believe bars or restricts their
right to file charges with the National
Labor Relations Board, the Respondent
has engaged in unfair labor practices
affecting commerce within the meaning
of Section 2(6) and (7) of the Act and
has violated Section 8(a)(1) of the Act.”
For NELA as amicus: Victoria W. Ni,
Public Justice P.C., Oakland; Michael
C. Subit, Frank Freed Subit & Thomas,
Seattle.
NLRB, 1/3/12; Case 12-CA-257634;
Decision and Order signed by Chairman Pearce and Member Becker;
available at www.nlrb.gov.
UNITED STATES
SUPREME COURT
SUPREME COURT ENDORSES
“MINISTERIAL EXCEPTION” AND
HOLDS THAT IT BARRED ADA
RETALIATION CLAIM BY
“CALLED” TEACHER IN CHURCH
SCHOOL
HOSANNA-TABOR EVANGELICAL
LUTHERAN CHURCH AND SCHOOL.
In a unanimous January 11 opinion by
Roberts, the United States Supreme
Court reversed the Sixth Circuit, (597
F3d 769), writing in part as follows:
“Certain employment discrimination
laws authorize employees who have
been wrongfully terminated to sue their
employers for reinstatement and damages. The question presented is whether
the Establishment and Free Exercise
Clauses of the First Amendment bar
such an action when the employer is a
religious group and the employee is one
of the group’s ministers.
“Petitioner ... is a member congregation of the Lutheran Church-Missouri
Synod... [It] operated a small school ...
offering a ‘Christ-centered education’ to
students in Kindergarten through eighth
grade...
“The Synod classifies teachers into two
categories: ‘called’ and ‘lay.’ ‘Called’
teachers are regarded as having been
called to their vocation by God through
a congregation... Once called, a teacher
receives the formal title ‘Minister of
Religion, Commissioned’... A commissioned minister serves for an openended term; in Hosanna-Tabor, a call
could be rescinded only for cause and
by a supermajority vote of the congregation.
-3-
“Respondent Cheryl Perich was first
employed ... as a lay teacher in 1999.
After Perich completed her colloquy later
that school year, Hosanna-Tabor asked
her to become a called teacher. Perich
accepted the call and received a ‘diploma of vocation’ designating her a
commissioned minister...
“Perich filed a charge with the [EEOC],
alleging that her employment had been
terminated in violation of the Americans
with Disabilities Act... [¶] The EEOC
brought suit..., alleging that Perich had
been fired in retaliation for threatening to
file an ADA lawsuit. Perich intervened in
the litigation, claiming unlawful retaliation under both the ADA and [a Michigan
statute]...
“Hosanna-Tabor moved for summary
judgment. Invoking what is known as the
‘ministerial exception,’ the Church argued that the suit was barred by the First
Amendment because the claims at issue concerned the employment relationship between a religious institution
and one of its ministers. According to
the Church, Perich was a minister, and
she had been fired for a religious reason—namely, that her threat to sue the
Church violated the Synod’s belief that
Christians should resolve their disputes
internally.
“The District Court agreed ... and granted
summary judgment... [¶] The Court of
Appeals for the Sixth Circuit vacated
and remanded, directing the District Court
to proceed to the merits of Perich’s
retaliation claims... The court concluded
... that Perich did not qualify as a ‘minister’ under the exception, noting in
particular that her duties as a called
teacher were identical to her duties as a
lay teacher...
“Until today, we have not had occasion
to consider whether [the] freedom of a
religious organization to select its ministers is implicated by a suit alleging
discrimination in employment. The
Courts of Appeals, in contrast ... have
uniformly recognized the existence of a
‘ministerial exception,’ grounded in the
First Amendment, that precludes appli(Cont'd on Page 4, DECISIONS)
DECISIONS
(From Page 3)
cation of such legislation to claims
concerning the employment relationship between a religious institution and
its ministers. [cites omitted.]
“We agree that there is such a ministerial exception... By imposing an unwanted minister, the state infringes the
Free Exercise Clause... According the
state the power to determine which
individuals will minister to the faithful
also violates the Establishment
Clause...
“The EEOC and Perich acknowledge
that employment discrimination laws
would be unconstitutional as applied to
religious groups in certain circumstances. They grant, for example, that
it would violate the First Amendment for
courts to apply such laws to compel the
ordination of women by the Catholic
Church or by an Orthodox Jewish seminary... According to the EEOC and
Perich, religious organizations could
successfully defend against employment discrimination claims in those
circumstances by invoking the constitutional right to freedom of association... The EEOC and Perich thus see
no need—and no basis—for a special
rule for ministers grounded in the Religion Clauses themselves.
“We find this position untenable.... That
result is hard to square with the text of
the First Amendment itself, which gives
special solicitude to the rights of religious organizations. We cannot accept
the remarkable view that the Religion
Clauses have nothing to say about a
religious organization’s freedom to select its own ministers.
“The EEOC and Perich also contend
that our decision in Employment Div.,
Dept. of Human Resources of Ore. v.
Smith, 494 U.S. 872 (1990), precludes
recognition of a ministerial exception. In
Smith, two members of the Native American Church were denied state unemployment benefits after it was determined that they had been fired from their
jobs for ingesting Peyote, a crime under
Oregon law. We held that this did not
violate the Free Exercise Clause, even
though the peyote had been ingested
for sacramental purposes...
“Smith involved government regulation
of only outward physical acts. The
present case, in contrast, concerns
government interference with an internal church decision that affects the
health and mission of the church itself...
The contention that Smith forecloses
recognition of a ministerial exception
rooted in the Religion Clauses has no
merit.
“Having concluded that there is a ministerial exception grounded in the Religion Clauses of the First Amendment,
we consider whether the exception applies in this case. We hold that it does.
“Every Court of Appeals to have considered the question has concluded that
the ministerial exception is not limited
to the head of a religious congregation,
and we agree. We are reluctant, however, to adopt a rigid formula for deciding
when an employee qualifies as a minister. It is enough for us to conclude ...
that the exception covers Perich, given
all the circumstances of her employment... [¶] In light of ... the formal title
given Perich by the Church, the substance reflected in that title, her own
use of the title, and the important religious functions she performed for the
Church—we conclude that Perich was
a minister covered by the ministerial
exception.
“The EEOC and Perich suggest that
Hosanna-Tabor’s asserted religious reason for firing Perich ... was pretextual.
That suggestion misses the point of the
ministerial exception. The purpose of
the exception is not to safeguard a
church’s decision to fire a minister only
when it is made for a religious reason.
The exception instead ensures that the
authority to select and control who will
administer to the faithful ... is the
church’s alone.
“Today we hold only that the ministerial
exception bars [an employment discrimination suit brought on behalf of a
minister]. We express no view on
whether the exception bars other types
of suits, including actions by employees alleging breach of contract or tortious conduct by their religious employers...”
-4-
Thomas, concurring, wrote separately
“...to note that, in my view, the Religion
Clauses require civil courts to apply the
ministerial exception and to defer to a
religious organization’s good-faith understanding of who qualifies as a minister.”
Also concurring, Alito joined by Kagan,
emphasized that “...[b]ecause virtually
every religion in the world is represented
in the population of the United States, it
would be a mistake if the term ‘minister’
or the concept of ordination were viewed
as central to the important issue of
religious autonomy that is presented in
cases like this one. Instead, the courts
should focus on the function performed
by persons who work for religious bodies.”
For EEOC: Leondra R. Kruger, Washington DC.
For Perich: Walter Dellinger, Washington DC.
For Church: Eric C. Rassbach, Hannah
C. Smith, Luke W. Goodrich, Lori H.
Windham, The Becket Fund for Religious Liberty, Washington DC.
USSC, 1/11/12; unanimous opinion
by Roberts; concurring opinion by
Thomas; concurring opinion by Alito
joined by Kagan; 2012 DAR 374,
2012 WL 75047.
REVERSING THE NINTH CIRCUIT,
SUPREME COURT HOLDS THAT
THE CREDIT REPAIR
ORGANIZATION ACT DOES NOT
CONTAIN LANGUAGE SUFFICIENT
TO OVERRIDE THE FAA AND
PRECLUDE ARBITRATION OF
CONSUMERS’ CLAIMS
COMPUCREDIT CORPORATION v
GREENWOOD. In a January 10 opinion
by Scalia with only Ginsburg dissenting, (and Sotomayor and Kagan concurring in the judgment), the Supreme
Court reversed the Ninth Circuit, (615
F3d 1204), in an action by consumers
against the marketer of a credit card
and the card’s issuing bank alleging
that the fees they were charged violated
DECISIONS
(From Page 4)
the Credit Repair Organization Act. The
Supreme Court held that “...[b]ecause
the Credit Repair Organization Act is
silent on whether claims under the Act
can proceed in an arbitrable forum, the
FAA requires the arbitration agreement
to be enforced according to its terms.”
The Ninth Circuit had held that the
CROA provides for a non-waivable right
to sue, and that the arbitration clause in
the consumers’ agreement was therefore void. Scalia’s opinion reads in part
as follows:
“Like the District Court and the Ninth
Circuit, respondents focus on the
CROA’s disclosure and nonwaiver provisions... One sentence of [the] required [disclosure] statement reads:
‘You have a right to sue a credit repair
organization that violates the Credit
Repair Organization Act.’ The Act’s
nonwaiver provision states, ‘Any waiver
by any consumer of any protection
provided by or any right of the consumer
under this subchapter—(1) shall be
treated as void; and (2) may not be
enforced by any Federal or State court
or any other person.’ § 1679f(a).
“The Ninth Circuit adopted the following
line of reasoning...: The disclosure provision gives consumers the ‘right to
sue,’ which ‘clearly involves the right to
bring an action in a court of law.’ 615
F.3d at 1208. Because the nonwaiver
provision prohibits the waiver of ‘any
right of the consumer under this subchapter,’ the arbitration agreement—
which waived the right to bring an action
in a court of law—cannot be enforced.
Id., at 1214.
“The flaw in this argument is its premise:
that the disclosure provision provides
consumers with a right to bring an
action in a court of law. It does not.
Rather, it imposes an obligation on
credit repair organizations to supply
consumers with a specific statement
set forth ... in the statute. The only
consumer right it creates is the right to
receive the statement, which is meant
to describe the consumer protections
that the law elsewhere provides...
“Respondents suggest that the CROA’s
civil-liability provision ... demonstrates
that the Act provides consumers with a
‘right’ to bring an action in court. They
cite the provision’s repeated use of the
terms ‘action,’ ‘class action,’ and
‘court’—terms that they say call to mind
a judicial proceeding. These references
cannot do the heavy lifting that respondents assign them. It is utterly commonplace for statutes that create civil
causes of action to describe the details
of those causes of action, including the
relief available, in the context of a court
suit. If the mere formulation of the cause
of action in this standard fashion were
sufficient to establish the ‘contrary congressional command’ overriding the
FAA, [cite omitted], valid arbitration
agreements covering federal causes of
action would be rare indeed...”
In an opinion concurring in the judgment, Justice Sotomayor, joined by
Kagan, wrote in part: “I agree with the
Court that Congress has not shown [the
intent to override the FAA] here. But, for
the reasons stated by the dissent, I find
this to be a much closer case than the
majority opinion suggests... [¶] In my
mind ... the parties’ arguments [are] in
equipoise, and our precedents require
that petitioners prevail in this circumstance. This is because respondents,
as the opponents of arbitration, bear the
burden of showing that Congress disallowed arbitration of their claims, and
because we resolve doubts in favor of
arbitration. [cite omitted.] Of course, if
we have misread Congress’ intent, then
Congress can correct our error by amending the statute.”
In dissent, Justice Ginsburg wrote in
part: “In accord with the Ninth Circuit, I
would hold that Congress, in an Act
meant to curb deceptive practices, did
not authorize credit repair organizations
to make a false or misleading disclosure—telling consumers of a right they
do not, in fact, possess. If the Act
affords consumers a nonwaivable right
to sue in court, as I believe it does, a
credit repair organization cannot retract
that right by making arbitration the
consumer’s sole recourse.”
USSC, 1/10/12; opinion by Scalia
joined by Roberts, Kennedy, Thomas, Breyer, and Alito; opinion con-5-
curring in the judgment by
Sotomayor joined by Kagan; dissenting opinion by Ginsburg; 2012
DAR 288, 2012 WL 43514.
CALIFORNIA
SUPREME COURT
SUPREME COURT WILL
ADDRESS DEFENDANTS’
ENTITLEMENT TO ATTORNEYS’
FEES FOR PREVAILING ON
MEAL AND REST BREAK CLAIMS
ZELASKO-BARRETT v BRAYTONPURCELL, LLP. On January 18, the
California Supreme Court granted review and deferred further action pending
consideration and disposition of a related issue in Kirby v Immoos Fire
Protection, Inc., S185827.
In its October 24, 2011 unpublished
opinion, (2011 WL 5037411), the First
District, Division Three, addressed the
plaintiff’s contention that the trial court
had erred in awarding attorneys’ fees
under section 218.5 to the prevailing
defendant. Under Labor Code section
1194, the plaintiff argued, fees may be
awarded only to a prevailing plaintiff
despite the inclusion in the plaintiff’s
complaint of additional causes of action
that are not explicitly covered by section 1194. (Section 1194 establishes
one-way fee shifting on claims for unpaid overtime and minimum wage.)
“Pending Supreme Court resolution that
has divided the Courts of Appeal,” the
First District wrote, “we conclude [that
the employer] is not entitled to recover
statutory attorney fees in this action.”
(In an earlier appeal in the same litigation, the Court of Appeal had affirmed
summary judgment, holding that a law
school graduate awaiting bar exam results was properly classified as an exempt employee under Wage Order 42001. Zelasko-Barrett v. BraytonPurcell, LLP (2011) 198 CA4th 582, 131
CR3d 114; summarized in CELA Bulletin, Aug 2011, p.4.)
DECISIONS
(From Page 5)
The Third District’s July 2010 opinion in
Kirby v Immoos (2010) 186 CA4th 1361,
113 CR3d 370, (summarized in CELA
Bulletin, Aug 2010, p. 10), held that the
inclusion of claims for unpaid wages
does not preclude an award of attorneys’ fees to a prevailing defendant on
unrelated claims. In granting review in
Kirby on November 17, 2010, the Supreme Court wrote: “The issues to be
briefed and argued are limited to the
following: (1) Does Labor Code section
1194 apply to a cause of action alleging
meal and rest period violations (Lab.
Code, § 226.7) or may attorney’s fees
be awarded under Labor Code section
218.5? (2) Is our analysis affected by
whether the claims for meal and rest
periods are brought alone or are accompanied by claims for minimum wage
and overtime?” 242 P3d 104, 117 CR3d
658.
For plaintiff: Arthur Charles Chambers,
San Francisco.
For defendant: Alan Sam Levins,
Rachelle Lee Willis, Littler Mendelson,
San Francisco.
Cal SC, 1/18/12; 2012 DAR 756 (granting review).
CALIFORNIA COURTS
OF APPEAL
REVERSING VERDICT FOR
PLAINTIFF, SECOND DISTRICT
HOLDS THAT AN EMPLOYER
MAY DISCIPLINE AN EMPLOYEE
FOR MAKING FALSE CHARGES
OF SEXUAL HARASSMENT
JOAQUIN v CITY OF LOS ANGELES.
“This case has a somewhat tortuous
procedural history,” the Second District, Division four, began in a January
23 opinion by Suzukawa. “Plaintiff Richard Joaquin, a Los Angeles Police Department officer, complained of sexual
harassment by Sergeant James Sands
in 2005. The department investigated
and found Joaquin’s complaint unfounded. Sands then pursued a complaint against Joaquin for filing a spurious sexual harassment charge. Internal Affairs investigated Sands’s com-
plaint, agreed that Joaquin’s charge
was without foundation, and recommended that the matter be adjudicated
by a Board of Rights. The Board of
Rights found Joaquin’s charge to have
been fabricated and recommended termination. The Chief of Police adopted
the recommendation, and Joaquin was
terminated effective March 2006.
“Joaquin filed a petition for writ of mandate. The superior court [Judge William
A. MacLaughlin] granted the petition
and ordered Joaquin reinstated, concluding that the Board of Rights’ findings were not supported by the weight of
the evidence.
“Following his reinstatement, Joaquin
filed the present action against the City
of Los Angeles, alleging that his termination was in retaliation for filing a sexual
harassment complaint in violation of
[FEHA]. A jury agreed and awarded
Joaquin more than $2 million for lost
wages and emotional distress.
“The City appeals, contending, among
other things, that the jury’s verdict was
not supported by substantial evidence.
Having reviewed the entire record, we
agree that Joaquin did not present substantial evidence that his termination
was motivated by retaliatory animus, a
necessary element of his claim. We
thus reverse the judgment...
“In the present case, Joaquin indisputably established a prima facie [case] of
retaliation—the evidence was undisputed that he engaged in protected
activity (reporting sexual harassment),
was performing competently as a motor
officer, and suffered an adverse employment action (termination). Further, the
department articulated a legitimate,
nonretaliatory reason for the adverse
employment action, i.e., that Joaquin
fabricated a sexual harassment complaint against Sands...
“The City contends that Joaquin failed
to introduce substantial evidence of the
second element of a cause of action for
FEHA—that its decision ... was motivated by retaliatory animus. For the
following reasons, we agree.
“The City urges that Joaquin had to
prove that those involved ... harbored
unlawful retaliatory animus... Joaquin
disagrees, contending that he was required to prove only a causal link between his harassment complaint and
termination. Further, he says, the Board
of Rights conceded the necessary
causal link in its statement of decision...
“Joaquin is correct that there was a
direct causal connection between his
report of sexual harassment and the
Board of Rights recommendation to
terminate him. However, the Board of
Rights did not recommend termination
merely because Joaquin had reported
sexual harassment, but rather because
it concluded that he had fabricated the
accounts of sexual harassment. In other
words, the Board of Rights recommended termination not because
Joaquin reported sexual harassment,
but because it concluded that he had
done so falsely.
“On this unusual set of facts, the relevant legal question is whether an employee may be disciplined if his or her
employer concludes that the employee
has fabricated a claim of sexual harassment, or whether such a complaint is
insulated from discipline even where, as
here, the employer determined that it
was fabricated. Neither Joaquin nor the
City has cited any California case that
has discussed it. Our research has
revealed, however, that the question ...
has been addressed in federal cases
interpreting Title VII ... and state antidiscrimination laws. These cases are persuasive ... and thus we now consider
them. [Cites and detailed discussion
omitted.]
“We believe the reasoning of these cases
is sound and we adopt it... [¶] We thus
conclude that in appropriate circumstances, an employer may discipline or
terminate an employee for making false
charges, even where the subject matter
of those charges is an allegation of
sexual harassment...
“Having thus framed the issue, we now
turn to whether there is substantial
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DECISIONS
(From Page 6)
evidence that supports a reasoned inference either that Joaquin’s termination was the product of discriminatory or
retaliatory animus or that the
department’s stated reason ... was
pretextual. In this regard, Joaquin relies
on the following evidence, from which he
asserts the jury could reasonably have
inferred that his termination was the
product of retaliatory animus: (1) Sands
wanted Joaquin disciplined for having
made a sexual harassment complaint;
(2) the Internal Affairs investigation was
initiated only after Sands threatened to
go to the Inspector General to demand
action; (3) Internal Affairs, Captain
Young, and the Board of Rights all
overlooked compelling evidence in favor
of Joaquin... [W]e conclude that none of
this evidence constitutes substantial
evidence of retaliatory animus.
Board, not merely before Internal Affairs.
He failed to do so. Indeed, there was
virtually no evidence before the jury concerning the evidence presented to the
Board...
“[W]e need not decide whether the jury
was correctly instructed. However, our
focus on the element of intent highlights
a significant flaw in the Judicial Council’s
retaliation instruction [CACI No. 2505].
“As we have noted, retaliatory intent is
an essential element... However, that
element is not identified in the CACI
retaliation instruction.... Indeed, under
the unique facts of the present case, the
instruction may have made a plaintiff’s
verdict inevitable... [¶] We urge the Judicial Council to redraft the retaliation
instruction and the corresponding special verdict form...”
“1. Sands’s Alleged Retaliatory Intent
“Joaquin has not identified any evidence
that Sands played a role in the Internal
Affairs investigation of his complaint or
had the power to direct the result. Further, there is significant evidence to the
contrary...
“2. Sands’s Threat to Complain to the
Inspector General
“While there is evidence that Sands
threatened to go to the Inspector General if Internal Affairs did not investigate
his complaint, there is no evidence that
Sands’s threat had any effect on the
results of the Internal Affairs investigation. In any event..., the recommendation to terminate Joaquin was made by
the Board of Rights, not Internal Affairs,
and there is no evidence that any improper motive that may have infected
the Internal Affairs investigation also
infected the Board of Rights.
“3. Board’s Alleged Overlooking of
Evidence
“Joaquin identifies two ... pieces of [allegedly overlooked] evidence... [¶] [But]
to have made the case the Board intentionally overlooked compelling evidence
that Sands was not credible, Joaquin
would have to have demonstrated to the
jury that such evidence was before the
For plaintiff: Lipow & Harris, Jeffrey Lipow
and Sean P. Feeney; Benedon & Serlin,
Douglas G. Benedon, and Kelly R.
Horwitz.
For defendant: Carmen A. Trutanich,
City Attorney, and Paul L. Winnemore,
Deputy City Attorney.
Second Dist Div Four, 1/23/12; opinion by Suzukawa with Eptsten and
Manella concurring; 2012 DAR 939,
2012 WL 171723.
INSTRUCTIONAL ERROR
REQUIRES REVERSAL OF
JUDGMENT FOR DEFENSE ON
WHISTLEBLOWER CLAIMS
MIZE-KURZMAN v MARIN COMMUNITY COLLEGE DISTRICT. “Plaintiff ...
appeals from a judgment in favor of
defendants ... following a jury trial on her
claims that the district was liable under
two California ‘whistleblower’ protection
statutes, Labor Code section 1102.5
and Education Code section 87160 et
seq.,” the First District, Division Two,
began in a January 10 opinion by Kline.
The court’s 30-page opinion continues
in part as follows:
“Plaintiff contends the trial court [Judge
Verna Alana Adams] committed reversible error in jury instructions it gave that
-7-
were patterned upon federal law; that
the errors were compounded by erroneous answers to the jury’s questions;
that the court unduly pressured the jury
to return a verdict; and that the court
committed reversible error when it allowed the district to present evidence of
plaintiff’s retirement pension on the issue of her mitigation of damages and
instructed the jury that it could determine whether such retirement pension
should reduce any damages. We shall
conclude that three of the court’s instructions were erroneous and require
reversal and remand for a new trial.
“We conclude that the trial court could
properly include in its jury instructions,
language further defining (and limiting)
the disclosures protected under California law as ‘whistleblowing’ in accord
with federal cases interpreting the parallel federal WPA. We turn to the question whether the limiting instructions
given by the court provided accurate
statements of the law.
“The five federally-based limitations provided by the court in its special instructions 2 and 3 and challenged here
stated: (1) Plaintiff must prove that any
disclosure was made in good faith and
for the public good and not for personal
reasons. (2) Debatable differences of
opinion concerning policy matters are
not protected disclosures. (3) Information passed along to a supervisor in the
normal course of duties is not a protected disclosure. (4) Reporting publicly known facts is not a protected
disclosure. (5) Efforts to determine if a
practice violates the law are not protected disclosures.
“(1) Plaintiff Must Prove That Any
Disclosure Was Made in Good Faith
and for the Public Good and Not for
Personal Reasons.
“This sentence of the special instructions misstated the applicable law... [¶]
Nothing in Labor Code section 1102.5
and Education Code section 87160, et
seq. persuade us that such limitation
was intended to be a part of these
California statutes... Hence, it is not
the motive of the asserted whistleblower,
DECISIONS
(From Page 7)
but the nature of the communication
that determines whether it is covered.
“(2) Debatable Differences of Opinion
Concerning Policy Matters Are Not
Protected Disclosures.
visions (b) and (h) expressly require that
[a] person engaging in retaliation do so
‘intentionally,’ Nothing in that requirement undermines the burdens of proof
set forth in subdivision (j)... [¶] The court
did not err in giving this instruction.
“The court erred in failing to distinguish
between the disclosure of policies that
plaintiff believed to be unwise, wasteful,
gross misconduct or the like, which are
subject to the limitation, and the disclosure of policies that plaintiff reasonably
believed violated federal or state statutes, rules, or regulations, which are
not subject to this limitation...
“Plaintiff contends the court erred in
instructing the jury as follows: ‘If said
Defendants reasonably believed that
they were justified in removing Plaintiff
from her position ... on the basis of
evidence separate and apart from the
fact that Plaintiff made a ‘protected
disclosure’ ..., then said Defendants
are not liable...’
“(3) Information Passed Along to a
Supervisor in the Normal Course of
Duties is Not a Protected Disclosure.
“Plaintiff maintains that the instruction
... creates an affirmative defense that
allowed the district to evade its burden
... to demonstrate ...that the actions
taken against her would have occurred
for ‘legitimate and independent reasons,’
had she not made protected disclosures... [¶] Although the instructions
were somewhat redundant in this respect, we do not believe they incorrectly stated the law, lessened the
district’s burden of proof, or unduly overemphasized the district’s defenses to
plaintiff’s prejudice.
“This instruction was erroneous under
both federal law and established California law... [¶] In circumstances where
the supervisor is not the alleged wrongdoer ... it cannot categorically be stated
that a report to a supervisor in the
normal course of duties is not a protected disclosure...
“(4) Reporting Publicly Known Facts
is Not a Protected Disclosure.
“We are persuaded that this was a
proper limitation on what constitutes
disclosure protected by California law.
We agree with Huffman [v Office of
Personnel Management (Fed Cir 2001)]
263 F3d 1341, 1349-1350, and other
federal cases that have held that the
report of information that was already
known did not constitute a protected
disclosure. [cites omitted.]
“(5) Efforts to Determine if a Practice
Violates the Law are Not Protected
Disclosures.
“This appears to be a correct statement
of the law, extrapolated from Reid [v
Merit Systems Protection Bd. (Fed Cir
2007)] 508 F.3d 674...
“Plaintiff contends [that Special Jury
Instruction No. 3, Paragraph 6] erroneously required the jury to find the district
intended to retaliate against her... [¶]
Education Code section 87164, subdi-
“Plaintif has shown prejudice. We
conclude that had the jury believed the
plaintiff’s evidence, it is reasonably probable that it would have rendered a verdict more favorable to her ... had it not
been erroneously instructed that ‘debatable differences of opinion concerning policy matters are not protected
disclosures’ ... and that ‘information
passed along to a supervisor in the
normal course of duties is not a protected disclosure.’ We shall therefore
reverse the judgment and remand for
retrial of those claims. These instructional errors require reversal and remand for a new trial.
“In light of our decision, we need not
address plaintiff’s assertion that the
trial court placed ‘improper pressure’ on
the jury to conclude deliberations by ...
the last day before the judge left for her
two-week vacation. Nevertheless, we ...
do not see anything improper or prejudicial... The judge did not pressure the
jury and the jury never indicated it was
-8-
‘deadlocked’...
“Evidence of Plaintiff’s Eligibility for
Retirement
“[W]e believe that the court erred in
admitting evidence of plaintiff’s retirement eligibility and income on the issue
of mitigation of her damages and erred
in instructing the jury it could consider
whether and in what amount to reduce
any damages suffered by plaintiff in light
of that evidence... [¶] It seems to us to
make little sense to allow introduction
into evidence of retirement benefits that
plaintiff never received on the issue of
mitigation where such evidence would
have been precluded under the collateral source rule had she actually received the benefits...”
For plaintiff: Martin M. Horowitz,
Stephanie Rubinoff.
For defendants: Larry Frierson.
First Dist Div Two, 1/10/12; opinion
by Kline with Haerle and Lambden
concurring; 2012 DAR 348, 2012 WL
75015.
TRIAL COURT CORRECTLY
APPLIED COMMON LAW TEST
FOR “EMPLOYMENT” IN
CONCLUDING THAT NONEXCLUSIVE INSURANCE
SOLICITING AGENT WAS
INDEPENDENT CONTRACTOR
ARNOLD v MUTUAL OF OMAHA INSURANCE CO. “Plaintiff Kimbly Arnold
worked as a nonexclusive insurance
agent for [defendant Mutual],” the First
District,Division One, began in a December 30 opinion by Marchiano. “After
plaintiff terminated her contractual relationship with Mutual, she filed suit claiming unpaid employee entitlements under the Labor Code. She appeals from a
summary judgment... in which the trial
court [Contra Costa County Superior
Court Judge Cheryl R. Mills] determined
Ms. Arnold’s causes of action depended
on her being a former ‘employee’ of
Mutual, and the undisputed facts established she was ... an independent con(Cont'd on Page 9, DECISIONS)
DECISIONS
(From Page 8)
tractor. Arnold claims the court erred in
concluding the common law test for
employment was applicable..., arguing
that a broader statutory definition of
‘employee’ is applicable under Labor
Code section 2750. Alternatively, she
contends the trial court incorrectly applied the common law test when it
determined ... she was not an ‘employee’ as a matter of law. As discussed below, we conclude after a de
novo review the trial court was correct...
rather than an independent contractor,
and a physician working for a primary
care clinic is an independent contractor
rather than an employee. (Lab. Code,
§§ 2750.5, 2750.6.) These presumptions clearly qualify, in particular cases,
the common law distinction between
‘employee’ and ‘independent contractor.’ As such, they would conflict with
section 2750 were it to be construed to
supplant the application of that distinction.
“Arnold contends it was error to apply
the common law test expressed in [S.
G.] Borello [& Sons, Inc. v Department
of Industrial Relations (1989)] 48 Cal.3d
341, to determine whether she was an
‘employee’ within the meaning of Labor
Code section 2802 [reimbursement of
expenditures]—the alleged violation of
which formed the basis of both her first
cause of action, as well as the derivative
third cause of action under the UCL.
She reasons Labor Code section 2750
provides a statutory definition that governs the meaning of ‘employee’ as it is
used in section 2802, and undisputed
facts established her as an ‘employee’
within the broader definition...
“We are not persuaded otherwise by
Arnold’s arguments concerning the legislative history of division 3 of the Labor
Code... [¶] We conclude the trial court
correctly determined the common law
[test] of employment was applicable for
purposes of Labor Code section 2802...
“Arnold claims ... that the trial court
nevertheless applied [the common law
test] incorrectly, largely because it
based its decision on facts relating to
the degree of control Mutual actually
asserted over work instead of the degree of control Mutual was entitled to
assert...
“One reviewing court has recently held
the Labor Code does not expressly
define ‘employee’ for purposes of Labor
Code section 2802, and therefore, the
common law test of employment applies to that section. (Estrada v. FedEx
Ground Package System, Inc. (2007)
154 Cal.App.4th 1, 10.)
“After a careful review of the opposing
evidence, we find nothing that raises a
material conflict... [U]nder the principal
test for employment under common law
principles, Mutual had no significant
right to control the manner and means
by which Arnold accomplished the results of the services she performed as
one of Mutual’s soliciting agents.
“It is unclear whether the ... court in
Estrada ... was called upon to consider
whether Labor Code section 2750 provided the statutory definition of ‘employee’ when it concluded such a definition did not exist. In any event, section
2750 does not supply such a definition
of ‘employee’ that is clearly and unequivocally intended to supplant the
common law definition of employment
for purposes of Labor Code section
2802...
“The additional factors of the common
law test also weigh in favor of finding an
independent contractor relationship...
[¶] Even if one or two of the individual
factors might suggest an employment
relationship, summary judgment is nevertheless proper when, as here, all the
factors weighed and considered as a
whole establish that Arnold was an
independent contractor and not an employee for purposes of Labor Code sections 202 and 2802...”
“Further, we note two statutes that immediately follow Labor Code section
2750... These sections provide rebuttable presumptions, respectively, that a
licensed contractor is an employee
For plaintiff: Initiative Legal Group,
Monica Balderrama, Glenn A. Danas,
and Katherine W. Kehr.
For defendant: Seyfarth Shaw, Francis
J. Ortman III, Eden Anderson, and Robb
-9-
D. McFadden.
First Dist Div One, 12/30/11; opinion
by Marchiano with Margulies and
Dondero concurring; 2012 DAR 71,
2011 WL 6849652.
PLAINTIFFS AS UNNAMED
PUTATIVE CLASS MEMBERS
WERE NOT BOUND BY
COLLATERAL ESTOPPEL WITH
RESPECT TO ANY ISSUE
DECIDED IN CONNECTION WITH
DENIAL OF CLASS
CERTIFICATION.
BRIDGEFORD v PACIFIC HEALTH
CORPORATION. In a January 18 opinion by Croskey, the Second District,
Division Three, reversed the dismissal
of a complaint alleging wage and hour
violations that had been entered by Los
Angeles Superior Court Judge Zaven V.
Sinanian. The opinion reads in part as
follows:
“We find the reasoning in Smith v. Bayer
Corporation (2011) 131 S.Ct. 2368 [a
consumer case] persuasive and conclude, under California law, that the
denial of class certification cannot establish collateral estoppel against unnamed putative class members on any
issue because unnamed putative class
members were neither parties to the
prior proceeding nor represented by a
party to the prior proceeding so as to be
considered in privity with such a party
for purposes of collateral estoppel.
“Plaintiffs here were not named plaintiffs
in Larner [v Pacific Health Foundation
(Super. Ct. L.A. County] No. BC322049,
and the trial court in that case denied
class certification. [The Court of Appeal
concluded that the settlement of Larner’s
individual claims deprived her of any
personal interest in the litigation and
rendered the appeal moot, and therefore dismissed the appeal [in which
Larner challenged the denial of class
certification]. Larner v. Los Angeles
Doctors Hospital Associates, LP (2008)
168 CA4th 1291, (summarized in CELA
Bulletin, Dec 08, p.6.)] Contrary to the
DECISIONS
(From Page 9)
trial court’s ruling, we conclude that
plaintiffs as unnamed putative class
members in Larner cannot be bound by
collateral estoppel with respect to any
issue decided in connection with the
denial of class certification. We therefore conclude that the sustaining of the
demurrer to the class action allegations
based on collateral estoppel was error.
“The trial court stated in its order sustaining the demurrer without leave to
amend that the entire complaint was
barred by collateral estoppel and that
plaintiffs should not be allowed to litigate as a class action the same causes
of action for which class certification
was denied in Larner..., or additional
causes of action that could have been
alleged in that case. The court did not
separately address plaintiffs’ individual
claims or their representative claims
under PAGA. Defendants concede that
there was no proper basis for sustaining
the demurrer to those claims, and we
agree.”
For plaintiffs: Mark Yablonovich, Neda
Roshanian, and Michael D. Coats.
For defendants: Silver & Freedman,
Andrew B. Kaplan and Jeffrey W. Mayes.
Second Dist Div Three, 1/18/12; opinion by Croskey with Klein and
Kitching concurring; 2012 DAR 684,
2012 WL 130615.
FIRST DISTRICT AFFIRMS
DISMISSAL OF EMPLOYER’S
ATTEMPT TO APPEAL ORDER
THAT GRANTED EMPLOYER’S
MOTION TO COMPEL
ARBITRATION OF INDIVIDUAL
CLAIMS BUT DENIED ITS
REQUEST TO DISMISS CLASS
AND PAGA ALLEGATIONS
REYES v MACY’S, INC. “Plaintiff and
respondent Felicia Reyes has moved to
dismiss the appeal of defendants ...
from an order granting Macy’s motion to
compel arbitration of plaintiff’s individual
claims but denying the request to dismiss class allegations and plaintiff’s
claim under [PAGA],” the First District,
Division Three, began in a December 21
opinion by Pollak that was certified for
publication on January 19. “We shall
gant the motion to dismiss the appeal
because that portion of the trial court’s
order granting Macy’s own motion to
compel arbitration of the individual claims
is not appealable, and the remainder of
the order denying the motion to dismiss
representative claims is not a final judgment and, therefore, also is not appealable at this time.”
current and former Surrex employees.
In his complaint, Muldrow brought
causes of action including failure to pay
overtime ... and failure to provide meal
periods ... among other claims. The trial
court certified a class of current and
former Surrex ‘senior consulting service
managers,’ who formerly worked (or
were currently working) as employment
recruiters for Surrex, since January 31,
2004.
For plaintiff: Aviva Natanya Roller, Qualls
& Workman, San Francisco.
For defendants: David Stanley
Bradshaw, Jackson Lewis, Sacramento; Betty Thorne Tierney, St. Louis.
First Dist Div Three, 12/21/11, cert’d
for pub 1/19/12; opinion by Pollak
with McGuiness and Jenkins concurring; 2012 DAR 797, 2011 WL
6416432.
“Appellants claim that they were not
subject to the commissioned employees exemption because they were not
primarily engaged in sales, their commissions were not based on price, and
Surrex’s compensation system was not
a bona fide commission system. We
consider each argument in turn.
FOURTH DISTRICT UPHOLDS
CLASSIFICATION OF PLAINTIFFS
AS EXEMPT COMMISSIONED
EMPLOYEES AND CITES
BRINKER IN REJECTING MEAL
BREAK CLAIMS
MULDROW v SURREX SOLUTIONS
CORPORATION. “In this appeal from a
judgment after a bench trial,” the Fourth
District wrote in a January 24 opinion by
Aaron, “we consider whether the trial
court [Judge Thomas P. Nugent] erred
in determining that an employer was not
required to pay overtime wages (Lab.
Code, § 510) to a class of current and
former employees because they were
subject to the commissioned employees exemption (Cal. Code Regs., tit. 8,
§ 11070, subd. (3)(D). Pursuant to this
exemption, employers are not required
to pay overtime wages to employees
‘whose earnings exceed one and onehalf times the minimum wage if more
than half of that employee’s compensation represents commissions.’ (Ibid.)
We conclude that the trial court properly determined that the employees
were subject to the commissioned
employees exemption...
“Tyrone Muldrow filed this class action
... on behalf of himself and a class of
-10-
“The evidence ... demonstrates that
appellants’ job, reduced to its essence,
was to offer a candidate employee’s
services to a client in exchange for a
payment of money from the client to
Surrex. Offering a candidate’s employment services in exchange for money
meets the ordinary definition of the word
‘sell’ ...
“Appellants’ contention that the term
‘commissions’ in the relevant regulation
... should be interpreted to include only
those commissions that are based
strictly, and solely, on a percentage of
the price of the product or service rendered constitutes an excessively narrow and wooden application of Keyes
Motors [Inc. v DLSE (1987) 197 CA3d
557] and Ramirez [Yosemite Water Co.
(1999) 20 C4th 785]. Such a limited
definition would not comport with the
contemporary legal sense of the word
‘commission.’ ... [¶] Accordingly, we
conclude that Surrex’s commissions
were sufficiently related to the price of
services sold to constitute commissions...
“Appellants note that the DLSE’s Enforcement Policies and Interpretations
Manual states, ‘Consistent commission earnings below, at or near the draw
are indicative of a commission plan that
is not bona fide.’ (DLSE Enforcement
DECISIONS
(From Page 10)
Policies and Interpretations Manual
(June 2002) § 50.6.1(4).) ... In light of the
... evidence [that ‘seven to ten’ consulting service managers consistently received payment in excess of their guaranteed draw], we reject appellants’ contention that Surrex’s commission system ‘was not bona fide as a matter of
law.’
“Appellants claim that the court erred in
concluding that Surrex ‘only had to
provide for [meal] breaks, even if they
were not taken.’ Appellants acknowledge that this court has held that an
employer need only provide such
breaks... (Brinker Restaurant Corp. v
Superior Court (2008) 165 Cal.App.4th
25, review granted Oct. 22, 2008...)
Appellants explain that ‘[s]hould the
Supreme Court not decide Brinker before this Court decides their appeal,
appellants raise the issue so as to
preserve their right to petition the Supreme Court for a grant of review on this
issue.’
“As of the date of the filing of this
opinion, the Supreme Court has not
decided Brinker. [Appellants] raise this
claim solely to preserve their right to
petition the Supreme Court on this issue. Accordingly, we conclude that
appellants have not demonstrated that
the trial court erred in denying appellants’ missed meal period claim.”
For plaintiffs: Lee Hogue, Tyler J. Belong, Tony R. Skogen; John S. Addams.
For defendant: Gibbs & Fuerst, Michael
T. Gibbs and Kevin L. Borgen.
Fourth Dist, 1/24/12; opinion by
Aaron with McConnell and McIntyre
1811998.
NINTH CIRCUIT
DISTRICT COURT IN
WASHINGTON ERRED IN
GRANTING SUMMARY JUDGMENT
ON AGE DISCRIMINATION
CLAIMS
SHELLEY v GEREN. Reversing summary judgment that had been granted
by the USDC for the Eastern District of
Washington on ADEA claims, the Ninth
Circuit wrote in part as follows in a
January 12 opinion by Claudia Wilken,
(Northern District Judge sitting by designation):
“Shelley sued the [Army Corps of Engineers] for violating [ADEA] by failing to
interview him and rejecting his application for two promotions... We find that
Shelley presented a prima facie case of
age discrimination and evidence of pretext sufficient to create a material dispute as to whether age-related bias was
the ‘but-for’ cause of the Corps’ failure to
interview and promote him. The district
court’s grant of summary judgment ... is
reversed.
“In 2005, the Corps sought to fill a GS14 Supervisory Procurement Analyst
position... The Corps pursued a twostep hiring process, in which it advertised an opening for a 120-day temporary position, and then announced a
formal process to hire a permanent
Chief of Contracting...
“Preliminarily, the Corps argues that we
may not consider Shelley’s complaint
of non-selection for the 120-day position because he failed to seek administrative remedies for that decision in a
timely manner. [¶] Shelley’s initial contact with the Corps’ EEO officer seventeen days after he learned that he had
been denied the opportunity to interview
for the permanent Chief of Contracting
position timely initiated his administrative claim based on being denied interviews and selection for the 120-day and
the permanent positions, all of which
occurred as part of the same course of
conduct by the Corps...
“Prior to Gross [v FBL Financial Services, Inc. (2009) 129 S Ct 2343], our
circuit applied the burden-shifting evidentiary framework of McDonnell Douglas, 411 U.S. at 802, to motions for
summary judgment on ADEA claims.
[cites omitted.] The district court declined to apply this framework, believing
that Gross rejected it. The Corps argues to the same effect.
“We disagree. In Gross, the Court
-11-
grappled with whether a mixed-motives
instruction may be given to the jury in an
ADEA case [and] held that a plaintiff
retains at all times the burden of persuasion to establish that age was the ‘butfor’ cause of an employer’s adverse
action. Because Gross involved a case
that had already progressed to trial, it
did not address the evidentiary framework applicable to a motion for summary judgment. The Court, in fact, explicitly noted that it ‘has not definitively
decided whether the evidentiary framework of McDonnell Douglas utilized in
Title VII cases is appropriate in the
ADEA context.’ Id. at 2349 n. 2.
“Since the decision in Gross, several
sister circuits have continued to utilize
the McDonnell Douglas framework to
decide motions for summary judgment.
[cites omitted.] We join them and hold
that nothing in Gross overruled our cases
utilizing this framework to decide summary judgment motions in ADEA
cases...
“It is undisputed that Shelley was fiftyfour at the relevant time, he was qualified for both the temporary and permanent positions, he was denied both
positions, and both went to a substantially younger candidate. Accordingly,
Shelley has established a prima facie
case of age discrimination.
“Shelley presented direct evidence of
age discrimination to rebut the Corps’
purported nondiscriminatory reason.
Oberle testified that Scanlan and Brice
inquired about the projected retirement
dates for employees in the contracting
divisions during the hiring period for the
120-day and permanent positions. A
fact-finder could infer from this that they
considered age and projected retirement relevant to the hiring decision...
[¶] Although Scanlan and Brice did not
make the hiring decisions alone, evidence of their inquiry and of their influence over the process supports an inference that the Corps’ proffered explanation ... was a pretext for age discrimination...
“[Indirect] [e]vidence of a plaintiff’s quali(Cont'd on Page 12, DECISIONS)
DECISIONS
(From Page 11)
fications, standing alone, may [also] be
sufficient to prove pretext. [cites omitted.] A comparison of Shelley’s and
Marsh’s resumes gives rise to a factual
dispute as to whether Shelley was better qualified for the position than Marsh...
trict Judge William H. Stafford’s] grant
of summary judgment in favor of his
former employer ... as to his claims for
race discrimination and harassment,
retaliatory discharge, and [WTVPP]
under [FEHA]...
“The Corps argues that age bias cannot
be inferred in the selection for the permanent position, because other applicants close in age to Shelley were
interviewed for that position and Shelley
was not. Those applicants, however,
were not selected for the position...
Stacking the interview pool with older
candidates does not immunize the decision to hire a younger one...
“Applying the burden-shifting analysis
under McDonnell Douglas Corp. v.
Green, 411 U.S. 792 (1973), we conclude that Lawrence presented sufficient evidence to raise a triable issue of
fact as to whether [company president]
Small’s decision to fire him was
pretextual.
“In sum, Shelley produced sufficient
evidence to establish a prima facie case
of age discrimination, and has responded to the Corps’ alleged nondiscriminatory reason ... by identifying evidence, both direct and indirect, showing that the Corps’ explanation is
pretextual.”
For plaintiff: David M. Rose, Walla Walla.
For defendant: James A. McDevitt,
United States Attorney, Frank A. Wilson, Assistant United States Attorney,
Spokane; William E. Edwards, United
States Army Corps of Engineers, Kansas City MO.
Ninth Circuit, 1/12/12; opinion by
Wilken joined by B. Fletcher; concurring and dissenting opinion by
Bybee; 2012 DAR 514, 2012 WL 89215.
IN UNPUBLISHED MEMORANDUM,
NINTH CIRCUIT PANEL HOLDS
THAT CENTRAL DISTRICT JUDGE
STAFFORD ERRED IN GRANTING
SUMMARY JUDGMENT ON RACE
DISCRIMINATION AND WTVPP
CLAIMS
LAWRENCE v TURNER’S OUTDOORSMAN CORP. In a January 6
memorandum, a Ninth Circuit panel,
(Pregerson, Paez, and District Judge
James P. Jones from Virginia), wrote in
part as follows:
“Philip Lawrence appeals [Central Dis-
“In the months prior to Lawrence’s termination, Small made a series of racially charged comments deriding
Lawrence and Turner’s only other African-American manager. Small was also
the sole decision-maker involved in
Lawrence’s termination... In addition,
Lawrence offered sworn testimony that
raises triable issues as to whether
Turner’s stated reasons for his termination—namely, his poor work performance, and Turner’s need to
downsize—were unworthy of credence.
For example, although Turner’s employees testified that Lawrence failed to
answer his cell phone during the day,
and failed to respond to an alarm call on
at least one occasion, Lawrence testified that he consistently responded to
phone calls and never missed an alarm
call during his tenure. Lawrence also
testified that he observed Small make
financial decisions inconsistent with
Turner’s assertion that it was experiencing financial difficulties at the time of
his termination. In light of the numerous
disputed issues of fact present in the
record, the district court erred in granting summary judgment in Turner’s’ favor
as to Lawrence’s race discrimination
claim. [FN2. Because Lawrence’s
[WTVPP] claim is based on the same
facts as his FEHA race discrimination
claim, the district court [also] erred in
granting summary judgment as to
Lawrence’s wrongful termination claim.]
“Lawrence has failed to raise triable
issues of fact as to his FEHA retaliation
claim, however. Lawrence adduced no
evidence that Small was aware that he
discussed Small’s racially charged com-12-
ments with Turner’s’ human resources
personnel. Lawrence declined to file a
formal complaint, and stated that he did
not want Small to know that he found
the comments offensive. There is no
record evidence that his wishes were
ignored.”
For plaintiff: Okorie Okorocha, Pasadena.
For defendant: Joshua Adam Fields, El
Segundo.
Ninth Circuit, 1/6/12; memorandum
opinion by Pregerson, Paez, and
Jones; 2012 WL 32201 (not selected
for publication in the Federal Reporter).
NINTH CIRCUIT EXPLAINS AND
APPLIES PRINCIPLES OF ISSUE
PRECLUSION IN AFFIRMING
DISMISSAL OF DISABILITY
CLAIMS
WHITE v CITY OF PASADENA. In a
January 17 opinion by Ikuta, the Ninth
Circuit affirmed Central District Judge
Manuel Real’s dismissal of claims alleging that the plaintiff police officer had
been discriminated against and harassed by the City due it is perception
that she had a disability. The Ninth
Circuit wrote in part as follows:
“After her first termination ... and subsequent reinstatement, Karin White
brought a suit in state court [White I] ...
After her second termination, she reiterated her discrimination and harassment
claims in an administrative proceeding,
where she also argued that the termination was retaliatory. [White II] Both of
White’s actions resulted in a decision in
favor of the City. White now brings
claims in federal court based on the
same theories litigated in state proceedings. We conclude that California
principles of issue preclusion prevent
us from reaching these issues here...
“The California Supreme Court established its general rules for issue preclusion in the seminal case of Lucido v.
Superior Court, 795 P.2d 1223 (Cal.
1990). According to Lucido, the doc(Cont'd on Page 13, DECISIONS)
DECISIONS
(From Page 12)
trine of issue preclusion [applies] when
six criteria are met... These criteria are:
(1) ‘the issue sought to be precluded
from relitigation must be identical to
that decided in a former proceeding’; (2)
the issue to be precluded ‘must have
been actually litigated in the former
proceeding’; (3) the issue to be precluded ‘must have been necessarily
decided in the former proceeding’; (4)
‘the decision in the former proceeding
must be final and on the merits;’ (5) ‘the
party against whom preclusion is sought
must be the same as, or in privity with,
the party to the former proceeding’: and
(6) application of issue preclusion must
be consistent with the public policies of
‘preservation of the integrity of the judicial system, promotion of judicial
economy, and protection of litigants
from harassment by vexatious litigation.’ Id at 1225-27.
“We conclude ... that White I precludes
White from arguing that the City’s actions constituted discrimination or harassment based on perceived disabilities, and that White II precludes White
from arguing that the City did not have
an adequate justification for her termination, or that the proffered explanation
for her termination was a pretext for
retaliatory intent.”
For plaintiff: Richard A. Love, Kathleen
M. Erskine, Los Angeles.
For defendants: Richard R. Terzian,
Robert J. Tyson, Burke, Williams &
Sorensen, Los Angeles.
Ikuta joined by Canby and Gould;
2012 DAR 613, 2012 WL 118569.
REVERSING DISMISSAL, NINTH
CIRCUIT HOLDS THAT WHETHER
FORMER EMPLOYEE IS AN
ERISA “PLAN PARTICIPANT” IS A
SUBSTANTIVE ELEMENT OF THE
CLAIM, NOT A PREREQUISITE
FOR SUBJECT MATTER
JURISDICTION
LEESON v TRANSAMERICA DISABILITY INCOME PLAN. In an opinion by
Paez filed on January 23, the Ninth
Circuit wrote in part as follows:
“Plaintiff ..., a former employee of Defendant..., filed this action under [ERISA]
to challenge the termination of his longterm disability benefits. The district court
[WD Wash], applying an abuse of discretion standard, upheld [the Plan’s]
decision to terminate his benefits.
Leeson appealed. In a prior disposition,
we reversed the district court’s grant of
summary judgment ... and remanded
with instructions to the district court to
apply a de novo standard of review...
Leeson v. Transamerica Disability Income Plan, 279 F. App’x 593 (9th
Cir.2008).
“On remand, Transamerica filed a motion to dismiss Leeson’s action for lack
of subject matter jurisdiction on the
ground that Leeson did not have statutory standing as a plan participant to file
suit under ERISA. Leeson, on the other
hand, argued that he was a plan participant because he was employed at
Transamerica at the time he applied for
benefits. Leeson also stressed that
Transamerica approved his claim and,
in fact, paid him benefits for four years.
The district court, relying on Curtis v.
Nevada Bonding Corp., 53 F.3d 1023
(9th Cir. 1995), concluded that Leeson
was not a plan participant and granted
Transamerica’s motion to dismiss. The
district court concluded that because
Leeson lacked standing to pursue an
ERISA claim, there was no federal subject matter jurisdiction. Leeson again
timely appealed.
“In this appeal, Leeson argues that the
district court erroneously relied on our
prior holding in Curtis... In Curtis, we
held that a district court lacked jurisdiction to consider an ERISA claim where
a former employee ‘had neither a reasonable expectation of returning to covered employment nor a colorable claim
to vested benefits. Id. at 1027. Relying
on a more recent decision, Vaughn v.
Bay Environmental Management, Inc.,
Leeson contends that under ERISA, a
‘dismissal for lack of standing is properly viewed as a dismissal for failure to
state a claim rather than a dismissal for
lack of subject matter jurisdiction.’ 567
F.3d 1021, 1024 (9th Cir.2009). Leeson
-13-
therefore argues that because he alleged a colorable claim for benefits, the
district court had subject matter jurisdiction to address the merits of his case
on remand.
“[W]e agree with Leeson that Vaughn
controls. Whether Leeson is a plan
participant for purposes of ERISA is a
substantive element of his claim, not a
prerequisite for subject matter jurisdiction. As the Supreme Court has instructed, ‘when Congress does not rank
a statutory limitation on coverage as
jurisdictional, courts should treat the
restriction as nonjurisdictional in character.’ Arbaugh v. Y & H Corp. 546 U.S.
500, 516 (2006). To the extent our prior
cases—including Curtis—hold otherwise, they have ‘no precedential effect’
because they are precisely the type of
‘drive-by jurisdictional rulings’ the Supreme Court has since rejected. Id. at
511 (quoting Steel Co. v. Citizens for a
Better Env’t, 523 U.S. 83, 91 (1998).
We therefore vacate the dismissal and
remand for further proceedings.”
For plaintiff: Steven Krafchick, Seattle.
For defendant: David Levin, Drinker
Biddle & Reath, Washington DC.
Paez joined by B. Fletcher and
McKeown; 2012 DAR 918, 2012 WL
171598.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
THIRD DISTRICT AFFIRMS
SUMMARY JUDGMENT ON
RETALIATION CLAIMS AND
SANCTIONS FOR OVERBROAD
AND IRRELEVANT REQUESTS
FOR ADMISSIONS
SWINDLE v RES-CARE OF CALIFORNIA, INC. “Swindle and Granados filed
suit against Res-Care,” the Third District began in a January 11 opinion by
Raye, “alleging retaliation under [FEHA]
and [WTVPP]. Res-Care moved for sum(Cont'd on Page 14, DECISIONS)
DECISIONS
(From Page 13)
mary judgment, which the trial court
granted. The court found the undisputed
facts demonstrated legitimate nondiscriminatory reasons for Res-Care’s actions. Swindle and Granados appeal,
arguing they established pretext on the
part of Res-Care, and the court erred in
granting Res-Care’s motion for a protective order and request for sanctions.
We shall affirm the judgment.
“In August 2005 Granados received her
first and only performance review from
[area director] Nichols. The review was
very positive and Granados received a
raise. In July 2006 Cal-Res terminated
Granados. The termination was based
on her failure to complete a background
check on a new employee and allowing
the employee to begin working ... without background clearance, and for failing to report abuse of a client. [¶]
Granados admitted the misconduct...
Shortly after her termination, Granados
submitted a complaint to the [DFEH]
alleging her termination was because
she was pregnant.
“[Executive Director] Smith terminated
Swindle ... in December 2006. Smith
cited Swindle’s disciplinary warnings
for disrespectful speech, violation of the
photograph policy, spreading false information about a coworker, offending a
client’s parent, and yelling at a coworker, all of which occurred between
October and December 2006.
“In June 2006 Swindle’s daughter,
Samantha Swindle, filed an action
against Res-Care and Nichols alleging
numerous causes of action stemming
from her alleged sexual harassment by
coworker Michael Madsen. Granados
submitted a sworn declaration regarding Madsen’s conduct. Res-Care filed a
motion for summary judgment or ...
summary adjudication.
“The trial court denied Res-Care’s motion for summary judgment but granted
summary adjudication as to nine of
Samantha Swindle’s 10 causes of action. The court found that upon learning
of the harassment allegation in July
2005, Res-Care immediately took steps
to prevent further harassment. In addition, the court found the declaration and
deposition testimony of Granados conflicted with Samantha Swindle’s own
deposition testimony.
“In December 2007 Swindle filed an
action against Res-Care; Granados filed
a separate action in March 2008. The
two actions were later consolidated...
[¶] In March 2009 Granados served
Res-Care with a request for admissions
and form interrogatories. The court
granted Res-Care’s motion for a protective order and, finding the requests overbroad and irrelevant, awarded $1,800 in
monetary sanctions.
“Res-Care filed a motion for summary
judgment... The trial court granted summary adjudication in favor of Res-Care
as to three causes of action regarding
Swindle and two causes of action regarding Granados. [¶] The court found
that although both Swindle and Granados
made prima facie showings that they
engaged in the protected activities of
complaining about sexual harassment,
reporting abuse and neglect of dependent adults, and supporting a coworker
in her unemployment claim, ‘[t]he undisputed facts presented demonstrate
legitimate non-discriminatory reasons
for the actions ending in termination
taken against Ms. Swindle. Thereafter
Plaintiff has failed to establish ‘Pretext’
for the actions...’ The court made a
similar finding regarding Granados. In
addition, the court found Swindle’s facts
failed to support termination in violation
of public policy.
“The trial court determined plaintiffs failed
to show Res-Care’s reasons ... were
mere pretext, concealing a retaliatory
motive. Plaintiffs contend the trial court
could only have reached its conclusion
regarding pretext ‘by accepting all facts
and inferences in Res-Care’s favor and
rejecting those favorable to’ plaintiffs.
We disagree; nothing in the record supports plaintiffs’ assertion that the trial
court accepted one party’s version over
the over. [detailed discussion of evidence omitted.]
“Granados argues the trial court abused
its discretion in granting Res-Care’s
protective order. Granados argued that
Res-Care’s parent company, Res-Care,
-14-
Inc., controlled Res-Care to such an
extent that it was liable for Res-Care’s
conduct. Granados served requests for
admissions on the parent company.
She sought information about other
subsidiaries nationwide. The trial court
granted Res-Care’s motion for a protective order, finding the requests overbroad and irrelevant.
“According to Granados, the court erred
in granting the motion in its entirety,
since some of the requests were relevant to her claims against Res-Care.
However, Granados requested information Res-Care had previously provided
to her in the form of a declaration by a
corporate officer. We find no abuse of
discretion.”
For plaintiffs: Mark Peter Velez, Rocklin;
John F. Hodges, Arroyo Grande.
For defendants: Dorothy Sheng-Ing Liu,
Hanson, Bridgett, Marcus, Vhlahos &
Rudy, San Francisco.
Third Dist, 1/11/12; opinion by Raye
with Blease and Nicholson concurring; 2012 WL 86406 (unpublished).
STIPULATION SIGNED
FOLLOWING MEDIATION WAS
ENFORCEABLE AS BINDING
SETTLEMENT AGREEMENT
MEJIA v JHAN, INC. In an unpublished
opinion by Grimes filed on January 10,
the Second District, Division Eight, wrote
in part as follows:
“Defendants and appellants ... appeal
from the judgment entered on a written
stipulation for settlement following the
court’s granting of plaintiff and respondent Gilda C. Mejia’s motion pursuant
to Code of Civil Procedure, section
664.6. We conclude substantial evidence supports the court’s order enforcing the written settlement and therefore affirm.
“Mejia, a home health care worker,
brought this action against the Jhan
Defendants for failure to pay minimum
wages ... along with other alleged statutory violations. The Jhan defendants ...
DECISIONS
(From Page 14)
contend[ed] Mejia was not an employee
but an independent contractor, as were
all of the several hundred home care
workers with whom they worked.
“A week before trial was set to begin in
October 2010, the parties participated
in a day-long mediation session. The
parties agreed to resolve their dispute
and signed a two-page document titled
‘Stipulation for Settlement.’ The gist of
the settlement was that the Jhan defendants, with no admission of liability,
would pay Mejia within 45 days the sum
of $25,000 in return for a release of all
claims, the terms of the agreement
would be confidential, and Mejia would
not reapply for work with, or otherwise
seek referrals from, the Jhan defendants in the future. Mejia, her counsel,
defense counsel and both Jhan defendants executed the Stipulation that day.
“Paragraph 4(f) of the Stipulation provides: ‘Parties contemplate preparation
of a long form settlement agreement by
defense counsel and its delivery to
plaintiff’s counsel within the next 10
days.’ Defense counsel drafted a fourpage, long-form agreement reiterating
the terms set forth in the Stipulation and
forwarded it to Mejia’s counsel. Mejia
and her counsel executed the long-form
agreement and returned it to defense
counsel on October 25, 2010.
“Consistent with paragraph 4(h) of the
Stipulation, Mejia also filed a Notice of
Settlement with the court, indicating a
dismissal of the action would be forthcoming. On November 30, 2010, defense counsel notified Mejia’s counsel
that the Jhan defendants would not
make payment under the settlement
agreement because of an alleged breach
of the confidentiality provision by Mejia.
The Jhan Defendants refused to execute the long-form agreement and did
not comply with the Stipulation.
“Mejia filed a motion pursuant to section
664.6 to enforce the Stipulation and
enter its terms as a judgment... [¶] After
briefing and argument, the court [Judge
Daniel J. Buckley] granted Mejia’s motion, citing Hines v. Lukes (2008) 167
Cal.App.4th 1174, and explaining the
court was authorized to enforce a bind-
ing settlement irrespective of whether
there were allegations of breach or excuse for nonperformance. The Jhan
Defendants contend on appeal the trial
court erred in granting Mejia’s motion
and entering judgment...
ADMINISTRATIVE COMPLAINT
FAILED TO EXHAUST
HARASSMENT CLAIM, BUT
DEFENDANT WAS NOT ENTITLED
TO ATTORNEYS’ FEES
“The Stipulation satisfies the statutory
prerequisites of section 664.6. It is a
written agreement duly executed by all
parties. Moreover, paragraph 6 of the
Stipulation expressly provides that ‘[t]his
mediation settlement agreement is intended to be binding and enforceable
and is effective this 13th day of Oct.,
2010, and reflects the final agreement
between the parties ... pursuant to Evidence Code Section 1123...’
RADFORD v VANDERSPEK. “In this
consolidated appeal,” the First District,
Division Five, began in an unpublished
January 9 opinion by Simons, “plaintiff
Randall Radford appeals the dismissal
of his cause of action for racial harassment ... after the trial court granted
defendant’s motion for judgment on the
pleadings. Defendant appeals the court’s
denial of his postjudgment motion for
attorney fees. We reject the parties’
contentions and affirm the judgment
and postjudgment attorney fee order.
“Paragraph 4(f) of the Stipulation, which
states the parties contemplated drafting
a long-form agreement with more formality, does not detract from the enforceability of the Stipulation as a binding settlement agreement...
“The Jhan defendants also contend the
court erred because the Stipulation was
induced by fraud... They assert they
learned in October 2010 that Mejia had
falsely stated her immigration status on
an official document, a fact she apparently denied at her deposition. In argument before this court, they contend ...
they would have proceeded to trial and
not settled on any basis had Mejia
testified honestly at her deposition. The
Jhan Defendants presented no evidence
to the trial court that they would not
[otherwise] have entered into the settlement... We find no merit to the ... purported fraud defense to contract formation.”
For plaintiff: Joseph M. Lovretovich and
Christopher W. Taylor.
For defendants: Mito Law and Justin G.
Lynch.
Second Dist Div Eight, 1/10/12; opinion by Grimes with Rubin and Flier
concurring; 2012 WL 75668 (unpublished).
“Plaintiff contends judgment on the
pleadings was improperly granted because his DFEH complaint was sufficient to encompass his claim of race
harassment. [¶] Nazir [v United Airlines, Inc. (2009) 178 CA4th 243] requires us to construe the administrative
complaint in light of what might be
uncovered by a reasonable investigation... Plaintiff argues this compels an
examination of facts and information
outside the scope of the pleadings and,
therefore, cannot be determined as a
matter of law on a motion for judgment
on the pleadings...
“We disagree. First, Nazir did not hold
or suggest that the determination ...
cannot be made at the pleading stage,
and plaintiff provides no authority for
that assertion. Second..., there is no
logical barrier to resolving this issue on
the pleadings in the appropriate case.
As a practical matter, a plaintiff may
attach to a complaint or seek judicial
notice of his or her administrative
complaint(s) and other documents filed
by him or her with the agency in support
thereof. Plaintiff attached documents of
this nature to his complaint. In addition,
a plaintiff may seek judicial notice of
documents in the agency file... This
information combined with the allegations in the complaint may then provide
a sufficient basis for the trial court to
determine the scope of the plaintiff’s
-15-
DECISIONS
(From Page 15)
administrative complaint and the scope
of any reasonable or actual agency
investigation...
“The allegations of plaintiff’s administrative complaints clearly allege discrimination: ‘explicit changes in the ‘terms,
conditions, or privileges of employment’
(§ 12940, subd. (a); that is, changes
involving some official action taken by
the employer. [cite omitted.] Even construed liberally, the allegations ... do not
allege harassment...
“Plaintiff argues the official employment
actions alleged as discrimination in his
DFEH complaints, including ‘precluding his equitable pay adjustments, and
terminating him,’ also communicated a
‘hostile message,’ thereby establishing
a basis for plaintiff’s harassment claim.
“Roby [v McKesson Corp. (2009) 47
C4th 686] is inapposite. In Roby, the
Supreme Court concluded ‘official employment actions ... can also have a
secondary effect of communicating a
hostile message ‘when the actions establish a widespread pattern of bias.’
(47 Cal.4th at p. 709.) ... Here, unlike in
Roby, plaintiff alleged no ‘widespread
pattern of bias’ in his DFEH complaint.
Moreover, the discriminatory acts alleged do not add to a hostile message
expressed in ‘other, more explicit ways’
or provide a motive for pervasive harassment. Instead, the discriminatory acts
stand alone...
“Plaintiff also argues on appeal that a
reasonable agency investigation of these
complaints would have uncovered harassment. However, he never made this
argument in the trial court and we treat
it as forfeited... In any event, we reject
the argument on the merits...
“The trial court’s ... order denying
defendant’s attorney fee motion states,
in part: ‘Although the retaliation claim
was frivolous the harassment claim was
not. Even if allocation was appropriate
under ... section 12956b there are no
costs and very little fees that would not
have been incurred on the harassment
claim...
“[D]efendant’s counsel engaged in ‘block
billing,’ a time-keeping method in which
each attorney entered his or her total
hours spent working on defendant’s
case, rather than itemizing the time
expended on specific tasks... Because
defendant failed to provide sufficient
information for the trial court to determine the number of hours devoted by
counsel to the retaliation claim, defendant has failed to establish that the
court’s denial of attorney fees was an
abuse of discretion.”
For plaintiff: Carla Vanessa Minnard,
Oakland; Sharon Joellen Arkin, Los
Angeles.
For defendant: Raymond A. Cardozo,
Reed Smith LLP, San Francisco.
First Dist Div Five, 1/9/12; opinion by
Simons with Jones and Bruiniers
EMPLOYER WAIVED RIGHT TO
MOVE TO COMPEL ARBITRATION
OF CLASS WAGE AND HOUR
CLAIMS; THREE-YEAR DELAY
WAS NOT EXCUSED BY
INVOCATION OF INTERVENING
ISSUANCE OF STOLT-NIELSEN
DECISION
BURTON v 24 HOUR FITNESS. “Defendant ... appeals from [Orange County
Superior Court Judge Kim G. Dunning’s]
March 8, 2011 order deny its motion to
compel arbitration,” the Second District, Division Five, began in an unpublished January 18 opinion by Turner.
The opinion continues in part as follows:
“Defendant sought to compel arbitration
almost three years after plaintiff ... filed
a class action alleging various violations under the Business and Professions and Labor Codes. The trial court
ruled defendant waived the right to move
to compel arbitration. Defendant asserts this was error. Additionally, the
trial court ruled that Stolt-Nielsen S.A.
v. AnimalFeeds International Corp.
(2010) 559 U.S. ___, [130 S.Ct. 1758,
1774] did not preempt the unconscionability analysis in Gentry v. Superior
Court (2007) 42 Cal.4th 443, 462-463.
We conclude the trial court’s finding of
-16-
arbitration waiver is supported by substantial evidence. Accordingly, we affirm the denial of defendant’s motion to
compel arbitration. We need not discuss the preemption question.
“On December 10, 2007, plaintiff filed a
class action against defendant. The
complaint asserted Labor Code causes
of action for unpaid wages; unpaid split
shift wages; wage statement violations;
and failure to provide meal and rest
periods. The complaint also contained
causes of action for unfair business
practices in violation of Business and
Professions Code section 17200 et seq.
and declaratory relief. On March 7, 2008,
defendants filed an answer asserting
arbitration as an affirmative defense...
On August 31, 2009, plaintiff filed a first
amended complaint asserting the same
causes of action as those in the original
complaint. Neither the original nor the
first amended complaint contains a claim
pursuant to the Private Attorney General Act... On September 30, 2009, in
its answer, defendant again asserted
arbitration as an affirmative defense.
“From June 4, 2008 to January 22, 2010,
the parties propounded written discovery devices. Defendant served on plaintiff: a total of 151 interrogatories...; 3
document production demands, comprising 76 requests; and 30 admissions
requests. Plaintiff objected to being
served more than 25 interrogatories,
contending that the arbitration agreement, which incorporated the Federal
Rules of Civil Procedure, permitted defendant to serve only 25 interrogatories.
Plaintiff also served interrogatories and
3 document demands on defendant.
This included 75 document demands
relating to the factors identified in Gentry... Defendant objected to the Gentryrelated document production demands.
On October 1, 2008, plaintiff filed a case
management conference statement requesting resolution of the parties’ discovery dispute, ‘The fact Defendant continues to insist that it will file a motion to
compel arbitration has significantly impeded discovery, driven up costs of this
litigation, and will continue to impair the
efficiency in handling this case until the
issue is resolved.’ In addition to written
DECISIONS
(From Page 16)
discovery, Plaintiff also retained a consultant to formulate a sample of the
putative class members and analyze
data produced by defendant.
“At the October 3, 2008 case management conference, the trial court set a
deadline [of November 1] for defendant
to file its motion to compel arbitration...
[¶] On October 28, 2008, defendant
informed plaintiff it would not file a motion to compel arbitration... However,
defendant did not withdraw its affirmative defense of arbitration in its answer.
Defendant indicated it would move for
summary adjudication on that affirmative defense...
“At the November 6, 2008 case management conference..., the trial court
discussed plaintiff’s Gentry-related discovery: ‘There is one final issue. And
that is, although defendants have indicated they do not intend to bring a
motion to compel arbitration, they nevertheless are availing themselves of the
their rights to continue to maintain that
as an affirmative defense to the complaint... [¶] In regard to a motion to
compel [ ]—the bottom line is that there
is no need for [Gentry] discovery now—
underline ‘now’—since there is going to
be no motion to compel.’ To move forward with precertification issues, plaintiff agreed to withdraw discovery regarding the Gentry factors without prejudice
to renewing the discovery at a later
time.
“On November 10, 2010, defendant
moved to compel arbitration and stay
the judicial proceedings... Defendant
explained that it had informed plaintiff
that it was not going to file a motion to
compel arbitration because the existing
law at the time held class action waivers
... were unenforceable... Defendant now
sought to compel arbitration because
Stolt-Nielsen S.A. v. AnimalFeeds International Corp. (2010) 559 U.S. ___,
[130 S.Ct. at p. 1774], preempted Gentry... In addition, defendant sought a
stay of all proceedings pending arbitration, or in the alternative, pending the
United States Supreme Court’s ruling in
AT&T Mobility v. Concepcion (2011)
563 U.S. ___ [131 S.Ct. 1740, 17511753].
“We conclude the trial court’s arbitration waiver finding is supported by substantial evidence. First, defendant acted
inconsistent with its right to arbitration... [¶] Defendant’s assertion that it
could not move to compel arbitration in
October 2006 because of unfavorable
existing law is premised on its inaccurate reading of Gentry... Gentry never
held all class action waivers are unenforceable. Rather, depending on the
circumstances, a class action waiver
may be enforceable, notwithstanding
California’s unconscionability jurisprudence.
“Plaintiff has been prejudiced by
defendant’s delay... [¶] Here, plaintiff
withdrew his Gentry-related discovery
devices in reliance on defendant’s representation... [¶] In addition, plaintiff
was prejudiced because defendant took
advantage of discovery devices it was
not entitled to utilize had plaintiff’s claims
C O M I N G
been arbitrated...
“Because defendant waived its right to
arbitrate, we do not need to discuss the
parties’ arguments regarding whether
the Gentry unconscionability analysis
is preempted by the [FAA] under AT&T
Mobility v. Concepcion; [whether] the
class action waiver violates public policy;
[whether] the arbitration agreement is
procedurally and substantively unconscionable; and [whether] the unfair competition law injunctive relief claims are
arbitrable in part.”
For plaintiff: James M. Trush; Kevin T.
Barnes.
For defendant: Jackson Lewis, Nicky
Jatana, Cynthia J. Emry, and Bethany
J. Grabiec.
Second Dist Div Five, 1/18/12; opinion by Turner with Kriegler and
Kumar concurring; 2012 WL 130680
(unpublished).
E V E N T S
March 16-17, 2012
NELA Seminar
The ABCs of Alternative Dispute Resolution in Employment Cases
Seattle Marriott Waterfront
March 20, 2012
CELA Lobby Day 2012
Sacramento
(info: mariko@cela.org)
April 23, 2012
Symposium by The Institute and N.Y. Law School Law Review
Trial by Jury or Trial by Motion? Summary Judgment, Iqbal,
and Employment Discrimination
New York Law School, New York NY
(see www.nela.org)
May 18, 2012
CELA Wage and Hour Committee’s
Eighth Annual Advanced Wage and Hour Seminar
Bar Association of San Francisco
June 20-23, 2012
NELA's Annual Convention
Sheraton San Diego
(see www.nela.org)
October 5-6, 2012
CELA’s 25th Annual Conference
Hilton Orange County/Costa Mesa
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CHAIR MESSAGE
(From Page 1)
and proudly predict that CELA will continue to grow stronger and more influential on many levels. We ended 2011 with
1,035 members, compared to 970 in
2010. And our membership count continues to rise and our solidarity to
strengthen. Throughout the state, local
CELA groups are forming and meeting—West Valley CELA, Orange County
Employment Attorneys, Sacramento
CELA, LEFTJAW, and, soon to be
formed, San Diego CELA.
I am also happy to report that in October, 297 members attended our Annual
Conference in Monterey, and an additional 87 people attended the Social
Media Experience seminar that preceded it. (CELA generated approximately $65,000 from that enlightening
and inspiring conference.)
Throughout the year, CELA provided
top quality seminars and webinars which
were spearheaded by hard working volunteers from the Board and CELA’s
thirteen active committees. (Those thirteen committees are: Education,
Listserv, Website, Publication, Diversity Outreach, Mentor, DFEH, Amicus,
Legislation, Wage and Hour, Technology, Immigration Employment Rights,
and Practice Management.)
Each committee will continue to develop programs to educate and support
our members in their practices, and to
promote our common goal of advancing
the rights of California workers. Our
immediate past Chair, Virginia Keeny,
prepared an extensive report to the
membership which was mailed on October 28, 2011. That report provides a
detailed year-end review of CELA’s many
accomplishments and activities, all
made possible by members who have
generously volunteered their time and
knowledge.
This year, to interact more closely with
the volunteers on each committee, the
CELA Board has invited each committee Chair or its delegate to attend a
Committee Conclave on March 19, 2012
in Sacramento, the day before Lobby
Day. Our purpose is to introduce the
goals of CELA’s strategic plan, solicit
committee input, develop a shared un-
derstanding of the charter of each committee, establish a mechanism for better communication between the Board
and the committees, and to identify any
structural or administrative changes or
types of support that the committees
may need.
Our 2012 Lobby Day will be the following day, March 20. CELA’s voice is
heard and its presence felt in Sacramento every day, but particularly on
Lobby Day. And CELA’s Political Director, Mariko Yoshihara, is instrumental
in making that happen: she leads the
Legislative Committee which had its
strongest-ever legislative agenda in
2011. The Committee coordinated the
sponsorship of five bills: AB 267, Choice
of Law/Choice of Forum Clauses (vetoed); AB 325, Bereavement Leave (vetoed); AB 559, Equal Access to Justice
(vetoed); AB 1062, Arbitration Appeals
(eligible for action in 2012); and AB
1286, Chindarah pick-offs (eligible for
action in 2012). This year, the Legislative Committee will be working on issues involving forced arbitration,
caregiver discrimination, Chindarah v
Pick Up Stix, temporary agencies, and
will possibly revisit the bereavement
leave bill, to name just a few. We look
forward to the participation of many
CELA members in this year’s Lobby
Day, and to their increasing involvement
in CELA’s legislative activities.
A CELA mission dear to my heart is
increasing the diversity of our membership and leadership. I am so proud of the
members of CELA’s Diversity Committee for their creativity and endless energy. In addition to awarding scholarships for our Annual Conferences, volunteers spent full and multiple days
outreaching to law schools to promote
our Employee Justice Fellowship program. We also provided pro bono services to the community, attended State
Bar swearing-in ceremonies, presented
the Summer Law Clerk Orientation, and
provided networking/educational events
in both Northern and Southern California. I am thrilled to announce that this
year, through the leadership of Co-Chairs
Supreeta Sampath and Bryan Schwartz,
the Diversity Committee will be developing and coordinating our first ever Diver-18-
sity Leadership Summit. This important
project is made possible by a $5,000
grant from the California State Bar,
Labor & Employment Section. Details
of the summit will be explained in future
announcements.
I am continually amazed by the giving
and caring nature of our members. We
celebrate and cheer when our colleagues
win trials and motions. We console and
encourage each other after defeats.
This past twelve months, our hearts
ached when we learned that members
of our CELA family, Patti Roberts, Phil
Ganz, and Tina Posner had passed
away.
CELA has certainly persevered through
difficulties and differences. The CELA
Board held two town hall meetings, one
in Southern California on July 6, 2011,
and one in Northern California on July
14, 2011. The meetings provided a forum for members to raise concerns and
share ideas through direct dialogue with
CELA board members, and with our
Administrative Director, Christina
Krasomil, and Mariko Yoshihara. CELA
membership surveys were also developed and distributed so that the Board
could incorporate the desires and interests of the membership in our strategic
planning during the Board retreat.
CELA’s success and continued growth
are due to immense collective effort. I
want to extend a heartfelt thank-you to
our immediate past Chair, Virginia
Keeny, whom I admire greatly for her
leadership and commitment. I am also
very grateful to Christina, Mariko, and
each of my fellow Board members for
their vision, dedication, and friendship.
I am still in awe and humbled by the
opportunity to follow in the footsteps of
CELA’s past Chairs: Virginia, David
Duchrow, Michelle Reinglass, Phil
Horowitz, Dolores Leal, Jim Stoneman,
Nancy Bornn, Gary Laturno, Mary
Dryovage, Fred Ashley, and Bill Crosby.
And of course, I cannot express enough,
my gratitude to Joe Posner.
A new year with new beginnings does
not mean, of course, that we abandon
(Cont'd on Page 19, CHAIR MESSAGE)
CHAIR MESSAGE
LEGISLATION
(From Page 18)
(From Page 1)
work already underway. I look forward to
working toward still greater achievements with the Board, individual members, and committee leaders. I am not
an astrologist or numerologist, but if
you ask me, 2012 is a year of unique
opportunity. As advocates for workers
who have been discriminated against
and treated unfairly in the workplace,
every day of every year is an opportunity
to make a difference. Each day, we are
given an opportunity to discover our
inner strength as we fight for equality
and fairness. We are given the opportunity to show deep compassion and love
for strangers when we meet new clients
who seek our help. We are given the
opportunity to demonstrate diplomacy,
gentleness, and acceptance toward
each other, despite differences of opinion, culture, or background. These daily
opportunities are what make being an
employment lawyer so rewarding.
mariko@cela.org.
May the New Year bring many more
opportunities for us all, both individually
and collectively. May it be filled with
good luck, success, and happiness.
•
•
•
New bills, and the
Governor’s budget plan
At the beginning of the year,
Assemblymember Allen introduced AB
1450, which would make it unlawful for
an employer to knowingly or intentionally refuse to consider for employment
or refuse to offer employment to an
individual because of the individual’s
status as unemployed. This bill is in
response to the increasingly common
practice of excluding the unemployed
from even applying for jobs. CELA is
currently working with Allen’s office to
help craft the bill’s language.
Also this month the Governor unveiled
his budget plan for the 2012/13 fiscal
year, proposing deep cuts to state programs, and warning of even deeper cuts
if voters refuse to pass his tax proposal
in November. Included in those trigger
cuts would be a $125 million cut to the
California courts, which are already
bleeding from a $350 million cut in 2011.
The Governor’s budget also proposes to
eliminate the Fair Employment and
Housing Commission and the Commission on the Status of Women. CELA is
working with the Department of Fair
-19-
Employment and Housing and the Consumer Services Agency to help ensure
that the functions of these commissions
are preserved as much as possible.
Lobby Day
Mark your calendars and save the date
of March 20th, when CELA members
will take to the halls of the state capitol
to meet with elected officials and discuss legislative matters important to our
members and the workers we represent. Participating in Lobby Day is a
great way to learn more about the legislative process and to network with Sacramento politicos. Also importantly, it’s
a FUN day to spend with your CELA
peers!
This will be an all day event, beginning
with a breakfast orientation in the morning, meetings all day long, and a happy
hour cocktail reception to celebrate our
hard day’s work with our political friends
and allies. An invitation with specific
hotel information for the orientation and
for those coming to Sacramento the
night before will be announced shortly.
(Email mariko@cela.org for more information.)
•
•
•
NELA NEWS
The following information appeared during the past month in NELA’s electronic
newsletters “@NELA” and “On The Hill.”
—FAQ about the NLRB’s D. R. Horton
decision. NELA and The Employee
Rights Institute for Law & Policy have
recently released “Ten Frequently Asked
Questions About D. R. Horton Inc. And
Answers For Employee Rights Advocates.” The document, prepared by
NELA members Michael Rubin and
Michael C. Subit, can be found on
NELA’s website, www.nela.org. If you
are facing one of the issues raised by
the FAQ in court or arbitration, contact
Rebecca Hamburg, at (415) 296-7629,
rhamburg@nelahq.org. NELA and The
Institute will be maintaining a database
of companies that include class action
prohibitions in their contracts, and we
have a complete set of the D. R. Horton
briefs that set forth the various arguments of the parties and amici.
—Political Gridlock and NELA’s Legislative Agenda. Both the Arbitration
Fairness Act and the Civil Rights Tax
Relief Act, NELA’s legislative priorities,
have been filed in the House and Senate
this Congressional session and have
been referred to their respective committees. Although a hearing was held
regarding the AFA in the Senate Judiciary Committee, neither bill awaits
imminent mark-up. Our focus has been
to “lay the foundation” for these bills, as
well as to educate Members of Congress and their staffs on the merits of
the legislation, with an eye towards
bipartisan support. With respect to the
CRTRA, NELA is working with the officers of Senator Jeff Bingaman (D-NM)
and Representative John Lewis (D-GA)
to calculate the “score,” or budgetary
cost, to implement the CRTRA of 2011.
Scoring for the bill’s predecessor in the
107th Congress was $632 million over
ten years. That estimate was subsequently reduced by about $200 million
when relief for the double taxation of
attorneys’ fees in employment and civil
rights cases was enacted into law in
2004. The remaining costs are well
under an average of $50 million per year.
—ADR seminar in Seattle. Join us in
Seattle on March 16-17 for “The ABCs
of Alternative Dispute Resolution in
Employment Cases," (at the Seattle
Marriott Waterfront). Our expert speakers, including mediators, arbitrators,
and practitioners, will explore topics
such as pre-mediation negotiation; identifying and avoiding tricks and traps in
mediation and arbitration; determining
when to mediate; breaking impasses;
what to know before you go to arbitration; how to use arbitration to your
advantage; and ethical considerations
in ADR. Details and online registration
at www.nela.org/springseminar.
—2012 Annual Convention. NELA is
pleased to announce that Professor
Anita F. Hill will deliver the Keynote
Address at our Convention in San Diego
on Friday, June 22. [Editor’s note: An
outstanding California track of sessions
is being put together by Bernard
Alexander, Carol Gilliam, Noah
Lebowitz, and Charlotte Fishman.]
—Executive Board nominations.
NELA’s Nominating Committee is seeking nominations for our Executive Board.
NELA’s general membership will elect
four members in April, and the Executive Board will appoint two members at
its Summer meeting at the Annual Convention in June. The Nominating Committee will develop a slate of candidates
for the 2012 General Membership Elections in April, as well as the slate of
candidates to be appointed by the Board.
Your help in identifying active NELA
members who are capable of contributing to NELA’s growth and effectiveness
while bringing new views and backgrounds to our governing body will be
greatly appreciated.
In forwarding names for consideration
by the Nominating Committee, please
keep in mind the general criteria used in
evaluating candidates. In addition to
attendance at three Board meetings
each year, Board members are expected to devote a great deal of time and
energy to a wide variety of NELA projects
and activities, and to those of NELA’s
related charitable public interest organization, The Employee Rights Advocacy
Institute for Law & Policy. In particular,
Board members are expected to serve
as ambassadors for NELA and The
Institute, to engage in membership and
affiliate outreach, and to support fund
raising initiatives. NELA’s Bylaws require that a candidate have been a
-20-
current regular member of NELA for at
least two years. The Nominating Committee considers an individual’s contributions to NELA, involvement in NELA
activities, and other professional accomplishments. Diversity of practice
and background are also considered.
Please e-mail your recommendations
no later than Friday, February 17, to
Karen Maoki, NELA’s Project Manager,
(kmaoki@nelahq.org.) In addition to
stating your reasons for recommending
the individual, please include his or her
address, phone number, fax number,
and e-mail address.
—The Institute welcomes new
Tobias Attorney Fellow. The Institute
is pleased to announce the appointment of Kate S. Rozenvasser as the
Paul H. Tobias Attorney Fellow for 20122013. As our second PHT Fellow, Kate
will continue the work of the Institute’s
National Litigation Strategy Project,
which is devoted to combating summary judgment abuse by defendants
and unwarranted dismissals by the
courts. In addition, she will work with
NELA and our coalition partners on
finding ways to address Wal-Mart
Stores, Inc. v Dukes. Kate will also play
a significant role in The Institute’s continuing efforts to end forced arbitration of
employment claims by assisting with
our public education campaign.
Kate graduated from the University of
San Francisco School of Law in 2007,
where she also earned a Public Interest
Law Certificate, and was awarded the
CALI Award for Excellence in Employment Law, and the American Bar Association/BNA Award for Excellence in
Labor and Employment Law. Prior to
joining the Institute, Kate most recently
worked as an associate with NELA
members Barbara Lawless and Therese
Lawless. Among her many accomplishments, Kate solely briefed and argued
the plaintiff’s case and obtained a favorable published opinion by the First District in Trivedi v Curexo Technology
Corp. (2010) 189 CA4th 387 concerning
the unconscionability of an arbitration
agreement. Kate will be based in NELA/
The Institute’s San Francisco office,
and can be reached at krozenvasser
@employeerightsadvocacy.org.
Published
Monthly
BULLETIN
CALIFORNIA
SUPREME COURT
SUPREME COURT WILL NOT
REVIEW OR DEPUBLISH
SECOND DISTRICT DECISION
THAT AFFIRMED JUDGMENT
FOR SEX HARASSMENT
PLAINTIFF
FUENTES v AUTOZONE, INC. On
February 1, the Supreme Court denied
review and a request to depublish the
Second District’s November 16 decision that affirmed a judgment for the
plaintiff on sex harassment claims.
The Second District, in an opinion by
Epstein, rejected arguments that the
plaintiff’s testimony was inherently
improbable and that the conduct alleged was insufficiently severe or pervasive. The opinion appears at 200
CA4th 1221, 133 CR3d 409, and was
summarized in CELA Bulletin, Nov
2011, p.3.
For plaintiff: Rastegar & Matern, Matthew J. Matern, Paul J. Weiner, and
Sandra M. Falchetti; Norman Pine.
For defendant: Littler Mendelson and
Gregg C. Sindici.
Cal SC, 2/1/12.
REVIEW IS DENIED IN SECOND
DISTRICT CASE THAT AFFIRMED
JUDGMENT FOR PLAINTIFF ON
RETALIATORY DISCHARGE
CLAIM UNDER FALSE CLAIMS
ACT
CORDERO-SACKS v HOUSING AUTHORITY OF CITY OF LOS ANGELES. On February 22, the Supreme
Court denied review, letting stand the
Second District’s November 17 decision that affirmed a judgment on a jury
verdict for the plaintiff on a retaliatory
discharge claim under the False Claims
Act (Gov Code § 12653). The Second
District’s opinion appears at 200 CA4th
1267, 134 CR3d 883, and was summarized in CELA Bulletin, Nov 2011, p.5.
For plaintiff: Craig T. Byrnes, Lee R.
Feldman, Gina Browne, Ellen Lake.
For defendant: Burke, Williams &
Sorensen, Charles E. Slyngstad and
Sanaea H. Daruwalla; Morris Polich &
Purdy, David L. Brandon.
Cal SC, 2/22/12 (denying review).
CALIFORNIA COURTS
OF APPEAL
CASE ALLEGING “ADEQUATE
SEATING” VIOLATIONS WAS NOT
“SAME ACTION” AS SIMILAR
PRIOR-FILED CASE FOR
PURPOSES OF "ONE
PEREMPTORY CHALLENGE PER
SIDE" PROVISION
PICKETT v SUPERIOR COURT (99¢
ONLY STORES). A Second District,
Division Five, opinion by Mosk, filed on
February 22, reads in part as follows:
February 2012
Vol. 26, No. 2
LEGISLATIVE UPDATE
by Mariko Yoshihara
OUR THREE NEW BILLS
All new bills had to be introduced during
February, and CELA partnered with
legislators and allies to introduce three
important ones:
AB 1999 (Employment: familial status protection). Partnering with
Assemblymember Brownley’s office
and Equal Rights Advocates, we introduced this bill to prohibit discrimination
based on an employee’s familial status. Persons protected are defined by
the bill to include individuals who have,
or are assumed to have, family
caregiving responsibilities. “Family” is
defined to include child, domestic partner, grandchild, grandparent, parent,
parent-in-law, sibling, or spouse.
AB 2103 (Employment: wages and
hours: overtime). We've partnered with
Assemblymember Ammiano’s office,
the California Labor Federation, and
the Teamsters to introduce a bill to
overturn the Second District’s decision
in Arechiga v Dolores Press, Inc. (2011)
192 CA4th 567. This bill would make
clear that the Labor Code prohibits
“explicit mutual wage agreements” under which a fixed salary purportedly
compensates an employee for both
regular and overtime pay.
“Plaintiff Shelley Pickett’s action that
included a [PAGA] claim was deemed
related to a prior-filed PAGA action
brought by Eugenia Bright, against the
same defendant on similar allegations,
although the remedies sought were not
identical. Upon Pickett’s action being
reassigned to the all-purpose judge in
SB 1255 (Employee compensation:
itemized statements). With Senator
Wright’s office and CRLA, we introduced this bill to respond to recent
decisions that threaten the effective
enforcement of wage statement requirements. The bill clarifies that an employee “suffers injury” if the employer
fails to provide accurate and complete
information, for purposes of recovering
DECISIONS
(From Page 1)
the prior-filed action, but not consolidated with that prior action, Pickett
timely filed a peremptory challenge to
the trial judge... The respondent court
struck the challenge as improper. It
determined that Pickett’s action was
identical to and a continuation of the
action brought by Bright, who had already used her one peremptory challenge in the matter. Pickett petitioned
for an extraordinary writ of mandate
directing the respondent court to vacate
its order. Under [Code of Civ Proc]
section 170.6 and the authorities applying it, Pickett’s action is not a continuation of Bright’s action, nor is Pickett on
the same ‘side’ as Bright in one action,
and therefore Pickett’s peremptory challenge should have been accepted. We
grant the petition.
“Pickett is suing real party in interest
99¢ Only Stores, alleging that [it] violated wage order No. 7-2001 and Labor
Code section 1198 by failing to provide
adequate seating for cashiers at its
stores. Her first cause of action is under
PAGA... In a second cause of action,
Pickett alleges that because she suffers continuing injury that would not be
covered by the penalties sought in her
first claim, she also seeks an injunction
under sections 525 and 526, and Civil
Code sections 3420 through 3422...
“Bright had also sued 99¢ Only Stores
for failing to provide cashier seating...
She invoked the provisions of PAGA as
authority to seek penalties on behalf of
herself and all current and former employees. In conjunction with that claim,
she did not seek any additional relief,
such as injunctive relief.
“Bright’s case was assigned to Los
Angeles Superior Court Judge Luis Lavin.
Judge Lavin sustained a demurrer to
Bright’s allegations under PAGA, but
this court reversed the order. (Bright v.
99¢ Only Stores (2010) 189 Cal.App.4th
1472, 1475 [summarized in CELA Bulletin, Nov 2010, p.7]. Upon the return of
her action to the superior court, Bright
used a post-appeal peremptory challenge to disqualify Judge Lavin. Her
case was then assigned to the respondent court, presided over by Judge William Fahey.
“On November 4, 2011, 99¢ Only Stores
moved to strike all of Bright’s representative allegations. The same day, Pickett,
represented by different attorneys than
those representing Bright, filed her complaint. On November 10, 2011, Pickett
filed a notice of related cases, as required by rule 3.300 of the California
Rules of Court, identifying Bright’s action... On Wednesday, December 7,
2011, after a hearing, the respondent
court issued an order finding that the
cases were related, and assigned the
Pickett matter to its courtroom. On the
same day, the court granted the motion
to strike representative allegations from
Bright’s complaint.
“On December 14, 2011, Pickett filed a
peremptory challenge to the respondent court... In anticipation of that challenge, 99¢ Only Stores had already filed
an opposition ... contend[ing] that
Pickett was limited by the one-challenge-per-side rule... The respondent
court agreed and struck the challenge...
This timely petition followed...
“99¢ Only Stores argues that Pickett’s
PAGA allegations are repetitive of
Bright’s and both are made on behalf of
State enforcement agencies... [¶] Nevertheless, here there are two separate
actions. The named plaintiffs in both,
even though representatives, are different. Pickett seeks injunctive relief, while
Bright did not do so. Each named plaintiff who establishes a violation of the
Labor Code is entitled to a penalty and
her reasonable attorney fees. (Lab. Code,
§ 2699, subd. 3(g)(1).) Although a judgment in a PAGA case collaterally estops employees not parties to that
case—at least as to civil penalties [cite
omitted], here no such judgment has
been entered.
“The one challenge per side provision in
section 170.6, subdivision (a)(4) refers
to ‘one plaintiff or similar party ... appearing in the action ... [and provides]
only one motion for each side may be
made in any one action or special proceeding.’ (Italics added.) The Pickett
action and the Bright action were not
‘one action.’ They were separate actions.
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Toni Jaramilla
Suite. 300
Tel: (310) 551-3020
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
Mariko Yoshihara
Tel: (916) 442-5788
EXECUTIVE BOARD
(Santa Monica)
Virginia Keeny
(Pasadena)
Scot Bernstein
(Folsom)
Noah Lebowitz
(San Francisco)
David DeRubertis
(Studio City)
Cynthia Rice
(San Francisco)
Maria Diaz
(Fresno)
Mika Spencer
(San Diego)
David Duchrow
(Santa Monica)
James P. Stoneman
(Claremont)
Wilmer Harris
(Pasadena)
Deborah Vierra
(Ventura)
Phil Horowitz
(San Francisco)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Jeffrey Winikow
(Los Angeles)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
“99¢ Only Stores further suggests that
Pickett’s action is, in essence, an attempt by Bright’s counsel to bring forward a new representative plaintiff to
shore up Bright’s failing PAGA claims...
The court in NutraGenetics [LLC v Superior Court (2009) 179 CA4th 243] at
pages 259 through 260, recognized the
potential abuses inherent in the peremptory challenge procedure contained
in section 170.6. The court nevertheless noted that the Legislature promulgated that procedure, and has not
amended it despite being alerted to its
potential for misuse... Thus, the court
considered itself bound by the statute...
“The petition for writ of mandate is
granted... The respondent court is directed to ... enter a new and different
order accepting the challenge. Pickett
is awarded her costs in this proceeding.”
For petitioner: Lynch, Gilardi &
Grummer, Gary M. Ittig, Arif Virji, and
Victoria L. Tallman.
For real party: Munger, Tolles & Olson,
Mark H. Epstein, Malcolm A. Heinicke,
Katherine M. Foster, and Esther H.
Sung.
Second Dist Div Five, 2/22/12; opinion by Mosk with Turner concurring
and Kumar concurring separately;
2012 DAR 2323, 2012 WL 556314.
REVERSING $15 MILLION
VERDICT ON MISCLASSIFICATION
CLAIMS, FIRST DISTRICT HOLDS
THAT RANDOM SAMPLING
METHODOLOGY DEPRIVED
DEFENDANT OF RIGHT TO
PRESENT AFFIRMATIVE
DEFENSE TO CLASSWIDE
LIABILITY
DURAN v U.S. BANK NATIONAL ASSOCIATION. “Following a bifurcated
bench trial [before Alameda County
Superior Court Judge Robert B. Freedman], defendant [USB] has appealed
the resulting $15 million judgment in
this wage and hour class action brought
under [Bus & Prof Code] section 17200,”
the First District, Division One, began in
a fifty-page opinion by Dondero filed on
February 6. The court continued in part
as follows:
“The plaintiffs ... are 260 current and
former business banking officers
(BBO’s) who claimed they were
misclassified by USB as outside sales
personnel exempt from California’s overtime laws... In addition to arguing the
case should not have been certified as
a class action, USB contends the trial
court’s management plan deprived it of
its constitutional due process rights in
that the plan prevented it from defending
against the individual claims for over 90
percent of the class. We agree the trial
management plan was fatally flawed
and reverse the judgment. We also
conclude the case must be decertified,
and reverse an order awarding certain
expert witness fees to plaintiffs. We
remand the two named plaintiffs’ meal
and rest break period violation claims
for reconsideration in light of the California Supreme Court’s ruling in Brinker
Restaurant Corp. v. Superior Court
(2008) 165 Cal.App.4th 25, review
granted October 22, 2008 (S166350).
[FN2. The Supreme Court heard oral
argument on November 8, 2011. A decision should issue shortly after this
opinion is filed.]
“On June 22, 2006, plaintiffs submitted
a trial setting conference brief. In response to USB’s pre-trial proposal to
assign all class members to groups of
20 to 30 in order to conduct individualized evidentiary hearings before special
masters, plaintiffs, citing to Sav-On
Drug Stores, Inc. v. Superior Court
(2004) 34 Cal.4th 319, 337..., asserted
that USB ‘has no due process right to
assert its affirmative defense against
every class member in a class action.’
Instead, plaintiffs proposed a ‘phased
trial plan using surveys and random
sampling.’
“Under plaintiffs’ plan, the trial court
would have proceeded in three phases:
(1) Task identification and classification, (2) use of a class-wide survey
followed by a selection of a random
sample of plaintiffs who would be made
the subjects of the trial, and (3) damages... Plaintiffs included a declaration
-3-
from their expert statistician Richard
Drogin, in which he proposed a statistical methodology for assessing both liability and damages.
“On September 13, 2006, a case management conference was held in which
the trial court, on its own initiative, proposed the idea of taking a sample of 20
plaintiffs selected on a random basis to
testify at trial. The court suggested this
method would be preferable to conducting a survey, due to the possibility that
bias might infuse the survey process.
“At a hearing held on October 11, 2006,
the trial court confirmed its intent to use
a random sample of 20 class members
to testify... Plaintiffs’ counsel then informed the court that he intended to
dismiss the SAC’s legal claims and
proceed to bench trial under section
17200 only.
“The procedures we approved in Bell III
[115 CA4th 715] are only superficially
similar to the procedures utilized in the
present case... [¶] Here..., the trial court
exceeded acceptable due process parameters by limiting the presentation of
evidence of liability to the testifying BBO’s
only. Fundamental due process issues
are implicated not only by the unprecedented and inconsistent use of statistical procedures in the liability and damages phases, but also by the manner in
which USB was hobbled in its ability to
prove its affirmative defense. Under the
court’s plan..., USB was barred from
introducing manifestly relevant evidence.
[FN56. Plaintiffs acknowledge that USB
‘consistent with the trial plan, could not
introduce evidence about class members outside the RWG [random witness
group.’]
“USB claims California law precludes
class-wide liability determinations based
on evidence obtained from a representative sample in employment cases alleging misclassification... While all the
cases cited by USB, involve rulings on
motions to certify or decertify class
actions, they support the conclusion
that improper procedures were followed
in this case...
DECISIONS
(From Page 3)
“The procedural flaws anticipated by the
state and federal courts in the opinions
summarized above [cites and summaries omitted] appear to have been fully
realized in the present case. In the first
place, there was no statistical foundation for the trial court’s initial assumption that 20 out of 260 is a sufficient size
for a representative sample by which to
extrapolate either liability or damages...
[C]ourts are generally skeptical of the
use of representative sampling to determine liability, even in cases in which
plaintiffs have proposed using expert
testimony and statistical calculations
as foundations for setting the sample
size. Here, the trial management plan
was lacking in any expert input or principled statistical foundation.
“We note that while this appeal was
pending, the United States Supreme
Court issued its opinion in Wal-Mart
Stores, Inc. v. Dukes (2011) [131 S.Ct.
2541]... [¶] The same type of ‘Trial by
Formula’ that the U.S. Supreme Court
disapproved of in Wal-Mart is essentially what occurred in this case. [FN65.
While Wal-Mart is not dispositive of our
case, we agree with the reasoning that
underlies the court’s view that representative sampling may not be used to
prevent employers from asserting individualized affirmative defenses in cases
where they are entitled to do so.]
“The evidence USB sought to introduce,
if deemed persuasive, would have established that at least one-third of the
class was properly classified. Thus,
this evidence USB sought to introduce
is unquestionably relevant and therefore admissible...
“In granting plaintiffs’ motions in limine...,
the trial court effectively prevented USB
from establishing its affirmative defense
as to classwide liability. The record on
appeal supports the inference that a
large percentage of the absent class
member plaintiffs were properly classified and that USB did not owe them any
overtime pay. Thus, there is a reasonable probability that in the absence of
the error, USB would have received a
more favorable result.
“The denial of due process that oc-
curred here is sufficient to satisfy the
three-part [Connecticut v] Doehr [(1991)
501 US 1] test [for determining whether
a procedure by which a private party
invokes state power to deprive another
person of property satisfies due process].
“In sum, the court erred when, in the
interest of expediency, it constructed a
set of ground rules that unfairly prevented USB from defending itself. These
ground rules were the product of the trial
court. We do not suggest that the implementation of any particular procedural
tool would have satisfied due process.
We simply hold that the court, having
agreed to try this matter as a class
action, denied USB the opportunity to
defend itself by flatly foreclosing the
admission of potentially relevant evidence.
“While USB contests all of the certification decisions made by the trial court,
we focus on the denial of USB’s second
motion to decertify, which was filed after
the completion of Phase I of the trial...
[¶] The trial court’s denial of the second
motion to decertify was based on the
erroneous legal assumption that a finding of liability due to misclassification
could be determined by extrapolating
the findings based on the [random witness group] to the entire class. As we
have demonstrated, this conclusion was
legally unsound...
“USB also claims that the trial court
gave excessive weight to its finding that
USB classified all BBO’s as exempt...
We agree that the court erred in focusing on USB’s policies...
“At this juncture, we need not speculate
as to whether a workable trial plan could
have been devised to account for ...
individual inquiries. In view of the many
courts that have considered this problem at the [certification] stage, it is
doubtful that such a plan could be successfully implemented. Here, the trial
court attempted to manage the individual issues in the first phase of this
trial by resorting to an unproven statistical sampling methodology that denied
USB the right to properly defend the
claims against it... Accordingly, we
-4-
conclude the failure to grant USB’s
second motion to decertify was an abuse
of discretion.
“The judgment is reversed. We further
order the case decertified as a class
action. The order awarding expert witness fees for Miles Locker to plaintiff is
reversed. The matter is remanded to the
trial court to reconsider the two named
plaintiffs’ meal and rest break period
violation claims in light of the Supreme
Court’s soon-to-be-issued ruling in
Brinker Restaurant Corp. v. Superior
Court...”
For plaintiffs: Ellen Lake, Edward J.
Wynne, and J.E.B. Pickett.
For defendant: Carlton diSante &
Freudenberger LLP, Timothy M.
Freudenberger, Alison L. Tsao, and Kent
J. Sprinkle.
First Dist Div One, 2//6/12; opinion by
Dondero with Marchiano and
Margulies concurring; 2012 DAR
1613, 2012 WL 366590.
PREVAILING DEFENDANT IS
ENTITLED TO RECOVER, INTER
ALIA, COSTS OF DEPOSING
PLAINTIFF’S EXPERT
CHAABAN v WET SEAL, INC. “Sally
Chaaban appeals from an order [by
Orange County Superior Court Judge
Frederick P. Horn] denying her motion
to tax costs after a jury trial in which
defendants prevailed,” the Fourth District, Division Three, began in a January
31 opinion by Bedsworth, certified for
partial publication. “We affirm the order.
We publish this opinion because of our
holding regarding the recovery of expert
fees under Code of Civil Procedure section 998, subdivision (c).
“Chaaban sued her employer ... for
[WTVPP]. Chaaban alleged Wet Seal
fired her at the end of 2006 for refusing
to work past her shift and in retaliation
for complaining about not getting her
statutorily mandated meal and rest
breaks. Wet Seal, in turn, asserted that
her employment was first suspended,
then terminated, for leaving the
DECISIONS
(From Page 4)
company’s Fashion Island retail outlet
on the day after Christmas (one of the
busiest retail days of the year) when
only one other salesperson was working in the store. Company policy forbids
leaving a salesperson alone in a store
during business hours. The jury returned a verdict in Wet Seal’s favor.
“Wet Seal filed a memorandum of costs
claiming $29,770.67. Chaaban filed a
motion to tax costs, objecting to a
number of the items. With the exception of a small amount attributable to
travel expense, the court denied the
motion and allowed all of Wet Seal’s
costs. Chaaban appeals from this
postjudgment order.
“Miles Locker is an attorney whom
Chaaban hired to testify at trial. He was
so identified in an expert witness declaration served on December 31, 2009.
On January 12, 2010, Wet Seal served
a notice of his deposition, for February
4. Chaaban’s counsel asserted that
neither she nor the expert was available
on February 4; accordingly the deposition was rescheduled for February 10,
the day before the last day on which the
issue conference for the trial (at that
point set for February 22) could take
place. The Superior Court of Orange
County Local Rules, Rule 317, required
the parties to exchange motions in
limine at the issue conference. The
same rule requires the parties to submit
the in limine motions to the court a week
after the issue conference. Locker’s
deposition went forward on February
10, and Wet Seal ordered an expedited
transcript, which doubled the cost.
“Wet Seal excluded Locker as a trial
witness by means of a motion in limine.
Because Chaaban had turned down an
offer to compromise pursuant to section
998 made on December 16, 2009, Wet
Seal sought to recover as costs the
amount it had paid Locker to depose
him, in addition to the charges related to
his deposition transcript.
“Chaaban appeals from the denial of her
motion to tax the Locker costs on
several grounds. She first asserts Wet
Seal was not entitled to the amount
expended to expedite the transcript.
She also claims Wet Seal was not
entitled to be reimbursed for the fee it
paid to her expert, only for its own
experts’ fees. Finally, she argues she
should not have to reimburse Wet Seal
for Locker’s fee because he was not
allowed to testify at trial, having been
excluded by Wet Seal’s motion in limine.
None of these contentions has merit.
“Chaaban argues on appeal that because Locker did not testify at trial...,
his expert fee was not ‘reasonably necessary’ [within the meaning of section
998, subdivision (c)(1)]... Section
68092.5, subdivision (a), of the Government Code required Wet Seal to pay
Locker the fee he charged for depositions in order to obtain the testimony on
which to base its motion in limine.
Substantial evidence supports the
court’s exercise of its discretion in determining that the expert fee paid to
Locker was reasonably necessary to
prepare for trial...
“Chaaban also argues the amount of the
Locker fee should have been denied
because section 998 permits reimbursement only for fees paid to a defendant’s
experts... [¶] We have not found any
published opinion directly addressing
this issue. The policy behind section
998, however, supports the principle
that a non-settling plaintiff is at least
potentially liable under subdivision (c)
for all of the expert fees a defendant was
required to pay...
“Finally Chaaban argues the fees were
not recoverable because the court did
not order Locker’s testimony. (See §
1033.5, subd. (b)(1).) This argument
assumes only section 1033.5 apples to
costs in this case; Chaaban ignores the
explicit statutory language of section
998, subdivision (a): ‘The costs allowed
under Sections 1031 and 1032 shall be
withheld or augmented as provided in
this section.’ Section 998 allows a prevailing party to recover fees paid to
experts under the specific circumstances outlined in the statute in addition to the costs allowable under sections 1032 and 1033.5, such as courtordered experts. [cite omitted.]
“As for the extra cost paid to expedite
-5-
the deposition transcript..., [t]he evidence before the court supported the
court’s determination this was a proper
charge, and it cannot be disturbed on
appeal.
“The order denying Chaaban’s motion
to tax costs is affirmed. Appellant is to
bear all costs on appeal.” [Editor’s note:
the opinion also rejects plaintiff’s arguments relative to a number of other
costs items, including another expert’s
fees, deposition costs relative to other
witnesses, jury fees, court reporter fees,
photocopying costs, and travel costs.]
For plaintiff: Sima Fard.
For defendants: Sheppard, Mullin, Richter & Hampton, Ryan D. McCortney and
Matthew M. Sonne.
Fourth Dist Div Three, 1/31/12; opinion by Bedsworth with O’Leary and
Fybel concurring; 2012 DAR 1307,
2012 WL 266871.
ARBITRATION AGREEMENT
DID NOT CLEARLY AND
UNMISTAKABLY DELEGATE
TO ARBITRATOR THE POWER
TO DETERMINE
UNCONSCIONABIILITY, AND
TRIAL COURT DID NOT ERR IN
FINDING MULTIPLE
UNCONSCIONABLE TERMS
AJAMIAN v CantorCO2e. The First
District, Division Five, wrote in part as
follows in a February 16 opinion by
Needham:
“CantorCO2e and Joshua Margolis appeal from an order [by San Francisco
County Superior Court Judge Peter J.
Busch] denying their motion to compel
arbitration of respondent’s claims under
the [FAA]. They contend: (1) the arbitration panel, rather than the court, should
have decided whether the arbitration
provision in respondent’s employment
agreement was unconscionable; (2)
respondent failed to establish that the
arbitration provision was unconscionable, and any unconscionable portion
of the provision should have been sev(Cont'd on Page 6, DECISIONS)
DECISIONS
(From Page 5)
ered to permit the arbitration to proceed; and (3) alternatively, arbitration
should have been compelled under the
terms of an employee handbook.
“We will affirm the order. Although the
arbitration provision was broadly worded
and indicated that arbitration might be
conducted under the rules of an arbitration service that gives arbitrators the
power to decide the validity of arbitration
agreements, it did not provide clear and
unmistakable evidence that the parties
intended to delegate authority to the
arbitrator, rather than to the court, to
decide the threshold issue of whether
the arbitration provision itself was unconscionable. The unconscionability
issue was therefore for the court to
decide. Furthermore, the provision was
procedurally unconscionable and substantively unconscionable in more than
one respect, such that the court did not
abuse its discretion in concluding that
the provision could not be saved by
severing the offending terms. In addition, appellants failed to establish that
arbitration should been compelled under the employee handbook.
“On September 8, 2010, Ajamian filed a
complaint against appellants, asserting claims for sexual discrimination,
sexual harassment, retaliation, failure
to pay overtime..., failure to provide rest
breaks and meal breaks..., failure to
keep accurate records or to provide
required paystubs..., failure to pay
Ajamian all amounts due to her upon
termination, and violation of Business
and Professions Code section 17200...
“A. Who Should Decide Whether the
Arbitration Agreement Is Unconscionable?
“Under the [FAA], the enforceability of
an arbitration agreement is ordinarily to
be determined by the court. The parties
may agree in the arbitration provision,
however that the enforceability issue
will be delegated to the arbitrator. (E.g.,
AT&T Technologies v. Communications
Workers (1986) 475 U.S. 643, 649.)
“To establish this exception, it must be
shown by ‘clear and unmistakable’ evidence that the parties intended to del-
egate the issue to the arbitrator. (First
Options of Chicago, Inc. v. Kaplan
(1995) 514 U.S. 938, 944; see Rent-ACenter, W., Inc. v. Jackson (2010) 561
U.S. ___, 130 S.Ct. 2772, 2777...) [¶]
[T]he parties present no extrinsic evidence... Instead, they look to the language of the Employment Agreement
itself.
“Nowhere in the Employment Agreement is there any express grant of
authority to the arbitrator to decide
threshold issues such as the unconscionability of the arbitration provision...
Indeed, there is no language indicating
that the parties ever contemplated who
would decide such issues.
“Appellants nonetheless insist that the
Employment Agreement clearly and
unmistakably sets forth an intent to
delegate such issues to the arbitration
panel, pointing primarily to the breadth
of the arbitration provision and its proviso that arbitration may be conducted
according to the rules of the AAA (under
which an arbitrator has the power to
determine the validity of an arbitration
agreement). Ajamian and the trial court
have it right.
“We ... hold that the clear and unmistakable evidence test is not met by
language requiring arbitration of ‘[a]ny
disputes, differences or controversies
arising under’ a contract. Even though,
in this case, the agreement also contains language referring to ‘all matters’
and purporting to exclude the parties
from initiating a court proceeding, it
remains uncertain whether this language
merely buttresses the requirement that
every substantive claim must be arbitrated. Thus, while there might be something short of an express delegation
that constitutes clear and unmistable
evidence of the parties’ intent to arbitrate the unconscionability of an arbitration provision, this is not it.
“Appellants next contend there was
clear and unmistakable evidence ...
because the Employment Agreement
specified that the arbitration could proceed according to the rules of the AAA,
and those rules state that the arbitrator
has the power to determine issues of
-6-
his or her own jurisdiction. Appellants’
argument is unpersuasive, at least under the circumstances of this case.
“[W]e need not decide whether an unqualified incantation of AAA rules establishes a clear and unmistakable delegation, because the reference to AAA
rules in this case was insufficient for
another reason: the Employment Agreement did not mandate that AAA rules
would necessarily apply...
“Even if the broad language of the arbitration provision and the reference to
AAA rules evinced an intent to delegate..., in this case other provisions of
the Employment Agreement create an
ambiguity that renders the totality of the
evidence on the issue neither clear nor
unmistakable.
“Here, a provision of the Employment
Agreement provides that a ‘court of
competent jurisdiction’ may determine
that a covenant in the Employment
Agreement is impermissibly ‘broad in
scope, duration, or geographical area’...
The Employment Agreement anticipates, therefore, that a court will in
some circumstances have authority to
rule on the breadth of the parties’ covenants...
“B. Unconscionability of the Arbitration
Provision in the Employment Agreement
“Substantial evidence supports the
court’s finding [of procedural unconscionability]. Ajamian, who had already
been working as a broker for almost 10
months, had no realistic bargaining
power and was required to sign the
Employment Agreement to receive her
promised compensation for work she
had already performed. Furthermore,
the Employment Agreement was not
the subject of any negotiation. Ajamian
stated in her declaration that she wanted
to make changes to the Employment
Agreement and felt uncomfortable signing it, but felt she had no choice...
“The arbitration provision precludes an
award of special or punitive damages to
either party, but permits the arbitrators
DECISIONS
(From Page 6)
to award CantorCO2e liquidated damages in addition to other damages... [¶]
The arbitration provision imposes another limitation on Ajamian’s potential
relief because it states that disputes
will be ‘finally determined by arbitration
... according to ... the laws of the state
of New York then in effect.’ ... We find no
applicable New York law in the record,
and appellants fail to show that New
York law would provide Ajamian with
rights and remedies equivalent to those
provided by California law...
“The arbitration clause states: ‘The arbitrators shall make their award in accordance with and based upon all provisions in this Agreement.’ One of these
‘provisions’ ... impos[es] upon Ajamian
the obligation to pay CantorCO2e’s attorney fees if CantorCO2e prevails in
the proceeding, without granting her the
right to recoup her own attorney fees if
she prevails... [¶] This provision is obviously not mutual and, on that basis
alone, is unconscionable and unenforceable...
“Appellants next argue that the unconscionable terms in the arbitration provision should be interpreted so as to
render the provision valid rather than
void, in order to further the public policy
favoring arbitration, based on the ruling
in Pearson Dental Supplies, Inc. v.
Superior Court (2010) 48 Cal.4th 665,
682.
“As a general proposition (where the
clear and unmistakable test does not
apply), we agree that ambiguous terms
should be construed, where reasonable, in favor of arbitration. But the
Pearson Dental rule does not apply
here. In Pearson Dental, the court considered a single potentially unconscionable term in an arbitration agreement;
here, there are multiple unconscionable
terms... Moreover, the term in Pearson
Dental was ambiguous and did not expressly preclude the plaintiff from pursuing any remedy...
“3. Severance of Unconscionable Terms
“In the matter before us, there are multiple unconscionable terms..., and it
was not an abuse of discretion to con-
clude that the unconscionability so permeated the provision that it could not be
cured except by rewriting it (which the
court cannot do) or by refusing to enforce it in its entirety...
“Furthermore, by attempting to require
Ajamian to submit claims pertaining to
her employment in California to a threearbitrator panel across the country in
New York under New York law, according to the undisclosed rules of an arbitration organization CantorCO2e could
choose at its sole discretion, without the
remedies to which she was statutorily
entitled, yet saddled with the prospect of
paying CantorCO2e’s attorney fees contrary to California law, there is more than
a reasonable inference that the arbitration provision had little to do with agreeing on an efficient, less-costly forum and
everything to do with usurping an unfair
advantage and, indeed, discouraging her
from seeking redress for her claims at
all. [FN17. Appellants argue that the
arbitration provision was not in bad faith
because the limitation on rights and
remedies would have been permissible
under New York law. That, however,
ignores the point: the arbitration provision was presented to a California employee, whose employment occurred in
California and was governed by California statutes.]
“As an alternative to enforcing the arbitration provision in the Employment
Agreement, appellants seek to enforce
the arbitration provision in the handbook. The court did not err in declining to
do so.
“When Ajamian commenced her employment in September 2006, she acknowledged receipt of the Handbook
which contained CantorCO2e’s policy
on arbitrating disputes and an arbitration
agreement with a signature page.
Ajamian asserts she did not know the
contents of the Handbook at the time,
and it is undisputed she did not sign the
arbitration agreement... Appellants do
not contend that Ajamian was nonetheless bound by the arbitration agreement
in the Handbook when she commenced
her employment; instead, they urge that
she became bound after the termination
of the Employment Agreement.
-7-
“The Employment Agreement was terminated as of March 1, 2010. Pursuant
to section 4 of the Employment Agreement, at that point ‘the terms of the
Employee’s employment, including, but
not limited to Employee’s compensation, shall be governed by Company’s
policies then in effect...’ By that time,
Ajamian acknowledges she had seen
the Handbook, which sets forth ... the
company’s arbitration policy. By continuing in CantorCO2e’s employ, appellants argue, she agreed to abide by
the arbitration policy and, more specifically, the arbitration agreement contained in the Handbook.
“We disagree. Although section 4 of the
Employment Agreement dictates that
Ajamian’s employment would be ‘governed’ by CantorCO2e’s ‘policies then
in effect,’ it does not specifically state
she would be bound by any arbitration
agreement or even mention arbitration
at all. Nor was there evidence that she
was provided ... a copy of those ‘policies then in effect.’ Moreover, ... she
never signed or agreed to the actual
arbitration agreement in the Handbook,
and she was never asked to do so after
the Employment Agreement was terminated...”
For plaintiff: Charles H. Jung, Kassra P.
Nassiri, and Andrew R. Kislik.
For defendants: Curley, Hessinger &
Johnsrud.
First Dist Div Five, 2/16/12; opinion
by Needham with Simons and
Bruniers concurring; 2012 DAR 2189,
2012 WL 503876.
NINTH CIRCUIT
PARTIES CHOICE OF GEORGIA
LAW WAS UNENFORCEABLE,
AND ON REMAND DISTRICT
COURT MUST APPLY
CALIFORNIA LAW IN
DETERMINING WHETHER
DRIVERS ARE EMPLOYEES OR
INDEPENDENT CONTRACTORS
RUIZ v AFFINITY LOGISTICS CORP.
DECISIONS
(From Page 7)
“Fernando Ruiz appeals the district
court’s judgment, after a bench trial, in
his action ... for alleged violations of the
[FLSA] and California laws,” the Ninth
Circuit began in a February 8 opinion by
Pregerson. “To work as a driver for
Affinity, individuals [like the plaintiff] had
to enter into the Independent Truckman’s
Agreement and Equipment Lease Agreement ... with Affinity. [¶] The Agreements included clauses stating that (1)
the parties were entering into an independent contractor relationship, and (2)
Georgia law applied to any disputes...
“Ruiz and drivers similarly situated filed
a class action ... alleging violations of
FLSA and California laws, including
failure to pay overtime, failure to pay
wages (including payment for vacation,
holidays, sick days, and severance),
improper charges for workers’ compensation insurance, and the unfair business practice of wrongfully classifying
California drivers. The district court
[Southern District Judge Janis L.
Sammartino] initially granted partial
summary judgment to Affinity on Ruiz’s
cause of action for violation of FLSA.
Affinity then moved for summary judgment ... on the remainder of Ruiz’s
claims.
“On June 5, 2008, the district court
granted Affinity’s motion for summary
judgment on Ruiz’s second cause of
action for overtime pay under California
law. The remainder of Ruiz’s claims,
however, turned on whether Ruiz should
be classified as an independent contractor or as an Affinity employee.
“Applying Georgia law, the court concluded that there was ‘sufficient evidence from which a reasonable jury
could conclude that [Ruiz] has overcome the presumption of ‘independent
contractor’ status and established that
he was [Affinity’s] employee.’ ... The
matter was set for a bench trial on the
remaining claims. [¶] After a three-day
bench trial, the district court ... found
that Ruiz was unable to establish an
employer-employee relationship and
thus failed to rebut Georgia’s presumption of independent contractor status.
“Ruiz contends that the district court
after applying California’s choice of law
framework, erred when it concluded
that Georgia law applies. We agree.
Whether the district court erred ... is a
question of law subject to de novo review. [cite omitted.]
“The district court properly found that ...
Georgia ... has a substantial relationship to the parties... [¶] But the district
court’s inquiry should not have ended
there... The district court should have
then considered (1) whether applying
Georgia law ‘is contrary to a fundamental policy of California,’ and then (2)
‘whether California has a materially
greater interest than [Georgia] in resolution of the issue.’ [cite omitted].
“Properly applying California’s choice of
law framework requires us to conclude
that California law applies in determining whether the drivers are employees
or independent contractors. First, Georgia law ‘is contrary to a fundamental
policy of California.’ [cite omitted.] ... In
essence, the drivers are at a disadvantage under Georgia law because they
must overcome the presumption that
they are independent contractors. By
contrast, under California law, the presumption is that the drivers are employees... As such, Georgia law directly
conflicts with California law.
“Additionally, Georgia law directly conflicts with a fundamental California policy
that seeks to protect its workers...
[A]pplication of Georgia law in this case
would contravene the fundamental public policy in favor of ensuring worker
protections.
“Second, California also has a materially greater interest than Georgia in the
outcome of this case... The only connection with Georgia is that Georgia is
where Affinity is incorporated...
“For these reasons, we hold that the
parties’ choice of Georgia law is unenforceable in California. We also hold
that under California’s choice of law
framework, the law of California applies.
Accordingly, on remand the district court
shall apply California law to determine
whether the drivers are employees or
independent contractors.”
-8-
For plaintiffs: Daniel A. Osborn, NYC;
Elic Anbar, Phoenix.
For defendant: James H. Hanson,
Scopelitis, Garvin, Light, Hanson &
Ferry, Indianapolis.
For amicus National Employment Law
Project: Catherine K. Ruckelshaus,
NYC.
For amicus CRLA: Cynthia L. Rice,
Sacramento.
Ninth Circuit, 2/8/12; 2012 DAR 1813,
2012 WL 388171.
NINTH CIRCUIT AFFIRMS
ORDER THAT AFFIRMED
ARBITRATION AWARD IN
FAVOR OF EMPLOYER ON ITS
CLAIMS FOR BREACH OF
CONTRACT, CONVERSION,
AND UNAUTHORIZED
COMPUTER ACCESS
BILLER v TOYOTA MOTOR CORPORATION. Affirming an order that affirmed an arbitration award in favor of the
employer, the Ninth Circuit wrote in part
as follows in a February 3 opinion by
Gould:
“Dimitrios P. Biller appeals [Central District Judge George H. King’s] order
affirming an arbitration award and permanent injunction against him... [¶]
Appellant Biller worked as in-house
counsel for Toyota Motor Sales (‘TMS’),
a subsidiary of Toyota Motor Corp.,
from 2003 to 2007, with responsibilities
on product liability matters. In 2007,
Biller presented TMS with a claim asserting, inter alia, constructive wrongful
discharge related to TMS’s alleged unethical discovery practices. TMS and
Biller settled the claims, and, in September 2007, the parties signed a Severance Agreement... [¶] With respect
to Dispute Resolution, the parties
agreed to arbitrate ‘all known and unknown’ claims that related, inter alia, to
the interpretation, application, or alleged breach of the Severance Agreement...
“In November 2008, TMS sued in state
superior court seeking a temporary
DECISIONS
(From Page 8)
restraining order and permanent injunctive relief to prevent Biller from violating
the attorney-client privilege [in connection with his own new consulting business]. Biller filed a cross-complaint for
a TRO and permanent injunction prohibiting TMS from interfering with his business practices and those of LDTC [his
consulting company].
“TMS moved to compel arbitration under the terms of the Severance Agreement. The state superior court granted
the motion, and the parties were ordered to arbitration, with the arbitrator to
determine first whether the claims were
arbitable under the Severance Agreement. The Honorable Gary L. Taylor
(ret.) was appointed as the mutually
agreed-upon JAMS arbitrator.
“In July 2009, Biller ... filed a complaint
against TMS in the Central District of
California, alleging violations under the
RICO Act, constructive wrongful discharge, [IIED], and defamation per se.
TMS moved to dismiss the RICO Act
claim brought by LDTC and to compel
arbitration ... as to the claims brought
by Biller individually. In November 2009,
the district court dismissed the RICO
Act claim ... and granted TMS’s motion
to compel arbitration...
“The Arbitrator decided that Biller was
liable to TMS on all of its claims (breach
of contract, conversion, and unauthorized computer access), and that TMS
was entitled to injunctive relief, punitive
damages, and liquidated damages...
The Arbitrator awarded TMS $2.5 million in liquidated damages and $100,000
in punitive damages... [¶] The district
court confirmed the Final Award, granted
the Permanent Injunction, and denied
Biller’s request for vacatur of the Final
Award.
“We first consider whether the Severance Agreement called for arbitration
under the FAA or under California law.
Biller contends ... that the district court
erred by considering the Final Award
under the limited review authorized by
the FAA rather than under the more
expansive review authorized by [the]
California Arbitration Act in cases where
the parties contract for such expansive
judicial review.
“Consistent with state law regarding
contract interpretation, the plain language of the Severance Agreement is
unambiguous and shows the parties’
intent that while contract terms are
generally to be governed by California
law, any arbitration more specifically is
to be conducted under the FAA unless
‘a decision maker of competent jurisdiction’ finds that it should be governed
by the CAA...
“We next consider Biller’s argument
that the district court erred by not conducting a merits review of the Final
Award, urging that it was required by the
Severance Agreement. In Kyocera Corp.
v. Prudential-Bache Trade Serv. Inc.,
341 F.3d 987 (9th Cir. 2003) (en banc)...,
[w]e held that: “...Congress has specified the exclusive standard by which
federal courts may review an
arbitatrator’s decision, [and] private
parties may not contractually impose
their own standard on the courts.’ [¶]
[I]n Hall Street [Assoc., LLC v. Mattel,
Inc., 552 U.S. 576 (2008)] ..., the Court
agreed with our holding in Kyocera and
held that ‘§ 10 ... provide[s] the FAA’s
exclusive grounds for expedited vacatur...’ [¶] Under this framework, we reject Biller’s argument that the district
court erred by not conducting a merits
review of the Final Award... [¶] [T]he
California Supreme Court’s decision in
Cable Connection [Inc. v Direc-TV, Inc.
(2008)] is inapposite [because there the
court considered an arbitration agreement under the CAA].
“Biller argues that the Arbitrator exceeded his powers under the Severance Agreement first by not issuing a
writing sufficient to provide for judicial
review and second by failing to address
Biller’s affirmative defenses under California law... [¶] The district court concluded that ... the Arbitrator’s written
decision was in fact sufficient to provide
for the limited review authorized by the
FAA... We agree with the district court’s
conclusion...
“Biller contends that the Arbitrator acted
in manifest disregard of the law by not
expressly addressing Biller’s affirmative defenses of unclean hands and
equitable estoppel under California law...
[¶] The Arbitrator’s conclusion that given
the facts presented Biller’s actions were
-9-
unjustified suggests that, consistent
with the state unclean hands law, the
Arbitrator concluded that the equities
did not favor a finding in Biller’s favor...
[¶] Moreover, the district court suggested that it may be that in not crediting Biller’s evidence of TMS’s allegedly
fraudulent and criminal actions surrounding its discovery practices, the Arbitrator manifestly disregarded the facts.
But whether or not that characterization
is correct, the district court also correctly pointed out that we have previously held that ‘[m]anifest disregard of
the facts [alone] in not an independent
ground for vacatur in this circuit.’ Coutee
v. Barrington Capital Group, L.P., 336
F.3d 1128, 1133 (9th Cir.2003).
“Biller contends that the Arbitrator did
not address [his equitable estoppel]
defense in his written decision which in
turn reflected the Arbitrator’s manifest
disregard of the law. The district court
held that the Arbitrator implicitly rejected Biller’s equitable estoppel defense... The district court did not err in
coming to this conclusion... The Arbitrator concluded that Biller was well
aware of his ethical duty to TMS and
that nothing justified Biller’s breach of
that ethical duty, not even TMS’s allegedly false representations to Biller about
the scope of his ethical duties...”
For plaintiff: Dimitrios P. Biller, Pacific
Palisades, Pro Se.
For defendant: David L. Schrader, Roger
K. Smith, Morgan, Lewis & Bockius,
Los Angeles.
Gould joined by Noonan and Ikuta;
2012 DAR 1482, 2012 WL 336135.
SHERIFF-CORONER WAS
ENTITLED TO QUALIFIED
IMMUNITY FOR DEMOTING
SUBORDINATE WHO HAD
UNSUCCESSFULLY OPPOSED
HIS RE-ELECTION
HUNT v COUNTY OF ORANGE. “The
day after his scandal-ridden third election to the position of Orange County
Sheriff-Coroner,” the Ninth Circuit began in a February 13 opinion by Wardlaw,
“Michael Carona placed on administra(Cont'd on Page 10, DECISIONS)
DECISIONS
(From Page 9)
tive leave William Hunt, a former lieutenant officer with the Orange County
Sheriff’s Department, who had dared to
enter the race and campaign against
Carona’s alleged culture of corruption.
Carona then demoted Hunt, an action
that prompted Hunt to file this 42 U.S.C.
§ 1983 suit claiming that his placement
on administrative leave and subsequent
demotion were in unconstitutional retaliation for the exercise of his First
Amendment rights. The district court
[Central District Judge Margaret M.
Morrow] concluded that Hunt’s campaign speech was not protected by the
First Amendment because, based on
upon special factual findings by a jury,
Hunt fell into the narrow ‘policymaker’
exception to the general rule against
politically-motivated dismissals. Although we determine that the district
court erred in this conclusion, we agree
with the district court’s alternative holding that Carona is entitled to qualified
immunity because a government official
in his position ‘reasonably but mistakenly’ could have believed that political
loyalty was required by someone with
Hunt’s job responsibilities at the time
he ran against Carona. We therefore
affirm the judgment of the district court.”
For plaintiff: Stephen H. Silver and Richard A. Levine.
For County and Michael S. Carona:
Norman J. Watkins and S. Frank Harrell,
Lynberg & Watkins.
Wardlaw joined by Mahan; concurring and dissenting opinion by
Leavy; 2012 DAR 1978, 2012 WL
432297.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
FOURTH DISTRICT AFFIRMS
DISABILITY HARASSMENT
CLAIMS BUT ALSO AFFIRMS
SHARP REDUCTION OF
ATTORNEYS’ FEES AWARD
ESPINOZA v COUNTY OF ORANGE.
In an unpublished opinion by
Rylaarsdam filed on February 9, the
Fourth District, Division Three, wrote in
part as follows:
also appeals denial of expert witness
fees.
“Defendant County of Orange appeals
from a judgment in favor of its employee,
Ralph Espinoza, in his action for harassment based on disability and failure
to prevent harassment under [FEHA]...
In addition to defendant County, plaintiff
also sued four employees of the probation department... The jury found in their
favor and they are not parties to this
appeal...
“We conclude there was no error and
affirm.
“On trial of the bifurcated liability issue,
the jury returned a verdict against defendant, finding it liable for harassment
based on plaintiff’s disability and failure
to prevent the harassment. It found in
favor of defendant on the retaliation and
wrongful discharge causes of action
and in favor of the individual defendants
on all claims. In the damages phase
plaintiff was awarded over $820,000,
consisting of $700 for medical expenses,
$320,000 in lost earnings, and $500,000
for mental distress.
“Some of the harassment underlying
the judgment was conducted on blog
postings [that mocked the plaintiff’s
disability]. Defendant claims the
postings were improperly considered
for a variety of reasons: (1) they were
anonymous, (2) defendant did not create or approve the blog, and (3) liability
is proscribed under the First Amendment ... and the federal Communications Decency Act of 1996, 47 U.S.C.
section 230 et seq., which preempts
any state law in this field.
“Defendant further asserts the judgment
is not supported by substantial evidence of harassment so severe or pervasive as to satisfy FEHA requirements
or that it failed to take reasonable action
to prevent any harassment.
“When plaintiff was born his right hand
had no fingers or thumb but contained
only two small stubs. He was generally
able to function although he could not
perform some tasks such as holding a
knife or fork with that hand. He was selfconscious about people seeing it and
often kept his hand in his pocket... [¶]
Plaintiff began working for the Orange
County Probation Department in July
1996... At the time of the incidents he
was a level two deputy juvenile corrections officer at juvenile hall...
“Defendant claims the court erred in
admitting the blog postings into evidence because the conduct was outside the physical workplace and was
‘non-place activity where the employer
has not dictated or authorized’ it, discussing several cases in detail in support.
“[T]he harassment for which defendant
could be liable had to have been committed by its employees. [¶] And there
is evidence of that. Employees accessed the blog on workplace computers as revealed by defendant’s own
investigation. The postings referred both
directly and indirectly to plaintiff, who
was specifically named in at least some
of them, and the postings discussed
workplace issues. It was reasonable for
the jury to infer the derogatory blogs
were made by coworkers. Management
sent two e-mails to employees directing they discontinue posting the improper comments on the blog. This
suggests the administrators believed
employees were posting...
“Finally, defendant challenges the
amount of damages, claiming insufficient evidence, juror misconduct, and
instructional error. [Discussion of those
unsuccessful claims omitted.]
“Further, defendant completely ignores
the other conduct at the workplace, i.e.,
the incidents where employees put their
right hands in their pockets, the scrawling of ‘the claw’ on plaintiff’s cart and
elsewhere, the occasions when plaintiff
was ignored, and the like.
“Plaintiff filed a cross-appeal from a
postjudgment order on the ground attorney fees awarded to him were insufficient because [Orange County Superior Court Judge Derek W. Hunt] incorrectly applied the lodestar formula. He
“Defendant claims the Communications
Decency Act bars liability based on
federal preemption of FEHA. That act ...
-10-
DECISIONS
(From Page 10)
declares that a ‘provider or user of an
interactive computer service shall [not]
be treated as the publisher or speaker of
any information provided by another
information content provider’ ... [¶]
“Here, plaintiff is not arguing defendant
is the publisher of the blog postings. In
his brief he unequivocally asserts he is
relying solely on defendant’s knowledge of the harassment and failure to
take appropriate action to correct it;
respondeat superior is not the basis of
the claim... [¶] Defendant contends
plaintiff’s reliance on the blog postings
to impose liability violates the First
Amendment... But it offers no credible
support for this claim... [And] [e]valuating
the blog postings and the acts in the
workplace as would a reasonable person in plaintiff’s position, the evidence
established sufficient harassing and
threatening comments and conduct to
satisfy the serve or pervasive test.
“Defendant asserts there is insufficient
evidence to support a finding it failed to
take reasonable steps to prevent harassment... [¶] It ... detail[s] that it had
enacted policies to prevent harassment,
including regular training for employees, and points to undisputed evidence
that it began an investigation once it
learned of the blog. And defendant
claims it blocked access through use of
the generic login and passwords. It also
highlights the two e-mails sent to employees criticizing the blogs.
“But there is contrary evidence. The
blog continued for eight weeks after
defendant began investigating. And although it did block the generic logins,
defendant did not block access of those
using personal passwords, which it had
the ability to do. Further..., it never
interviewed anyone, including plaintiff
and the individual defendants. And none
of management’s requests to cease
conduct was directed toward the nonblogging-harassment conduct. This is
sufficient evidence to support a determination defendant failed to respond sufficiently.
“Over defendant’s objections and after
an Evidence Code section 402 hearing,
the court allowed plaintiff to put on
expert testimony from Michael A.
Robbins, a lawyer and president of a
company that conducts training and
investigations ... on workplace harassment and discrimination... [¶] It was
Robbins’s opinion that ... defendant
failed to follow any of [the] steps [that
employers usually take]. [¶]
[Defendant’s] reliance on [FEHC v]
Gemini [Aluminum Corp. (2004)] 122
Cal.App.4th 1004 is not well founded...
[¶] Nor are we persuaded by the claim
Robbins speculated. Defendant’s failure to investigate was the reason he
could not be more specific as to what it
could have learned. That was his point.
“Plaintiff claims the $194,581 attorney
fees awarded to him, instead of the
$628,083.75 requested are too low because the court failed to properly calculate the amount... [¶] Plaintiff proposed
a lodestar amount of $418,722.50 based
on the number of hours with a 1.5
multiplier. Defendant objected to the
number of hours and argued a proper
lodestar amount was $335,482.50 with
a .5 multiplier applied as a reduction
because plaintiff prevailed only on two of
its causes of action, did not prevail
against the individual defendants, and
received an award less than that he
sought, resulting in a suggested attorney fee award of $167,741.25.
“During argument on the motion the
court noted its ‘astonish[ment]’ that the
amount requested was 75 percent of
the damages, beyond its experience
with even ‘complex business cases’...
[¶] Plaintiff argues that, in reducing the
amount of fees by more than half of the
amount conceded by defendant, the
‘court must have deviated from the lodestar.’ We disagree. [T]he court made
clear its belief the case was routine. It is
reasonable to infer the court did not
believe plaintiff should have spent the
number of hours it did litigating the
case. The court was not required to
specify the time it found unreasonable.
[cite omitted.] ... The court is the best
judge of the amount that should be
awarded. We find no basis to reverse.
“Plaintiff claims the court abused its
discretion when it denied his request for
slightly more than $45,000 as expert
witness fees for Robbins... In rejecting
the request the court noted the testimony was ‘not particularly illuminating’
or helpful... [¶] [P]laintiff claims the
court’s lack of enthusiasm for Robbins’s
testimony does not make an award of
-11-
costs unjust... But if the testimony had
virtually no value, a factual finding to
which we must give deference, an award
of costs would not be just.”
For plaintiff: Timothy B. McCaffrey, Jr.,
Nastasha R. Chesler; Norman Pine.
For defendant: Lewis Brisbois Bisgaard
& Smith, Nancy E. Zeltzer, Gary M.
Lape, and Stephanie K. Vaudreuil.
Fourth Dist Div Three, 2/9/12; opinion by Rylaarsdam with O’Leary and
Ikola concurring; 2012 WL 420149
(unpublished).
FIFTH DISTRICT REVERSES
SUMMARY JUDGMENT ON
CLAIMS FOR SEX
DISCRIMINATION, RETALIATION,
WTVPP, AND IIED, WHILE
AFFIRMING SUMMARY
JUDGMENT ON CLAIMS FOR
HARASSMENT AND DEFAMATION
ROUTH v KERN COUNTY PROBATION DEPARTMENT. In an 20-page
unpublished opinion by Gomes filed on
February 1, the Fifth District wrote in
part as follows:
“Melissa Routh appeals from a summary judgment ... on her claims (1)
under [FEHA] for sexual harassment,
discrimination, and retaliation, (2)
[WTVPP], (3) [IIED], (4) defamation, (5)
intentional interference with prospective economic advantage, and (6) violation of Labor Code section 1050. We
hold that triable issues of material fact
exist with respect to Routh’s FEHA
claims for retaliation and discrimination, as well as her claims for wrongful
termination and [IIED], and therefore
reverse the judgment and orders on
those claims. We agree with [Kern
County Superior Court Judge Sidney P.
Chapin’s] ruling on the [other claims].
On those claims, we direct the court to
grant the Department’s alternative motions for summary adjudication.
“Citing Nazir v. United Airlines, Inc.
(2009) 178 Cal.App.4th 243, 255, Routh
contends we should disregard the trial
court’s evidentiary rulings and review all
of the evidence the parties submitted on
DECISIONS
(From Page 11)
the motion. The court in Nazir, however,
did not hold that a trial court’s evidentiary rulings should be disregarded in all
summary judgment cases... [¶] We will
review the objections only to the extent
Routh specifically challenges particular
evidentiary rulings with meaningful argument and authority, and demonstrates
an abuse of discretion...
“The trial court granted summary adjudication on Routh’s sexual harassment
claim after finding the undisputed facts
showed the alleged conduct was insufficient to constitute severe or pervasive
cond[uct], or altered any condition of
her employment... Routh’s sexual harassment claim is based on: (1) comments Pruett made about Routh’s physique...; and (2) the conversation between Pruett and Hillis, in which Hillis
said he should be reminded not to talk
about Routh’s breasts, which were referred to as ‘bolt-ons.’ ... These incidents alone do not show a sufficiently
severe or pervasive work environment...
“Routh contends she was subjected to
a variety of adverse employment actions for complaining ... that she was
sexually harassed, which constitute both
retaliation and discrimination under
FEHA, and which resulted in her wrongful termination... [¶] Although the Department presented evidence sufficient
to show that the two internal affairs
investigations were instituted and conducted for legitimate, non-retaliatory
reasons, Routh presented circumstantial evidence that she was a victim of
retaliation... Roberts was certainly
aware of [Routh’s sexual harassment
complaint and] he was the one who
ordered the internal affairs investigation
into [problems with Routh’s probation
reports]... Roberts admitted in his deposition that he was not aware of any other
person subjected to an internal affairs
investigation into timecard irregularities
[or probation report problems]... Roberts’ decision to institute internal affairs
investigations into these matters, and
ultimately to terminate Routh, might
strike a trier of fact as rather suspicious...
for retaliation and discrimination, there
is also an issue of fact regarding her
claim for IIED.
“In Routh’s fourth cause of action for
defamation, she alleges the Department published defamatory statements
about her to ‘third persons who had no
need to know,’ including the BPD, the
CDCR, other agents or employees of
the Department, prospective employers, and the community. The alleged
statements are that she ‘deserved written warnings and disciplinary actions
against her including termination and
that she was dishonest and insubordinate.’
“On appeal, Routh contends the release to the CDCR and BPD of the letter
that contained the information that
should have been redacted constituted
defamatory publications that were not
subject to the privilege of Civil Code
section 47, subdivision (b), as the letter
was released outside of any official
proceeding. In response, the Department asserts that any statements made
to the CDCR and BPD as part of their
background investigations are absolutely privileged under O’Shea v. General Tel. Co. (1987) 193 Cal.App.3d
1040.
“Information given by a former employer
during a background investigation of a
prospective employee by a law enforcement agency is absolutely privileged
under Civil Code section 47, subdivision
(b). [cites omitted.] ... [¶] [Case law]
does not compel the conclusion the
absolute privilege as stated in O’Shea
does not apply when a current law
enforcement officer is applying for a
position with another law enforcement
agency. In our view, the same public
policy considerations apply...”
For plaintiff: Nicolas C. Vrataric.
For defendant: Theresa A. Goldner,
County Counsel, and Mark L. Nations,
Deputy County Counsel.
Fifth Dist, 2/1/12; opinion by Gomes
with Wiseman and Cornell concurring; 2012 WL 286885 (unpublished).
“The parties disagree ... on whether the
Department’s conduct was extreme and
outrageous [for purposes of the IIED
claim]... [¶] Since Routh established a
triable issue of fact regarding her claims
15-DAY PERIOD FOR
DEFENDANT’S PEREMPTORY
CHALLENGE WAS SUSPENDED
DURING TIME THE CASE WAS
TEMPORARILY PENDING IN
FEDERAL COURT PRIOR TO
REMAND
RAYTHEON v SUPERIOR COURT
(BYRD). The Second District, Division
One, wrote in part as follows in a short
unpublished February 1 per curiam opinion:
“We hold that because the 15-day period for filing a peremptory challenge
was suspended while the matter was
pending in federal court, the peremptory
challenge of petitioner Raytheon Company, defendant in an underlying age
discrimination action..., was timely.
Accordingly, we grant the petition and
order the superior court to transfer the
matter to a judge other than the Honorable Susan Bryant-Deason.
“On August 29, 2011, after real party
Byrd exercised her peremptory challenge, the case was assigned to Judge
Susan Bryant-Deason. On September
27, Raytheon made its first appearance
by filing its answer. On September 29,
Raytheon was successful in having the
case removed from the superior court to
federal court. On October 25, the federal court remanded the matter back to
state court. On October 26, notice of
remand was served electronically on
Raytheon and Byrd and via United
States mail on the superior court. On
October 27, Raytheon filed a notice of
remand and its peremptory challenge to
Judge Bryant-Deason, who struck the
challenge as untimely on the basis that
it had not been filed within 15 calendar
days of the date that Raytheon made its
first appearance in the superior court.
“The 15-day period stopped running for
the period of time during which the
matter was pending in federal court,
because the state court’s jurisdiction
was suspended during that period...”
For real party: Victor L. George.
For petitioner: Cohon & Pollak, Jeffrey
M. Cohon and Kristina S. Keller.
Second Dist Div One, 2/1/12; per
curiam
opinion
(Mallano,
-12-
DECISIONS
(From Page 12)
Rothschild, and Johnson); 2012 WL
290370 (unpublished).
FOURTH DISTRICT HOLDS
UNCONSCIONABLE BECAUSE OF
ATTORNEYS’ FEES TERM AND
EMPLOYER’S FAILURE TO
PROVIDE COPY OF AAA RULES
MAYERS v VOLT MANAGEMENT
CORP. “Plaintiff Stephen Michael
Mayers filed a complaint against his
former employer ... alleging several
claims under [FEHA],” the Fourth District, Division Three, wrote in an unpublished opinion by Fybel filed on February 2. “Defendant filed a motion to compel arbitration... The trial court [Orange
County Superior Court Judge Geoffrey
T. Glass] denied the motion.
“Defendant argues the trial court erred
because the arbitration provisions were
enforceable and did not contain any
unconscionable elements. Defendant
argues that, in any event, the trial court
should have severed any offending provisions and ordered arbitration.
“We affirm. The arbitration provisions
contained in the employment application, employment agreement, and employee handbook each required that
plaintiff submit employment-related
claims to arbitration pursuant to the
‘applicable rules of the American Arbitration Association in the state’ where
plaintiff was employed or was last employed by defendant. Plaintiff was not
provided with a copy of the controlling
[AAA] rules or advised as to how he
could find or review them. The provisions also failed to identify which set of
rules promulgated by the AAA would
apply. They further stated that the ‘arbitrator shall be entitled to award reasonable attorney’s fees and costs to the
prevailing party.’ [S]uch a prevailing party
attorney fees term exposed plaintiff to a
greater risk of being liable to defendant
for attorney fees than he would have
been had he pursued his FEHA claims
in court.
“Under well-established authority, the
above discussed arbitration provisions
were unconscionable and therefore un-
enforceable. Because the unconscionable terms cannot be severed from the
rest of the arbitration provisions, plaintiff
cannot be compelled to arbitrate his
claims against defendant.”
For plaintiff: Sessions & Kimball,
Stephen C. Kimball and James R. Vogel.
For defendant: Simpson, Cameron,
Medina & Autrey, Erin Nemirovsky
Medina; Littler Mendelson and Henry D.
Lederman.
Fourth Dist Div Three, 2/2/12; opinion by Fybel with Rylaarsdam and
Aronson concurring; 2012 WL 314863
(unpublished).
MISDRAFTED ARBITRATION
AGREEMENT FAILED TO COVER
ALL EMPLOYMENT RELATED
DISPUTES
DERR v SUPERIOR COURT (NEPENTHE/PHOENIX CORP.) In an unpublished February 8 opinion by Elia, the
Sixth District wrote in part as follows in
connection with claims for disability
discrimination and WTVPP:
“Petitioner Susan Derr seeks a writ of
mandate directing the trial court to vacate its order compelling her to arbitrate
employment related claims against her
employer... We issued an order to show
cause why the writ should not be granted.
Having considered the parties’ further
briefing, we order that the writ should
issue.
“Nepenthe argued that Ms. Derr’s claims
were within the scope of the 2007 arbitration agreement... [¶] Ms. Derr opposed Nepenthe’s petition. She argued
that the agreement she signed did not
actually state that she was required to
arbitrate claims arising out of her employment. She pointed out that the
agreement made no explicit reference
to claims arising out of employment,
rather, by its express terms arbitration
was required only for ‘dispute[s] arising
from or relating to th[e] Agreement’
itself.
“Orders compelling arbitration are considered interlocutory and not directly
appeable. [cites omitted.] However, writ
review is available in a proper case.
[cites omitted.]
-13-
“[W]e set forth in detail the first [paragraph] of the ‘NEPENTHE ARBITRATION AGREEMENT.’
‘1. The parties shall submit any dispute
arising from or relating to this Agreement or the breach hereof, whether
based on contract, tort, or statutory
duty or prohibition (including any prohibition against discrimination or harassment) to binding arbitration in accordance with the California Arbitration
Act... Either party may enforce the
award of the arbitrator under California
Code of Civil Procedure § 1285. The
parties understand that they are waiving their right to a jury trial.’
“Ms. Derr argues that in order to compel
her to arbitrate all employment claims
arising out of her employment with Nepenthe, there must be evidence that
she actually agreed to arbitrate all employment claims.
“Although Ms. Derr seems to concede
that paragraph one outlined ante is
ambiguous, we find that it plainly and
unmistakably indicates that any disputes between the parties arising from
or relating to the arbitration agreement
itself shall be submitted to arbitration; it
does not, as Nepenthe argued below,
‘expressly provide[ ] that any disputes
arising between the employee and the
employer ... shall be submitted to binding arbitration.’
“We do not find the language of paragraph one to be susceptible of more
than one reasonable interpretation; and
that interpretation is there was an agreement to arbitrate disputes ‘arising from
or relating to’ the arbitration agreement
itself; the arbitration agreement does
not describe the types of disputes that
could arise from or relate to the agreement—as nonsensical as that is.
“Certainly in 1996, Ms. Derr did sign an
‘ACKNOWLEDGMENT’ AND ARBITRATION AGREEMENT’ whereby she
acknowledged receiving a copy of
Nepenthe’s employee handbook and
she did agree ‘that the handbook provides for the arbitration of any and all
claims or controversies between [her]
and Nepenthe/Phoenix Corporation arising from [her] employment with the
DECISIONS
(From Page 13)
company...’ Neverthess, the 2007 ‘ACKNOWLEDGMENT OF RECEIPT OF
EMPLOYEE HANDBOOK’ states that
the policies contained in the 2007 handbook ‘supercede and replace all previously communicated policies both in
written and verbal form.’ Thus, the 2007
acknowledgment expressly voided the
terms of the 1996 employee handbook
and arbitration provision that was contained therein and the 1996 acknowledgment... Although the ‘problem solving’ section of the handbook states that
an additional step in the resolution of
disputes between the employer and
employee ‘may’ involve ‘Alternative Dispute Resolution’ including ‘mediation
and/or arbitration of claims,’ the introduction section of the handbook expressly provides that the ‘handbook
does not create a contract express or
implied.’
“With regard to the 2007 arbitration
agreement the acknowledgment contains a paragraph that reads as follows:
‘By initialing on the line below, I represent that I have received and read the
Nepenthe Arbitration Agreement and
that I understand the legal effect of
binding arbitration. Further, I willingly
agree to participate in arbitration as set
forth in the Arbitration Agreement and
am aware that I am not obligated to
accept the Arbitration Agreement as a
condition of my employment.’ Ms. Derr’s
signature appears on the acknowledgment. However, nothing in the acknowledgment indicates that Ms. Derr is
required arbitrate all claims arising out
of her employment. Rather, the acknowledgment expressly provides that
the employee agrees to participate in
arbitration as set forth in the arbitration
agreement; the particular controversies
within the scope of the arbitration agreement are left undefined.
“It appears that there was a huge drafting mistake... [¶] If Nepenthe wished to
require Ms. Derr to adhere to an arbitration clause that required her to arbitrate
any disputes arising from her employment with Nepenthe, it should have
made that clause explicit, preferably as
explicit as possible, and understandable to a layperson not represented by
an attorney.
“In conclusion, we hold that Ms. Derr’s
employment related claims are beyond
the scope of the 2007 arbitration agreement. [FN4. In light of our holding, we
need not reach petitioner’s additional
argument that the 2007 arbitration agreement is unconscionable.]”
For petitioner: Christopher Edward
Panetta, Fenton & Keller, Monterey.
C O M I N G
For real party: James J. Cook, Elizabeth Catherine Gianola, Horan Lloyd
Law Offices, Monterey.
Sixth Dist, 2/8/12; opinion by Elia
with Premo and BamattreManoukian concurring; 2012 WL
E V E N T S
March 14, 2012
CELA Webinar
Starting Your Own Law Practice
Noon to 1:15pm
(info: www.cela.org)
March 16-17, 2012
NELA Seminar
The ABCs of Alternative Dispute Resolution in Employment Cases
Seattle Marriott Waterfront
March 20, 2012
CELA Lobby Day 2012
Sacramento
(info: mariko@cela.org)
April 23, 2012
(see www.nela.org)
May 18, 2012
June 1, 2012
CELA’s Diversity Outreach and Mentor Committees Present
DEPOSITION SKILLS: A PRACTICAL WORKSHOP
9:30am to 4:30pm
Sportsmen’s Lodge, Studio City
June 8, 2012
9:30am to 4:30pm
Parc 55 Hotel, San Francisco
June 20-23, 2012
Sheraton San Diego
(see www.nela.org)
October 5-6, 2012
-14-
LEGISLATION
(From Page 1)
penalties under Labor Code Section
226.
OTHER BILLS WE’RE TRACKING
AB 1655 (Dickinson - D). This bill would
enact the Public Employees’ Bill of
Rights, applicable to state employees
(other than “excluded” supervisory and
confidential employees). Its stated purpose would be to inform employees of
their rights and terms of employment.
Among other things, this bill would entitle employees to priority over “excluded”
employees or contractors in filling permanent, overtime, and on-call positions.
It would also authorize the formation of
peer review committees for professional
staff to provide input regarding workplace operations.
AB 1844 (Campos - D). This bill would
provide that an employer does not fail to
exercise reasonable care to discover
whether a potential employee is unfit or
incompetent by the employer’s failure
to search social media before hiring.
AB 1875 (Gatto - D). This bill would add
Section 2025.290 to the Code of Civil
Procedure, relating to depositions in
civil actions, to limit depositions to one
seven-hour day. The court would be
required to allow additional time if necessary to fairly examine the deponent.
And the court would also be required to
allow additional time if any circumstance
impedes or delays the examination.
AB 2043 (Wagner - R). This bill would
amend Section 904.1 of the Code of
Civil Procedure, relating to appeals, to
add an order granting or denying class
action certification, allowing appeal at
the discretion of the Court of Appeal.
The bill would specify factors the court
must consider in determining whether
to allow the appeal.
For more information on these and other
bills, go to www.leginfo.ca.gov and click
on bill search, or email mariko
@cela.org.
REGISTER FOR LOBBY DAY
On Tuesday, March 20, CELA members will take to the halls of the state
capitol to meet with elected officials and
lobby for our three sponsored bills. Par-
FROM CELA’S EDUCATION COMMITTEE
New Members Sought. CELA’s Education Committee is seeking new members. Attrition over the past year has left
the Committee with some open seats.
Most recently, Karen Berntson and
Michelle Reinglass left the Committee:
we congratulate Karen on her growing
family, and wish Michelle well with her
growing mediation practice.
The Education Committee plans all
details of the CELA Annual Conference,
including the plenary and breakout sessions, speakers, general content, conference program, conference theme,
meals and refreshments, cost, location, dates--everything. The Committee
also coordinates CELA’s overall educational schedule and plans most the
seminars and other programs that CELA
offers throughout the year. This is a
hard-working, time-consuming committee, and its members devote significant
time developing high-quality programs
for our members. The Committee meets
throughout the year, every year. Annual
Conference planning begins immediately after the end of the previous year’s
Conference.
We are looking for letters of interest
from CELA members who are able to:
• Devote from two hours up to 20 hours
per month. (The five months before the
Annual Conference are the busiest.)
• Attend between 16 and 20 telephonic
meetings per year, lasting about one
hour each. This includes regular monthly
meetings as well others, (more frequently in the months leading up to the
Annual Conference).
• Organize and manage from start to
finish (and on deadline) one or more of
the Annual Conference breakout sessions—session content, speakers,
materials, equipment, etc.
• Work with other Committee members
toward the overall goal, with flexibility
and spontaneity, even when their own
suggestions may not have been adopted.
ticipating is a great way to learn more
about the legislative process and to
network with Sacramento politicos.
Plus, it’s a FUN day spent with your
CELA peers!
This will be an all-day event, beginning
with a breakfast orientation, meetings
-15-
If you are interested in applying, please
send a letter of interest to the Education
Committee in care of Administrative
Director Christina Krasomil, (christina
@cela.org), by Friday, March 23. Please
explain your interest in the Committee
and your expected contributions, and
include a short description of your law
practice and location. The Committee
will select from the applications based
on its needs, and may conduct some
interviews. As do all CELA Committees, we aim for diversity in race, national origin, gender, age, sexual orientation, disability, religion, office size,
geography, legal concentration, length
in practice, etc.
Help Plan Our 2012 Annual Conference and other Events. The Education Committee is gearing up for 20122013. The 2012 Annual Conference will
take place in Costa Mesa on Friday and
Saturday, October 5 and 6, 2012, with
a skills seminar on Thursday, October
4. The Conference will offer a number of
concurrent 75-minute sessions.
The Education Committee is in the
planning stage for full- and half-day
seminars in 2012 and 2013. CELA Seminars throughout the year cover topics
variously directed toward newer attorneys, advanced practitioners, and all
levels.
Please let us know what topics are of
interest to you for the Annual Conference and the seminars. The Education
Committee welcomes your suggestions
relating to substantive law, practical
skills, theoretical application, demonstration, or any other focus.
Please send us your Conference session and seminar ideas, including any
speaker recommendations, by Friday,
March 23, addressed to Christina
Krasomil: christina@cela.org; or by fax:
(818) 907-7474.
all day, and a happy hour cocktail reception with our political friends and
allies to celebrate our hard day’s work.
For more information and to register, go
to www.surveymonkey.com/s/CELALobbyDay.
•
•
•
NELA NEWS
The following news and information appeared during the past month in NELA’s
electronic newsletters “@NELA” and
“On The Hill.”
—Professor Robert Bolton, a beloved
member of the NELA family, passed
away on February 9 at the age of 76 after
suffering a stroke. “The Professor,” as
he was affectionately called by those
who knew him in NELA, served on our
Executive Board from 1999 to 2002, and
taught hundreds of us at our Annual
Conventions and seminars. A founding
member of The Institute’s National
Litigation Strategy Project, Professor
Belton was the inspiration for The
Institute’s upcoming April 23 symposium in NYC with New York Law School,
“Trial By Jury or Trial By Motion? Summary Judgment, Iqbal, and Employment Discrimination.”
Professor Bolton was a civil rights pioneer and nationally recognized scholar
of labor and employment law. NELA
members use and cite his work every
day—crucial cases including Griggs v
Duke Power Co., Albermarle Paper Co.v
Moody, and Harris v Forklift Systems.
He joined Vanderbilt Law School in
1975 and became the first African American to be granted tenure at the law
school, where he was a beloved teacher
and played an important mentoring role.
During his tenure on the NELA Board,
Professor Bolton worked to enhance
the participation of lawyers and students of color.
[Editor’s note: the following additional
information appeared on Vanderbilt
University’s website.] From 1970 to
1975, Professor Bolton practiced law
as a partner at Chambers Stein
Ferguson & Lanning in Charlotte, one of
the first racially integrated firms in the
south. The firm’s building was firebombed at the height of its involvement
in a series of landmark civil rights cases,
including Swann v Charlotte
Mecklenburg Board of Education, in
which the Supreme Court approved busing as a remedy to enforce Brown v
Board of Education.
Professor Bolton authored numerous
law review articles and book chapters,
and was the lead author of a widely
adopted casebook on employment discrimination law that was the first to
incorporate critical race and feminist
theory. He taught courses on The Law of
Work, Employment Discrimination Law,
Constitutional Tort Litigation, and Race
and the Law.
Over the course of his career, Professor
Belton was a visiting professor at Harvard
Law School, the University of North
Carolina, and the North Carolina Central
School of Law. Among other honors, he
received the Clyde C. Ferguson Award
from the Minority Section of the American Association of Law Schools in 2003,
and the National Bar Association’s Presidential Award in 2006.
Professor Bolton was born in High Point,
North Carolina, the fourth child of laborers whose family ultimately included
eighteen children. He excelled academically, and was offered a full scholarship
at Morehouse College, but decided first
to spend time with a sister in Connecticut. He earned his B.A. at the University
of Connecticut in 1961, and his J.D. at
Boston University in 1965.
—NELA’s 2012 Gala Fundraiser will
take place on Friday evening, June 22,
during our Annual Convention in San
Diego. “Honoring NELA’s Champions”
will feature the premiere of a video montage produced by and for NELA members, who are all invited to submit a video
of up to three minutes explaining how
and why their employee rights advocate
inspires them as a champion of equality
and justice in the American workplace.
For technical information on preparing
the videos, contact Pedro Valverde,
NELA’s Technology and Office Administrator: (415) 296-7629; pvalverde
@nelahq.org. And concerning Fundraiser sponsorship, contact Leah A.
Hofkin, Director of Development: (415)
296-7629; lhofkin@employeerightsadvocacy.org.
—Amicus Activity. NELA and the National Employment Law Project have
joined together as amicus curiae in
Christopher v SmithKline Beecham, (No.
11-204), to urge the United States Supreme Court to recognize the right of
-16-
pharmaceutical sales representatives
to be classified as non-exempt employees. In the case below, (635 F3d 383),
the Ninth Circuit held otherwise, and
certiorari was granted on November 28,
2011, (132 S Ct 780). [The Ninth Circuit’s
2/14/11 opinion was summarized in
CELA Bulletin, Feb 2011, p.11.] The
petitioner-plaintiffs are two among approximately 90,000 PSRs employed
within the pharmaceutical industry who
visit physicians’ officers and encourage
doctors to prescribe their employers’
products. Plaintiffs filed suit under the
FLSA, seeking overtime pay on behalf
of a nationwide class of PSRs employed by respondent-defendant
SmithKline Beecham Corp., d/b/a
GlaxoSmithKline. Numerous similar
suits have been filed throughout the
country by PSRs employed by various
pharmaceutical companies. The Ninth
Circuit affirmed summary judgment
granted by the United States District
Court for the District of Arizona on the
ground that the PSRs had been correctly classified as exempt “outside
salesmen.”
We thank our team of authors from
Outten & Golden (NYC), Mariko Hirose,
Paul W. Mollica, and Justin M. Swartz,
and Nichols Kaster (Minneapolis),
Charles G. Frohman and Rachhana T.
Srey, as well as our reviewers, Eve H.
Cervantez, James M. Finberg, and David
Borgen. NELA members Jeremy
Heisler, Katherine M. Kimpel, Michael
R. Pruitt, and David W. Sanford are
among the attorneys representing the
petitioner-plaintiffs before the Supreme
Court. The brief is available on NELA’s
website, www.nela.org.
—A NELA Report, “Judicial Hostility
To Workers’ Rights: The Case For Professional Diversity On The Federal
Bench,” can be found at www.nela.org/
judicialdiversity. And the latest issue of
The Employee Advocate is now at
www.nela.org/employeeadvocate.
•
•
•
Published
Monthly
BULLETIN
UNITED STATES
SUPREME COURT
States under this provision are barred
by the States’ immunity as sovereigns
in our federal system.
CONGRESS DID NOT VALIDLY
ABROGATE STATES’ IMMUNITY
FROM DAMAGES FOR
VIOLATIONS OF FMLA’S SELFCARE PROVISION
“This Court considered subparagraph
(C) [of 29 USC § 2617(a)(2)] in Nevada
Dept. of Human Resources v. Hibbs,
538 U.S. 721 (2003). Subparagraph
(C), like (A) and (B), grants leave for
reasons related to family care, and
those three provisions are referred to
here as the family-care provisions.
Hibbs held that Congress could subject States to suit for violations of subparagraph (C)... That holding rested on
evidence that States had family-leave
policies that differentiated on the basis
of sex and that States administered
even neutral family-leave policies in
ways that discriminated on the basis of
sex... Subparagraph (D), the self-care
provision, was not at issue in Hibbs.
COLEMAN v COURT OF APPEALS
OF MARYLAND. In a March 20 opinion by Kennedy joined by Roberts,
Thomas, and Alito, (concurring opinion by Thomas; opinion concurring in
the judgment by Scalia; and dissenting opinion by Ginsburg joined by
Breyer, Sotomayor, and Kagan), the
Supreme Court, affirming the Fourth
Circuit (626 F3d 187), held that Congress did not validly abrogate the states’
sovereign immunity from suits for damages when it enacted the FMLA’s selfcare provision. Kennedy’s opinion reads
in part as follows:
“The question in this case is whether a
state employee is allowed to recover
damages from the state entity that
employs him by invoking one of the
provisions of a federal statute that, in
express terms, seeks to abrogate the
States’ immunity from suits for damages. The statute in question is the
[FMLA]. The provision at issue requires employers, including state employers, to grant unpaid leave for self
care of a serious medical condition,
provided other statutory requisites are
met, particularly requirements that the
total amount of annual leave taken
under the Act’s provisions does not
exceed a stated maximum... In agreement with every Court of Appeals to
have addressed this question, this
Court now holds that suits against
“The question [is] whether the self-care
provision and its attempt to abrogate
the States’ immunity are a valid exercise of congressional power under § 5
of the Fourteenth Amendment. Section
5 grants Congress the power ‘to enforce’ the substantive guarantees of § 1
of the Amendment by ‘appropriate legislation.’ ... To ensure Congress’ enforcement powers under § 5 remain
enforcement powers ... rather than powers to redefine the substantive scope of
§ 1, Congress ‘must tailor’ legislation
enacted under § 5 ‘to remedy or prevent’ ‘conduct transgressing the Fourteenth Amendment’s substantive provisions.’ [cite omitted.]
“Whether a congressional Act passed
under § 5 can impose monetary liability
upon States requires an assessment of
both ‘the ‘evil’ or ‘wrong’ that Congress
March 2012
Vol. 26, No. 3
LEGISLATIVE UPDATE
by Mariko Yoshihara
LOBBY DAY SUCCESS!
Nearly 50 CELA members joined in on
Lobby Day, March 20, to meet with
legislators and staff to discuss court
funding and our three sponsored bills.
Our mission was a success: the day
was fun, and the experience was meaningful. CELA Board Member Noah
Lebowitz summed it up this way:
“Though I’m more than a little embarrassed to admit that this was the first
Lobby Day I’ve actually attended, I am
here to report that it was an unbelievably great experience to be roaming
the halls of the Legislature with my
CELA Sisters and Brothers, making
the case for shoring-up and adding
protections for California’s workforce. I’ll
leave the details of our bills and efforts
to Mariko, but I want to take this opportunity to encourage all those who have
not attended Lobby Days in the past, or
who thought about attending this year
but didn’t, to definitely join in the fun
next year! It’s a unique opportunity to
set aside the drudgery of daily litigation
practice and to do something totally
different but equally important for our
clients. For me, it was also was a great
opportunity to connect with CELA members—both people I already I knew, and
many I was meeting for the first time. My
only regret is that there weren’t even
more of us there. So, next year when
the Lobby Day announcement comes
around, my message is: Just Do It!! Or,
in the words of another old
commercial: Try it, you’ll like it!!”
DECISIONS
(From Page 1)
intended to remedy,’ [cite omitted], and
the means that Congress adopted to
address that evil [cite omitted.]
“Faced with ‘the States’ record of unconstitutional participation in, and fostering of, gender-based discrimination
in the administration of leave benefits,’
Hibbs concluded that requiring state
employers to give all employees the
opportunity to take family-care leave
was ‘narrowly targeted at the faultline
between work and family—precisely
where sex-based overgeneralization has
been and remains strongest.’ [cite omitted.]
“The same cannot be said for requiring
the States to give all employees the
opportunity to take self-care leave. Petitioner advances three arguments for
allowing employees to recover damages from States that violate the FMLA’s
self-care provision: The self-care provision standing alone addresses sex discrimination and sex stereotyping; the
provision is a necessary adjunct to the
family-care provision addressed in
Hibbs; and the provision eases the
burden on single parents. But what the
family-care provisions have to support
them, the self-care provision lacks,
namely evidence of a pattern of state
constitutional violations accompanied
by a remedy drawn in narrow terms to
address or prevent those violations.”
Justice Ginsburg’s dissenting opinion
reads in part as follows:
“Even accepting this Court’s view of the
scope of Congress’ power under § 5 of
the Fourteenth Amendment, I would
hold that the self-care provision ... validly enforces the right to be free from
gender discrimination in the workplace.
[FN1. I remain of the view that Congress
can abrogate state sovereign immunity
pursuant to its Article I Commerce
Clause power... Beyond debate, 29
U.S.C. § 2612(a)(1)(D) is valid Commerce Clause legislation... I also share
the view that Congress can abrogate
state immunity pursuant to § 5 of the
Fourteenth Amendment where Congress could reasonably conclude that
legislation ‘constitutes an appropriate
way to enforce [a] basic equal protec-
tion requirement.’ [cite omitted.]]
“The FMLA’s purpose and legislative
history reinforce the conclusion that the
FMLA, in its entirety, is directed at sex
discrimination. Indeed, the FMLA was
originally envisioned as a way to guarantee—without singling out women or
pregnancy—that pregnant women would
not lose their jobs when they gave birth.
The self-care provision achieves that
aim. [detailed discussion omitted.]
“In sum, childbearing is not only a biological function unique to women, it is
also inextricably intertwined with employers’ ‘stereotypical views about
women’s commitment to work and their
value as employees.’ Hibbs, 538 U.S.
at 736...
“The plurality ... gets it wrong in concluding that ‘[o]nly supposition and conjecture support the contention that the
self-care provision is necessary to make
the family-care provision effective.’ Selfcare leave, I would hold, is a key part of
Congress’ endeavor to make it feasible
for women to work and have families...
By reducing an employer’s perceived
incentive to avoid hiring women, §
2612(a)(1)(D) lessens the risk that the
FMLA as a whole would give rise to the
very sex discrimination it was enacted
to thwart. The plurality offers no legitimate ground to dilute the force of the
Act.
“The plurality pays scant attention to
the overarching aim of the FMLA: to
make it feasible for women to work while
sustaining family life. Over the course of
eight years, Congress considered the
problem of workplace discrimination
against women, and devised the FMLA
to reduce sex-based inequalities in leave
programs. Essential to its design, Congress assiduously avoided a legislative
package that, overall, was or would be
seen as geared to women only. Congress thereby reduced employers’ incentives to prefer men over women,
advanced women’s economic opportunities, and laid the foundation for a more
egalitarian relationship at home and at
work, The self-care provision is a key
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Toni Jaramilla
Suite. 300
Tel: (310) 551-3020
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
Mariko Yoshihara
Tel: (916) 442-5788
EXECUTIVE BOARD
(Santa Monica)
Virginia Keeny
(Pasadena)
Scot Bernstein
(Folsom)
Noah Lebowitz
(San Francisco)
David DeRubertis
(Studio City)
Cynthia Rice
(San Francisco)
Maria Diaz
(Fresno)
Mika Spencer
(San Diego)
David Duchrow
(Santa Monica)
James P. Stoneman
(Claremont)
Wilmer Harris
(Pasadena)
Deborah Vierra
(Ventura)
Phil Horowitz
(San Francisco)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Jeffrey Winikow
(Los Angeles)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
part of that endeavor, and, in my view, a
valid exercise of congressional power
under § 5 of the Fourteenth Amendment.”
For petitioners: Michael L. Foreman,
Counsel of Record; The Pennsylvania
State University, Dickinson School of
Law, Civil Rights Appellate Clinic; Edward Smith, Baltimore.
For respondents: Douglas F. Gansler,
Attorney General of Maryland; John B.
Howard, Jr., Deputy Attorney General;
William F. Brockman, Acting Solicitor
General.
USSC, 3/20/12; opinion by Kennedy
joined by Roberts, Thomas, and
Alito; concurring opinion by Thomas; opinion concurring in the judgment by Scalia; dissenting opinion
by Ginsburg joined by Breyer,
Sotomayor, and Kagan; 2012 DAR
3627, 2012 WL 912851.
CALIFORNIA
SUPREME COURT
SUPREME COURT WILL REVIEW
SECOND DISTRICT’S DECISION
THAT DISTINGUISHED
CONCEPCION IN CONSUMER
CLASS ACTION
SANCHEZ v VALENCIA HOLDING
COMPANY. On March 21, the California Supreme Court announced that it
will review the Second District’s decision, filed on November 23, 2011, that
affirmed the denial of a motion to compel the arbitration of class claims by
customers against a car dealer. The
Court of Appeal’s decision, by Mallano,
(201 CA4th 74, 135 CR3d 19), read in
part as follows:
“The car dealer filed a motion to compel
arbitration pursuant to a provision in the
sales contract, which also contained a
class action waiver. The trial court [Judge
Rex Heeseman] determined that a class
action waiver was unenforceable on the
ground that a consumer is statutorily
entitled to maintain a CRLA suit as a
class action. (See Civ.Code, § 1781.)
The arbitration provision in the sales
contract stated that if the class action
waiver was declared unenforceable, the
entire arbitration provision was not to be
enforced. Pursuant to this ‘poison pill’
clause, the trial court denied the petition to compel arbitration. The car dealer
appealed.
REVIEW IS GRANTED IN CASE IN
WHICH THIRD DISTRICT
AFFIRMED DENIAL OF MOTION
TO ARBITRATE ON GROUNDS
THAT PROVISION IN JOB
APPLICATION LACKED MUTUALITY
“We affirm but for a different reason. We
conclude that the arbitration provision
is unconscionable: The provision is
adhesive—involving oppression and
surprise—and contains harsh one-sided
terms that favor the car dealer... Because the provision contains multiple
invalid clauses, it is permeated by unconscionability and unenforceable. We
cannot sever all of the offending language. Thus, regardless of the validity
of the class waiver, the trial court properly declined to compel arbitration.
WISDOM v ACCENTCARE, INC. The
Supreme Court announced on March 28
that it will review the Third District’s
decision, filed on January 3, that affirmed Sacramento Superior Court Judge
Steven H. Rodda’s denial of a motion to
compel arbitration of wage and hour
claims. “In this case,” Justice Blease
wrote, “we decide that a clause in an
application for employment ... requiring
only the applicant to agree that, if hired,
all disputes that cannot be resolved
informally will be submitted to binding
arbitration is both procedurally and substantively unenforceable as unconscionable.” The Third District’s opinion appeared at 202 CA4th 591, 136 CR3d
188, and was summarized in CELA
Bulletin, Dec 2011, p.5.
“Concepcion is inapplicable where, as
here, we are not addressing the enforceability of a class action waiver or a
judicially imposed procedure that is
inconsistent with the arbitration provision and the purposes of the [FAA]...
Concepcion ‘concerns the presumption of unconscionability determinations
for class action waivers in consumer
cases [,] ... specifically ... with the rule
enunciated in Discover Bank...’ (Brown
v. Ralphs Grocery Co. (2011) 197
Cal.App.4th 489, 499, italics added.)
The unconscionability principles on
which we rely govern all contracts, are
not unique to arbitration agreements,
and do not disfavor arbitration...
“Our conclusion today does not undermine the purpose of the FAA... On the
contrary..., the arbitration provision itself sacrifices efficient and speedy resolution through the adoption of harsh,
one-sided terms in an effort to ensure
that the car dealer will be the prevailing
party.”
For plaintiffs: Rosner, Barry & Babbitt,
San Diego.
For defendant: Tharpe & Howell,
Sherman Oaks; Greines, Martin, Stein
& Richland, Los Angeles.
Cal SC, 3/21/12; review granted.
For plaintiffs: Domenic D. Spinelli,
Amanda S. Uhrhammer, Monica M.
Espejo.
For defendants: Stradling Yocca Carlson
& Rauth, Robert J. Kane and Peter L.
Wucetich.
REVIEW IS GRANTED AND
FURTHER ACTION IS DEFERRED
PENDING DISPOSITION OF
RELATED ATTORNEYS’ FEES
ISSUE IN KIRBY v IMMOOS
ALEMAN v AIRTOUCH CELLULAR.
On March 14, the Supreme Court granted
review in the case in which the Second
District, in an opinion filed on December
21, 2011, reversed the trial court’s award
of attorneys’ fees to the prevailing employer following the entry of summary
judgment on wage claims for “reporting
time” and “split shift” pay. Both claims,
the Court of Appeal held, were subject to
Labor Code § 1194, a “plaintiffs only” fee
-3-
DECISIONS
(From Page 3)
shifting statute. The Supreme Court
ordered that further action be deferred
pending consideration and disposition
of a related issue in Kirby v Immoos Fire
Protection, Inc., S185827. The Second
District’s opinion appeared at 202 CA4th
117, 134 CR3d 643, and was summarized in CELA Bulletin, Dec 2011, p.5.
For plaintiffs: Knapp, Petersen & Clarke,
Andre E. Jardini, K. L. Myles.
For defendant: Jones Day, Deborah C.
Saxe, Brian M. Jorgensen.
CALIFORNIA COURTS
OF APPEAL
SECOND DISTRICT REVERSES
JUDGMENT THAT AFFIRMED
ARBITRATION AWARD, HOLDING
THAT STATUTORY CLAIMS WERE
OUTSIDE SCOPE OF OPERATIVE
ARBITRATION CLAUSE
GREY v AMERICAN MANAGEMENT
SERVICES. “Appellant Brandon Grey
appeals from a judgment of the trial
court [Judge Alan S. Rosenfield] confirming an arbitration award in favor of
respondents,” the Second District, Division Four, began in a March 28 opinion
by Epstein. “Grey contends he was not
required to submit his claims to arbitration under the terms of his employment
contract. We agree. We reverse the
judgment and remand with directions
for further proceedings.
“On April 30, 2009, Grey filed a complaint in superior court against AMS
and its then executive Scott Mencaccy.
Grey alleged that Mencaccy harassed
and ultimately discharged Grey on the
basis of his sexual orientation. The
complaint stated causes of action for:
(1) employment discrimination, harassment, and retaliation on the basis of
sexual orientation (Gov.Code, § 12900
et seq.); (2) failure to pay wages
(Lab.Code, § 200 et seq.); (3) intentional infliction of emotional distress; (4)
defamation and compelled self-defamation; and (5) wrongful termination in
violation of public policy.
“AMS and Mencaccy petitioned the
court to compel Grey to arbitrate his
claims under the terms of the IRA [Issue
Resolution Agreement included in the
job application packet]. Grey opposed
this petition, contending that (1) [his]
contract supersedes the IRA, and (2)
the IRA is unconscionable. [¶] The court
granted the petition and ordered Grey to
arbitrate his claims. [¶] Grey petitioned
this court for a writ of mandate. (Grey v.
Superior Court (August 27, 2009,
B217803).) We denied the petition.
“The parties proceeded with binding
arbitration. The arbitrator found in favor
of AMS and awarded AMS its costs.
Grey moved to vacate the award. The
trial court affirmed the award. This timely
appeal followed.
“Appellant argues the contract superseded the IRA. Because the contract
has a narrower scope of arbitrable claims
than the IRA, he contends the contract
does not compel arbitration for his claims
against AMS.
“The contract contains an integration
clause. It provides, in part: ‘This Agreement is the entire agreement between
the parties in connection with
Employee’s employment with [AMS],
and supersedes all prior and contemporaneous discussions and understandings.’
“AMS argues the parties did not intend
the contract to be final or supersede the
IRA. It contends the plain meaning of
the phrase ‘discussions and understandings’ does not apply to written agreements, but only oral ones.
“Construing the clause as a whole, we
interpret it to mean the contract is the
final expression of the parties’ agreement with respect to Grey’s employment and it supersedes the IRA... We
find the clause’s express language that
it is the ‘entire agreement’ and supersedes all prior ‘understandings’ to mean
that the parties intended the contract to
be the final and exclusive embodiment
of their agreement.
“AMS contends in the alternative that
the IRA is not an ‘agreement’ but an
‘employment procedure’ that supplements the employment contract. The
contract states: ‘Employee acknowledges that this Agreement is supplemented by such general employment
policies and procedures as [AMS] may
implement from time to time. Employee
agrees that it is his sole responsibility
to remain informed about all applicable
general employment policies and guidelines of [AMS] that may be contained in
the Employee Handbook or posted on
[AMS’s] intranet site.’
“The IRA ... does not say it is an
employment procedure, but that it is an
agreement. Consistent with this, AMS
makes all applicants sign the IRA. An
AMS representative also signs the IRA.
[¶] AMS counters that the application
packet, which contains the IRA, describes the rules attached to the IRA as
‘an arbitration procedure.’ A procedure
describing how an applicant’s legal
claims are to arbitrated is not an ‘employment procedure,’ it is the procedure
for arbitration once an applicant brings
an arbitrable claim....
“More fundamentally, a party is not
obligated to arbitrate unless he or she
has expressly agreed to do so by entering into a valid and enforceable written
contract with the party who seeks arbitration. [cite omitted.] Thus, in order for
the IRA to be enforceable on the issue
of arbitration, it must be a written contract. Since the IRA predates the employment contract, it was superseded
by that contract’s integration clause...
[¶] Because we find the IRA is superseded, we do not reach Grey’s arguments that its specific provisions are
unconscionable.
“Appellant argues that the contract does
not require him to arbitrate his claims
against AMS. His lawsuit is based on
statutory violations, not breach of contract. AMS concedes that the scope of
the arbitration clause contained in the
contract is too narrow as to require Grey
to submit his discrimination claims to
arbitration. [¶] Under ‘Remedies’ the
contract provides: ‘a dispute arising out
-4-
DECISIONS
(From Page 4)
of the alleged breach of any other provision of this Agreement ... [¶] ... shall be
submitted to final and binding arbitration.’ An arbitration clause that limits its
scope to disputes arising out of an
alleged breach of the contract is more
limited in scope than would be, for
example, a clause agreeing to arbitrate
‘any controversy ... arising out of or
relating to this contract.’ (See Mansdorf
v. California Physicians’ Service, Inc.
(1978) 87 Cal.App.3d 4122, 417.) ... All
of Grey’s claims are for statutory violations, and none arises from a breach of
the employment contract. We agree
with both parties that Grey is not required to arbitrate his claims under
these terms.”
For plaintiff: Carney R. Shegerian.
For defendant: Jackson Lewis, Thomas
G. Mackey, Sherry L. Swieca, and
Brian D. Fahy.
Second Dist Div Four, 3/28/12; opinion by Epstein with Willhite and
Suzukawa concurring; 2012 DAR
4075, 2012 WL 1021450.
SIXTH DISTRICT REVERSES
SUMMARY ADJUDICATION ON
CLAIMS FOR HARASSMENT ON
BASIS OF NATIONAL ORIGIN AND
RELIGION
REHMANI v SUPERIOR COURT
(ERICSSON, INC.) “In this proceeding,”
the Sixth District began in a March 29
opinion by Elia, “petitioner Mustafa
Rehmani seeks a writ of mandate to
overturn an order granting summary
adjudication to his employer... Rehman
contends that the superior court [Judge
Kevin McKenney] erroneously dismissed his claims of workplace harassment based on national origin and religion, violations of [FEHA]... We agree
with Rehmani that triable issues exist
as to Ericsson’s liability for harassment. We will therefore grant the petition and issue the writ.
“Petitioner Rehmani, a Muslim born in
Pakistan, worked as a System Test
Engineer for Ericsson from February
2007, when Ericsson acquired
Rehmani’s former employer, to Novem-
ber 13, 2009, the day he was terminated. During his tenure at Ericsson he
had coworkers from at least 12 different
countries, including India, China, and
Pakistan. Three of those coworkers—
Amit Patel, Aneel Choppa, and Ashit
Ghevaria—originally were, along with
Ericsson, the objects of the underlying
lawsuit in this case. Rehmani contends
that those three harassed him based on
his Pakistani nationality and his Muslim
faith, and that his supervisor, Afarin
Daftari, took no remedial action when he
reported this conduct.
“On November 2, 2009, the Human Resources Department had come to believe that Rehmani had sent e-mail to a
number of Ericsson employees, using
Choppa’s name. The e-mail contained a
spreadsheet of confidential salary information. HR then suspected that
Rehmani had also been the one who
had sent e-mail to an Ericsson customer disparaging the Ericsson management team...
“On November 6, 2009, Rehmani reported to the HR director, Dawn Ehrsam,
that he had experienced harassment, in
that Ghevaria and other Indian employees had been uncooperative toward him
and Ghevaria had humiliated him over
technical matters... Rehmani also complained that he had suffered ‘salary
discrimination’ ... as well as ‘promotion
discrimination’ because indian employees were promoted while he was not.
“Rehmani was terminated on November
13, 2009, after Rehmani admitted having sent the prohibited e-mails under his
coworkers’ names. He filed his complaint the following month... [¶] The
superior court granted summary adjudication of the first two causes of action,
because the undisputed facts ‘demonstrate that Plaintiff was not subject to
unwelcome harassment based on religion and/or national origin, and/or the
harassment did not unreasonably interfere with his work performance by creating an intimidating, hostile, or offensive
work environment.’ The court also granted
summary adjudication of the fourth
cause of action for discrimination based
on religion; but it denied the defendants’
motion as to discrimination based on
-5-
national origin—not with respect to the
termination of Rehmani, but in [relation
to] the allegation that Ericsson consistently promoted Indians over non-Indians. The court also denied summary
adjudication on the remaining claims of
retaliation, failure to investigate and prevent discrimination and retaliation, and
wrongful termination.
“Rehmani then filed this petition for a
writ of mandate, seeking immediate
relief to foreclose the prospect of duplicate trials should an appeal result in a
favorable outcome. The court issued a
stay of the trial court proceedings, followed by an order to show cause.
“[W]e first examine the allegations of
Rehmani’s complaint as they relate to
the first and second causes of action,
for harassment based on national origin
and religion, respectively. Only these
two claims are before us in this proceeding, and only against Ericsson, as
summary adjudication in the individual
defendants’ favor is no longer challenged.
Accordingly, the focus of our inquiry is
Rehmani’s allegation that Ericsson
management failed to ameliorate the
hostile work environment...
“In support of their motion defendants
argued that ... the incidents Rehmani
described were (1) only ‘a few isolated
statements over several years of working together, primarily about politics,
and not harassment of [Rehmani] because of his religion or national origin’;
and (2) not so severe or pervasive as to
constitute a hostile work environment.
Ericsson further argued ... that it
promptly investigated the only complaints Rehmani made...
“Whether an employee was subjected
to a hostile work environment is ordinarily one of fact. (Nazir v. United Airlines, Inc. [2009] 178 Cal.App.4th [243]
at p. 264.) Having independently reviewed the evidence supplied by both
parties, we cannot conclude that
Rehmani will be unable to establish that
he experienced harassment at work, for
which Ericsson is liable. While
Rehmani’s case may be too weak to
withstand the scrutiny of a jury at trial,
DECISIONS
(From Page 5)
at this stage of the litigation we cannot
say as a matter of law that the evidence
he wishes to adduce is insufficient in
the aggregate to establish a claim for
harassment based on national origin.
The trier of fact at the upcoming trial
thus should be permitted to determine
either that Rehmani’s claims have merit
or, instead, that his interpersonal difficulties at work were unrelated to Indian
sentiment toward non-Indian coworkers—or alternatively, that his complaints
to [HR] were insufficient to trigger an
investigation into harassment within the
meaning of the FEHA. Rehmani’s claim
of harassment based on religion may be
even less tenable; but considering the
current international climate of tension
between Muslims and non-Muslims and
that factor’s interaction with relations
between various countries (including
Pakistan and India), we cannot regard
this cause of action as independent of
the evidence related to national origin.”
For petitioner: Scott Bonagofsky and
Elizabeth R. Weiss.
For real party: Morgan, Lewis & Bockius,
Kathryn M. Dancisak, Melinda S.
Riechert, and Michael D. Schlemmer.
Sixth Dist, 3/29/12; opinion by Elia
with Rushing and Walsch concurring; 2012 DAR 4177, 2012 WL
1034533.
FOURTH DISTRICT MODIFIES AND
ORDERS PUBLICATION OF
OPINION HOLDING ARBITRATION
AGREEMENT UNCONSCIONABLE
BECAUSE OF ITS ATTORNEYS’
FEES TERM AND ITS FAILURE TO
INCLUDE COPY OF AAA RULES
MAYERS v VOLT MANAGEMENT
CORP. On February 27, the Fourth
District, Division Three, denied a petition for rehearing, granted requests for
publication, and modified its February 2
opinion that held, agreeing with the trial
court, that an arbitration agreement was
unconscionable because of its attorneys’ fees provision and the employer’s
failure to provide a copy of the applicable AAA rules. (The original opinion
was summarized in CELA Bulletin,
Feb 2012, p.13.) The modified opinion
includes a new section that reads in
part as follows:
“Defendant filed a petition for rehearing
in which it argues we failed to address
certain issues raised in this appeal. For
the following reasons, defendant’s petition is without merit.
“Defendant argues we failed to address
FAA preemption and the FAA’s ‘mandate that rules related to the formation
of ordinary contracts be applied to the
formation of arbitration agreements.’ ...
[B]oth the employment application and
the employment agreement state that
any dispute ‘shall be resolved by final
and binding arbitration, pursuant to the
Federal Arbitration Act.’ The parties
expressly agreed to the applicability of
the FAA and we apply the FAA; as a
result, we do not need to address FAA
preemption. Defendant ignores our recognition of the parties’ stipulation to the
applicability of the FAA.
“In part II of the Discussion section...,
we summarize and apply the United
States Supreme Court’s interpretation
of the FAA in AT&T Mobility [v
Concepcion (2011)] 536 U.S.___, [131
S.Ct. 1740]. For reasons we explain in
detail, the Supreme Court expressly
recognized that certain agreements to
arbitrate may be invalidated by ‘generally applicable contract defenses such
as ... unconscionability.’ (Id. at p.___
[131 S.Ct. at p. 1746].) In accordance
with AT&T Mobility, we explain in detail
the reasons for and our analysis of the
application of the general principles of
unconscionability to the specific arbitration provisions at issue in this case.
Our analysis does not ‘preserve statelaw rules that stand as an obstacle to
the accomplishment of the FAA’s objectives.’ (Id. at p.___ [131 S.Ct. at
p.1748].) Quite simply, we scrupulously
apply the FAA, as interpreted by the
United States Supreme Court in AT&T
Mobility, in this case.
“Defendant next argues we ignore
Asmus v. Pacific Bell (2000) 23 Cal.4th
1 and Pearson Dental Supplies, Inc. v.
Superior Court (2010) 48 Cal.4th 665.
Neither case is applicable...
“Defendant also argues we fail to address the trial court’s grant of defendant’s
request for judicial notice of a certain
set of AAA rules in ruling on the motion
to compel arbitration, which included a
rule limiting the arbitrator’s authority to
award attorney fees and costs ‘in accordance with applicable law.’ The grant of
judicial notice of a particular set of AAA
rules is irrelevant to our determination
whether the arbitration provisions contain elements of substantive unconscionability because that set of rules
was not included with, attached to, or
identified in the arbitration provisions
themselves.”
For plaintiff: Sessions & Kimball,
Stephen C. Kimball and James R. Vogel.
For defendant: Simpson, Cameron,
Medina & Autrey, Erin Nemirovsky
Medina; Littler Mendelson and Henry D.
Lederman.
Fourth Dist Div Three, 2/27/12 (modifying 2/2/12 opinion); opinion by
Fybel with Rylaarsdam and Aronson
604390.
SECOND DISTRICT AFFIRMS
SUMMARY ADJUDICATION OF
RETALIATION CLAIM, BUT HOLDS
THAT EXPERT WITNESS FEES
SHOULD NOT HAVE BEEN
AWARDED TO PREVAILING
DEFENDANT IN ABSENCE OF
FINDING THAT ACTION WAS
FRIVOLOUS
BAKER v MULHOLLAND SECURITY
AND PATROL, INC. “Eric Baker sued
Mulholland Security and Patrol, Inc., for
retaliation, failure to pay overtime compensation, and failure to maintain
records,” the Second District, Division
Eight, began in a March 28 opinion by
Grimes, “claiming he was terminated
after just 13 days of employment when
he complained about discriminatory
remarks made at his workplace. The
trial court [Judge Conrad R. Aragon]
disposed of his retaliation claim by
summary adjudication, and the remainder of his claims were dismissed after
-6-
DECISIONS
(From Page 6)
the parties reached a settlement. The
trial court concluded plaintiff was terminated for his poor performance and that
plaintiff failed to demonstrate that there
were triable issues [as to pretext]. Plaintiff filed two appeals, which were consolidated, challenging the judgment on
the retaliation claim, as well as the trial
court’s order awarding expert witness
fees to defendant. Finding no error with
the summary adjudication of plaintiff’s
retaliation claim, we affirm the judgment. However, we conclude that the
trial court applied an erroneous legal
standard in awarding defendant its expert witness fees, and that any expert
fee award would be an abuse of discretion because plaintiff made a sufficient
prima facie showing of retaliation. We
therefore reverse the expert witness
fee.
“[W]e conclude plaintiff made a sufficient prima facie showing of retaliation.
Plaintiff adduced evidence he complained about discriminatory remarks
at his workplace and he was terminated
within a week of making his complaint.
He also produced evidence supporting
a reasonable inference that [co-owner
and vice-president of human resources]
Campbell, as well as the remainder of
defendant’s management team, knew
about the protected activity before terminating him. A chain of emails was
distributed within an hour of plaintiff
being removed from the workplace, which
discussed plaintiff’s complaint about
discrimination...
“Nevertheless, defendant presented evidence it received two complaints from
its client about plaintiff’s work performance during the first 13 days of
plaintiff’s employment. Plaintiff does not
dispute that defendant’s client complained about him. Customer complaints
are evidence of poor work performance
sufficient to support a moving defendant’s
burden of proof on summary judgment...
“[T]here is simply no evidence that
plaintiff’s protected activity influenced
defendant’s decision to terminate him.
Pretext cannot be found simply because of the closeness of the protected
activity and the adverse employment
action, otherwise plaintiffs could easily
manufacture retaliation claims by engaging in protected activity whenever an
adverse employment action is threatened...
“Plaintiff points to several facts which he
claims support an inference of pretext,
such as evidence defendant considered
reassigning him but inexplicably
changed its mind and terminated him;
defendant’s investigation of the discrimination was a sham; plaintiff never received any discipline or write-ups for his
job performance before he made his
complaint; and he did not engage in any
wrongdoing, because all of his phone
calls (about which [the customer] complained) were work related. We disagree
that any of this evidence is sufficient to
establish a triable issue of pretext.
“It is well settled that a prevailing defendant in a FEHA action ‘may recover
attorney fees only when the plaintiff’s
action was frivolous, unreasonable, without foundation, or brought in bad faith.’
(Chavez v. City of Los Angeles (2010) 47
Cal.4th 970, 985; Christianburg Garment Co. v. EEOC (1978) 434 U.S. 412.
“The courts of appeal are split about
whether this standard applies to an
award of ordinary litigation costs to an
prevailing FEHA defendant. [cites omitted.] [¶] [And] no California case has
specifically addressed the applicability
of the Christianburg standard to the
recovery of expert witness fees, as opposed to ordinary litigation costs, by a
prevailing FEHA defendant under Government Code section 12965, subdivision (b)...
“We agree the standard applicable to
attorney’s fees should apply to expert
witness fees for a prevailing FEHA defendant. Expert fees, just like attorney’s
fees, are not ordinary litigation costs
which are routinely shifted under Code of
Civil Procedure sections 1032 and
1033.5. Like attorney’s fees, expert fees
should be treated differently than ordinary litigation costs because they can
be expensive and unpredictable, and
could chill plaintiffs from bringing meritorious actions...
“In this case, the trial court relied on
-7-
Knight [v Hayward Unified School Dist.
(2005) 132 CA4th 121], which concerned ordinary litigation costs, not
expert witness fees, in concluding it
was not necessary to find the action
was frivolous in order to award expert
fees to a prevailing defendant... Since
we find the Christianburg standard applies to an award of expert witness fees
in favor of a prevailing FEHA defendant,
the trial court’s ruling was erroneous...
In our review of the record, we conclude
the action was not frivolous, because
plaintiff made a prima facie case of
retaliation...”
For plaintiff: Michael B. Eisenberg and
Joseph S. Socher.
For defendant: Squire, Sanders &
Dempsey, Alexandra A. Bodnar, Casey
J. T. McCoy; Ogletree, Deakins, Nash,
Smoak & Stewart and Alexandra A.
Bodnar.
Second Dist Div Eight, 3/28/12; opinion by Grimes with Rubin and Flier
concurring; 2012 DAR 4093, 2012
WL 1021445.
[Editor’s note: For another recent discussion of the “frivolous” finding necessary to support an award of attorneys’
fees to a prevailing defendant, see the
unpublished February 28 opinion by the
Second District, Division Eight, in Williams v County of Los Angeles, 2012
WL 661647. Affirming summary judgment on harassment and retaliation
claims, the court wrote, in an opinion by
Grimes: “In a consolidated appeal, plaintiff also challenges the trial court’s
postjudgment order awarding defendant
$183,292.75 in attorney fees... We find
that summary judgment was proper,
because plaintiff failed to make a prima
facie showing of any discriminatory or
retaliatory motive. Consequently, we
find that attorney fees were properly
awarded, because plaintiff’s claims for
harassment and retaliation lacked any
factual basis, and therefore the trial
court [Judge Rolf M. Treu] did not abuse
its discretion in finding they were frivolous.” No fact issues had been raised
as to pretext, the court held, despite
the fact that a previous race discrimination claim by the plaintiff, an African
American physician, had been settled
DECISIONS
(From Page 7)
six months before her demotion, and
despite evidence of the decision-maker’s
use of language that arguably suggested
racial stereotyping.]
FOURTH DISTRICT
SUBSTANTIALLY AFFIRMS
CLAIMS FOR MISSED MEAL AND
REST PERIODS, BUT REMANDS
FOR RECALCULATION OF CIVIL
PENALTIES
THURMAN v BAYSHORE TRANSIT
MANAGEMENT, INC. In a representative action originally brought by a union
on behalf of its member bus drivers
alleging meal and rest period violations,
the Fourth District, Division One, in a
35-page opinion by Aaron filed on February 27, ordered that the case be
remanded for a recalculation of the appropriate amount of civil penalties, including unpaid wages. After a bench
trial, the trial court, (Judges Kevin A.
Enright and Timothy Taylor), had entered a judgment imposing civil penalties, including unpaid wages, in the
total amount of $358,588.22 under
PAGA, as well as restitution in the
amount of $28,605 under the UCL, and
prejudgment interest in the amount of
$10,253. The Court of Appeal summarized the parties’ contentions and its
conclusions as follows:
“[Plaintiff] Thurman contends that the
trial court committed reversible error in
(1) denying his request to continue the
trial to allow him to bring a noticed
motion for class certification, after the
California Supreme Court issued a decision [Amalgamated Transit Union, Local 1756, AFL-CIO v Superior Court
(2009) 46 C4th 993] that precluded the
union from maintaining its representative action; (2) denying class certification; (3) denying him recovery of civil
penalties under both [Lab Code] section 558, and Wage Order No. 9-2001...;
(4) reducing defendant’s civil penalties
under section 2699, subdivision (e); and
(5) ruling that defendants’ liability for his
UCL claims began on January 1, 2002,
rather than on October 1, 2000, due to
the collective bargaining exemption in
the former version of section 514...
“Defendants contend that the trial court
erred in (1) awarding unpaid wages
under section 558 as a civil penalty; (2)
awarding Thurman relief under the PAGA,
because Thurman failed to exhaust his
administrative remedies before he was
named as a plaintiff in the third amended
complaint; (3) allowing Thurman to recover PAGA penalties on behalf of other
bus operators for missed rest periods
under section 558, because that statute allows recovery for missed meal
periods only...; and (4) allowing Thurman
to avoid the judicial admission, set forth
in his complaint, that defendants had
provided meal periods since July 2003,
and permitting him to recover for missed
meal periods after July 2003. We agree
with defendants’ last contention. Accordingly, we reverse the portions of the
judgment awarding recovery for missed
meal periods and remand for a redetermination of that recovery. In all other
respects, we affirm the judgment.”
For plaintiff: Neyhart, Anderson, Flynn
& Grosboll, John L. Anderson and Benjamin K. Lunch.
For defendants: Paul, Plevin, Sullivan &
Connaughton, J. Rod Betts and Michael
J. Etchepare.
Fourth Dist Div One, 2/27/12; opinion
by Aaron with Haller and McDonald
604037.
NINTH CIRCUIT
CONCEPCION REQUIRES
CONCLUSION THAT FAA
PREEMPTS CALIFORNIA’S RULE
PROHIBITING ARBITRATION OF
CLAIMS FOR BROAD PUBLIC
INJUNCTIVE RELIEF
KILGORE v KEYBANK, NATIONAL
ASSOCIATION. A March 7 opinion by
Trott reads in part as follows:
“These consolidated appeals involve the
sometimes delicate and precarious
dance between state and federal law.
[Plaintiffs] brought this putative class
-8-
action ... alleging violations of California’s
Unfair Competition Law ... in connection with private student loans that
KeyBank extended to plaintiffs. Each of
Plaintiffs’ loan contracts contained an
arbitration clause, which the district
court [Northern District Judge Thelton
E. Henderson] declined to enforce. In
Interlocutory Appeal No. 09-17603, we
consider whether, in light of the Supreme Court’s recent decision in AT &
T Mobility, Inc. v. Concepcion,
___U.S.___, 131 S.Ct. 1740 (2011), the
[FAA] preempts California’s state law
rule prohibiting the arbitration of claims
for broad, public injunctive relief—a rule
established in Broughton v. Cigna
Healthplans of California, 988 P.2d 67
(Cal.1999), and Cruz v. Pacificare Health
Systems, Inc., 66 P.3d 1157 (Cal.2003).
We consider also whether the arbitration clause is unconscionable...
“We conclude that (1) the FAA preempts the Broughton-Cruz rule and (2)
the arbitration clause in the parties’
contracts must be enforced because it
is not unconscionable. Therefore, we do
not reach the question, presented in
Appeal No. 10-15934, whether the National Bank Act and the regulations of
the Comptroller of the Currency preempt Plaintiff’s UCL claims. Accordingly, in Interlocutory Appeal No. 0916703, we reverse the district court’s
denial of KeyBank’s motion to compel
arbitration, vacate the judgment, and
remand to the district court with instructions to enter an order staying the case
and compelling arbitration. Because the
disposition of that appeal renders the
district court’s subsequent dismissal
order a nullity, we dismiss Appeal No.
10-15934 as moot...
“On June 17, 2008, Plaintiffs filed suit
against KeyBank in California state
court. After Plaintiffs filed their Second
Amended Complaint, KeyBank removed
the case to the U.S. District Court for
the Northern District of California... Plaintiffs asserted claims of unfair competition under California’s UCL...
“Plaintiffs did not seek damages. Rather,
they requested an order enjoining
KeyBank from (1) ‘reporting to any credit
DECISIONS
(From Page 8)
agency any default by Plaintiffs of the
Class...,’ (2) ‘enforcing the Notes against
Plaintiffs and the Class or taking any
action in furtherance of enforcement
efforts,’ and (3) ‘engaging in false and
deceptive acts and practices’ with respect to consumer credit contracts involving purchase money loans. Plaintiffs sought to prohibit KeyBank from
collecting any amount of the debt, even
though Plaintiffs had received at least
some benefit from the loans in the
helicopter pilot training they received
before SSH [the school] shut down.
“KeyBank moved to compel arbitration.
The district court ... denied the motion.
The initial question the district court had
to consider was whether California or
Ohio law applied to determine the enforceability of the arbitration clause.
Plaintiffs argued that the parties’ choice
of Ohio law could not control. The district court agreed, holding that Ohio law
was ‘contrary to a fundamental policy of
California’ and that California had a
‘materially greater interest’ than Ohio in
the resolution of the dispute... This
fundamental policy was California’s rule
prohibiting the arbitration of claims for
public injunctive relief, notwithstanding
the parties’ agreement to arbitrate... In
contrast to California, Ohio law appeared
to allow arbitration of such claims...
With these considerations in mind, the
court declined to apply the parties’
choice of Ohio law.
“Judge Henderson ... [next]... held that
Broughton and Cruz prohibited the arbitration of Plaintiffs’ injunctive relief claims
and that therefore, the arbitration clause
was unenforceable. Judge Henderson
denied the motion to compel arbitration
in July of 2009, nearly two years before
the Supreme Court issued the
Concepcion decision and thus did not
have the benefit of that opinion.
“Pursuant to 9 U.S.C. § 16(a)(1)(c),
KeyBank appealed the district court’s
denial of its motion to compel arbitration. While that interlocutory appeal
was pending, KeyBank moved to dismiss the Third Amended Complaint.
The district court granted the motion
and entered judgment, from which Plaintiffs appeal.
“KeyBank asks us to find error in the
district court’s refusal to enforce the
Note’s choice of Ohio law and its application of California law, but we need not
address this issue. We assume, without deciding, that California law governs
Plaintiffs’ claims, because even under
California law, the arbitration agreement
must be enforced.
“The FAA preserves generally-applicable
contract defenses and thus allows for
invalidation of arbitration agreements in
limited circumstances—that is, if the
clause would be unenforceable ‘upon
such grounds as exist at law or in equity
for the revocation of any contract.’ 9
U.S.C. § 2 (emphasis added)...
“Although that section ‘explicitly retains an external body of law governing
revocation (such grounds ‘as exist at
law or in equity’),’ [cite omitted], it also
‘ensures that [the parties’] agreement
will be enforced according to its terms
even if a rule of state law would otherwise exclude such claims from arbitration,’ Mastrobuono [v Shearson Lehman
Hutton, Inc.] 514 U.S. [52] at 58 (emphasis added). This inherent tension
between the two clauses of § 2 has
caused many courts to struggle to define the precise scope of the savings
clause.
“The Supreme Court recently clarified
that scope in AT & T Mobility LLC v.
Concepcion, ___U.S.___, 131 S.Ct.
1740 (2011). Concepcion reemphasized
that the ‘saving clause permits agreements to arbitrate to be invalidated by
‘generally applicable contract defenses,
such as fraud, duress, or unconscionability,’ but not by defenses that apply
only to arbitration or that derive their
meaning from the fact that an agreement to arbitrate is at issue.’ Id. at 1746
(quoting Doctor’s Associates, Inc. v.
Casarotto, 517 U.S. 681, 687 (1996))...
“As the Supreme Court did with the
Discover Bank rule in Concepcion, we
examine the state law rule at issue here
to determine whether it is preempted by
the FAA... [¶] We have previously agreed
with the California Supreme Court that
the Broughton-Cruz rule prohibits arbitration for claims for public injunctive
-9-
relief. Davis v. O’Melveny & Myers, 485
F.3d 1066, 1082 (9th Cir. 2007)... We
must, however, reexamine whether
Davis remains good law after
Concepcion... [¶] The district courts in
California have been working diligently
to discern precisely whether the
Broughton-Cruz rule has survived
Concepcion. They have come to different conclusions. [cites and discussion
omitted.]
“We hold that the Broughton-Cruz rule
does not survive Concepcion because
the rule ‘prohibits outright the arbitration
of a particular type of claim’—claims for
broad public injunctive relief.
Concepcion, 131 S.Ct. at 1747. Therefore, our statement in Davis—that
Broughton and Cruz prohibit the arbitration of public injunctive relief claims in
California—is no longer good law.
“We are not blind to the concerns engendered by our holding today. It may
be that enforcing arbitration agreements
even when the plaintiff is requesting
public injunctive relief will reduce the
effectiveness of state laws like the UCL.
It may be that FAA preemption in this
case will run contrary to a state’s decision that arbitration is not as conducive
to broad injunctive relief claims as the
judicial forum. And it may be that state
legislatures will find their purposes frustrated. These concerns, however, cannot justify departing from the appropriate preemption analysis as set forth by
the Supreme Court in Concepcion...
“The district court ... did not decide
whether the Note’s arbitration clause is
unconscionable. Given our conclusion
that the Broughton-Cruz rule is no longer
viable post-Concepcion, we accept the
parties’ invitation to consider this issue.
“[B]oth procedural and substantive unconscionability are required for a court
to hold an arbitration agreement unenforceable... [¶] Here, the arbitration
clause ... withstands scrutiny. The arbitration agreement is not buried within
the document; it is conspicuous and
appears in its own section of the Note.
The Note contains more than one statement setting forth in plain language the
DECISIONS
(From Page 9)
rights that Plaintiffs would waive if they
did not opt-out of the arbitration clause:
the right to litigate in court, the right to
a jury trial, and the right to proceed on
a class basis. The arbitration clause
even points out that the costs of arbitration could be higher than those of a
trial...
“The arbitration agreement was not
forced upon the Plaintiffs leaving them
no meaningful choice. We will not relieve Plaintiffs of their contractual obligation to arbitrate by manufacturing
unconscionability where there is none.
Because we hold that the arbitration
clause ... is not procedurally unconscionable, we need not address whether
the terms of that clause are substantively unconscionable. It is enough that
when faced with a 60-day opt-out provision and a conspicuous and comprehensive explanation of the arbitration
agreement, Plaintiffs did not reject that
agreement.
“At oral argument, both counsel urged
us to reach the issues raised in Appeal
No. 10-15934 even if we were to conclude that the case must proceed to
arbitration. It would be inappropriate for
us to do so. Because the motion to
compel arbitration should have been
granted, the subsequent judgment in
favor of KeyBank is a nullity. For this
reason, and given our decision to vacate
the judgment, Appeal No. 10-15934 is
moot...”
For plaintiffs: Andrew A. August, Pinnacle Law Group, San Francisco.
For defendants: W. Scott O’Connell,
Nixon Peabody LLP, Manchester NH.
Ninth Circuit, 3/7/12; opinion by Trott
joined by Bea and Pall-Meyer (District Judge); 2012 DAR 3088, 2012 WL
718344.
WASHINGTON’S
UNCONSCIONABILTY RULE re
CLASS ACTION WAIVERS, LIKE
CALIFORNIA’S DISCOVER BANK
RULE, IS PREEMPTED BY FAA
per CONCEPCION
CONEFF v AT & T CORP. In a March 16
opinion by Graber relating to a consumer class action, the Ninth Circuit
reversed the denial of AT & T’s motion to
compel arbitration. “Concepcion controls,” the Ninth Circuit wrote, “the FAA
preempts the Washington state law
invalidating the class-action waiver, and
we reverse the district court’s conclusions regarding preemption and substantive unconscionability.” The court
explained the issues and its holdings in
part as follows:
“Because it concluded that substantive
unconscionability alone was a sufficient basis to void a contract under
Washington law, the district court did
not rule on Plaintiffs’ alternative, procedural unconscionability argument. Because the arbitration provision stated
that it would be unenforceable in its
entirety if the class-action waiver were
struck, the district court invalidated the
entire arbitration agreement.
“Plaintiffs argue that Concepcion is distinguishable. None of their arguments is
persuasive. [¶] First, Plaintiffs argue
that Supreme Court precedents require
arbitration of statutory rights only if a
prospective litigant ‘effectively may vindicate those rights in the arbitral forum.’
Green Tree Fin. Corp.-Ala. v. Randolph,
531 U.S. 70, 90 (2000)... Plaintiffs cite
Green Tree and other similarly reasoned decisions as being in tension
with Concepcion. They argue that this
tension must be resolved by reading an
implied exception into Concepcion;
specifically, they suggest that
Concepcion’s rule permits state law to
invalidate class-action waivers when
such waivers preclude effective enforcement of statutory rights.
“We do not read Concepcion to be
inconsistent with Green Tree and similar cases. Although Plaintiffs argue that
the claims at issue cannot be vindicated effectively because they are worth
much less than the cost of litigating
them, the Concepcion majority rejected
that premise... [¶] [T]he concern is not
so much that customers have no effective means to vindicate their rights, but
rather that customers have insufficient
incentive to do so. That concern is, of
course, a primary policy rationale for
-10-
class actions... But, as the Supreme
Court stated in Concepcion, such unrelated policy concerns, however worthwhile, cannot undermine the FAA...
“Next, Plaintiffs argue that the Washington Supreme Court’s rule on unconscionability of class action waivers,
announced in Scott v. Cingular Wireless, 161 P.3d 1000 (Wash. 2007), is
meaningfully different from California’s
rule, announced in Discover Bank v.
Superior Court, 113 P.3d 1100 (Cal.
2005), and rejected in Concepcion. But,
as we have observed, the concerns
underlying those two states’ rules are
‘almost identical.’ Lowden v. T-Mobile
USA, Inc., 512 F.3d 1213, 1221 (9th Cir.
2008). Indeed, Scott contains reasoning similar to the reasoning of Discover
Bank, on which it relies heavily... [¶] [I]f
California’s substantive unconscionability rule is preempted by the FAA,
then so is Washington’s similarly reasoned rule.
“Undaunted, Plaintiffs argue that classaction waivers are unconscionable under Washington law only on a case-bycase, evidence-specific finding of exculpation. Essentially, Plaintiffs argue
that Concepcion would not apply to a
sufficiently narrow, fact-based statelaw rule for voiding class-action waivers.
[¶] Concepcion, particularly the section
responding to the dissent, forecloses
this argument. 131 S.Ct. at 1753. The
Eleventh Circuit agrees. See Cruz [v
Cingular Wireless, LLC (11th Cir 2011)]
648 F3d [1205] at 1214...
“The Eleventh Circuit also easily rejected the same argument that Plaintiffs now make in a final attempt to
distinguish Concepcion—Washington
law would enforce the ‘blow-up’ provision to invalidate the entire arbitration
agreement, whereas Concepcion dealt
with a state-law rule that would have
forced the parties into non-consensual
class-wide arbitration... Concepcion
cannot be distinguished on this ground.
“We remand to the district court to
apply Washington choice-of-law rules
to Plaintiffs’ procedural unconscionability arguments... If the laws all require at
DECISIONS
(From Page 10)
least some showing of substantive unconscionability, then Plaintiffs’ claim
necessarily fails because of our holding
that the arbitration clause at issue is not
substantively unconscionable. But if a
showing of procedural unconscionability would result in success for Plaintiffs
under some of the relevant state precedents, the district court must complete
the conflict-of-law analysis and decide
which Plaintiffs, if any, may benefit.”
For plaintiffs: F. Paul Bland, Jr., Public
Justice, P.C., Washington D.C., and
Leslie A. Bailey, Public Justice, P.C.,
Oakland.
For defendants: Mayer Brown, LLP,
Washington DC.
Graber joined by Fisher and
Rawlinson; 2012 DAR 3498, 2012 WL
887598.
ERISA RETIREMENT PLAN
PARTICIPANTS WERE ENTITLED
TO NO COMPENSATION WHERE
THEY FAILED TO SHOW
RELIANCE ON INACCURATE
“SUMMARY PLAN DESCRIPTION”
SKINNER v NORTHRUP GRUMAN
RETIREMENT PLAN B. “Appellants
were employees of Litton Industries,
Inc., and participated in its retirement
plan ... (‘Litton Plan B’),” the Ninth
Circuit began in a March 16 opinion by
Goodwin. “Following corporate mergers
and plan modifications, Appellants sued
the successor corporation, Northrop
Grumman, ... and (‘Northrup Plan B’) ...
to enforce their understanding of their
rights under Northrop Plan B...
“The [Central District] granted summary
judgment for the defendants... We reversed and remanded the case upon our
conclusion that an ambiguity existed
between summary plan descriptions
(‘SPDs’) issued to employees in earlier
years and the plan master documents
that were actually being enforced by the
plan administrators... We held ... that
the ambiguity created a triable issue.
“The district court again granted summary judgment, and Appellants again
appealed. We deferred argument and
submission of the second appeal until
the Supreme Court’s resolution of CIGNA
Corp. v. Amara, 131 S.Ct. 1866 (2011).
In that case, the Supreme Court overruled, in relevant parts, our two prior
decisions that had treated SPD language as if it were an enforceable part of
the retirement plan... We now hold that
summary judgment was appropriate on
Appellants’ claims under [ERISA] §
502(a)(1)(B) and § 502(a)(3).
But considering that Appellants did not
rely on the inaccurate SPD, they establish no harm for which they should be
compensated. [¶] Appellants argue that
the ‘harm’ of being deprived of their
statutory right to an accurate SPD is a
compensable harm, but we disagree...
Appellants have not shown that their
current positions are any different than
they would have been without the inaccurate SPD. The judgment is AFFIRMED.”
“Recognizing that Amara has foreclosed
their principal theory of relief, Appellants have focused this appeal on equitable remedies under ERISA §
502(a)(3)... [¶] Appellants have conceded ... that they presented no evidence of reliance on the inaccurate
SPD and that they do not claim estoppel. Appellants do, however, seek reformation and surcharge.
For plaintiffs: Ellen M. Doyle and William T. Payne, Stember Feinstein Doyle
& Payne, LLC, Pittsburgh PA.
For defendants: Chris C. Scheithauer,
McDermott Will & Emery LLP, Irvine;
Nancy G. Ross, McDermott, Will &
Emery, Chicago.
For AARP as amicus: Mary Ellen
Signorille, Washington DC.
Goodwin joined by O’Scannlain and
Graber; 2012 DAR 3502, 2012 WL
887600.
“Appellants have presented no evidence
that Northrop Plan B contains terms
that fail to reflect [the] drafter’s true
intent. Appellants argue that the 2003
SPD is evidence of the drafter’s true
intent and that the master document
contains a mistake. That argument fails.
Appellants have provided no evidence of
authorship of the 2003 SPD or of the
SPD’s capturing any intent at all, other
than to create an ‘accurate and comprehensive’ summary of Northrop Plan B. It
would be unreasonable for us to infer
otherwise.
“Appellants have presented no evidence
that Northrop Plan B contains terms
that were induced by fraud, duress, or
undue influence. The inconsistency
between the 2003 SPD and the plan
master document is not evidence of
fraudulent inducement. The SPD summarizes the plan, so it appears to have
been created after the plan, and Appellants have provided no evidence to allow
us to infer otherwise... Appellants have
provided no evidence that Northrop
Grumman materially misled its employees and, even if it had misled its employees, Appellants have conceded that
they did not rely on any of the misleading information...
“Appellants seek compensatory relief.
-11-
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
SUMMARY JUDGMENT WAS
CORRECTLY GRANTED WHERE
ALLEGED HARASSING CONDUCT
WAS LIMITED TO ATTEMPTS BY
CO-WORKER TO RENEW PRIOR
ROMANTIC RELATIONSHIP
LEURIDAN v DEP’T OF CORRECTIONS AND REHABILITATION. The
Fourth District, Division Two, wrote in
part as follows in an unpublished March
6 opinion affirming summary judgment
and an order sustaining a demurrer, on
a correctional officer’s claims for sexual
harassment, retaliation, failure to prevent sexual harassment, and wrongful
termination.
“The trial court [Judge Mark E. Johnson]
determined that there was no sexual
harassment. [Francine] Munoz [the alleged co-worker harasser] was not an
DECISIONS
(From Page 11)
agent of CDCR or a supervisor, and the
sexual harassment claims were barred
by the statute of limitations. The wrongful termination claim was dismissed
because plaintiff failed to amend the
complaint after a demurrer was sustained for failure to present a timely
claim against the governmental entity...
“On appeal, plaintiff claims the trial
court erred where (1) there were triable
issues of fact as to whether Munoz
sexually harassed plaintiff and whether
she was an agent or supervisor of CDCR,
(2) the action was not barred by the
statute of limitations because sexual
harassment is a continuing offense and
because the CDCR’s delay in informing
plaintiff of the results of the investigation
equitably tolled the statute of limitations, and (3) a claim against the governmental agency is not a prerequisite
to an action for wrongful termination
based on the [FEHA] violations. We
affirm.
“After the sexual harassment investigation was completed, the investigator
prepared a memorandum... Although it
appeared Munoz had continued to call
and inquire of plaintiff after he last broke
off their relationship, the report concluded there was no sexual harassment, because the parties had been in
a relationship. However, because of the
strict policy on any form of harassment,
and because plaintiff claimed there had
been unwanted contact, the regional
parole administrator sent a letter of
counseling to Munoz...
with a coworker does not create a hostile work environment within the meaning of the FEHA... [¶]Any harassment
was trivial, because the contact between Munoz and plaintiff, while unwanted by the latter, was not hostile or
abusive. Insofar as there was no actionable sexual harassment by Munoz,
summary judgement on the cause of
action against her as an individual was
proper.
“Plaintiff’s theory of CDCR’s liability for
harassment is grounded on his assertion Munoz acted or held herself out as
a supervisor and CDCR failed to investigate the harassment claim or prevent
the harassment... The CDCR job specification for parole agent II Specialist
reveals it is not a supervisory classification, and such individuals cannot, on
behalf of CDCR, hire, transfer, suspend,
lay off, recall, promote, discharge, assign, reward or discipline other employees... There was no triable issue of
material fact as to whether Munoz was
a supervisor.
“The sexual harassment cause of action and the failure to prevent or investigate ... cause of action were barred by
the statute of limitations. The undisputed facts reveal that any alleged sexual
harassment ceased after plaintiff made
the complaint to CDCR in October
2004... We hold that the harassment
was not continuous [under the threepart test of Richards v CH2M Hill, Inc.
(2001) 26 C4th 798], and that the harassment-related claims were not equitably tolled.
“[T]he alleged harassment in this case
arises from Munoz’s contact with plaintiff in her attempt to resume a relationship with him... The undisputed evidence shows that plaintiff was not harassed because of his sex, but because
of the prior relationship with Munoz.
Any conduct that might be categorized
as harassment was attributable to
Munoz, individually, respecting plaintiff,
individually, and not to a hostile environment created by CDCR or its policies.
“Plaintiff did not pursue alternative remedies ... after the administrative complaint of October 2004, and that process was concluded in December 2004.
Because he did not pursue any further
alternative administrative remedies following the closure of the harassment
investigation, the doctrine of equitable
tolling does not apply... Summary judgment was proper as to the first three
causes of action.
“A coworker’s romantic involvement with
a supervisor does not, by itself, create
a hostile work environment... It follows
that a coworker’s romantic involvement
“As to the ... cause of action for retaliation, plaintiff argues that he was engaged in protected activity (the complaint against Munoz for sexual harass-12-
ment) when the information about the
[in]validity of his bachelor’s degree came
to light... [¶] [H]is protestations notwithstanding, the disclosure of plaintiff’s
dishonesty was properly made in the
course of CDCR’s investigation, and
CDCR’s conclusion that plaintiff knew
or should have known of the invalidity of
his degree was reasonable... [And]
[b]ecause the termination occurred more
than one year after plaintiff made his
sexual harassment complaint, there was
insufficient temporal proximity to raise
an inference of retaliation...
“The fourth cause of action alleged
wrongful termination in violation of public policy... [¶] As a tort action seeking
damages against a public entity [subject to the Tort Claims Act], presentation of a claim to the public entity was
required (Gov.Code § 945.4). Plaintiff
acknowledges he did not submit such a
claim. This was fatal to his cause of
action... [¶] We are aware that one
court has held that once a FEHA claim
has been alleged, all other causes of
action related to the same facts are
exempt from the exhaustion requirement respecting the Tort Claims Act.
(Williams v. Housing Authority of Los
Angeles (2004) 121 Cal.App.4th
708,729.) However, even if we were to
determine that the demurrer was improperly sustained on that ground, it
would not revive the fourth cause of
action because the FEHA claims on
which the wrongful termination cause of
action was dependent were found to
lack merit...”
For plaintiff: Maryann P. Gallagher.
For defendants: Chris A. Knudsen,
Deputy Attorney General.
Fourth Dist Div Two, 3/6/12; opinion
by Ramirez with Hollenhorst and
Miller concurring; 2012 WL 733898
(unpublished).
DECISIONS
(From Page 12)
DOCTRINE OF EQUITABLE
TOLLING DID NOT PERMIT
PLAINTIFF TO FILE SUIT BEFORE
RECEIVING RIGHT-TO-SUE
LETTER
PELAYO v LOS ANGELES COUNTY
DEPT. OF CHILDREN AND FAMILY
SERVICES. In an unpublished February 22 opinion by Mallano, the Second
District, Division One, wrote in part as
follows:
“Plaintiff filed a complaint asserting four
causes of action ... under [FEHA] even
though she had not exhausted administrative remedies under the act and received a right-to-sue letter. The trial
court dismissed the causes of action for
failure to exhaust administrative remedies. For the same reason, we affirm.
“On September 19, 2008, Rosa Pelayo,
a ‘Mexican female,’ filed this action,
alleging four causes of action under the
FEHA against her employer ... and
three of its employees. Specifically,
she alleged causes of action against all
defendants for (1) racial and national
origin harassment... and (2) failure to
prevent harassment... Against the DCFS
only, she alleged causes of action for
(1) retaliation... and race discrimination... The complaint also alleged common law causes of action for negligent
and intentional [infliction of] emotional
distress against all defendants. It did
not allege that Pelayo had exhausted
her administrative remedies...
“The DCFS demurred to the complaint...
Pelayo decided not to oppose the demurrer and chose instead to file a first
amended complaint.
“The amended complaint ... included
the same causes of action ... plus two
additional claims against DCFS only:
[WTVPP] and constructive discharge.
Pelayo alleged she had timely pursued
her internal administrative remedies with
the DCFS, had filed a charge with the
[EEOC]—asserting a violation of title
VII...—and had filed a Government
Claims Act form... She stated she was
‘in the process of obtaining her right to
sue letters from the [DFEH].
“The DCFS demurred, challenging all of
the causes of action with the exception
of the claim for [IIED]. Again, the DCFS
attacked the FEHA claims on the ground
Pelayo had not exhausted her administrative remedies. The remaining, common law claims were challenged on
various grounds not relevant to this
appeal.
“In her opposition papers, Pelayo included a right-to-sue letter from the
DFEH, dated March 3, 2009—approximately two weeks after the amended
complaint was filed. She sought leave
to file a second amended complaint to
allege exhaustion... [¶] [T]he trial court,
Judge Ramona G. See presiding, sustained the demurrer without leave to
amend and ordered the DCFS to answer the amended complaint as to the
intentional infliction claim. An answer
followed.
“The DCFS subsequently brought a
motion for judgment on the pleadings,
contending that the cause of action for
[IIED] was barred by the exclusive remedies available under the Workers’ Compensation Act... The trial court granted
the motion.
“The individual defendants demurred
separately to the amended complaint,
asserting the same grounds as the
DCFS. The trial court sustained the
demurrers without leave to amend. [¶]
By order dated November 15, 2010,
Judge Dudley W. Gray II presiding, the
trial court ordered that the case be
dismissed without prejudice. Pelayo
appealed.
“On appeal, Pelayo seeks to reverse
the court’s order as to the FEHA claims
only, arguing that the doctrine of equitable tolling permitted her to file suit on
those claims before satisfying the act’s
exhaustion requirement and obtaining a
right-to-sue letter. We disagree. Administrative remedies under the FEHA
must be exhausted before a civil action
can be filed. Consequently, this action
was filed prematurely and was properly
dismissed. In contrast, the doctrine of
equitable tolling excuses a delay in
completing the exhaustion requirement
under the FEHA during the time an
-13-
employee pursues an alternative administrative scheme such as the
DCFS’s internal procedure, but the doctrine does not allow a civil action under
the FEHA before the act’s administrative process is completed.
“Pelayo had at least three options that
would have avoided the procedural morass that now exists. First, she could
have filed the original complaint without
any FEHA causes of action and then
amended the complaint to add them
after she received a right-to-sue letter
from the DFEH... Second, while pursuing her internal remedies with the DCFS,
she could have postponed commencing the administrative process under
the FEHA. If she had eventually obtained a right-to-sue letter from the DFEH
more than one year after the date of the
unlawful practice—late—the time spent
involved in the DCFS’s internal administrative procedure would have tolled the
one-year deadline under the FEHA. [cite
omitted.] And, in addition to appealing
the order of dismissal in this case,
Pelayo could have promptly filed a second suit, alleging that she had exhausted her remedies under the FEHA,
and thereby avoided the problems created by a premature filing and the failure
to satisfy the FEHA exhaustion requirement.”
For plaintiff: Jorge Reyes, Omid Nosrati.
For defendant: Kohrs & Fiske, Conrad
Kohrs, Kenneth P. Scholtz, and Adam
Grable.
Second Dist Div One, 2/22/12; opinion by Mallano with Rothschild and
Chaney concurring; 2012 WL 590780
(unpublished).
•
•
•
LEGISLATION
(From Page 1)
2012 Legislation
Again, here are our three sponsored
bills for the year. If you have any stories
or cases related to these issues, please
email me at mariko@cela.org. These
bills will be heard in their first policy
committee next month.
AB 1999 (Brownley) Employment:
familial status protection
Sponsors: CELA and Equal Rights
Advocates
This bill would amend FEHA to prohibit
discrimination based on the “familial
status” of an employee. Persons protected are defined by the bill to include
individuals who have, or who are assumed to have, family caregiving responsibilities. “Family” is defined as
including child, domestic partner, grandchild, grandparent, parent, parent-inlaw, sibling, or spouse.
AB 2103 (Ammiano) Employment:
wages and hours: overtime
Sponsors: CELA and California Teamsters Public Affairs Council
This bill would overturn the Second
District’s decision in Arechiga v Dolores
Press, Inc. (2011) 192 CA4th 567. It
would make clear that the Labor Code
prohibits “explicit mutual wage agreements” under which a fixed salary purportedly compensates an employee for
both regular and overtime pay.
suffered by each individual plaintiff or
member of a class amounting to at least
$500.
AB 2236 (Hueso D) School employees: employment. This bill will provide
statutory wage and hour protections to
non-classified employees working in
public schools and community colleges.
Such protections will mirror those currently provided to classified school
employees and private sector workers.
SB 1349 (Yee D) The Social Media
Privacy Act: post-secondary education and employment. This bill would
prohibit a post-secondary educational
institution and an employer, whether
public or private, from requiring, or formally requesting in writing, a student or
an employee, or a prospective student
or employee, to disclose the user name
or account password for a personal
social media account, or to otherwise
provide the institution or employer with
access to any content of that account.
AB 2099 (Cedillo D) Employment:
wage and hour violations. Under
existing law, every employer or other
person acting either individually, or as
SB 1255 (Wright) Employee compensation: itemized statements
Sponsors: CELA and California Rural
Legal Assistance Foundation
This bill responds to a recent series of
poorly reasoned decisions that threaten
the effective enforcement of wage statement requirements. The bill clarifies
that an employee “suffers injury” if the
employer fails to provide accurate and
complete information, for purposes of
recovering penalties under Labor Code
§ 226.
Some Other Bills We’re Tracking
AB 2599 (Berryhill R) Unfair competition: private enforcement actions.
This bill would define the injury in fact
required for a private person to bring an
unfair competition claim, as damages
-14-
an officer, agent, or employee of another person, who requires or causes
an employee to work for longer hours
than those fixed, or to work under conditions of labor prohibited by an order of
the Industrial Welfare Commission, who
pays or causes to be paid to an employee a wage less than minimum wage
fixed by an order of the commission, or
who violates or refuses or neglects to
comply with any specified provision of
the Labor Code or any order or ruling of
the Commission, is guilty of a misdemeanor, punishable by a fine of not less
than $100, or by imprisonment for not
less than 30 days, or both. This bill
would increase the fine for a violation of
this provision to not less than $250.
For more information on these bills, go
to www.leginfo.ca.gov/bilinfo. To see all
of the bills that CELA is tracking, go to
www.cela.org/legislation. If you have
any input, stories, or cases related to
any of them, please email Mariko at
mariko@cela.org. And remember to
“like” us on Facebook, at
www.facebook.com/CELALawyers.
•
•
•
CELA EVENTS AND NOTICES
—DIVERSITY SUMMIT. CELA’s Diversity Summit will take place on May 31
from 10:30am until 3pm at Golden Gate
University School of Law, 536 Mission
Street, San Francisco. A morning panel,
(Darci Burrell, Toni Jaramilla, and Joshua
Davidson), will discuss “Diversity in the
Employment Bar: Overcoming Bias.” A
networking lunch will feature remarks
by DFEH Director Phyllis Cheng. And
there will be an afternoon panel on
“Skills To Shape Diverse Leadership for
the Employment Bar,” with William
Tamayo of the EEOC, along with Laura
Ho, Fred Alvarez, and Theodora Lee.
RSVP to Melanie Rowen at
mrowen@law.berkeley.edu. The event
is being funded by a grant from the
Labor & Employment Law Section of
the State Bar of California. Sponsors
include Berkeley Law, Golden Gate
University School of Law, Santa Clara
University School of Law, UC Hastings
College of the Law, University of San
Francisco School of Law, and the Berkeley Journal of Employment and Labor
Law.
—OUR EIGHTH ANNUAL ADVANCED
WAGE AND HOUR SEMINAR will take
place on Friday, May 18, from 9am until
4pm at the Parc 55 Wyndham Hotel, 55
Cyril Magnin Street, San Francisco.
For the seminar brochure and on-line
registration, go to www.cela.org.
—CELA’s WAGE AND HOUR COMMITTEE SEEKS CO-CHAIR. Committee founder and co-chair Rene Barge
will be leaving her position within the
next few months and we’re looking for
her replacement. The new co-chair will
share committee duties with Steve
Pearl. The co-chair’s responsibilities
include: organizing and planning the
Annual Advanced Wage and Hour Seminar, and panels at our Annual Conference; interacting with government agencies such as the DLSE; preparing the
agenda and moderating monthly committee meetings; delegating committee
projects; brainstorming current wage
and hour and class action issues; and
more. To apply, send a letter of interest
to the Wage and Hour Committee in
care of Administrative Director Christina Krasomil, (christina@cela. org), by
Friday, April 13, 2012. Your letter should
explain your interest in the Committee
and what you expect your contributions
will be. Please include a short description of your law practice and your location. The Committee will select from the
applications based on its needs, and
may conduct some interviews. As in the
case of all CELA committees, we strive
toward diversity in race, national origin,
sex, age, sexual orientation, disability,
religion, office size, geography, legal
concentration, length of practice, and
more.
C O M I N G
E V E N T S
April 23, 2012
(see www.nela.org)
May 18, 2012
May 31, 2012
CELA’s Diversity Summit
10:30am to 3pm
Golden Gate University School of Law
536 Mission Street, San Francisco
(see top left this page; and www.cela.org)
June 1, 2012
9:30am to 4:30pm
June 8, 2012
9:30am to 4:30pm
June 20-23, 2012
Sheraton San Diego
(see www.nela.org)
October 5-6, 2012
-15-
NELA NEWS
“On The Hill.”
—Bill To Overturn the Gross Decision. NELA declared its enthusiastic
support for legislation introduced in the
Senate on March 13 to restore significant ADEA protections that were unduly narrowed by the Supreme Court’s
decision in Gross v FBL Financial Services (2009) 129 S Ct 2343. The new
bill, called the “Protecting Older Workers Against Discrimination Act,”
(POWADA), is modeled on a bill of the
same name introduced in 2010. The
bipartisan bill is co-sponsored by both
Senators from plaintiff Jack Gross’s
home state of Iowa, Tom Harkin and
Charles Grassley, as well as by Patrick
Leahy. Senator Harkin is Chairman of
the Senate Health, Education, Labor
and Pensions Committee; Senator
Leahy is Chairman of the Senate Judiciary Committee; and Senator Grassley
is Ranking Member of the Senate Judiciary Committee.
Before the Gross decision, it was well
established that older workers had the
option of establishing discrimination by
proving that age had been one factor
motivating an adverse action. The Supreme Court in Gross held, however,
that the “motivating factor” method of
proof is inapplicable in ADEA cases,
and that plaintiffs must meet a much
higher “but for” standard. Moreover, many
lower courts have interpreted Gross as
requiring proof that age was the only
factor—in other words, the “sole cause.”
In addition to its impact on age discrimination cases, the Gross decision has
created uncertainty with respect to other
employment and civil rights laws. The
decision’s reasoning can logically be
applied not only to ADEA, but also to
any law that requires proof of motivation, unless a different causation standard is explicitly stated. For example,
courts have held that the Gross causation standard applies to the ADA, the
Rehab Act, the Jury Systems Improvement Act, the First Amendment, and
even to retaliation claims under Title VII.
—EEOC Issues Final Regs on ADEA
Disparate Impact. The EEOC has published in the Federal Register its final
regulations providing guidance on the
“reasonable factors other than age” affirmative defense to disparate impact
claims under ADEA section 623(f)(1).
This step brings the agency’s regulations in line with the Supreme Court’s
decisions in Smith v City of Jackson
(2005) 544 US 228, and Meacham v
Knolls Atomic Power Laboratory (2008)
554 US 84, which upheld the disparate
impact theory of liability under ADEA
(Smith), and assigned to employers the
burden of proving the existence of a
reasonable factor other than age as an
affirmative defense (Meacham). But
those cases did not identify standards
to determine whether an employer’s
age-neutral practice is “reasonable.” The
new regulations replace the “business
necessity” test that the EEOC previously applied to age-neutral employer
rules in disparate impact cases. (NELA
had submitted comments to the EEOC
on May 30, 2008, urging the EEOC to
amend the regulations to reflect the
holding in Smith, to clarify the standards
for disparate impact claims, and to provide additional guidance regarding the
meaning of “reasonable factor other than
age.”)
—House Subcommittee Hearings on
Homecare Workers. On March 7, the
Workforce Protections Subcommittee
of the House Education and Workforce
Committee held a hearing that examined the DOL’s proposed rule that would
provide most homecare workers with
federal minimum wage and overtime
protections. NELA had previously submitted comments to the DOL with regard to the proposed rules. Representative Linda Sanchez (D-CA) announced
her intention to introduce legislation that
would extend the FLSA to home care
workers, and Senator Bob Casey (DPA) is expected to follow suit in the
Senate shortly.
—Bill To Prohibit Forced Arbitration
of Employment Disputes. On March
8, Representative Robert Andrews (DNJ) introduced legislation (H.R. 4181)
that would amend Title 9 of the United
States Code to specify that no
-16-
predispute arbitration agreement shall
be valid or enforceable if it requires
arbitration of an employment dispute.
“This critically important bill,” says Cliff
Palefsky, “will restore the original intention of Congress when it passed the
FAA by excluding from its scope
predispute arbitration agreements imposed on workers who are powerless to
say no. The U.S. Supreme Court has
repeatedly said that arbitration is a
matter of ‘consent and not coercion.’
This bill will make sure this is true.”
—Judicial Nominations. On March
12, after days of sparring, Senate leaders reached agreement on a group of
President Obama’s judicial nominees,
avoiding a showdown that could have
brought the chamber to a standstill.
Majority Leader Harry Reid cancelled
cloture votes on 17 of Obama’s nominees, after reaching a deal with Minority
Leader Mitch O’Connell. Under the
agreement, the Senate will put 14 of the
17 judicial nominees up for votes by
May 7, at a pace of two per week.
—ADR Seminar Materials and D. R.
Horton Webinar. If you weren’t able to
join us in Seattle on March 16 and 17 for
our seminar “The ABCs of Alternative
Dispute Resolution,”the Seminar
Manual is available on CD. To see the
Table of Contents and to order, go to
www.nela.org. And our February webinar
“D. R. Horton: New Tool In The Employee Advocate’s Box,” is available on
demand. See www.nela.org/
seminarweb.
•
•
•
Published
Monthly
BULLETIN
UNITED STATES
SUPREME COURT
SUPREME COURT DENIES
CERTIORARI IN CASE HOLDING
THAT CLASS ACTION WAIVERS
MAY NOT BE ENFORCED TO
PRECLUDE PAGA
REPRESENTATIVE ACTIONS
BROWN v RALPHS GROCERY COMPANY. On April 16, the Supreme Court
denied a petition for writ of certiorari,
letting stand the Second District’s July
20, 2011 decision that distinguished
Concepcion in holding that class action waivers may not be enforced to
preclude PAGA representative actions,
and suggested that the rule in Gentry is
not preempted by the FAA. The Second District’s opinion appears at 197
CA4th 489, 128 CR3d 854, and was
summarized in CELA Bulletin, July
20, 2011, p.6. The California Supreme
Court denied review on October 19,
2011.
For plaintiffs: Initiative Legal Group,
Gene Williams, Mark P. Pifko; Arnab
Banerjee.
For defendants: Reed Smith, Linda S.
Husar and Steven B. Katz.
USSC, 4/16/12; 2012 WL 136923 (denying certiorari).
CONCEPCION DID NOT END RESTRICTIONS ON
UNFAIR AND COERCIVE ARBITRATION POLICIES
In AT & T Mobility LLC v Concepcion
(2011) 131 S Ct 1740, the Supreme
Court held that the Federal Arbitration
Act (FAA) preempts what the court
called “California’s Discover Bank rule.”
Some recent commentators have
opined that Concepcion spells the end
of any and all restrictions on mandatory arbitration agreements in the employment context. Common sense and
recent authority show that these commentators mis-read Concepcion, and
fail to appreciate the differences be-
"Finding an Expectation
of Privacy in Social
Networks," by CELA
member Eugene Lee,
begins on Page 16.
tween the non-waivable statutory rights
at issue in the typical employment law
suit and the consumer claims alleged
in Concepcion.
Consider the following example. John
Doe applies for a sales job with Company X. The application —which John
must sign to be eligible for employment—says that the applicant will resolve any dispute with Company X by
final, binding arbitration pursuant to the
company’s dispute resolution rules.
John works happily and productively for
several years, but has problems when
a new supervisor comes in. After John
is fired, he files suit alleging individual
claims for sexual harassment and retaliation, and class and representative
(PAGA) claims for failure to pay over(Cont'd on Page 12, CONCEPCION)
April 2012
Vol. 26, No. 4
PLAINTIFFS WIN A
“GREAT VICTORY” IN
THE LONG-AWAITED
BRINKER MEAL AND
REST PERIOD DECISION
by Bryan Schwartz
Reversing and remanding in large part
the decision by the Fourth District Court
of Appeal (80 CR3d 781), the California
Supreme Court held, in a unanimous
opinion by Justice Werdegar filed on
April 12, that employers must comply
with stringent obligations to provide
both meal and rest periods to employees or face paying premiums under
California Labor Code §226.7.
Though portrayed by Brinker’s attorneys and employer-oriented spin doctors as a win for employers, the Brinker
decision was described by Michael
Rubin of Altshuler Berzon, who coargued the matter on behalf of the
workers at the Supreme Court, as a
“great victory for Brinker employees.”
On April 20, L. Tracee Lorens, who has
represented the Brinker employees
throughout, joined a panel with Michael
Rubin and others at a CELA webinar.
Rest break claims in particular, she
said, can no longer be considered
“throwaway claims” after this decision—
they’re “alive and well in California.”
After the Brinker decision, Rubin
agreed, meal and rest period cases
(Cont'd on Page 13, BRINKER)
This issue of the CELA
Bulletin is being distributed
to Judges and Justices
throughout California, as
well as to CELA members.
DECISIONS
(From Page 1)
CALIFORNIA
SUPREME COURT
SUPREME COURT ADDRESSES
ISSUES CONCERNING CLASS
CERTIFICATION AND SCOPE OF
EMPLOYERS’ DUTY TO PROVIDE
MEAL AND REST BREAKS
BRINKER RESTAURANT CORP. v
SUPERIOR COURT (HOHNBAUM). In
a long-awaited opinion by Judge
Werdegar filed on April 12, a unanimous
California Supreme Court, affirming and
reversing in parts the Fourth District’s
July 22, 2008 opinion, (80 CR3d 781;
summarized in CELA Bulletin, July
2008), addressed a number of issues
concerning meal and rest break claims,
and concerning the class certification of
wage and hour claims generally.
“We granted review,” the Supreme Court
began, “to consider issues of significance to class actions generally and to
meal and rest break class actions in
particular. We conclude, contrary to the
Court of Appeal, that trial courts are not
obligated as a matter of law to resolve
threshold disputes over the elements of
a plaintiff’s claims, unless a particular
determination is necessarily dispositive of the certification question. Because the parties have so requested,
however, we nevertheless address such
threshold issues here. On the most
contentious of these, the nature of an
employer’s duty to provide meal periods, we conclude an employer’s obligation is to relieve its employee of all duty,
with the employee thereafter at liberty
to use the meal period for whatever
purpose he or she desires, but the
employer need not ensure that no work
is done.
“On the ultimate question of class certification, we review the trial court’s
ruling [by Judge Patricia Yim Cowett]
for abuse of discretion. In light of the
substantial evidence submitted by plaintiffs of defendants’ uniform policy, we
conclude the trial court properly certified a rest break subclass. On the
question of meal break subclass certification, we remand to the trial court for
reconsideration. With respect to the
third contested subclass, covering allegations that employees were required
to work ‘off-the-clock,’ no evidence of
common policies or means of proof was
supplied, and the trial court therefore
erred in certifying a subclass. Accordingly, because the Court of Appeal rejected certification of all three subclasses, we will affirm in part, reverse in
part, and remand for further proceedings.”
[Editor’s note: For a detailed discussion
of the Brinker decision, see the article
by Bryan Schwartz, p.1, supra.]
For real parties: L. Tracee Lorens, Robert D. Wilson III, Wayne A. Hughes;
Timothy D. Cohelan, Michael D. Singer,
Christopher A. Olsen; William Turley,
David Mara; Frederick P. Furth, Jessica
L. Grant; Robert C. Schubert, Kimberly
A. Kralowec; Michael Rubin.
For CELA and CAOC as amici: Bryan
Schwartz, David M. Arbogast.
For putative Brookler class as amicus:
Ian Herzog.
For California Labor Federation as amicus: Donald C. Carroll and Charles P.
Scully II.
For Impact Fund et al. as amici: Brad
Seligman.
For Bet Tzedek Legal Services et al. as
amici: Clare Pastore and Kevin Kish.
For Alameda County Central Labor
Council et al. as amici: David A.
Rosenfeld, William A. Sokol, Theodore
Franklin, Patricia M. Gates.
For La Raza Centro Legal et al. as
amici: Michael L. Smith, Lora Jo Foo,
Danielle A. Lucido.
For CRLA et al. as amici: Cynthia L.
Rice, Jennifer Ambacher, Brad
Seligman, Julia Campins, Julie Su, Peter
Zchiesche, Irma Herrera, Donna Ryu,
Margaret Prado-Alvarez, Matthew
Goldberg, Anamaria Loya, D. Micahel
Dale, Marci Seville.
Cal SC, 4/12/12; unanimous opinion
by Werdegar; concurring opinion
also by Werdegar; 2012 DAR 4615,
2012 WL 12116356.
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Toni Jaramilla
Suite. 300
Tel: (310) 551-3020
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
Mariko Yoshihara
Tel: (916) 442-5788
EXECUTIVE BOARD
(Santa Monica)
Virginia Keeny
(Pasadena)
Scot Bernstein
(Folsom)
Noah Lebowitz
(San Francisco)
David DeRubertis
(Studio City)
Cynthia Rice
(San Francisco)
Maria Diaz
(Fresno)
Mika Spencer
(San Diego)
David Duchrow
(Santa Monica)
James P. Stoneman
(Claremont)
Wilmer Harris
(Pasadena)
Deborah Vierra
(Ventura)
Phil Horowitz
(San Francisco)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Jeffrey Winikow
(Los Angeles)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
THE LEGISLATURE INTENDED
REST BREAK CLAIMS TO BE
GOVERNED BY THE AMERICAN
RULE THAT EACH SIDE MUST
COVER ITS OWN ATTORNEYS’
FEES
KIRBY v IMMOOS FIRE PROTECTION, INC. In a unanimous opinion by
Liu filed on April 30, the Supreme Court
reversed the Third District’s July, 2010,
decision that appeared at 186 CA4th
1381, 113 CR3d 370, (summarized in
CELA Bulletin, Aug 2010, p.11). The
Supreme Court’s opinion reads in part
as follows:
“In general, a prevailing party may recover attorney’s fees only when a statute or agreement of the parties provides
for fee shifting. (Santisas v. Goodlin
(1998) 17 Cal.4th 599, 606.) Labor Code
section 218.5 requires the awarding of
attorney’s fees to the prevailing party
‘[i]n any action brought for the nonpayment of wages, fringe benefits, or health
and welfare or pension fund contributions.’ This provision awards fees to the
prevailing party whether it is the employee or the employer; it is a two-way
fee-shifting provision. However, Labor
Code section 218.5 ‘does not apply to
any action for which attorney’s fees are
recoverable under [Labor Code] Section
1194.’ (Lab. Code, § 218.5.) Labor Code
section 1194 provides that employees
who prevail in an action for any unpaid
‘legal minimum wage or ... legal overtime compensation’ are entitled to recover attorney’s fees. It is a one-way
fee-shifting provision...
“In this case, plaintiffs ... sued [IFP] and
multiple Doe defendants for violating
various labor laws as well as the [UCL].
The amended complaint stated seven
claims, the sixth of which alleged the
failure to provide rest breaks as required
by section 226.7. The remedy for such
a violation is ‘one additional hour of pay
... for each work day that the ... rest
period is not provided.’ ... Plaintiffs ultimately dismissed this claim with prejudice after settling with the Doe defendants. IFP subsequently moved for
attorney’s fees under section 218.5.
The trial court awarded fees, and the
Court of Appeal affirmed.
“In April 2009, IFP moved to recover
attorney’s fees from plaintiffs under section 218.5 Plaintiffs opposed the motion, arguing in part that section 1194
barred an award of fees to IFP. In June
2009, the trial court awarded fees to IFP
‘for [its] defense of the [first, sixth] and
[seventh] causes of action’ [for UCL
violations, rest period violations, and
the section 2810 violations by the Doe
defendants]... In its fee motion, IFP
impliedly conceded that section 1194
barred a fee award on plaintiffs’ second,
fourth, and fifth claims because they
involved or overlapped with plaintiffs’
overtime cause of action. The trial court
ordered plaintiffs to pay $49,846.05 in
fees.
“The Court of Appeal affirmed the award
of fees as to the rest period claim, but
reversed as to the section 2810 and
UCL claims. Regarding the rest period
claim, the Court of Appeal concluded
that an award of fees was proper under
section 218.5 because plaintiffs were
seeking payment of ‘additional wages’
for missed rest periods. The court rejected plaintiffs’ argument that, because
at least some of their claims fell under
section 1194, the entire action was
shielded from an award of fees under
section 218.5. The court also rejected
plaintiffs’ alternative argument that the
rest period claim is properly construed
as a claim for a statutorily mandated
minimum wage and is thus governed by
section 1194’s one-way fee-shifting provision in favor of employees, not employers.
“We conclude that section 1194 does
not authorize an award of attorney’s
fees to employees who prevail on a
section 226.7 action for the nonprovision
of statutorily mandated rest periods...
Although plaintiffs may be correct that
section 226.7 shares characteristics
with minimum wage and overtime
laws..., it is up to the Legislature to
decide whether section 1194’s oneway fee-shifting provision should be
broadened to include section 226.7
actions.
“In light of the statutory text and legis-3-
lative history of section 218.5 and section 226.7, we conclude that section
218.5’s two-way fee-shifting provision
does not apply to section 226.7 claims...
“Having concluded that section 226.7
claims do not constitute ‘action[s]
brought for the nonpayment of wages’
within the meaning of section 218.5, we
do not address plaintiffs’ argument that,
when a suit includes claims covered by
section 1194, the entire suit is shielded
from attorney’s fees under section 218.5.”
For plaintiffs: Law Offices of Ellyn
Moscowitz, Ellyn Moscowitz, Jennifer
Lai, Enrique Gallardo; Law Offices of
Scot D. Bernstein and Scot Bernstein.
For CELA as amicus: Bryan Schwartz.
For CRLA et al as amici: Cynthia L.
Rice.
For defendant: Robert L. Rediger, Laura
C. McHugh, and Jimmie E. Johnson.
Cal SC, 4/30/12; unanimous opinion
by Liu; 2012 DAR 5544, 2012 WL
1470313.
[Editor’s note: Bryan Schwartz, who
authored CELA’s amicus brief, blogged
in part as follows about the Kirby decision, (bryanschwartzlaw.blogspot.com):
“The Court of Appeal held that an employee not prevailing on a meal/rest
claim (or even one who settled the claims)
could be subject to paying the employer’s
attorneys’ fees under Cal. Lab. Code §
218.5, which provides for two-way feeshifting. The consequences of that decision, had it been allowed to stand, would
have been disastrous—no employee
could risk paying an employer’s attorneys’ fees to pursue claims for meal/
rest period violations. The plaintiff’s
claims might amount to $5,000, and the
employer’s fees might amount to sums
that would bankrupt the average hourly
non-exempt worker. Since the California
Supreme Court and the Legislature have
repeatedly emphasized the importance
of promoting wage and hour litigation
under the Labor Code, (see, e.g., Murphy
v Kenneth Cole Productions, Inc. (2007)
40 Cal.4th 1094), the Court of Appeal’s
wage/hour claim-killing decision seemed
out of line...
DECISIONS
(From Page 3)
“The Court left for another day the battle
over whether one-way fee-shifting for
employees is available for meal/rest
claims in suits where they are alleged
alongside overtime and minimum wage
claims. This battle—the sequel to Kirby
v Immoos—will most likely be where
the rubber meets the road. In the meantime, employees and their advocates
should continue to seek attorneys’ fees
for meal/rest claims alleged along with
overtime and minimum wage claims
under § 1194. We will also continue to
seek fees under Cal. Code Civil Procedure § 1021.5, which allows fee-shifting
in certain cases brought to vindicate the
public interest—as meal/rest litigation
often does.”]
For defendant: Paul L. Winnemore,
Deputy City Attorney.
Cal SC, 4/25/12.
SUPREME COURT WILL NOT
REVIEW OR DEPUBLISH
OPINION THAT REVERSED
JUDGMENT FOR POLICE
OFFICER TERMINATED FOR
MAKING SEX HARASSMENT
COMPLAINT THAT DEPARTMENT
CONCLUDED WAS UNFOUNDED
PELEG v NEIMAN MARCUS GROUP.
“In this employment case,” the Second
District, Division One, began in a long
April 17 opinion by Mallano, “an employer and its at-will employees purportedly entered into a contract requiring the arbitration of claims by both
sides. But the contract contains a modification provision stating that the employer may amend, modify, or revoke
the arbitration contract on 30 days’
written notice; at the end of the 30-day
period, a contract change applies to
any claim that has not been filed with
the American Arbitration Association
(AAA). The contract also has a choiceof-law clause stating that the contract
shall be governed by Texas law and the
AAA. The employee contends, under
the choice-of-law clause, the employer’s
unilateral right to make contract changes
renders the contract illusory. We ultimately conclude that the choice-of-law
clause is valid and that the arbitration
contract is illusory under Texas law.
JOAQUIN v CITY OF LOS ANGELES.
On April 25, the Supreme Court denied
both a petition for review and a request
to depublish the Second District’s January 23 opinion that reversed a judgment
on a jury verdict for a Los Angeles police
officer. The jury had awarded damages
totaling over $2 million for lost wages
and emotional distress. The Second
District held, as what it called a matter
of first impression in California, that an
employer may discipline an employee
for making charges of sexual harassment that the employer concludes were
fabricated, and that in the present case
there was no substantial evidence that
Joaquin’s termination had been the product of discriminatory or retaliatory animus, or that the department’s stated
reason was pretextual. The Court of
Appeal’s opinion appears at 202 CA4th
1207, 136 CR3d 472, and was summarized in CELA Bulletin, Jan 2012, p.6.
For plaintiff: Jeffrey Lipow and Sean P.
Feeney; Douglas G. Benedon and Kelly
R. Horwitz.
CALIFORNIA COURTS
OF APPEAL
UNDER TEXAS LAW, WHICH
DOES NOT CONFLICT WITH
FUNDAMENTAL CALIFORNIA
POLICY, ARBITRATION
AGREEMENT WAS ILLUSORY
BECAUSE IT GAVE EMPLOYER
UNRESTRICTED RIGHT
TO CHANGE AGREEMENT
AT ANY TIME
“In reaching that conclusion, we also
examine California law regarding illusory arbitration contracts. On that subject, we determine that an arbitration
contract that contains a modification
provision is illusory if an amendment,
modification, or revocation—a contract
change—applies to claims that have
accrued or are known to the employer.
If a modification provision is restricted—
by express language or by the terms
implied under the covenant of good faith
-4-
and fair dealing—so that it exempts all
claims, accrued or known, from a contract change, the arbitration contract is
not illusory. Were it otherwise, the
employer could amend the contract in
anticipation of a specific claim, altering
the arbitration process to the employee’s
detriment and making it more likely the
employer would prevail. The employer
could also terminate the arbitration contract altogether, opting for a judicial
forum if that seemed beneficial to the
company.
“The complaint alleges that plaintiff,
Amir Peleg, is a gay Jewish male of
Israeli national origin... Peleg’s supervisor was an Iranian woman of the Muslim
religious faith. [¶] Peleg worked in the
fragrances department and performed
his duties in an exemplary manner. [¶]
On February 21, 2008, Peleg was discharged because of his national origin,
religion, and sexual orientation in violation of [FEHA]. He was also harassed
and subjected to retaliation for the same
reasons... In addition, his discharge
violated an implied-in-fact contract requiring good cause for termination and
was contrary to public policy... Finally,
Neiman Marcus falsely stated that it
had discharged Peleg because he stole
samples from the store... [¶] The complaint ... contained causes of action
alleging violations of the FEHA, breach
of an implied-in-fact contract requiring
good cause for termination, wrongful
termination in violation of public policy,
and defamation.
“The motion to compel [arbitration] was
heard on February 2, 2009. By order of
the same date, the trial court [Judge
David L. Minning] granted the motion
and stayed further judicial proceedings
pending the outcome of arbitration.
“By order dated on or about November
4, 2010, the arbitrator dismissed the
case with prejudice pursuant to AAA
rules on the ground Peleg had failed to
comply with an order, namely, to present
his case at the hearing on October 19,
2010. [The arbitrator had denied a continuance sought by the plaintiff because
of his attorney’s scheduling conflict.] ...
[¶] The arbitrator awarded Neiman
DECISIONS
(From Page 4)
Marcus sanctions of $40,350.22 in attorney fees and expenses.
“The parties filed cross-motions to vacate and confirm the award. Peleg argued the arbitrator had improperly denied a continuance..., and lacked the
authority to impose sanctions... [The
trial court] granted the motion to confirm
the award...
“On appeal, Peleg contends—as he did
in opposition to the motion to compel
arbitration—that the Agreement is illusory because Neiman Marcus retained
the unilateral right to amend, modify, or
revoke it on 30 days’ advance written
notice, with the change to apply to any
unfiled claim. We agree with that contention.
“A. Arbitral Claims
“As a preliminary matter, we must decide who should decide whether the
Agreement is illusory. Neiman Marcus
contends the arbitrator should decide
that question. Peleg presses for a judicial determination...
“Neiman Marcus relies on a ... delegation provision found in section 19: ‘Any
dispute concerning the Agreement—
the way it was formed, its applicability,
meaning, scope, enforceability, or any
claim that all or part of this Agreement
is void or voidable—is subject to arbitration under this Agreement and shall be
determined by the arbitrator.’
“Unlike the circumstances in Rent-ACenter [West, Inc. v Jackson (2010)]
130 S.Ct. 2772, the delegation provision here is not the only language in the
Agreement that bears on who decides
whether the Agreement is illusory...
[A]ccording to Neiman Marcus, the
Agreement’s delegation provision
means that an arbitrator always decides
any question concerning enforceability.
The severability provision, however, recognizes that a court may decide the
same issue...
“In sum, the Agreement’s statement in
the severability provision ... creates an
ambiguity... Under Rent-A-Center, supra, 130 S.Ct. 2772, the parties must
clearly and unmistakeably agree that
the arbitrator will decide whether the
agreement is enforceable (id. at p. 2777,
fn. 1). Ambiguous language or evidence,
which we have here, does not suffice.
“B. Choice of Law
“Simply put, Neiman Marcus has a
substantial relationship to Texas and
engages in interstate commerce. It follows that the parties had an adequate
basis for designating Texas law and the
FAA to govern the Agreement. [¶] We
must examine Texas law and the FAA
regarding illusory arbitration agreements.
Ultimately, we must decide if the law
chosen by the parties is contrary to a
fundamental policy of California law.
“1. Texas Law
“Texas law mandates that an employer’s
unilateral right to amend, modify, or
revoke a stand-alone arbitration agreement be expressly restricted so that a
contract change does not apply to any
claim that has accrued or of which the
employer has knowledge. In this case,
the Agreement provides that, after 30
days’ written notice, a contract change
applies to all claims not yet filed with the
AAA... As a result, the modification
provision improperly creates two separate categories of claims: those filed
within 30 days of notice—the protected
category—and those that have accrued
or are known to the employer but are not
filed within 30 days—the unprotected
category. Under Texas law, all claims
that have accrued or of which the employer has knowledge must be protected from contract changes...
“2. The FAA
“The Agreement states that it is governed by the FAA as well as Texas law.
We therefore examine decisions under
the FAA. [¶] The prevailing view under
the FAA regarding illusory arbitration
agreements is the same as that of the
Texas state courts: An employer’s unrestricted right to amend, modify, or
terminate an arbitration agreement at
any time renders the agreement illusory...
“C. Application of Texas Law
“We must now determine whether Texas
law or the FAA ‘is contrary to a fundamental policy of California.' If there is no
-5-
such conflict, the court shall enforce the
parties’ choice of law. If, however, there
is a fundamental conflict with California
law, the court must then determine
whether California has a ‘materially
greater interest than the chosen state in
the determination of the particular issue...’
“Under Texas law, an arbitration agreement containing a modification provision must expressly state that a change
in the agreement will not apply to a
claim that has arisen or is known to the
employer. Under California law, a court
may imply such a restriction [arising
from the implied covenant of good faith
and fair dealing] if an arbitration agreement is silent on the issue. [24 Hour
Fitness, Inc. v Superior Court (1998) 66
CA4th 1199.] Both states value an
employer’s commitment to mutual binding arbitration that does not countenance retroactive changes. Indeed,
...Texas law is more demanding than
California law... Thus, it can hardly be
said that Texas law is contrary to a
fundamental policy of California. And
the prevailing view under the FAA is
substantially similar to Texas law...
“Texas law dictates that the Agreement
is illusory and unenforceable. The orders compelling arbitration and confirming the arbitration award are reversed.
On remand, the case shall be heard in
a court of law.”
In dissent, Justice Rothschild argued
that “[U]nder Texas law the agreement
is enforceable and not illusory.”
For plaintiff: Shegarian & Associates
and Carney R. Shegarian.
For defendant: Jackson Lewis, Theresa
M. Marchlewski and Sherry L. Swieca.
Second Dist Div One, 4/17/12; opinion by Mallano with Johnson concurring and Rothschild dissenting;
2012 DAR 4854, 2012 WL 1297337.
DECISIONS
(From Page 5)
SECOND DISTRICT CITES
ABSENCE OF EVIDENCE OF
GENTRY FACTORS IN ORDERING
SUPERIOR COURT TO VACATE
ORDER THAT DENIED
EMPLOYER’S MOTION TO
DISMISS CLASS ARBITRATION
ALLEGATIONS
KINECTA ALTERNATIVE FINANCIAL
SOLUTIONS, INC. v SUPERIOR
COURT (MALONE). In an April 25 partially published opinion by Kitching, the
Second District, Division Three, wrote
in part as follows:
“Defendant ... petitions for writ of mandate or prohibition to set aside an order
[by Judge Abraham Khan] denying
Kinecta’s request for dismissal of class
claims... When Kinecta hired Malone,
she signed a provision that Kinecta and
Malone would arbitrate disputes arising
out of Malone’s employment. By granting Kinecta’s motion to compel arbitration and denying its motion to dismiss
class allegations from Malone’s complaint, the trial court imposed class
arbitration, even though the arbitration
provision was silent on the issue of
class arbitration and limited the arbitration to disputes between Malone and
Kinecta. We address the issue whether
a party to an arbitration provision which
neither authorizes nor prohibits class
arbitration can be compelled to arbitrate
class arbitration.
“Relying on Gentry [v Superior Court
(2007) 42 C4th 443], Malone contends
that an arbitration provision that precludes effective vindication of statutory
claims for overtime pay and wage and
hour claims is unenforceable if the trial
court determines that classwide arbitration would be a significantly more
effective way of vindicating employees’
rights than individual arbitration. Under
Gentry, however, Malone was required
... [to make] a factual showing of the
four factors showing that class arbitration is likely to be ... significantly more
effective... Malone made no evidentiary
showing on this issue, and thus there
was no substantial evidence of any
factual basis that would require a finding
that the arbitration agreement limiting
arbitration to bilateral arbitration was
unenforceable.
“This petition is governed by StoltNielsen v. AnimalFeeds International
Corp. (2010) 559 U.S. ___ [130 S.Ct.
1758], which holds that under the FAA,
a party may not be compelled to submit
to class arbitration unless the arbitration contract provides a basis for concluding that the party agreed to do so.
The arbitration provision in this case
expressly limited arbitration to the arbitration of disputes between Malone and
Kinecta. The arbitration agreement made
no reference to, and did not authorize,
class arbitration of disputes. Thus the
parties did not agree to authorize class
arbitration..., and the order denying
Kinecta’s motion to dismiss class
claims must be reversed...
“On November 2, 2010, Malone, ‘on
behalf of herself and all others similarly
situated,’ filed a class action complaint
for damages, injunctive relief, and restitution... The complaint alleged that ...
Kinecta failed to pay overtime to branch
managers and failed to provide them
with rest and meal periods. The complaint further alleged that Kinecta failed
to pay wages due at termination, failed
to comply with itemized employee wage
statement provisions, and violated the
unfair competition law... Malone’s complaint sought to represent six classes:
a branch manager class, a former branch
manager class, a wage statement class,
a late pay class, a meal period class,
and a rest period class...
“On September 22, 2011, Kinecta filed
a petition for writ of mandate or prohibition to set aside and vacate that portion
of the July 26, 2011, order denying
Kinecta’s request to dismiss class
claims... [FN2. Kinecta also filed a
second writ petition ... seeking vacation
of the trial court’s ... order granting
Malone’s discovery motion to disclose
putative class members’ private contact information. In the unpublished
portion of this opinion, we grant this
petition.]
“A question exists about whether Gentry survived the overruling of Discover
Bank in Concepcion, but it is not one we
-6-
need to decide. (Brown v. Ralphs Grocery Co. (2011) 197 Cal.App.4th
489,498.) Gentry decided a different
issue from Discover Bank. In contrast
to the unconscionability analysis in Discover Bank, the rule in Gentry concerns
‘the effect of a class action waiver on
unwaivable statutory rights regardless
of unconscionability.’ (ArguellesRomero v. Superior Court (2010) 184
Cal.App.4th 825, 836.)... Discover Bank
and Gentry established two different
tests of whether to enforce a class
arbitration waiver, which should be considered separately. (Arguelles-Romero,
at pp. 836-837.) Since it has not been
expressly abrogated or overruled, Gentry appears to remain the binding law in
California. (Brown v. Ralphs Grocery
Co., at pp. 498, 505.)
“Even if Gentry has not been overruled...,
Malone had to provide evidence of the
four Gentry factors... The record shows
that Malone provided no evidence as to
any of the four Gentry factors... [¶]
Because there are no grounds to declare the arbitration agreement unenforceable and because the arbitration
provision contained no agreement to
classwide arbitration, Kinecta argues
that Concepcion and Stolt-Nielsen require reversal of the order... We agree.
“Kinecta provided evidence that as
Malone’s employer, Kinecta conducted
numerous interstate commercial transactions on a daily basis... [¶] Malone
argues that in performing her employment duties, she was not working in or
producing goods for commerce and was
not engaging in activity that affected
commerce. Kinecta provided evidence
showing that Malone ... was engaging
in activity that affected commerce...
The FAA governs the arbitration agreement...
“Malone makes a series of arguments
concerning defenses to the arbitration
agreement which, if valid, would make it
unenforceable. These arguments assert that the trial court erroneously
granted Kinecta’s motion to compel
arbitration, and Malone seeks reversal
of that order. Malone did not seek review
of the order granting Kinecta’s motion to
DECISIONS
(From Page 6)
compel arbitration, and cannot obtain
review of that order by way of her response to Kinecta’s writ petition.”
[Editor’s note: Attorneys for real parties
are considering filing a Petition for Rehearing on the basis, inter alia, that the
Court of Appeal did not discuss D.R.
Horton, which was extensively briefed
by both sides by way of letter briefs.]
For real parties: Michael Nourmand and
James A. De Sario.
For petitioner: Jackson Lewis, David G.
Hoiles, Jr. And Karen D. Simpson.
Second Dist Div Three, 4/25/12; opinion by Kitching with Croskey and
Aldrich concurring; 2012 DAR 5329,
2012 WL 1416619.
FEE AWARDS UNDER LABOR
CODE §§ 1194(a) AND 226(c)
ARE PAYABLE TO THE
ATTORNEY RATHER THAN THE
CLIENT
LEE LAW CORPORATION v SUPERIOR COURT (OK SONG CHANG). In
an April 16 opinion by Croskey, the
Second District, Division Three, held
that “an attorney fee award under Labor
Code sections 1194, subdivision (a)
and 226, subdivision (c) should be made
payable to the attorney who provided
the legal services rather than the client,
unless their fee agreement otherwise
provides.” Following a lengthy summary
of the case’s complicated procedural
history, the court explained its reasoning in part as follows:
“Henry M. Lee represented Ok Song
Chang as her attorney in employment
litigation resulting in a $62,246.74 judgment in favor of Chang after a jury trial.
The trial court [Judge Mary H. Strobel]
also awarded Chang $300,000 in attorney fees... Chang later substituted herself in propria persona for her former
attorney. Henry M. Lee Law Corporation then moved to intervene in the
action and to amend the postjudgment
order awarding attorney fees to make
the fee award payable to Henry M. Lee
Law Corporation. The trial court denied
the motion.
“Lee petitioned this court for extraordinary relief contending that he is entitled
to intervene and that the attorney fee
award belongs to and should be made
payable to him. We conclude that Lee,
as a person whose interests were injuriously affected by the order awarding
attorney fees, was entitled to move to
vacate the order and enter a new order
awarding fees to him. We also conclude
that an appeal from the denial of his
motion is not an adequate legal remedy
in these circumstances and that extraordinary writ review is appropriate. On
the merits of the motion, we hold that an
attorney fee award under Labor Code
sections 1194, subdivision (a) and 226,
subdivision (c) should be made payable
to the attorney who provided the legal
services rather than the client, unless
their fee agreement otherwise provides.
Because there remains an unresolved
factual question as to the terms of the
agreement entered into by Chang and
Lee, the trial court, on remand, must
reconsider its ruling on Lee’s motion...
“The California Supreme Court in Flannery
v. Prentice (2001) 26 Cal.4th 572 decided a question analogous to the one
presented here. Flannery construed
Government Code section 12965, subdivision (b), which authorizes an attorney fee award ‘to the prevailing party’ in
actions for employment discrimination
under [FEHA]... [¶] Flannery concluded
that the statute was ambiguous as to
the meaning of ‘party’ and therefore
considered the legislative intent in light
of federal and California precedents and
public policy concerns ... [¶] and concluded that attorney fees awarded under
Government Code section 12965 in excess of fees already paid to the attorneys ‘belong, absent an enforceable
agreement to the contrary, to the attorneys who labored to earn them.’
“Labor Code sections 1194, subdivision
(a) and 226, subdivision (c) authorize a
fee award to an ‘employee’ rather than a
‘party.’ ... We conclude that the term
‘employee’ is similarly ambiguous in the
context of wage and hour statutes... We
believe that the same ambiguity that
Flannery found in the term ‘party’ is also
inherent in the term ‘employee’ as used
in this context.
-7-
“As with FEHA litigation, privately initiated lawsuits are often essential to
vindicate the right to payment of earned
wages and to effectuate the fundamental public policy in favor of such payment. The attorney fee provisions ...
encourage counsel to prosecute such
wage and hour litigation.... Construing
[the statutes] as requiring the payment
of a statutory attorney fee award to the
litigant rather than to the attorney ...
would diminish the certainty that attorneys who undertake such litigation will
be fully compensated, contrary to the
legislative intent of encouraging counsel to prosecute such litigation...
“As the trial court denied Lee’s motion
on legal grounds that we have rejected,
it has had no occasion to construe or
apply the agreement between Chang
and Lee regarding the amount and payment of the latter’s fees. Upon remand,
the trial court must therefore conduct
further proceedings to determine the
terms of that contract and then reconsider its ruling on Lee’s motion in light
of the views expressed in this opinion.”
For petitioner: Henry M. Lee and Robert
Myong.
For real party Ok Song Chang: John H.
Oh.
Second Dist Div Three, 4/16/12; opinion by Croskey with Klein and
Kitching concurring; 2012 DAR 4763.
2012 WL 1255306.
NINTH CIRCUIT
SUMMARY JUDGMENT IS
AFFIRMED ON ADA CLAIMS BY
DISCHARGED HOSPITAL NURSE
WHO SOUGHT ACCOMMODATION
ALLOWING HER EXTRA
UNPLANNED ABSENCES AS
ACCOMMODATION FOR HER
FIBROMYALGIA
SAMPER v PROVIDENCE ST.
VINCENT MEDICAL CENTER. “This
case tests the limits of an employer’s
attendance policy,” the Ninth Circuit
began in an April 11 opinion by
DECISIONS
(From Page 7)
McKeown. “Just how essential is showing up for work on a predictable basis?
In the case of a neo-natal intensive care
nurse, we conclude that attendance
really is essential.
“Monika Samper ... sought an accommodation ... that would have allowed her
an unspecified number of unplanned
absences from her job. She wanted to
opt out of Providence’s attendance
policy, which sanctioned five unplanned
absences of unlimited duration as well
as other permitted absences. Samper
appeals the [USDC D Oregon’s] summary judgment in favor of Providence on
her reasonable accommodation claim
under the [ADA]. Because regular attendance is an essential function of a
neo-natal nursing position at Providence,
we affirm.
“[Providence’s] NICU offers a high level
of intensive care to premature infants.
According to the NICU charge nurse,
absences among NICU staff can jeopardize patient care: NICU nurses require
special training such that the universe
of nurses that can be called in at the last
minute is limited. As the charge nurse
explains, given the relevant patient population, being understaffed is ‘highly undesirable and, potentially, can compromise patient care.’ Nonetheless, striking a balance between the needs of
patients and employees, Providence’s
attendance policy allows its employees
to take up to five unplanned absences
during a rolling twelve-month period. In
addition, ‘[u]nplanned absences related
to family medical leave ... jury duty,
bereavement leave and other approved
bases are not counted’ towards this
limit, and each absence, however long,
counts as only one occurrence. Samper
challenges the application of this generous absence policy to her circumstances.
“Although Samper claims material issues of fact remain regarding the circumstances surrounding her dismissal,
the sequence of events is undisputed.
Samper was employed with Providence
as a registered NICU nurse for eleven
years. Since at least 2005, she has had
fibromyalgia, a condition that limits her
sleep and causes her chronic pain.
Over the entire period of her employment, Samper never worked full time,
but, nonetheless, regularly exceeded
the number of unplanned absences
permitted even for full-time employees.
In July 2000, while on leave of absence,
Samper received a performance appraisal that reflected she had taken
seven unplanned absences over the
year... She was informed her attendance needed improvement. In 2002,
Samper was placed on work plans to
manage her continued absences, the
result, according to her, of a difficult
divorce...
“After two more years of attendance
problems, and yet another negative attendance review, in August 2005
Samper’s manager asked to meet with
her and a leave-of-absence specialist to
address Samper’s chronic attendance
problems. At the meeting, Providence
agreed to a highly flexible accommodation: Samper was allowed to call in
when having a bad day, and move her
shift to another day in the week. Providence did not require Samper to find a
replacement for her shift.
“Providence’s flexibility, however, yielded
no results... Samper again met with
management in August 2006, which
agreed to yet another accommodation
under which Samper’s two shifts-perweek would not be scheduled on consecutive days. Again, despite hoped for
improvement, Samper received a verbal
warning at the end of the year because
of her attendance. Samper responded
by seeking an exemption from the attendance policy altogether...
“Matters came to a head in early 2008,
when management informed Samper
that her part-time position would cease
to exist, and that she could transfer to
another position or face termination.
Samper responded by making inappropriate comments in the presence of
patients... Samper was finally discharged for, among other issues, seven
absences in a twelve month period, and
general problems with attendance.
“The district court granted summary
judgment..., reasoning that because
Samper was unable to adhere to
Providence’s attendance policy, she
was unqualified for her position as a
matter of law. The court also held that
the 2006 part-time work plan was a
reasonable accommodation, and that
the accommodation that Samper re-8-
quired, to obtain a waiver from the five
unplanned absence limit, was unreasonable.
“It is a ‘rather common-sense idea ...
that if one is not able to be at work, one
cannot be a qualified individual.’ [cite
omitted.] Both before and since the
passage of the ADA, a majority of circuits have endorsed the proposition
that in those jobs where performance
requires attendance at the job, irregular
attendance compromises essential job
functions. Attendance may be necessary for a variety of reasons. [cites and
examples omitted.]
“The common-sense notion that on-site
regular attendance is an essential job
function could hardly be more [clearly
illustrated] than in the context of a neonatal nurse... [¶] Rather than merely
relying on Samper’s own admissions,
or the logical presumption that it is
essential for a nurse to be present
regularly and predictably to do her job,
Providence supplies evidence to support its burden of production with alacrity...
“The record shows that Samper’s position differs from those considered by our
sister circuits in only one important
respect: Samper’s regular, predictable
presence to perform specialized, lifesaving work in a hospital context was
even more essential than in those
cases...
“Samper offers nothing to rebut
Providence’s undisputed evidence except for highlighting that Providence’s
policy allows for some unplanned absences, and that her absences had
exceeded those permitted under the
policy in past years without repercussions. She claims, without evidence,
that ‘[t]he impact on staffing levels resulting from an employee’s first absence is the same as the impact from
an employee’s twentieth absence,’ and
clings to our decision in Humphrey v.
Memorial Hosps. Ass’n for support,
where we noted that ‘regular and predictable attendance is not per se an
essential function of all jobs.’ 239 F.3d
1128, 1135 n.11 (9th Cir. 2001). [¶]
[That] observation ... is hardly remarkable when on-site presence is not re(Cont'd on Page 9, DECISIONS)
DECISIONS
(From Page 8)
quired for all jobs, a point not lost on our
sister circuits. [cites omitted.]
“Turning to the reasonable accommodation analysis, Samper attempts to
gild the lily by claiming not that attendance in general is [not] an essential
function, but, rather that her proposed
variation to the attendance policy constitutes a reasonable accommodation.
[¶] Even under a ‘fact-specific, individualized analysis’ of the accommodation,
Samper’s argument fails. Wong v. Regents of the Univ. Of Cal., 192 F.3d 807,
818 (9th Cir. 1999). As Providence points
out, ‘Samper never quanitfied the number of additional unplanned absences
she was seeking,’ even though she
could have done so at any time during
her years-long negotiating with the hospital over attendance. As the Seventh
Circuit observed in similar circumstances in [EEOC v] Yellow Freight
[Sys., Inc. (7th Cir. 2001) 253 F.3d 943]
and Jovanovic [v In-Sink-Erator (7th Cir
2000) 201 F3d 894], such behavior suggests that ‘the only imaginable accommodation’ that would satisfy the employee ‘would be an open-ended schedule that would allow [her] to come and
go as [s]he pleased.’ [cites omitted.] ...
“Indeed, Samper’s request so far exceeds the realm of reasonableness that
her argument leads to a breakdown in
well-established ADA analysis...
Samper essentially asks for a reasonable accommodation that exempts her
from an essential function, causing the
essential functions and reasonable accommodation analyses to run together.
Samper’s approach would eviscerate
any attendance policy, leaving the hospital with the potential for unlimited
absences.
“Providence was under no obligation to
give Samper a free pass for every unplanned absence. Importantly, even
though Samper ‘had fashioned a poor
attendance record for [her]self well before [s]he was diagnosed,’ Yellow
Freight, 253 F.3d at 951, Providence
had already provided her with various
accommodations... We need not decide whether these accommodations
exceeded Providence’s ADA obligations...
“Samper’s performance is predicated
on her attendance; reliable, dependable
performance requires reliable and dependable attendance. An employer need
not provide accommodations that compromise performance quality—to require
a hospital to do so could, quite literally,
be fatal.”
For plaintiff: Thomas K. Doyle, Bennett,
Hartman, Morris & Kaplan, Portland.
For defendant: Jeffrey J. Druckman,
Janine C. Blatt, Portland.
McKeown joined by Guy and
Tallman; 2012 DAR 4559, 2012 WL
1194141.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
FIRST DISTRICT AFFIRMS DENIAL
OF MOTION TO COMPEL
ARBITRATION, HOLDING THAT
UNCONSCIONABILITY ANALYSIS
WAS NOT ALTERED BY
CONCEPCION, AND REFUSING
TO HONOR ILLINOIS CHOICE-OFLAW PROVISION
SAMANIEGO v EMPIRE TODAY, LLC.
In an unpublished opinion by Siggins
filed on April 5, the First District, Division Three, wrote in part as follows:
“Empire Today, LLC, a national carpet
and flooring business, appeals from the
superior court’s refusal to compel contractual arbitration of claims by carpet
installers that Empire violated multiple
provisions of the California Labor Code.
The court [Judge Steven A. Brick] found
the arbitration provision was unconscionable under California law. We affirm.
We hold the provision is unconscionable and unenforceable under
Armendariz v. Foundation Psychcare
Services, Inc. (2000) 24 Cal.4th 83; that
our consideration of the issues is governed by California law [despite an Illinois choice-of-law provision]; and that
the recent decision of the Supreme
Court of the United States in AT & T
Mobility LLC v. Concepcion (2011)
___U.S.___ [131 S.Ct. 1740] does not
change our analysis. We also hold that
the trial court did not abuse its discre-9-
tion when it declined to sever the unconscionable contract provisions...
“Empire stakes its position that the
Agreement was not procedurally unconscionable primarily on Roman v.
1462... [¶] Roman has little bearing on
the issues in this case... [¶] ‘[P]laintiffs
perform manual labor, do not speak
English as a first language, have limited
or no literacy in English, and were told
that they could not continue employment if they did not sign the agreements.’ [¶] Moreover, Empire failed to
provide plaintiffs with a copy of the
relevant arbitration rules... [¶] The Agreement was comprised of 11 pages of
densely worded, single-spaced text
printed in small typeface. The arbitration clause is the penultimate of 37
sections which, in contrast to Roman,
were neither flagged by individual headings nor required to be initialed by the
subcontractor... [¶] Taken together,
these factors amply support the trial
court’s finding that the Agreement was
procedurally unconscionable.
“The Agreement also demonstrates
‘strong indicia of substantive unconscionability,’ as the trial court found...
Empire ... supports its argument only
with authority for the general proposition that a contractual provision that
unilaterally shortens a limitations period to six months, taken alone, does
not necessarily render an adhesion
contract substantively unconscionable.
[cite omitted.] The import of such a
clause is quite different in the context of
the statutory wage and hour claims
asserted here. The Labor Code provides
the basis for the class claims, and it
affords employees three or four years to
assert them. [cite omitted.] Where, as
in this case, arbitration provisions undermine statutory protections, courts
have readily found unconscionability.
[cites omitted.] As noted in Armendariz,
supra, ‘an arbitration agreement cannot
be made to serve as a vehicle for the
waiver of statutory rights created by the
FEHA.’ (24 Cal.4th at p. 101.)
“In any event, the limitations period is
just one of several one-sided provisions.
The Agreement also requires plaintiffs
to pay any attorneys’ fees incurred by
DECISIONS
(From Page 9)
Empire, but imposes no reciprocal obligation on Empire... Empire argues this
clause is of no moment because, after
all, one-way fee shifting provisions that
benefit only employers violate both the
Labor Code and commercial arbitration
rules... In other words, according to
Empire, it isn’t unconscionable because
it’s illegal and, hence, unenforceable.
To state the premise is to refute Empire’s
logic... [¶] In addition, the Agreement
exempts from the arbitration requirement claims typically brought by employers...
“Empire asserts the enforceability of
the arbitration clause is governed by
Illinois, not California, law, pursuant to
the Agreement’s choice of law provision... [¶] Empire relies on Nedlloyd
Lines B.V. v. Superior Court (1992) 3
Cal.4th 459, 464-465 to support its
argument that the choice-of-law clause
must be construed broadly to encompass plaintiffs’ statutory wage and hour
claims. Washington Mutual Bank, FA
v. Superior Court (2001) 24 Cal.4th 906
reveals why Empire’s reliance on
Nedlloyd misses the mark... [¶] Applying [the Washington Mutual Bank] principles, the same factors that render the
arbitration provision unconscionable
warrant the application of California law...
[since] ... the Agreement was obtained
by ‘improper means.’
“Empire argues that ... the court abused
its discretion when it declined to sever
[the unconscionable provisions]... We
disagree. ... [¶] Preliminarily, plaintiffs
have a creditable argument that Empire
forfeited this claim because it never
asked the trial court for severance... In
any event, the record here amply supports the ruling... [T]he court could, and
presumably did, make [the relevant]
inquiry, and conclude that severance
would not serve the interests of justice.
“Finally, Empire contends [that]
Concepcion... extends the [FAA] so
broadly as to preempt each ‘unconscionability-based rationale’ that supported
the trial court’s refusal to compel arbitration here. Empire reads Concepcion
too broadly.
“[A]t the same time as the Court repudiated the categorical rule in Discover
Bank, it explicitly reaffirmed that the
FAA ‘permits agreements to arbitrate to
be invalidated by ‘generally applicable
contract defenses, such as fraud, duress, or unconscionability,’ [although]
not by defenses that apply only to
arbitration or that derive their meaning
from the fact that an agreement to
arbitrate is at issue.’ [cite omitted.] In
short, arbitration agreements remain
subject, post-Concepcion, to the unconscionability analysis employed by
the trial court in this case.”
For plaintiffs: Legal Aid Society-Employment Law Center, William C.
McNeill, Jinny Kim; Aaron Kaufmann,
David P. Pogrel.
For defendant: Jones Day, Elwood Lui,
Catherine Nasser.
First Dist Div Three, 4/5/12; opinion
by Siggins with McGuiness and
Jenkins concurring; 2012 WL
FOLLOWING GRANT OF REVIEW
AND REMAND, SECOND DISTRICT
AGAIN FINDS RALPHS’
UNCONSCIONABLE, WITHOUT
DECIDING WHETHER GENTRY
SURVIVES CONCEPCION
MASSIE v RALPHS GROCERY COMPANY. “In our prior opinion,” the Second
District, Division Seven, began in an
April 2 opinion by Woods, “we addressed
Ralphs Grocery Co.’s appeal from orders denying its petitions to compel
arbitration of two class action lawsuits
filed by its employees, alleging Labor
Code and Unfair Competition Law violations. Ralphs had unsuccessfully sought
arbitration of these disputes in accordance with provisions in various agreements that subject such claims to individual binding arbitration and prohibit
proceedings on a class or representative basis, and we affirmed the trial
court’s orders denying Ralphs’ petitions. (Massie v. Ralphs Grocery Co.,
McLeod v. Ralphs Grocery Co.,
B187844, B187854, May 14, 2007
[nonpub. opn.] [2007 WL 1395580].
Thereafter, our Supreme Court granted
Ralphs’ petitions for review and remanded the matters with directions to
vacate our prior decision and to reconsider the cause in light of Gentry v.
Superior Court (2007) 42 Cal.4th 443
-10-
(S153059.) We in turn remanded the
matter to the trial court for the required
factual showing.
“After permitting the parties to conduct
discovery on the Gentry factors and
considering supplemental briefing and
argument on these issues, the trial
court again denied Ralphs’ motion to
enforce its class action waiver and compel individual arbitration, finding ‘Just as
in Gentry, the class arbitration waivers
found in this case jeopardize the rights
of its employees by prohibiting the most
practical and most likely, only, effective
means of challenging defendants’ overtime practices.’
“Ralphs appeals. Because we conclude
the agreement Ralphs seeks to enforce
is procedurally and substantively unconscionable and unenforceable as a
result, we affirm...
“Just five days after Ralphs filed its
opening brief, the United States Supreme Court decided AT & T Mobility
LLC v. Concepcion (2011) 563 U.S. ___
[131 S.Ct. 1740]... [¶] According to
Ralphs, Concepcion now conclusively
establishes that Gentry ... is preempted
by the Federal Arbitration Act.
“In this appeal, however, we need not
decide whether Gentry survives
Concepcion or whether the class action
waiver, standing alone, is unenforceable; from the outset, the plaintiffs in
this case have argued the arbitration
agreements at issue are both procedurally and substantively unconscionable
for multiple deficiencies beyond the
class action waiver. We agree.
“FN12. We note that in Sanchez v.
Valencia Holding Company (2011) 201
Cal.App.4th 74, Division One determined
that ‘Concepcion... does not preclude
the application of the unconscionability
doctrine to determine whether an arbitration provision is unenforceable,’ and
our Supreme court has granted review
in this case. ([R]eview granted Mar. 21,
2012, S199119.)
“FN13. In an unpublished opinion in Vu
v. Superior Court (Nov. 17, 2009,
B213988) [2009 WL 3823383], we addressed a substantially similar iteration
DECISIONS
(From Page 10)
of Ralphs arbitration policy and found it
to be procedurally and substantively
unconscionable as a result. (See also
Chavarria v. Ralphs Grocery Company
(2011) [812 FS2d 1079].)
“Leaving to one side the evidence the
plaintiffs presented that they were pressured to sign the arbitration agreements
and were required to accept the arbitration terms in order to receive bonuses
for which they had already worked, the
agreements themselves establish the
agreements were presented on a ‘take
it or leave it’ basis. The 2001 Policy
states that the arbitration agreement is
‘a term of all Employees’ employment.’
... To the extent Ralphs claims some
employees had the opportunity to ‘opt
out’ of the arbitration policy (within a 14day window without any specification of
to whom such a request was to be
directed and forfeiting any bonus), such
an option was illusory since continued
employment purported constituted acceptance of arbitration—no signature is
even required. Even an employee who
attempted to opt out of the arbitration
policy and even lost a bonus as a result
would find the arbitration policy still
applied—an added element of surprise...
“For the reasons identified in
Chavarria,(as well as in Vu), we find
Ralphs arbitration policy to be substantively unconscionable as well. Substantive unconscionability ‘turns not only on
a ‘one-sided result,’ but also on an
absence of ‘justification’ for it.’ [cite
omitted.] Here, in addition to Ralphs’
preclusion of all representative, class
and private attorney general actions...,
in the same agreement it touts as fair
and for the benefit of everyone involved,
the Ralphs arbitration policy mandates
confidentiality as to the ‘existence, content and outcome’ of any proceeding...;
prohibits arbitration before providers
maintaining their own procedural safeguards in conflict with the limitations
Ralphs seeks to impose...; attempts to
shorten the limitations period (and thus
limit available damages) and impose
arbitration costs and fees on employees...; and provides Ralphs may modify
the agreement so long as it does so in
writing or otherwise allows itself to do
pursuant to its own policy..., among
other one-sided provisions...
Ralphs arbitration policy, severance of
an offending provision is no cure in this
case; we find the policy is permeated
with unconscionability and unenforceable as a result. (Civ.Code, § 1670.5,
subd. (a).)
“As the court in Chavarria, supra, stated,
‘Ralphs’ arbitration policy lacks any
semblance of fairness and eviscerates
the right to seek civil redress, rendering
it a right that exists in name only. To
condone such a policy would be a
disservice to the legitimate practice of
arbitration and a stain on the credibility
of our system of justice.’ As we said in
finding Ralphs’ arbitration policy unenforceable in Vu v. Superior Court, ‘This
is not a close case.’”
For plaintiffs: Law Offices of Ian Herzog
and Ian Herzog; Daniels, Fine, Israel,
Schonbuch & Lebovits, Scott A. Brooks
and Craig S. Momita; Law Offices of
Stephen Glick and Stephen Glick.
For defendants: Reid Smith, Linda S.
Husa and Steven B. Katz; Littler
Mendelson, Henry D. Lederman and
C O M I N G
E V E N T S
May 12, 2012
CELA’s Diversity Leadership Summit
10am to 2pm
Loyola Law School, Los Angeles
(see www.cela.org for info)
May 18, 2012
May 31, 2012
CELA’s Diversity Leadership Summit
10:30am to 3pm
Golden Gate University School of Law
536 Mission Street, San Francisco
(see www.cela.org)
June 1, 2012
Deposition Skills: A Practical Workshop
9:30am to 4:30pm
(see www.cela.org for info and registration)
June 8, 2012
Deposition Skills: A Practical Workshop
9:30am to 4:30pm
(see www.cela.org for info and registration)
June 20-23, 2012
Sheraton San Diego
(see www.nela.org)
October 5-6, 2012
“In light of the numerous deficiencies in
-11-
CONCEPCION
(From Page 1)
time and related Labor Code violations.
You are the judge, and the matter comes
before you on Company X’s petition to
compel arbitration. The policy, which
the company did not provide to John,
includes the following provisions: (1) the
arbitrator is to be chosen by the company in its sole discretion; (2) there is
no right to discovery; (3) there is no
requirement of a written decision; (4)
costs are to be split between the company and the employee; and (5) there is
no right to recover attorneys’ fees or
costs, unless the arbitrator finds that a
claim or defense is frivolous. John opposes the petition on the grounds that
the arbitration policy is unconscionable,
fails to meet minimum standards of
fairness, and would result in the waiver
of his non-waivable statutory rights.
California Law Prohibits the
Waiver of Certain Employment
Rights
“It is indisputable,” our Supreme Court
held in Armendariz v Foundation Health
Psychcare Services, Inc. (2000) 24 C4th
83, 100, “that an employment contract
that required employees to waive their
rights under the FEHA to redress sexual
harassment or discrimination would be
contrary to public policy and unlawful.”
Many of California’s wage and hour
protections also are non-waivable. (See
Edwards v Arthur Andersen LLP (2008)
44 C4th 937, 951-952 (employees’ right
to indemnity for necessary expense of
employment is unwaivable); Cal Lab
Code, § 206.5 (employer may not require execution of release of claim for
unpaid wages); Cal Lab Code, § 1194
(employer may not enforce any agreement to work for less than legal minimum wage or overtime compensation).
In Armendariz, the California Supreme
Court recognized that if a specified
arbitral forum is inadequate, arbitration
would compel an employee to forfeit
non-waivable statutory rights. To be
adequate, the Court held, an arbitral
forum must provide for: (1) arbitrator
neutrality; (2) adequate discovery; (3) a
written decision to permit limited judicial review; and (4) certain limitations on
cost.
In Gentry v Superior Court (2007) 42
C4th 443, the Supreme Court held that
the right to class arbitration is among
the minimum standards necessary for
the arbitration of non-waivable statutory
rights, “at least in some cases.” 42 C4th
at 450. The Court held that the following
factors are to be considered in determining whether a class arbitration waiver
would undermine the enforcement of
non-waivable statutory rights: (1) the
modest size of potential individual recoveries; (2) the potential for retaliation,
as where employees are suing their
current employer; (3) the fact that some
employees may be unaware that their
legal rights have been violated; and (4)
the existence of other “real world” obstacles to vindication of rights through
individual arbitration, as where the
employer’s cost of paying occasional
judgments and fines may be significantly outweighed by the cost savings
of not paying overtime. 42 C4th at 459462.
Concepcion in Context
Concepcion was not an employment
case and did not deal with non-waivable
statutory rights. It involved a putative
class action alleging that AT&T had
engaged in false advertising and fraud
by charging sales tax on “free” phones.
AT&T sought to compel individual arbitration, relying on a contract clause that
provided for arbitration of all disputes,
but did not permit classwide arbitration.
The District Court denied AT&T’s motion, and the Ninth Circuit affirmed, but
the Supreme Court reversed, holding
that “California’s Discover Bank rule”
“stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress” in
passing the FAA, and is therefore preempted. 131 S Ct at 1753.
Judicial Reactions to Concepcion
in Employment Cases
In the year since the Concepcion decision was filed, California courts have
continued to apply unconscionability
analysis, despite defense arguments
that it “stands as an obstacle” to arbitration.
In Zullo v California (2011) 197 CA4th
477, the Sixth District reversed an order
granting an employer’s petition to compel arbitration in a FEHA action on the
grounds that the arbitration policy was
procedurally unconscionable as a “takeit-or-leave-it” contract of adhesion, and
substantively unconscionable in that it
called for the use of AAA rules which
were not provided to the employee. The
policy was also one-sided, the court
emphasized, in that it required only the
employee to arbitrate. And it required
the employee, but not the employer, to
respond to any communications regarding the arbitration proceedings
within ten days or forfeit her claim.
In Ajamian v CantorCO2e, L.P. (2012)
203 CA4th 771, involving FEHA claims,
the First District held that it was proper
for the trial court, rather than an arbitrator, to determine whether an employer’s
arbitration policy was unconscionable.
The policy was procedurally unconscionable, the court held, because it was a
non-negotiable condition of continued
employment. And it was substantively
unconscionable for two reasons: (1) it
precluded an award of special or punitive damages to either party, but permitted the arbitrators to award liquidated
damages to the employer, in addition to
other damages; (2) it allowed only the
prevailing employer to recover attorneys’ fees, not a prevailing employee,
and thus required employees to waive
substantive rights under California law.
In Mayers v Volt Management Corp.
(2012) 203 CA4th 1194, the Fourth
District affirmed an order denying an
employer’s petition to compel arbitration in a FEHA action where: (1) the
arbitration policy provided that AAA rules
would apply, but the employer did not
provide those rules to the employee; (2)
the arbitration policy failed to specify
exactly which AAA rules would apply;
and (3) the policy allowed the arbitrator
to award attorneys’ fees and costs to
the prevailing party, thus exposing the
employee to the risk of an adverse
attorney fee award to which he would
not be exposed in a judicial forum.
(Cont'd on Page 13, CONCEPCION)
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CONCEPCION
BRINKER
(From Page 12)
(From Page 1)
Contrary to the common defense argument, unconscionability analysis does
not “stand as an obstacle” to the enforcement of mutually agreed-upon and
fair arbitration policies. It only prevents
employers from taking unfair advantage
of their position to impose on employees or applicants arbitration polices
that are procedurally coercive, onesided, and in derogation of statutory
rights.
Armendariz and Gentry Remain
Good Law in California
In Brown v Ralphs Grocery Co. (2011)
197 CA4th 489, the Second District
held that Gentry continues to be good
law in California. (The California Supreme Court denied review on October
19, 2011, and the U.S. Supreme Court
denied certiorari on April 16, 2012.)
Although the Court of Appeal held that
the employee had failed to make the
factual showing necessary under Gentry to invalidate the class action waiver
at issue, the court did not hold that
Gentry has been overruled.
Further, the Brown court held that the
employer could not enforce a waiver of
its employees’ right to bring a representative action under the Labor Code Private Attorneys General Act (Cal Labor
Code § 2698 et seq.) The court explained that a PAGA representative
action is an enforcement action, with
one aggrieved employee acting as a
private attorney general to collect penalties from employers who violate the
Labor Code. The court held that such
actions, unlike individual actions, are
not subject to the rule in Concepcion.
See also Plows v Rockwell Collins, Inc.
(CD Cal 2011) 812 FS2d 1063 (citing
Brown’s “persuasive” reasoning in allowing plaintiff to take additional discovery to establish Gentry factors, and
denying motion to compel arbitration of
PAGA claims.)
Federal Law Prohibits
Employers from Enforcing Class
Action Waivers
Relations Board considered whether an
employer violates the National Labor
Relations Act by requiring employees,
as a condition of employment, to sign
an arbitration agreement that prohibits
joint, class, or collective claims. The
NLRB found that such an agreement
does violate section 7 of the Act, which
gives employees the right to engage in
concerted activities for mutual aid or
protection. The Board found that there
was no conflict between Federal labor
law and policy and the Federal Arbitration Act.
The policy barred employees from exercising substantive rights that have long
been held protected by Section 7 of the
NLRA, the NLRB explained, because it
prohibited employees from bringing collective or class claims in any forum at
all. They could not proceed in court
because the policy waived their right to
a judicial forum. And they could not
proceed in arbitration because the policy
prohibited the arbitrator from consolidating claims or awarding collective
relief. And because the employer’s
policy “expressly restricted protected
activity,” the employer also violated
section 8(a)(1) of the Act, the Board
held, by imposing the policy on employees as a condition of employment.
provide greater opportunities than previously for CELA members and other
plaintiffs’ employment lawyers. (The
Brinker webinar is available on demand
via the CELA website, www.cela.org.)
The Court of Appeal in Brinker had held
that because an employer’s duty was
merely to “provide” meal periods to employees, employers could avoid class
liability with a compliant published
policy. The Court of Appeal wrote, in
language that would have been devastating to wage and hour class actions
had it been upheld by the Supreme
Court: “[T]he evidence does not show
that Brinker had a class-wide policy
that prohibited meal breaks. The evidence in this case indicated that some
employees took meal breaks and others did not. For those who did not, the
reasons they declined to take a meal
period require individualized adjudication. Further, plaintiffs’ statistical and
survey evidence does not render the
meal break claims one in which common issues predominate. While time
cards might show when meal breaks
were taken and when there were not,
they cannot show why.” 80 CR3d at 810.
If that reasoning had prevailed, plaintiffs
would seldom if ever have been able to
show that personal motivations for missing meal periods were sufficiently common to justify class certification.
Conclusion
The hypothetical arbitration policy outlined at the beginning of this article may
have seemed extreme and far-fetched.
But repeatedly over the past twelve
months, courts have been called upon
to address real policies with similar
terms. Fortunately, post-Concepcion
courts have continued to require that
employers’ arbitration policies comport
with fundamental fairness, withstand
unconscionability analysis, and don’t
result in the waiver of non-waivable statutory rights or violate the National Labor
Relations Act.
•
•
In D.R. Horton, Inc. (Case No. 12-CA25764; Jan.3, 2012), the National Labor
•
Similarly, as to rest breaks, the Fourth
District had written: “The question of
whether employees were forced to forgo
rest breaks or voluntarily chose not to
take them is a highly individualized
inquiry that would result in thousands of
mini-trials to determine as to each employee if a particular manager prohibited a full, timely break or if the employee waived it or voluntarily cut it
short.” Id. at 801.
Concerning meal periods, the Supreme
Court remanded to the Court of Appeal
with additional guidance, explaining that
“an employer’s obligation is to relieve its
employee of all duty, with the employee
thereafter at liberty to use the meal
period for whatever purpose he or she
desires.” Slip Op. at p. 2. “The employer
-13-
BRINKER
(From Page 13)
need not ensure that no work is done,”
the court added—language that employer advocates have seized upon to
claim victory.
On rest periods, the Supreme Court
outright reversed the Fourth District,
explaining: “An employer is required to
authorize and permit the amount of rest
break time called for under the wage
order for its industry. If it does not—if, for
example, it adopts a uniform policy
authorizing and permitting only one rest
break for employees working a sevenhour shift when two are required—it has
violated the wage order and is liable.”
Brinker, Slip Op. at pp. 25-26.
In addition to its core holdings, the
Supreme Court’s much-anticipated decision finally provided some of the guidance that every employer and non-exempt employee in California, (and many
CELA members), have been waiting for:
namely, what do employers have to do
to comply with California’s robust meal
and rest period requirements?
The Supreme Court answered this compound question in broad strokes, also
providing insight into which of the many
relevant court decisions and DLSE opinion letters it supports. Perhaps most
significantly, the Supreme Court’s decision cited with approval the case principally favored by the employees’ advocates, Cicairos v Summit Logistics,
Inc. (2005) 133 CA4th 949. And the
Supreme Court also leaned heavily on
Sav-On Drug Stores, Inc. v Superior
Court (2004) 34 C4th 319, a cornerstone of plaintiffs’ class certification
strategy in most California wage and
hour class actions.
Other key employee-friendly decisions
relied upon by the Supreme Court in
Brinker include: Dilts v Penske Logistics, LLC (SD Cal. 2010) 267 F.R.D.
625; Bono Enterprises, Inc. v Bradshaw
(1995) 32 CA4th 968; Ghazaryan v Diva
Limousine, Ltd., (2008) 169 CA4th 1524;
Bufil v Dollar Financial Group, Inc. (2008)
162 CA4th 1193; and Jaimez v Daiohs
USA, Inc. (2010) 181 CA4th 1286. These
decisions now provide a roadmap to
certification of meal-rest class actions,
post-Brinker.
On the other hand, the Court largely
disregarded the District Court decisions
that had been relied upon as persuasive
authority by the Fourth District below,
as well as the many Court of Appeal and
District Court decisions which built upon
them. Employers had hoped that the
meal and rest period class action would
die with Brinker, as it might have done
had the Fourth District’s sweeping decision been upheld in all respects. In fact,
the Supreme Court’s decision was a
disappointment to employer-side advocates.
Among the significant aspects of the
Brinker opinion are the following:
Meal Period Standard: “Reasonable Opportunity to Take the Full
Thirty-Minute Period Free of Any
Duty,” and “Free to Attend Any Personal Business.” The touchstone of
meal period compliance, after Brinker,
is the degree to which employers relinquish control over the thirty-minute,
unpaid time. See Slip Op. at p. 36
(describing employer’s meal period obligation as: “bona fide relief from duty
and relinquishing of control”). The Court
leaned upon a 1991 DLSE opinion letter
discussing the control test, which stated
that “if the employee has a reasonable
opportunity to take the full thirty-minute
period free of any duty, the employer
has satisfied his or her obligation. The
worker must be free to attend to any
personal business he or she may choose
during the unpaid meal period.”
(emphsasis in orig.) Slip Op. at p. 30.
The opinion also cited Bono Enterprises
in this regard. Slip Op. at p. 30, n. 15
(absence of duty and freedom from
employer control is central to unpaid
meal periods). See also Slip Op. at p.
31 (employees must be “free to come
and go as they please” during meal
periods).
Even the Court’s rejection of the employees’ (and CELA’s) most desired
standard—i.e., that employers be required to ensure that meal periods are
actually taken—stems from employers’ obligation to relinquish all control.
As the Court explained, “[T]he obligation to ensure employees do no work
may in some instances be inconsistent
with the fundamental employer obligations associated with a meal break: to
relieve the employee of all duty and
relinquish any employer control over the
employee and how he or she spends
the time.” Slip Op. at p. 33. In other
words, Brinker reasoned that employers cannot police employees to make
sure that no work is performed because
employers may exercise no control over
employees during their meal periods. If
an employer has a policy restricting
employees’ activities during meal periods, that may now clearly be the basis
for a meal period class action.
Finally, it is noteworthy that if the employer relinquishes control and an employee chooses to work, with the
employer’s knowledge, then the employer must still pay straight time wages
for the time worked, though not an
additional premium. See Slip Op. at p.
35 n. 19. Among other practices, autodeduct meal periods—where an employer subtracts 30 minutes a day from
workers’ time sheets, but knows that
employees tend to work through lunch—
will seemingly remain unlawful.
Timing of Meal and Rest Periods.
Employers must provide a 30-minute,
uninterrupted meal period after five hours’
work (absent a valid waiver), and another where there are ten hours of work
time. The employees argued that the
second meal period needs to be timed
to occur five hours after the first meal
period, (sometimes called the “rolling
five-hour” meal period), but the Supreme
Court rejected this timing requirement.
As to rest periods, the Supreme Court
clarified that when the wage orders
require that rest periods must be provided for each four-hour period or “major
fraction thereof,” they mean that a second rest break must be provided if the
employee has worked over six hours—
i.e., four hours, plus the “major fraction”
(2-plus hours) of a second four-hour
period. The Court explained: “Employees are entitled to 10 minutes’ rest for
shifts from three and one-half to six
hours in length, 20 minutes for shifts of
-14-
BRINKER
DECISIONS
(From Page 14)
(From Page 11)
more than six hours up to 10 hours, 30
minutes for shifts of more than 10 hours
up to 14 hours, and so on.” Slip Op. at
20.
Off-the-Clock Meal-Rest Class Actions. Regarding off-the-clock allegations, the Court affirmed the Court of
Appeal, which had vacated the Superior
Court’s certification order concerning
this subclass. “[T]he trial court was
presented with anecdotal evidence of a
handful of individual instances in which
employees worked off the clock, with or
without knowledge or awareness by
Brinker supervisors.” Slip Op. at 53.
Fortunately, the Court’s description of
the plaintiffs’ evidence of off-the-clock
violations portrayed it as so scant that
the decision will be readily distinguishable where there is extensive evidence
of a pattern of off-the-clock meal period
work.
Employer “Does Not Discourage
or Impede” Meal Periods. Plaintiffs
may continue to pursue meal period
individual or class claims where they
were impeded or discouraged from taking them. Slip Op. at p. 36. For example, if there is evidence that employers require an employee to sacrifice his
or her pending tips when going on a
meal break, this may suffice to show a
common policy of discouraging the taking of meal periods.
Class Certification. Relying in part
on Sav-On Drug Stores, the Supreme
Court rejected the extra layer of factual
analysis that the Court of Appeal had
required. If a court needs to look at the
facts to determine if a particular element is met, (e.g., needs to look to see
whether the same policy applied to the
entire putative class to decide if common issues predominate), then, but
only then, looking at the facts of the
case is appropriate. “A class certification motion is not a license for a freefloating inquiry into the validity of the
complaint’s allegations; rather, resolution of disputes over the merits of a case
generally must be postponed until after
class certification has been decided
[citation], with the court assuming for
purposes of the certification motion that
any claims have merit.” Slip Op. at p.
11. “Claims alleging that a uniform policy
consistently applied to a group of employees is in violation of the wage and
hour laws are of the sort routinely, and
properly, found suitable for class treatment.” Slip Op. at 25.
There are issues still undecided after
Brinker, some of which may be addressed with the resolution of the many
Court of Appeal decisions in which the
Supreme Court granted review and held
pending Brinker. The Court left open the
standard for rest period compliance.
And the lead opinion also did not resolve
the proper manner of certifying and
adjudicating a wage and hour class
action, (an issue addressed in Duran v
U.S. Bank National Ass’n (2012) 203
CA4th 212, a case in which CELA has
urged the Supreme Court to grant review). The concurrence in Brinker,
authored by the lead opinion’s author,
Justice Werdegar, rejects the Fourth
District’s notion that “the question why
a meal period was missed renders meal
period claims categorically uncertifiable”
(Slip Op. at Concurrence, p. 1), and
goes on to embrace “a variety of methods” of proof of class certification, liability, and damages, including
“[r]epresentative testimony, surveys,
and statistical analysis.” Slip Op. at
Concurrence, p. 4. It remains to be seen
to what degree courts throughout the
state will follow the concurrence, or
whether Duran’s harsh standards will
prevail so as to virtually preclude any
class litigation. Brinker gives reason for
optimism.
The Real Parties in Interest (employees) were represented by a host of
attorneys, led by CELA members L.
Tracee Lorens, Kimberly Kralowec,
Michael Singer, and Michael Rubin.
Bryan Schwartz authored CELA’s amicus brief in support of Real Parties in
Interest.
Bryan Schwartz (Oakland) represents
plaintiffs in a wide range of cases involving both private and public employment, including wage and hour, discrimination, harassment, and
whistleblowing. His practice encompasses individual, collective, and class
actions. (See www.BryanSchwartz
Law.com.) Bryan is Co-Chair of CELA’s
Diversity Committee, and a member of
the State Bar Labor and Employment
Law Executive Committee.
•
•
-15-
•
Lisa C. Chagala.
Second Dist Div Seven, 4/2/12; opinion by Woods with Perluss and Zelon
TRIAL COURT ERRED IN
GRANTING MOTIONS FOR
NONSUIT ON ISSUE OF PUNITIVE
DAMAGES AND JNOV ON AGE
DISCRIMINATION CLAIMS
DOUGHERTY v SEARS ROEBUCK
AND CO. “William Francis Dougherty
sued Sears Roebuck and Co. for age
discrimination after Sears terminated
his employment,” the First District, Division Two, began in a twenty page
unpublished opinion by Lambden filed
on April 19. “The matter proceeded to a
jury trial and the trial court granted
Sears’s motion for a nonsuit on the
issue of punitive damages. After hearing all of the evidence and the arguments, the jury found Sears liable for
age discrimination against Dougherty
but, subsequently, the trial court [Contra Costa Superior Court Judge Barbara
Zuniga] granted Sears’s motion for
[JNOV]. Dougherty appeals and argues
that the lower court erred when it granted
Sears’s motions for nonsuit and JNOV.
He also challenges various evidentiary
rulings made by the superior court.
“We conclude that Dougherty presented
sufficient evidence to support the jury’s
verdict and to have the jury consider the
question of punitive damages. We therefore reverse the trial court’s granting of
Sears’s motions for a nonsuit and a
JNOV. We, however, reject Dougherty’s
claims of prejudicial evidentiary errors.”
For plaintiff: Larry Organ and Barbara E.
Figari.
For defendant: Littler Mendelson, Dennis Brown and Erica Kelley.
by Lambden with Kline and Richman
•
•
•
FINDING AN EXPECTATION OF PRIVACY IN SOCIAL NETWORKS
by Eugene Lee
Los Angeles County Superior Court
Judge Yvette Palazuelos recently denied a motion to compel production of a
sexual harassment plaintiff’s Facebook
user name and password. In her ruling,
she wrote:
the production of the user name and
password, which would allow unfettered access to Plaintiff’s account,
is overbroad because it would necessarily lead to a significant amount
of evidence that would not be relevant to Plaintiff’s alleged emotional
injuries. Vaughn Hall v Skateland
Enterprises, Inc., et al., Order Denying in Part Defendants’ Motion to
Compel (Los Angeles Sup. Ct., Case
No. BC458871).
Judge Palazuelos further noted that
production of the plaintiff’s Facebook
user name and password would necessarily impact the “admittedly still uncertain” privacy rights of those third parties
who had interacted with the plaintiff on
Facebook by, for example, sending
Facebook messages to the plaintiff,
commenting on the plaintiff’s wall, or
tagging the plaintiff in a photo. She held
that those third parties “must be notified
(e.g., by letter or e-mail) and given an
opportunity to either consent or object,
before discovery responses revealing
their private information [are produced],
and parties cannot waive such rights of
third parties”.
Judge Palazuelos’ ruling acknowledges
what most social networking users already know: that for better or worse, the
posting of highly intimate content in
social networking which people expect
to remain private has become a widely
accepted community norm.
To be sure, social networking has had
its share of hype. But there is no denying that it’s here to stay, and is quickly
becoming the communication mode of
choice for its users. Pew Internet Research reports that 65% of adult internet
users are now social networking users.
At last count, Facebook users numbered 845 million, and active Twitter
users numbered 100 million. Social net-
working is threatening to overtake email
as a communication tool, especially
among younger demographics. According to PEW Research, 67 percent of
social networking users say that they
use it to stay in touch with current
friends and family members, while 50
percent use it to re-connect with old
friends.
Another big trend: smartphones, not
computers, are increasingly the devices
favored by social network users. According to Nielsen, U.S. teens aged 13
to 17 have shown a 256 percent increase in mobile data usage over the
past year. Go-Globe reports that the
main uses of smartphones are text
messages (92 percent), emails (76 percent), and social networking (59 percent).
Newspapers are filled with accounts of
people getting caught making embarrassing social networking posts about
work. Emma Short, a travel agent, was
fired for posting about her co-worker on
Facebook: “[I have] never been so angry
or annoyed and I swear to god I
will smack the brown-nosing cow in the
face before the end of my shift!!!!!”
Kimberely Swann, an office clerk, was
fired for posting in Facebook: “all i do is
shred holepunch n scan paper!!! omg! .
. . im so totally bord!!!” Connor Riley, a
summer internship applicant at Cisco,
unwisely twittered: “Cisco just offered
me a job! Now I have to weigh the utility
of a fatty paycheck against the daily
commute to San Jose and hating the
work.”
Spoliation of Facebook evidence also
recently made the news in spectacular
fashion. In Lester v Allied Concrete Co.
(Va Cir Ct 2010) 80 Va Cir 454, a highprofile Virginia plaintiff’s lawyer, Matt
Murray, ordered his personal injury client, the widower of a tragically killed
young woman, to remove from his
Facebook account certain post-death
photos. The photos included one of him
holding a can of beer and wearing a
garter belt on his head and a “I [love] hot
moms” t-shirt. Mr. Murray then lied about
it to the court. The judge punished the
-16-
intentional spoliation by reducing the
$10 million wrongful death award by
$4.13 million, and approving an additional clawback of $722,000 in legal
fees, of which the judge ordered Mr.
Murray to personally pay $522,000.
That sanction is perhaps the largest
ever against an attorney in an e-discovery matter. Mr. Murray subsequently
retired from the law while under an
ethics investigation.
Social networking is undoubtedly a rich
source of evidence for both plaintiff and
defense as they use it to establish
witness impeachment, emotional distress and disability impeachment, managing agent ratification, harasser/discriminator pattern or practice and state
of mind, fraudulent intent, etc. Social
networking is also becoming a costeffective tool for locating percipient witnesses and similarly-situated comparators to obtain declarations and serve
deposition subpoenas.
But for all of the usefulness of social
networking content in discovery, courts
have recently been wrestling with the
question: is there a reasonable expectation of privacy in social networking
communications, and if so, where
should the line be drawn in discovery?
The typical social networking account
has both a public-facing portion that is
open to the world, and, depending on
privacy settings, a non-public portion
that is accessible only to chosen friends
and family. Clearly there is no reasonable expectation of privacy in the public-facing portion. The more difficult question regards the non-public portion.
According to a phone survey of 2,277
adults conducted in April and May 2011
by the Pew Internet & American Life
Project, people are proactively managing their social networking privacy settings and online reputations more aggressively than they were two years
ago. For example, 44 percent of respondents said in 2011 that they deleted comments from their profile on a
social networking site, compared to 36
(Cont'd on Page 17, PRIVACY)
PRIVACY
(From Page 16)
percent in 2009. The Pew report also
shows that social networking users are
increasingly engaging in “profile pruning.” Nearly two-thirds of respondents
said in 2011 that they had deleted
“friends,” up from 56 percent in 2009.
Respondents in 2011 stated that they
are removing their names from more
photos they have been “tagged” in than
they did in 2009. In short, the Pew
findings suggest social network users
do care about their online privacy and,
given the tools, will try to protect it.
Because social networking discovery is
a new phenomenon, few courts have
addressed the question of social networking privacy. Those that do, occupy
both ends of the spectrum.
Moreno v Hanford Sentinel, Inc. Only
one California Court of Appeal case has
touched on the issue, and the Fifth
District’s opinion raises more questions than it answers. In Moreno v
Hanford Sentinel, Inc. (2009) 172 CA4th
1125, the plaintiff had posted an article
that was highly critical of her hometown, Coalinga, on her Myspace page.
Six days later, the plaintiff deleted the
article, but not before the principal of
Coalinga High School had copied the
article and submitted it to the editor of
the local newspaper. The editor republished the article in the paper and identified the plaintiff by name. The plaintiff
and her family were subjected to death
threats, a gunshot, and the loss of their
family business. The plaintiff sued the
paper for invasion of privacy. The trial
court sustained a demurrer and the
plaintiff appealed.
The Fifth District upheld the trial court’s
ruling, reasoning that, by posting to
Myspace, the plaintiff had made her
article “available to any person with a
computer and thus opened it to the
public eye. Under these circumstances,
no reasonable person would have had
an expectation of privacy regarding the
published material.” Id. at 1130. The
plaintiff had “opened the article to the
public at large,” and her “potential audience was vast.”Ibid.
The import of Moreno is difficult to evaluate because a critical fact is missing
from the decision: namely, whether the
plaintiff had posted the article in the
public or the non-public portion of her
Myspace account. Had it been in the
public portion, then the Moreno decision is unremarkable. If it was in the
non-public portion, however, then Moreno
stands for the more controversial proposition that there is no reasonable expectation of privacy even in non-public
social networking content. (Certain
statements in the opinion suggest that
the article was posted in the public
portion of Moreno’s Myspace account,
but in the absence of a definitive statement either way, it is difficult to say
what Moreno stands for.)
Mackelprang v Fidelity National Title
Agency (D Nev, Jan. 9, 2007, 2:06-CV00788-JCM) 2007 WL 119149, an unpublished federal trial court discovery
ruling, is one of the earliest cases to
have addressed social media discovery. In Mackelprang, the plaintiff was
suing her employer for emotional distress arising out of, among other things,
sexual harassment. The defendant
learned that the plaintiff had two
Myspace accounts and attempted to
subpoena the content directly from
Myspace.com. When Myspace.com
refused to produce non-public content,
the defendant asked the plaintiff to provide a letter of consent to disclosure to
Myspace.com, but the plaintiff refused.
The defendant then moved to compel
production of private messages in both
of the Myspace accounts. The court
denied the motions, finding that the
defendant was able to show “nothing
more than suspicion or speculation as
to what information might be contained
in the private messages,” i.e., it was a
classic “fishing expedition.” Ibid. The
court further noted that requiring the
plaintiff to give Myspace.com her consent to disclosure of all social media
content would:
cast too wide a net for any information that might be relevant and discoverable. It would, of course, permit
Defendants to also obtain irrelevant
information, including possibly sexually explicit or sexually promiscuous email communications between
Plaintiff and third persons, which are
-17-
not relevant, admissible or discoverable. Ibid.
Finally, the court noted that the defendant had not yet attempted to obtain
relevant social media content through
“properly limited requests for production of relevant email communications.”
Ibid. (emphasis in original). While
Mackelprang is well-reasoned, the court
did not specifically address whether the
plaintiff had a reasonable expectation of
privacy in her non-public social networking content.
Romano v Steelcase Inc. (N.Y. Sup.
Ct. Sept. 21, 2010) 2010 NY Slip Op
20388, 1 is one of a trio of out-of-state
trial court rulings that has been getting
attention recently. An unpublished New
York trial court discovery order, Romano
involved a plaintiff who had sued the
defendant for, among other things, loss
of enjoyment of life due to injuries sustained in a fall in a chair manufactured
by the defendant. The New York trial
court considered the defendant’s motion to compel full disclosure of the
plaintiff’s non-public Facebook and
Myspace content. The defendant argued that certain information contained
in the public portions of the plaintiff’s
Facebook and Myspace pages contradicted the plaintiff’s claims regarding
the extent and nature of her injuries,
particularly her claim for loss of enjoyment of life, justifying access to the
non-public portions. The trial judge
agreed and granted the defendant’s
motion, finding that:
In this regard, it appears that
Plaintiff’s public profile page on
Facebook shows her smiling happily in a photograph outside the
confines of her home despite her
claim that she has sustained permanent injuries and is largely confined to her house and bed. In light
of the fact that the public portions of
Plaintiff’s social networking sites
contain material that is contrary to
her claims and deposition testimony, there is a reasonable likelihood that the private portions of her
sites may contain further evidence
such as information with regard to
PRIVACY
(From Page 17)
her activities and enjoyment of life,
all of which are material and relevant to the defense of this action.
Id. at 3.
McMillen v Hummingbird Speedway,
Inc. (Pa. County Ct. Sept. 9, 2010)
2010 Pa. Dist. & Cnty. Dec. LEXIS 270,
the second of the trio of cases, is an
unpublished Pennsylvania trial court
discovery order. In McMillen, the plaintiff
was taking a cool-down lap following a
stock car race when the defendant rearended him, causing the plaintiff substantial injuries, including inability to
enjoy life. When the defendant reviewed
the public portion of the plaintiff’s
Facebook page, he found comments
about a fishing trip and attendance at
the Daytona 500 that were inconsistent
with the plaintiff’s claim of inability to
enjoy life. The defendant filed a motion
to compel disclosure of the plaintiff’s
Facebook “user name,” “login name,”
and “password” so as to “determine
whether or not plaintiff has made any
other comments which impeach and
contradict his disability and damages
claims.” The trial judge granted the
motion, declining to find a “social network site privilege” in Facebook content.
Zimmerman v Weis Markets, Inc. (Pa.
County Ct. May 19, 2011) 2011 Pa.
Dist. & Cnty. Dec. LEXIS 187, the third
case, is, like McMillen, an unpublished
Pennsylvania trial court discovery order. In Zimmerman, the plaintiff sued for
pain, suffering, and the “embarrassment” caused by leg scars that had
resulted from a forklift accident. The
defendant filed a motion to compel disclosure of the plaintiff’s Facebook and
Myspace “user names”, “login names,”
and “passwords,” based on the presence of impeaching photos of the plaintiff in the public portions of those accounts. The photos, taken after the
accident, depicted the plaintiff wearing
shorts and exposing his legs, and the
defendant argued that the presence of
those photos suggested that additional
impeaching material would be found in
the private portions of the accounts. The
trial judge granted the motion, citing
Romano and McMillen for the proposition that “no privilege exists in Pennsylvania for information posted in the nonpublic sections of social websites, liberal discovery is generally allowable,
and the pursuit of truth as to alleged
claims is a paramount ideal.”
discovery procedures that have been
followed by attorneys for years.
Despite this holding, the Zimmerman
court added a footnote emphasizing
that the party seeking social media user
names and passwords should be required to first establish a “factual predicate for the examination of the nonpublic portions of social networking sites.
So called ‘fishing expeditions’ will not
be authorized.” Id. at n. 8. The court
presumably had in mind a showing of
impeaching information in the public
portions of social networking, suggesting the existence of additional impeaching information in the non-public portions, a thread common to all of the
Romano line of cases.
The road ahead for California. Pending clear guidance from higher courts or
the legislature, California trial courts will
be left to their own devices as they
grapple with an increasing number of
social networking discovery disputes.
The threshold question to be answered
is whether there is any reasonable expectation of privacy in social networking
content.
Reaction to the Romano line of cases.
The Romano line of cases has not been
well received by legal commentators. In
“Discovering Facebook: Social Network
Subpoenas and The Stored Communications Act,” Harvard Journal of Law &
Tech., Vol. 24, No. 2, Spring 2011,
commentator Ryan Ward noted that
“the [Romano] court’s order granted the
defendant overly broad access to the
plaintiff’s social network accounts. Instead, discovery should have been narrowly tailored to information related to
the case.” Ward further noted:
The [Romano] court relies heavily
on Facebook’s claim that “if you
disclose personal information in
your profile . . . this information may
become publicly available.” . . . By
reasoning that the mere possibility
of information becoming publicly
available removes any reasonable
expectation of privacy, Judge Spinner reads the word “reasonable” out
of the legal standard for privacy.
Likewise, in “Privacy’s Role in the Discovery of Social Networking Site Information,” 64 SMU L. Rev. 1433, 1454
(2011), commentator Kelly Ann Bub
observed:
By requiring that total access to a
person’s account be turned over to
the opposing party, the [Romano
and McMillen courts] demonstrated
profound neglect of the very sensitive nature of much of the content
stored on a user’s SNS profile as
well as abandonment of the routine
-18-
Those who follow the Romano line of
cases from New York and Pennsylvania
will emphasize that even the non-public
portions of social networking are utterly
insecure. They will point to the privacy
policies of social networking providers,
which warn users that posting on social
networking accounts carries with it an
inherent risk of inadvertent disclosure
and republication. They will also point to
the fact that the raison d’etre of social
networking is the sharing and distribution of content, which inherently jeopardizes privacy.
Certainly the risk of inadvertent disclosure and republication of non-public
social networking content is far from
theoretical. News media recently reported on Paul Withee, a high school
football coach in Maine who posted a
nude picture of himself on Facebook for
his girlfriend. Although the picture was
up for only ten minutes, a student who
had friended Mr. Withee on Facebook
accessed the picture and showed it to
his parents. The result: Mr. Withee was
fired, becoming the latest social networking cautionary tale to make the
rounds on the Internet.
Nevertheless, California case law has
long recognized a robust right of privacy
under Article I, § 1 of the California
Constitution, which was amended in
1972 to include the right of privacy
among the “inalienable” rights of Californians. In Santa Barbara v Adamson
(1980) 27 C3d 123, the California Supreme Court observed:
The right of privacy is the right to be
left alone. It is a fundamental and
compelling interest. It protects our
homes, our families, our thoughts,
PRIVACY
(From Page 18)
our emotions, our expressions, our
personalities, our freedom of communion, and our freedom to associate with the people we choose.
Santa Barbara v. Adamson, 27 C3d
at 130
Consistent with Adamson, California
case law has expanded the right of
privacy to a wide range of areas and
activities: Kahn v Superior Court. (1987)
188 CA3d 752 (academic employment
process); Rancho Publications v Superior Court (1999) 68 CA4th 1538 (anonymous political speech); Craig v Municipal Court (1979) 100 CA3d 69 and
Denari v Superior Court. (1989) 215
CA3d 1488 (arrest records); Britt v Superior Court (1978) 20 C3d 844, 852 and
Olympic Club v Superior Court (1991)
229 CA3d 358, 362 (associational privacy); Pioneer Electronics v Superior
Court (2007) 40 C4th 360 (class member
information); San Diego Trolley, Inc v
Superior Court (2001) 87 CA4th 1083
(personnel records); Valley Bank of
Nevada v Superior Court (1975) 15 C3d
652 (financial affairs); Tylo v Superior
Court (1997) 55 CA4th 1379 (marital
relationships); Heda v Superior Court
(1990) 225 CA3d 525 (medical records);
Susan S. v Israels (1997) 55 CA4th 1290
(psychiatric records); Vinson v Superior Court (1987) 43 C3d 833 (psychiatric exams); Planned Parenthood Golden
Gate v Superior Court (2000) 83 CA4th
347 (addresses and phone numbers);
Barrenda v Superior Court (1998) 65
CA4th 794 (sexual behavior).
While California courts do recognize a
balancing test to determine whether a
compelling need for disclosure outweighs the right to privacy, the requirements of that test are stringent. The
Supreme Court has explained that the
California Constitution “does not purport to prohibit all incursion into individual privacy but rather that any such
intervention must be justified by a compelling [public] interest.” Santa Barbara
v Adamson (1980) 27 C3d 123, 131.
California case law establishes that a
trial court may compel disclosure only
where the information sought is “directly relevant” to a claim or defense
and “essential to the fair resolution of
the lawsuit.” Britt v Superior Court (1978)
20 C3d 844, 859. Moreover, even where
disclosure is compelled, it must be
“narrowly drawn to assure maximum
protection of the constitutional interests at stake.” Britt v Superior Court
(1978) 20 C3d 844, 859.
Ultimately, a right exists where there is
a reasonable expectation of privacy,
considering widely accepted community norms. Intl. Federation of Prof. and
Tech. Eng., Local 21 v Superior Court
(2007) 42 C4th 319, 331; Vo v City of
Garden Grove (2004) 115 CA4th 425,
448, (citing Hill v National Collegiate
Athletic Assn. (1994) 7 C4th 1, 37).
When it comes to non-public social
networking content, there is no denying
that people do in fact expect privacy.
Social networking privacy settings have
become increasingly sophisticated,
empowering users to exercise fine control over which friends and acquaintances are able to access specific photos,
wall posts, messages, and comments,
thereby substantially reducing the risk
of a privacy breach. Users who activate
those settings and then proceed to
publish intimate photos, videos, comments, and posts to lovers, family members, and acquaintances, typically do
so with the expectation that their
postings will remain private. According
to a November 2011 Posterous-Harris
Interactive study, 64 percent of social
media users felt that family photos were
for private sharing. That same view was
held by 56 percent of users with respect
to photos of themselves, and by 53
percent concerning comments left on
others’ photos and posts. Privacy expectations concerning status updates
and photos of friends were slightly less
widely held, at 49 percent and 46 percent respectively.
Legal commentators have similarly
noted:
First, SNS [social networking sites]
bring with them a “perceived sense
of privacy.” The act of “participating
in social networking encourages the
revelation of intimate details about
the participant’s life” such that “despite the warnings and potential
privacy dangers, users reveal intimate personal information through
social networks to fulfill their innate
human social needs.” Second, SNS
allow for complex privacy setting
options that act as a set of controls
to help limit access to information…
-19-
Although the terms and use policies
may try to warn users that there is
potential for their information to be
made publicly available, even reasonable people may end up being
misled since the site’s privacy settings make statements such as
“conversations within Facebook
[messages] are absolutely private.”
Kelly Ann Bub, “Privacy’s Role in
the Discovery of Social Networking
Site Information,” 64 SMU L. Rev.
1433, 1458-1459 (2011).
Anecdotal evidence corroborates this
general expectation of privacy in social
networking content. In a recent case of
mine, opposing counsel contended
throughout discovery that there was no
reasonable expectation of privacy in
social networking. But this same opposing counsel caused the adjournment of a witness deposition when she
interrupted my examination concerning
a directly relevant photo—-of the alleged sexual harasser kissing a subordinate—-that the witness had posted
on her Myspace page. Defense counsel
contended that my questions constituted an invasion of the witness’s privacy, causing the witness to become
visibly upset. (I have observed other
witnesses reacting with open-mouthed
disbelief when asked to disclose their
social networking user names and passwords in deposition.)
As social networking evidence becomes
increasingly prominent in litigation, and
online privacy comes under growing
siege, it will be up to the trial courts on
the front lines of discovery battles to
recognize and shape this expectation
of privacy. Judge Palazuelos’s ruling
represents a step in the right direction.
Eugene Lee is a CELA member and
plaintiff’s employment lawyer with offices in Los Angeles. He has obtained
numerous 6- and 7-figure judgments
and settlements for employees throughout California. His practice areas include overtime, breaks, class actions,
sexual harassment, discrimination, retaliation, and wrongful termination. His
employment law blog appears at
www.CALaborLaw.com.
•
•
•
NELA NEWS
“On The Hill.”
Judicial nominations. As of April 13,
Republican filibusters and obstructionism have resulted in 99 current vacancies in the nation’s district and appellate courts, and 27 jurisdictions being
designated as “judicial emergencies,”
meaning there are not enough sitting
judges to hear on a timely basis the
number of cases filed each year. NELA’s
Judicial Nominations Program plays a
key role in addressing the judicial vacancy crisis. On April 11, 2012, Eric M.
Gutierrez, NELA’s Legislative & Public
Policy Director, met with Christopher
Kang, Special Assistant to the President, Office of White House Counsel, to
discuss NELA’s nominations agenda.
The conversation centered on vacancies on the U.S. Court of Appeals for the
Fifth Circuit as well as the U.S. District
Court for the District of Oregon, and the
lack of women judges on the U.S. District Court for the Western District of
New York. To find out more abut NELA’s
Judicial Nominations Committee, go to:
www.nela.org/judicialnominations.
Amicus brief is filed in Kilgore v
KeyBank. On April 2, NELA and its
public interest organization The Employee Rights Advocacy Institute for
Law & Policy, along with CELA, filed an
amicus brief urging the U.S. Court of
Appeals for the Ninth Circuit to grant the
plaintiffs’ petition for rehearing en banc
in Kilgore v KeyBank (2012) 673 F3d
947 [summarized in CELA Bulletin,
March 2012, p.8]. In this case, in which
the plaintiffs are seeking only a public
injunction to prohibit the defendant from
continuing to break state law, a Ninth
Circuit panel held that an arbitration
clause had to be enforced even though
it would have the effect of preventing
consumers from pursuing their rights
under a state consumer protection statute. The court held that the Supreme
Court’s decision in AT&T Mobility v
Concepcion requires the conclusion that
the FAA preempts California’s rule prohibiting the arbitration of claims for broad
public injunctive relief. The panel held
that while the FAA would block the
enforcement of an arbitration clause
that deprives individual of federal statutory rights, state statutory rights can be
swept away by any form contract. The
plaintiffs and amici contend that such a
ruling contravenes U.S. and California
Supreme Court precedent. Moreover,
the Ninth Circuit’s mistaken assertion
that the FAA protects only federal and
not state statutory rights threatens to
allow employers (and other defendants)
to force their employees into arbitration
agreements that undercut non-waivable
state statutory protections. We thank
our author Ellen Lake (Oakland) for
excellent work on the brief, as well as
Cliff Palefsky (San Francisco) for his
invaluable contributions. (The brief is
available on NELA’s website,
www.nela.org.)
Knepper v Rite Aid Corporation (3d
Cir 2012) 2012 WL 1003515, represents the latest federal circuit court
decision rejecting the argument that a
worker cannot simultaneously pursue
overtime claims as both a “collective”
action under the FLSA and a class
action under a state’s overtime laws. In
so holding, the Third Circuit agreed with
the position that has been taken by
Second, Seventh, Ninth, and D.C. Circuits. The Third Circuit adopted many of
the arguments emphasized in NELA’s
amicus brief, authored by David Borgen,
Jason Tarricone, and Roberto
Concepcion of Goldstein, Demchak,
Baller, Borgen & Dardarian (Oakland),
which was joined by the National Employment Law Project and other workers’ rights organizations. NELA member Pete Winebrake (Dresher PA) argued for the employees, and the U.S.
Department of Labor also briefed and
argued the case in support of the plaintiffs.
Proposed changes to the FMLA regulations. On January 30, 2012, the U.S.
Department of Labor announced proposed changes to the FMLA regulations affecting military family leave, flight
crew FMLA eligibility, and the manner
in which employers calculate increments
of FMLA leave. NELA will submit comments that will focus on ensuring that
the proposed regulations are consistent with current language and defini-20-
tions outlined in the Uniformed Services
Employment and Reemployment Rights
Act (USERRA) as well as the FMLA.
For their work on crafting NELA’s comments, our thanks go to NELA members Kathryn S. Piscitelli, NELA’s
USERRA Advisor, and Elizabeth
Kristen, Director of the Gender Equity &
LGBT Rights Program and Senior Staff
Attorney for the Legal Aid Society-Employment Law Center (San Francisco).
•
•
•
EEOC NEWS
• On April 20, the EEOC ruled, in a
landmark decision, that a complaint of
discrimination based on “gender identity, change of sex, and/or transgender
status” is cognizable under Title VII.
Macy v Bureau of Alcohol, Tobacco,
Firearms and Explosives, EEOC Appeal No. 0120120821.
• On March 30, the EEOC published the
“Final Regulation on Disparate Impact
and Reasonable Factors Other than
Age” under ADEA. 77 Fed Reg 19030.
The Regulations take effect on April 30.
• On April 25, the EEOC issued an
updated Enforcement Guidance on
employer use of arrest and conviction
records in employment decisions under
Title VII. See www.eeoc.gov
•
•
•
Published
Monthly
BULLETIN
May 2012
Vol. 26, No. 5
CALIFORNIA
SUPREME COURT
SUPREME COURT WILL
REVIEW FIRST DISTRICT
DECISION THAT REVERSED $15
MILLION VERDICT ON
MISCLASSIFICATION CLAIMS BY
BUSINESS BANKING OFFICERS
DURAN v U.S. BANK NATIONAL
ASSOCIATION. On May 16, the California Supreme Court granted review in
the case in which the First District
reversed a $15 million verdict on claims
by 260 current and former business
banking officers who allege that they
were misclassified as outside sales
personnel exempt from overtime pay
requirements. The First District, in a
February 6, 2012 opinion by Dondero,
held that the plaintiffs’ random sampling methodology deprived the defendant of the right to present an affirmative
defense to classwide liability. The First
District’s opinion appeared at 203 CA4th
212, 137 CR3d 391, and was summarized in CELA Bulletin, Feb 2012, p.3.
For plaintiffs: Ellen Lake, Edward J.
Wynne, and J.E.B. Pickett.
For defendant: Carlton diSante &
Freudenberger,
Timothy
M.
Freudenberger, Alison L. Tsao, and
Kent J. Sprinkle.
Cal SC, 5/16/12; 2012 WL 1860854
(granting review).
LEGISLATIVE UPDATE
by Mariko Yoshihara
May has been an exciting month for
CELA at the Capitol. The governor
announced the appointments of two
CELA Board Members, Virginia Keeny
and Jeff Winikow, to the Los Angeles
Superior Court Bench, and the appointment of CELA’s Public Employment Committee Co-Chair, Dale
Brodsky, to the Fair Employment and
Housing Commission. In addition,
three of our sponsored bills passed out
of their houses of origin, and we helped
defeat the last batch of anti-employee,
tort-“deform”
that were intro"Findingmeasures
an Expectation
duced earlier this year.
month as the Governor unveiled his
May Revision Budget Proposal, which
included an additional $544 million cut
to the courts and the elimination or
consolidation of various state labor,
employment, and civil rights agencies.
The plan proposes to offset court cuts
by using trial court reserves, by delaying court construction projects, and by
increasing the retirement contributions
for state court employees. The plan’s
government restructuring plan involves
eliminating state agencies such as the
Fair Employment and Housing Commission, the Commission on the Status of Women, the Law Revision Commission, and Unemployment Insurance
Appeals Board, among others, and
Some unfortunate news came this
Networks,"
byMay
CELA
Governor’s
memberBudget
Eugene
Lee,
Revision
Proposal
begins on Page 16.
MESSAGE FROM THE
CELA CHAIR: CELA
GOVERNANCE
Dear CELA Members:
We are very pleased about the pending
appointments of Virginia Keeny and
Jeff Winikow, two of our current Board
members, to the Los Angeles County
Superior Court bench. We are also sad
to report the resignation of Jim
Stoneman from the Board. In part as a
result of these openings on the Executive Board, CELA is soliciting nominations for new Board members.
CELA is governed through an appointed
Board, and in order to make appointments we must reconstitute our Nominating Committee and solicit nominations.
Nominating Committee. We need
three volunteers for the Nomination
Selection Committee. The Nominating
Committee will review nominations from
the membership, sift through board
(Cont'd on Page 8, BOARD)
TWO CELA MEMBERS
ARE APPOINTED TO LOS
ANGELES SUPERIOR
COURT BENCH
On May 18, Governor Brown appointed
CELA Board members Virginia Keeny
and Jeff Winikow to the Los Angeles
County Superior Court bench. Both
Virginia and Jeff have served CELA for
many years. Virginia is our most immediate past Chair, and Jeff has long
This
issue
of the
CELA
served
as Chair
of our
Amicus
Committee,
and is a past
recipient
of our annual
Bulletin
is being
distributed
Joe Posner
Award.
congratuto Judges
andCELA
Justices
lates Judges Keeny and Winikow on
California,
theirthroughout
appointments,
and wishesas
them
great
success
their new
lives on the
well
as to in
CELA
members.
bench.
DECISIONS
(From Page 1)
CALIFORNIA COURTS
OF APPEAL
REJECTING LMRA PREEMPTION,
CLAIMS FOR VIOLATION OF
LABOR CODE § 221 AND
WRONGFUL CONSTRUCTIVE
DISCHARGE IN VIOLATION OF
PUBLIC POLICY
SCIBORSKI v PACIFIC BELL DIRECTORY. Rejecting the defendant’s LMRA
preemption argument and affirming a
judgment on a verdict for the plaintiff on
a claim for violation of Labor Code section 221, the Fourth District, Division
One, wrote in part as follows in a May 8
opinion by Haller:
“Annie Sciborski sued her former employer ... challenging Pacific Bell’s actions in deducting approximately
$19,000 from her wages to [begin]
recover[ing] a $36,000 sales commission paid to her [in error, according to
Pacific Bell]. After a three-day trial, a
jury found Pacific Bell’s wage deductions violated Labor Code section 221
and resulted in Sciborski’s constructive
discharge in violation of public policy.
The jury awarded Sciborski $36,000 in
lost earnings, but found Sciborski did
not prove her claimed future economic
loss and emotional distress damages.
The court awarded Sciborski attorney
fees based on her prevailing on the
Labor Code section 221 claim.
“Pacific Bell appeals, contending
Sciborski’s claims were preempted by
federal law under section 301 of the
[LMRA]. Pacific Bell maintains
Sciborski’s claims are preempted because she was a union member governed by a collective bargaining agreement and a consideration of her claims
required the court to interpret this agreement. We reject this contention.
Sciborski’s claims are not preempted
because they arose from independent
state law and did not require the interpretation of the [CBA].
“In Pacific Bell’s appeal and Sciborski’s
cross-appeal, each party challenges
the attorney fees award. Pacific Bell
contends Sciborski was not entitled to
the fees and the amount awarded was
unreasonable. Sciborski contends the
court erred in refusing to apply a multiplier... In the unpublished portion of the
opinion, we reject these challenges...
“On April 2, 2008, Sciborski resigned
from her employment to prevent Pacific
Bell from making additional deductions
from her paycheck... [¶] Soon after
resigning, Sciborski filed a complaint
against Pacific Bell alleging the deductions: (1) violated applicable wage statutes, including Labor Code section 221;
(2) constituted a breach of contract; and
(3) resulted in her constructive discharge
in violation of public policy. Labor Code
section 221 generally prohibits an employer from deducting earned amounts
from an employee’s wages.
“Within two months, Pacific Bell removed the action to the federal district
court under section 301’s complete preemption doctrine... Pacific Bell maintained that Sciborski’s claims arose
from the breach of a collective bargaining agreement...
“[T]he district court granted Sciborski’s
motion and ordered the case remanded
to the state court... [T]he court ruled
that neither the Labor Code section 221
claim nor the constructive discharge
claim was preempted by section 301...
“Four months after the remand, Pacific
Bell moved for summary judgment essentially on the same preemption
grounds. The court (Judge Charles
Hayes) denied the motion, finding there
was no federal preemption... [¶] Pacific
Bell later brought a cross-complaint
against Sciborski for breach of contract, seeking the remaining portion of
the $36,000 sales commission paid to
her...
“After several days of deliberations, the
jury found Sciborski proved both of her
causes of action. On the Labor Code
section 221 claim, the jury found
Sciborski satisfied ‘all of the conditions
necessary to earn [the disputed] commission...’ On the constructive discharge
claim, the jury found Sciborski resigned
from her employment because Pacific
Bell deducted her ‘earned wages’ and
these deductions ‘made [the] condi(Cont'd on Page 3, DECISIONS)
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
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Suite. 300
Tel: (310) 551-3020
Director:
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Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
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Tel: (916) 442-5788
EXECUTIVE BOARD
(Santa Monica)
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(Pasadena)
Scot Bernstein
(Folsom)
Noah Lebowitz
(San Francisco)
David DeRubertis
(Studio City)
Cynthia Rice
(San Francisco)
Maria Diaz
(Fresno)
Mika Spencer
(San Diego)
David Duchrow
(Santa Monica)
James P. Stoneman
(Claremont)
Wilmer Harris
(Pasadena)
Deborah Vierra
(Ventura)
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(San Francisco)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Jeffrey Winikow
(Los Angeles)
Bulletin Editor
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842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
tions so intolerable that a reasonable
person ... would have no reasonable
alternative except to resign.’...
“On appeal, Pacific Bell does not challenge that the Labor Code section 221
claim arose from independent state
law, but argues the law is preempted
because the jury was required to interpret provisions of the CBA to determine
whether Sciborski proved her claim that
Pacific Bell violated the code section...
[¶] Pacific Bell contends that Sciborksi’s
Labor Code section 221 claim was
preempted because: (1) Pacific Bell
was legally entitled to recoup the ...
commission if it was an advance; and
(2) the determination whether the commission was an ‘advance’ or ‘earned’
depended on an interpretation of the
CBA...
“We reject this argument... [T]he determination of whether Sciborski ‘earned’
the commission did not require the
court or jury to interpret an express
provision of the CBA. To the extent
there was a dispute over Pacific Bell’s
claim that an implied provision supported the recoupment based on Pacific Bell’s clerical error in assigning the
account, this provision was unenforceable under California law. Thus, there
was no need for interpretation because
the issue was whether the asserted
implied provision of the CBA complied
with state law, and not the meaning of a
particular CBA provision.
“At trial, Pacific Bell witnesses acknowledged there was no express provision in the CBA providing that a commission is not earned if it is later determined that there was an employer clerical error that caused an improper assignment. However, Pacific Bell argued
that such a contractual condition could
be implied from the ‘Commission Adjustment’ provision in the CBA and from
provisions in the Market Selection document that set forth rules for customer
account assignments...
“We agree that the CBA (and incorporated documents) contain detailed and
complicated rules for assigning employees to particular customer accounts, and that disputes regarding the
meaning of these provisions require
interpretation of the CBA. However, the
fundamental issue for the jury’s deter-
mination in this case was not the nature
of these assignment rules... Sciborski
did not specifically challenge Pacific
Bell’s claim that a clerical error may
have occurred in her assignment. Instead, she argued that the
misassignment based on Pacific Bell’s
admitted clerical error was not a proper
basis for concluding that she did not
earn the commission...
discussed above, we reject this argument.
“Absent an express provision..., Pacific
Bell was not entitled to unilaterally
declare that the commission was not
earned and use self-help measures to
deduct funds from Schiborski’s wages
that had already been paid to her. Under
California law, employers and employees may agree that an employee must
satisfy certain conditions before earning a sales commission and an employer may recoup an advance if these
conditions are not satisfied. However,
to rely on those conditions as a basis
for recouping an advance paid for a
commission, the condition must be
clearly expressed and generally must
be set forth in writing. [cites omitted.]
“In her moving papers, Sciborski requested $436,732.50, reflecting a ... 1.5
multiplier. [¶] In support Sciborski submitted the detailed declaration of her
counsel, Joshua Greenberg, who stated
that he is a highly experienced employment law attorney and has a $450 hourly
billable rate. Gruenberg stated that he
represented Sciborski on a contingent
basis and financed the case ‘at a great
risk to myself and my practice.’ He
summarized his work on the case, including that the case involved nine depositions, multiple sets of discovery, and
the review of thousands of documents.
He stated the case was ‘extremely timeconsuming,’ requiring him to turn down
many other cases...
“Under these principles, Pacific Bell’s
argument that the jury was required to
interpret implied provisions in the CBA
to determine whether Pacific Bell had a
legal right to recoup Sciborski’s commission is unsupported by California
law. Because the claimed disputed
provisions of the CBA were irrelevant to
Sciborski’s right to recover on her state
law claim, they do not support section
301 preemption...
“In addition to her statutory claim,
Sciborski brought a claim for wrongful
constructive discharge in violation of
public policy... An employer who fails to
pay an employee his or her wages, or
engages in unlawful wage deductions,
violates public policy. (See Gould v.
Maryland Sound Industries, Inc. (1995)
31 Cal.App.4th 1137, 1147.) The jury
found (and Pacific Bell does not challenge the finding) that Sciborski was
constructively discharged because of
the wage deductions.
“On appeal, Pacific Bell contends California wrongful discharge law was preempted by federal law... This contention is identical to the argument raised
with respect to Sciborksi’s Labor Code
section 221 claim, and for the reasons
-3-
“The court awarded Sciborski $291,155
in attorney fees based on her prevailing
on the Labor Code section 221 claim...
[W]e conclude Sciborski was entitled to
the fees and reject the parties’ contentions that the court abused its discretion
in the amount of the award.
“In response, Pacific Bell claimed the
fee request was ‘exorbitant’ and unsupported for numerous reasons, including
the hourly fees were excessive, the
hours expended were unreasonable, and
the amount of the fees was not proportionate to the damages awarded. Pacific
Bell also argued that Sciborski was not
entitled to any fee award because the
jury did not specifically award her damages on her statutory claim.
“We agree with Pacific Bell that the
$291,155 attorney fee award, on its
face, appears to be excessive when
compared to the relatively minimal
$36,000 damage award. However, the
issue whether a lodestar amount is reasonable does not involve only a facial
comparison... The inquiry instead considers whether the amount of time spent
by the moving party’s counsel was warranted under the circumstances and
whether the fee charged was reasonable. Applying this analysis, the award
was within the court’s discretion...
“We [also] agree the degree of success
... is an important factor... However, the
record shows the court did consider this
DECISIONS
(From Page 3)
factor, but decided that, on balance, it
did not warrant a reduction in the claimed
fees. The court did not abuse its discretion in reaching this conclusion... particularly because the record reflects
Pacific Bell appeared adverse to engaging in reasonable settlement negotiations and undertook litigation tactics
that increased the complexity of the
case. Moreover, the amount of the jury
award may have been a factor in the
court’s declining to apply a multiplier
and therefore the court was not required
to also reduce the lodestar amount on
the same basis... [¶]Pacific Bell’s argument that the damages were awarded
only for the constructive termination
claim is unsupported by the record. Our
review of the special verdict form confirms that the jury’s damage award applied to both claims.
“Finally, Pacific Bell’s reliance on the
trial judge’s comments at the hearing is
unhelpful. At the hearing, the trial judge
used blunt and colorful language to
express his frustration and the concerns of many in the legal community
with the upward trend of hourly attorney
fees, and the court aggressively challenged Sciborski’s counsel to explain
his rates and certain specific charges.
Sciborksi’s counsel responded to each
of these inquiries... [A]lthough the court
offered some strong statements at the
start of the proceedings, it was entitled
to change its opinion after listening to
counsel’s arguments...
“In her cross-appeal, Sciborski contends the court erred in refusing to apply
a multiplier... [W]e are satisfied that the
court considered all relevant factors in
determining an appropriate fee... The
court did not abuse its discretion in
finding that a multiplier was unwarranted.”
For plaintiff: Joshua D. Gruenberg;
Zachary Tyson; Jon R. Williams.
For defendant: Paul, Plevin, Sullivan &
Connaughton, Michael S. Sullivan, Aaron
A. Buckley, Karin K. Sherr, and Timothy M. Keegan.
by Haller with Benke and Nares
1592546.
JUDGMENT AS MATTER OF LAW
ON UCL CLAIMS CHALLENGING
PAYROLL SERVICE’S METHOD
OF CALCULATING PAY FOR
FRACTIONAL HOURS
ALEKSICK v 7-ELEVEN, INC. “Plaintiff
Kimberly Aleksick, individually and on
behalf of a class of those similarly
situated, appeals a judgment following
an order granting defendant 7-Eleven
Inc.’s motion for summary judgment,”
the Fourth District, Division One, began
in a May 8 opinion by McConnell.
“7-Eleven provides payroll services to
its franchisees. Alkesick contends reversal is required because 7-Eleven’s
payroll system violates both the ‘unlawful’ and ‘unfair’ prongs of Business and
Professions Code section 17200. Specifically, she asserts that 7-Eleven’s
practice of converting any partial hour
worked in a pay period from minutes to
hundredths of an hour sometimes shorts
employees of a few seconds of time,
and commensurate pay, and thus violates Labor Code wage statutes. She
focuses on the following example: 20
minutes is one-third of an hour, and at
an hourly rate of $12, pay should be $4.
When 7-Eleven converts the 20 minutes
to 0.33, however, and multiplies that
figure by $12, pay is $3.96. Aleksick
challenges 7-Eleven’s practice of ignoring numbers more than two places from
the decimal point.
“We affirm the judgment. Aleksick’s
complaint does not allege any statutory
predicate for her Unfair Competition Law
claim of unlawfulness, and she did not
seek leave to amend. Thus, the principle of forfeiture applies. Moreover, even
without forfeiture, she cannot pursue a
UCL claim for unlawfulness because
the Labor Code wage statutes govern
the employee-employer relationship, and
undisputed evidence shows 7-Eleven
was not the class members’ employer.
For the same reason, Aleksick cannot
pursue her claim of unfairness under the
UCL, which is tethered to the public
policy in favor of requiring employers to
comport with Labor Code wage statutes
and promptly and fully pay their employees. The trial court correctly determined
7-Eleven is entitled to judgment as a
matter of law.”
-4-
For plaintiffs: Sullivan & Christiani, William B. Sullivan, Kevin D. Sullivan, Gavin
E. Gruber, and Amber H. T. Gardina.
For defendant: Payne & Fears, Eric C.
Sohlgren; Welter Law Firm, Eric A.
Welter and Laura B. Chaimowitz.
by McConnell with Huffman and
Nares concurring; 2012 DAR 6014,
2012 WL 1589017.
FEHA SUPPORTS CLAIM BY
PARTNER THAT SHE WAS
RETALIATED AGAINST BY
PARTNERSHIP FOR OPPOSING
SEXUAL HARASSMENT OF
PARTNERSHIP’S EMPLOYEES
FITZSIMONS v CALIFORNIA EMERGENCY PHYSICIANS MEDICAL
GROUP. In a May 16 opinion by Pollak,
the First District, Division Three, wrote
in part as follows.
“Plaintiff Mary Fitzsimons appeals from
a judgment in favor of defendant [CEP]
on her complaint for unlawful retaliation
under [FEHA]. She contends the trial
court [Alameda County Superior Court
Judge Yvonne Gonzalez Rogers] erred
in concluding that a partner does not
have standing to assert a claim for
retaliation under the FEHA against his
or her partnership. We agree with plaintiff that the FEHA does support a claim
for retaliation by a partner against her
partnership for opposing sexual harassment. Accordingly, we shall reverse the
judgment and remand for further proceedings.
“CEP is a California general partnership
with approximately 700 partners working in hospital emergency rooms
throughout California. The partnership
is governed by a nine-member elected
board of directors. The emergency doctors at each hospital are supervised by
a medical director appointed by the
board and the hospitals are grouped in
regions supervised by appointed regional directors.
“Plaintiff is an emergency physician
who has been a member of CEP since
1985. In 1987, plaintiff began serving as
CEP’s medical director at Sutter Medical Center in Antioch, California. In June
DECISIONS
(From Page 4)
1999, plaintiff became a regional director... In November 2003, plaintiff was
elected to serve on the CEP Board of
Directors. In October 2004, plaintiff’s
appointment as a regional director was
terminated. Plaintiff was not removed
from the board of directors and continued to work as an emergency physician...
“In May 2006, plaintiff filed a complaint
against CEP, its president and its chief
operating officer alleging causes of action for retaliation in violation of public
policy, breach of contract, breach of the
covenant of good faith and fair dealing,
and breach of fiduciary duty. The complaint alleged CEP removed her from
her position as regional director and
otherwise created a hostile work environment in retaliation for reports she
made to her supervisors that ‘certain
officers and agents of CEP’ had sexually harassed female employees of
CEP’s management and billing subsidiaries. By the time of trial in January
2011, the individual defendants had been
dismissed and the sole remaining cause
of action against CEP was for retaliation
in violation of FEHA and public policy.
“Prior to trial, the court ruled that if
plaintiff was a bona fide partner in CEP,
she did not have standing to assert a
cause of action for retaliation under
FEHA against CEP. Pursuant to CEP’s
motion, the jury trial was bifurcated so
that the jury would first decide whether
plaintiff was an employee or partner.
The jury found that plaintiff was a partner
and the court entered judgment in favor
of CEP. Plaintiff filed a timely notice of
appeal...
“While CEP is not in an employment
relationship with plaintiff, CEP is the
employer of those persons who are the
victims of the alleged harassment that
plaintiff reported, for which she allegedly became the subject of CEP’s retaliation. The harassment of CEP employees, if proven, is an unlawful practice for which CEP is liable under section 12940, subdivision (j). And subdivision (h) makes it an unlawful practice for
CEP to retaliate against ‘any person’ for
opposing that harassment. Interpreting
‘person’ in the context of those against
whom the employer may not retaliate to
include a partner gives the word its
normal meaning and is consistent with
the definition in section 12925, subdivision (d). This interpretation does not
contravene any of the reasons explained
in [Jones v Lodge at] Torrey Pines
[Partnership (2008) 42 C4th 1158] for
excluding supervisors from the scope of
liability. Plaintiff’s claim does not seek
to impose liability on any ‘nonemployer
individual’ but only upon the employer—
the partnership. Upholding plaintiff’s
claim here does not imply that a partner
would have a valid claim for harassment
or discrimination against himself or herself by the partnership...
“[W]e conclude that under the unique
circumstances now before us, plaintiff’s
claim does not fail because she is a
partner in the partnership she alleges
has retaliated against her. [¶] The judgment is reversed and the matter is
remanded for further proceedings consistent with this opinion.”
For plaintiff: Richard C. Raines, Amanda
A. Beck, Gagen, McCoy, McMahon,
Koss, Markowitz & Raines, Danville.
For defendant: Sarah E. Robertson,
Fitzgerald Abbott & Beardsley, Oakland; Paul W. Cane, Jr., Julie Z. Lal,
Paul Hastings LLP, San Francisco.
First Dist Div Three, 5/16/12; opinion
by Pollak with McGuiness and
Siggins concurring; 2012 DAR 6364,
2012 WL 1699850.
A PARTY WHO FAILS TO
PROVIDE ORAL OR WRITTEN
OPPOSITION TO EVIDENTIARY
OBJECTIONS IN THE CONTEXT OF
A SUMMARY JUDGMENT MOTION
IS BARRED FROM CHALLENGING
ADVERSE RULINGS ON APPEAL
TARLE v KAISER FOUNDATION
HEALTH PLAN, INC. In a May 22 opinion by Croskey certified for partial publication, the Second District, Division
Three, wrote in part as follows in an
action alleging constructive discharge
resulting from gender-based mistreatment and retaliation.
“Plaintiff and appellant Patricia Tarle
appeals from the summary judgment
entered in favor of defendants ... in this
employment discrimination action. Tarle
contends the trial court [Judge David L.
Minning] erred in sustaining defendants’
-5-
evidentiary objections to much of the
evidence she submitted in opposition to
the summary judgment motion (and
that such evidence raises a triable issue of material fact). However, Tarle
never provided to the trial court any oral
or written opposition to the bulk of defendants’ objections. This case, therefore, raises the issue of whether, in the
context of a summary judgment motion, a party must provide the trial court
with such opposition to an opponent’s
objections or be barred from challenging on appeal the trial court’s order
sustaining the objections. Although this
precise issue appears to be one of first
impression, we conclude that existing
law compels the result that a failure to
provide such opposition to the trial court
on summary judgment bars a party from
challenging on appeal the trial court’s
order sustaining the unopposed evidentiary objections. In the unpublished portion of this opinion, we determine that,
as both parties are responsible for substantial flaws in the summary judgment
briefing in this case, the proper procedure is to remand with directions for a
properly-briefed summary judgment
motion.
“On December 12, 2008, defendants
filed their motion for summary judgment. It was supported by evidence and
a separate statement of undisputed
facts. Tarle opposed the summary judgment motion. In support of her opposition, Tarle submitted over 750 pages of
evidence. Her evidence included, but
was in no way limited to, so-called ‘me
too’ evidence, testimony from four other
women, who testified to being the victim
of, or observing, discriminatory and/or
harassing conduct from [the supervisors].
“Tarle’s opposition gave rise to a substantial number of evidentiary objections. On May 15, 2009, defendants
submitted 200 pages of objections,
consisting of 335 separate objections.
Most of the objections asserted multiple grounds... Defendants included
many objections to the ‘me too’ evidence. While they interposed specific
objections to specific excerpts from the
testimony, they also objected to the
‘me too’ deposition excerpts in their
entirety on the basis of relevance.
DECISIONS
(From Page 5)
“Defendants’ objections were filed on
May 15, 2009, along with their reply.
The hearing on the summary judgment
motion was set for June 4, 2009. Tarle
did not file any opposition to the objections, nor request a continuance for
additional time in which to prepare a
written opposition.
“Ultimately, the hearing was held on
June 11, 2009. Prior to the hearing, the
parties were provided with the court’s
tentative ruling, which was to grant the
motion for summary judgment. The tentative ruling indicated that 13 of defendants’ objections (identified by number)
were overruled, and the rest were sustained. At the hearing, Tarle’s counsel
specifically argued that sustaining the
objections to the so-called ‘me too’
evidence constituted reversible error.
Tarle did not argue against any of the
other tentative rulings on defendants’
objections.
“The hearing was ultimately continued,
however, to allow for Tarle to receive
additional discovery, and submit additional briefing based on that discovery.
On August 14, 2009, Tarle filed supplemental points and authorities in opposition to the summary judgment motion.
Although the supplemental briefing was
permitted in order to allow Tarle to
address the additional discovery she
had received, she spent the bulk of the
brief addressing the court’s tentative
ruling against her. She again argued for
the admissibility of her ‘me too’ evidence, but did not address other evidentiary rulings.
“A second hearing was held on February 19, 2010. At the hearing, Tarle
argued for the admissibility of the ‘me
too’ evidence, and also argued for the
admissibility of an additional piece of
evidence, against which a hearsay objection had been interposed and tentatively sustained. Tarle did not argue
against any of the other evidentiary
rulings which went against her in the
court’s tentative ruling of the previous
June.
“The trial court adopted its tentative
ruling and granted the motion for summary judgment. The court concluded
that Tarle could not establish a prima
facie case of gender discrimination.
Specifically, the court concluded that
there had been no adverse employment
action or constructive discharge, and
there was no evidence of discriminatory
motive. Similar conclusions were
reached with respect to Tarle’s causes
of action regarding harassment and retaliation. [FN4. The court stated this
ruling was ‘[n]ot the easiest call I’ve
made in my career.’]
“As to the objections, the court’s ruling
expressly sustained all but 13 of defendants’ objections. The ruling specifically addressed Tarle’s ‘me too’ evidence, stating, ‘The conclusory opinions of third parties regarding the reasons why they believe Defendants
treated them in a certain way have no
bearing on this case as to whether
Plaintiff was in fact unlawfully discriminated against.’ However, as the court’s
ruling sustained all of defendants’ objections, except the 13 it overruled, the
trial court necessarily sustained defendants’ relevance objections to the ‘me
too’ evidence in its entirety, not merely
the specific objections addressed to
the witnesses’ conclusory opinions. In
other words, the court sustained relevance objections to the other women’s
testimony as to the specific ways in
which [the supervisors] treated them, in
addition to their testimony as to their
belief that such treatment was motivated by gender bias.
[FN5. The law is clear that ‘me too’
evidence is, in fact, admissible. A trier
of fact can infer a discriminatory motive
from similar conduct addressed to individuals sharing the same protected classification. (Pantoja v. Anton (2011) 198
Cal.App.4th 87, 112; Johnson v. United
Cerebral Palsy/Spastic Children’s Foundation (2009) 173 Cal.App.4th 740, 745,
767.) Thus, the trial court erred to the
extent it struck all of the ‘me too’ evidence as irrelevant...]
“On appeal, Tarle challenged, for the
first time, the court’s ruling on the great
bulk of defendants’ objections. For example, she argued for the first time that
defendants had improperly objected to
evidence which defendants had themselves relied upon. She also argued, for
the first time, that the objections failed
to specify adequate reasons. In addition she argued, for the first time, that
many of the objections were frivolous.
-6-
“Tarle argued, also for the first time, that
the trial court’s ruling on the objections
was insufficiently specific to enable
adequate appellate review. She argues
that we should therefore reverse; or, in
the alternative, reverse for specific rulings on each objection...
“We sought additional briefing on the
issue of whether Tarle’s challenges ...
were waived by Tarle’s failure to raise
them before the trial court. [FN7. As
Tarle had argued for the admissibility of
the ‘me too’ evidence before the trial
court, there is clearly no waiver with
respect to that evidence, at least with
respect to the global objections.]
“This case presents the issue of whether
a party can challenge, on appeal from a
summary judgment, rulings sustaining
objections to her evidence to which she
never submitted oral or written opposition. We conclude that a party who fails
to provide some oral or written opposition to objections, in the context of a
summary judgment motion, is barred
from challenging the adverse rulings on
those objections on appeal. In the unpublished portion of this opinion, we
turn to the proper disposition of this
case. Although many of plaintiff’s arguments are barred on appeal due to her
failure to raise them before the trial
court, the summary judgment procedure below, when viewed as a whole,
was infected not only by some erroneous rulings by the court but, more significantly, by the multiple, voluminous,
and often incomprehensible, motion
papers filed by the parties. This flawed
process produced a record that makes
it impossible for this court to render a
proper judgment on the merits. We will
therefore reverse the summary judgment and remand with directions for
further proceedings...
“We sought additional briefing on whether
a waiver rule should be implied in this
context. Tarle’s response raised three
policy arguments which we briefly address. First, Tarle argues that, as a
party is permitted to submit written
objections as late as the reply papers ...
and oral objections at the hearing itself,
there is insufficient time for a written
opposition to be prepared... [W]e are
confident that trial courts will grant par(Cont'd on Page 7, DECISIONS)
DECISIONS
(From Page 6)
ties reasonable continuances to allow
written oppositions to be filed, where
properly sought. Moreover, we are not
holding that written opposition to objections must be submitted...
motion for summary judgment, based
only on purportedly undisputed material
facts. A properly briefed motion for summary judgment is the only way to achieve
justice in this case.”
“Second, Tarle argues that imposing a
requirement of opposing objections ...
is unduly burdensome. We disagree.
Tarle’s concern is apparently that parties ... submit excessive inconsequential objections. Indeed, courts have recognized that this ‘has become common
practice.’ [cites omitted.] ... [T]he proper
course of action is to seek trial court
intervention at that time, and obtain a
ruling requiring the opposing party to
exercise restraint...
For plaintiff: Charles T. Mathews;
Roxanne Huddleston; Jeffrey A. Rager.
For defendants: Reed Smith and Deborah
J. Broyles; Cole Pedroza, Kenneth R.
Pedroza and Joshua C. Traver.
Second Dist Div Three, 5/22/12; opinion by Croskey with Klein and Aldrich
1850926.
“Third, Tarle argues that it is unjust for
appellate court to uphold a summary
judgment on evidentiary rulings which
the appellate court knows were erroneous (and were established to be error on
appeal). We believe, however, that is
equally unjust for a party to lead a trial
court to make an erroneous ruling ... by
failing to suggest to the court a basis on
which the evidence is admissible, and
then raise the argument for the first time
on appeal...
“In sum, Tarle’s policy arguments ... are
unpersuasive. We see no reason to
treat evidentiary rulings different from
any other ruling: an appellant who does
not raise an argument before the trial
court is barred from raising it for the first
time on appeal.
“While it is clear that Tarle failed to
oppose evidentiary objections that she
should have opposed, a more detailed
review of the procedural history of this
case establishes that both parties are
equally at fault for the state of the
record. This case should never have
reached the point where Tarle was faced
with the prospect of responding to hundreds of multi-part evidentiary objections or risk waiving them. It would be
unjust ... for Tarle alone to suffer the
consequences.
“When we look at the record and attempt to consider all of the evidence
which may be admissible, we cannot
determine as a matter of law that Tarle
does not have a viable cause of action.
We therefore will reverse, and remand
with directions that defendants refile a
HOMECARE “PERSONAL
ATTENDANT” IS EXEMPT FROM
OVERTIME PAY REQUIREMENTS
EVEN IF HE OR SHE PERFORMS
SOME INCIDENTAL HEALTH CARE
RELATED SERVICES
CASH v WINN. “When a family hires an
employee to care for an elderly person in
his or her home, is the employee entitled
to overtime pay?” In a May 14 opinion by
Haller, the Fourth District, Division One,
addressed that question in part as follows:
“Under California law, the answer depends on the type of work performed by
the caretaker. If the employee performs
work of a ‘personal attendant,’ defined to
mean ‘a person employed ... to supervise, feed, or dress’ the client, the caretaker is exempt from overtime pay requirements. (IWC Wage Order No. 152001, §§ 1(B), 2(J), codified at Cal.Code
Regs., tit. 8, § 11150.) However, if the
caretaker performs a ‘significant amount
of work’ in addition to these task, the
caretaker is not exempt from overtime
pay requirements. (§ 11150, subd. 2(J).)
Additionally with certain exceptions, if
the caretaker is a registered nurse employed to engage in the practice of
nursing in the home, the nurse is not
exempt... (§ 11150, subd. 1(A)(3)(f),
(g).)
“The issue here is whether there exists
an additional exception to the personal
attendant exemption rule applicable if a
caretaker, who is not a licensed nurse,
performs any form of health care related
services for an elderly client. Based on
-7-
a sentence originally contained in an
interpretive bulletin issued by the [DLSE]
in 1996, the court [Judge Steven R.
Denton] instructed the jury that the
personal attendant exemption to the
overtime requirements is inapplicable if
a caregiver, who is not a licensed nurse,
regularly performs any health care functions, even if those tasks are incidental
to the caretaker’s primary tasks and
regardless of the amount of time spent
on these functions. We conclude this
instruction reflects an improper interpretation of Wage Order No. 15 and,
based on the jury’s findings in the
special verdict form, constituted prejudicial error.
“The issue here ... is whether a person,
who is not a licensed nurse of any type
... and whose work is primarily (more
than 80 percent of the time) that of a
personal attendant as defined above,
loses his or her status as a personal
attendant because the employee regularly performs any health care related
services, such as taking a ‘temperature
or pulse’ or assisting with over-thecounter blood sugar tests...
“The answer is no. There is no California
case law supporting this exception to
the personal attendant definition....
Moreover, such an interpretation would
be inconsistent with the policy underlying the narrow personal attendant exemption rule, which seeks to control
homecare costs for elderly individuals
who need help with daily living activities
and thus avoid the need for institutionalization, while maintaining the overtime pay requirements for all other types
of domestic work... [¶] Judgment reversed...”
For plaintiff: James C. Mitchell, Daniel
M. Gilleon; Frank S. Clowney III.
For defendant: Peter M. Hughes;
Michelle Soyon Park.
Fourth Dist Div One, 5/14/12; opinion by Haller with O’Rourke and
Irion concurring; 2012 DAR 6267,
2012 WL 1662629.
DECISIONS
BOARD
(From Page 7)
(From Page 1)
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
crimination by the employer and whether
their evidence is admissible depends
on whether the circumstances were
sufficiently similar. (Id. at pp. 766-767.)
FOURTH DISTRICT ADDRESSES
SCOPE OF ADMISSIBLE “ME
TOO” EVIDENCE AND
CONCLUDES THAT EMPLOYEE’S
DISCOVERY REQUEST WAS
OVERBROAD AND BURDENSOME
“We must conclude that the trial court’s
order for discovery is overbroad and
unduly burdensome. While we recognize that relevance for discovery purposes is broader than relevance in determining admissibility, we have to keep
in mind what real party in interest’s
purpose is. He is alleging that the individuals involved in the decision to fire
him used workplace violence as a pretext. Real party in interest was employed by a unit that is governed by the
human resources department’s policies
and overseen by HR personnel separate from those in Kaiser’s care-delivery
operations. Therefore, it does not appear that information regarding similar
claims that arose in a Kaiser hospital in
Sacramento, for example, would be
sufficiently similar to real party in
interest’s situation.
KAISER FOUNDATION HEALTH
PLAN, INC. v SUPERIOR COURT
(NOBLES). “In this matter,” the Fourth
District wrote in an unpublished March
19 opinion by Richli, “we have reviewed
the petition and the opposition filed by
real party in interest. We have determined that resolution of the matter involves the application of settled principles of law, and that issuance of a
peremptory writ in the first instance is
therefore appropriate. [cite omitted.]
“‘Me too’ evidence is evidence from
other ‘similarly situated’ employees of a
defendant who claim that they too were
discriminated against by the employer
for the same reason. In turn, ‘similarly
situated’ means that the other employee
engaged in the same conduct without
any mitigating or distinguishing circumstance. (Wills v. Superior Court (2011)
195 Cal.App.4th 143,172.)
“The trial court [Riverside County Superior Court Temporary Judge John Vineyard] was correct insofar as it concluded that ‘similarly situated’ does not
necessarily mean that this other employee had the same supervisor. Real
party in interest argues that petitioners
confuse ‘me too’ claims with ‘similarly
situated’ employees. They also describe
‘me too’ claims as [pertaining to] employees ... with the same disability and
‘similarly situated’ as those accused of
having violated the same policy, in this
case, workplace violence. However, we
find this distinction is of no assistance.
Rather, the relevance and admissibility
of such evidence depends on several
factors, including how closely the circumstances and theory of the case
resemble plaintiff’s. (Johnson v. United
Cerebral Palsy/Spastic Children’s Foundation (2009) 173 Cal.App.4th 740, 767.)
The nonparties must be alleging dis-
“The meaning of ‘similarly situated’ will
vary with the facts and theories in a
particular case... Even at the discovery
stage, at a minimum, the ‘me too’ evidence should related to actions by decision makers within the same chain of
command. (Sallis v. Univ. of Minn. (8th
Cir. 2005) 408 F.3d 470, 478... Unless
really party in interest shows that others outside this chain of command were
involved in the decision to fire him,
discovery should be limited to that pertaining to the facility and HR department where real party in interest was
employed. The trial court opined that if
discovery were so limited, then only real
party in interest’s complaint would be
disclosed. So be it. [¶] Thus, the trial
court abused its discretion in ordering
overbroad and burdensome discovery.”
For real party: Richard A. Stavin and
Mark D. Licker.
For petitioner: Nixon Peabody, Seth L.
Neulight, Ellen M. Papadakis and Tzaddi
S. Thompson.
Fourth Dist, 3/19/12; opinion by Richli
with Hollenhorst and McKinster concurring; 2012 WL 930839 (unpublished).
•
•
-8-
•
applications, review qualifications, and
vet applicants before making recommendations to the Board. Volunteers
cannot be applicants for Board membership.
Board Nominees. Nominations are
being solicited from everyone, including
the Chairs of the various committees
and CELA’s general membership. Individual members are invited to self-nominate. Nominations are made by submitting the Nomination Form, enclosed
with this issue of the CELA Bulletin, no
later than June 25, 2012, to Christina
Krasomil, CELA, 16133 Ventura Blvd.
Suite 625, Encino CA 91436; or by fax
to (818) 907-7474; or by email to
christina@cela.org.
Consideration is given to:
Contributions to CELA and CELA’s
mission, demonstrated willingness to
do volunteer work, geographic diversity,
practice diversity, and diversity of race,
ethnicity, national origin, religion, age,
gender, gender identity, sexual orientation, and disability.
Length of time that nominees have
been CELA regular members, (with a
two-year minimum as a guide).
Application Process. Interested nominees will be required to submit the
following:
A brief nominee statement, of no
more than two pages, describing who
you are, your interests, ideas, and overall qualifications for the Board; e.g.,
past experience on other boards or
committees both in outside of CELA,
significant contacts in the legal or employment community, etc. In essence,
any information that would be helpful in
explaining what assets and contributions you might make to the Board and
to CELA as an organization.
A current bio and/or CV.
Recommendations from others may
also be submitted, although the Nomination Committee is most interested in
the above materials.
We look forward to your responses. If
you have any questions, please feel free
to contact me at toni@tjjlaw.com.
In solidarity,
Toni J. Jaramilla, Chair
LEGISLATION
(From Page 1)
transferring their functions to other agencies, eliminating their functions altogether, or relying on private non-profits
to perform their functions.
CELA has been deeply involved with
these budget issues, trying to coordinate efforts with other stakeholders to
ensure that our courts stay open and
that vital state functions and resources
that protect and promote the rights of
workers are not lost. (Go to
www.ebudget.ca.gov for detailed information about the Governor’s May Revision proposal and his government restructuring plan.) The legislature has
until June 15 to pass a balanced budget.
Judicial Council Invitation to
Comment on Bond Cost Recovery
The Judicial Council Appellate Advisory
Committee is proposing that the rule
regarding recoverable costs on appeal
be amended to provide that the interest
expenses and fees incurred to borrow
funds to deposit as security for a letter
of credit procured to secure an appeal
bond are recoverable costs. CELA plans
to submit a letter in opposition to this
proposed amendment. For more information and to help with our comments,
please contact me: mariko@cela.org.
Legislature Hears
Bills on Social Media
Two bills currently making their way
through the legislature address the issue of social media privacy in the workplace. AB 1844, by Assemblymember
Campos, and SB 1349, by Senator
Yee, would prohibit an employer from
requiring an employee or prospective
employee to provide access to his or
her social media account. The bills are
currently being amended to address the
issue of formal workplace investigations and the level of privacy allowed
when social media is accessed on
employer-provided electronic devices.
For more information, go to
www.leginfo.ca.gov, click on “bill search,”
and enter the bill numbers above. If you
have comments or feedback on this
issue,
please
email
me:
mariko@cela.org.
CELA-Sponsored Bills
AB 1999 (Brownley) Employment:
familial status protection. This bill
would amend FEHA to prohibit discrimination based on the “familial status” of
an employee. Familial status would be
defined to include individuals who have
or who are assumed to have family
caregiving responsibilities. “Family”
would be defined as child, domestic
partner, grandchild, grandparent, parent, parent-in-law, sibling or spouse.
Passed the Assembly!
AB 2103 (Ammiano) Employment:
wages and hours: overtime. This bill
would overturn Arechiga v Dolores Press,
Inc. (2011) 192 CA4th 567, and make
clear that the Labor Code prohibits “explicit mutual wage agreements” under
which a fixed salary purportedly compensates an employee for both regular
and overtime pay. Passed the Assembly!
SB 1255 (Wright) Employee compensation: itemized statements. This
bill responds to a recent series of poorly
reasoned decisions that have threatened the effective public and private
enforcement of, and compliance with,
wage statement requirements. The bill
clarifies that an employee “suffers an
injury” if the employer fails to provide
accurate and complete information, for
purposes of recovering penalties under
Labor Code § 226. Passed the Senate!
Bills Passed
AB 1831 (Dickinson D) Local government: hiring practices. This bill would
prohibit a local agency from inquiring
into or considering the criminal history
of an applicant, or including any inquiry
about criminal history on any initial
employment application. Passed the
Assembly!
AB 1844 (Campos D) Employer use
of social media. This bill would prohibit an employer from requiring an
employee or prospective employee to
disclose a user name or account password for a personal social media account that is exclusively used by the
employee or prospective employee.
AB 1855 (Torres D) Employment:
contractors: sufficient funds. Current
law prohibits a person or entity from
entering into a contract or agreement for
labor or services with specified types of
contractors if the person or entity knows
or should know that the contract or
agreement does not include funds sufficient to allow the contractor to comply
with all applicable local, state, and federal laws or regulations governing the
labor or services to be provided. This bill
would make these provisions applicable
with regard to warehouse contractors.
AB 1875 (Gatto D) Civil procedure:
depositions. This bill would limit a
deposition of any person to one day of
seven hours, or to no more than seven
hours over two or more days if a witness
is ill or over 65 years of age, except as
specified. Under the bill, the court would
be required to allow additional time if
necessary to fairly examine the deponent. The court would also be required
to allow additional time if the deponent,
another person, or any other circumstance impedes or delays the examination. Passed the Assembly!
AB 2039 (Swanson D) Family and
medical leave. This bill would expand
the circumstances under which an
employee is entitled to protected leave
pursuant to the California Family Rights
Act by: (1) eliminating the age and
dependency elements from the definition of “child,” thereby permitting an
employee to take protected leave to
care for his or her independent adult
child suffering from a serious health
condition; (2) expanding the definition of
“parent” to include an employee’s parent-in-law; and (3) permitting an employee to also take leave to care for a
seriously ill grandparent, sibling, grandchild, or domestic partner, as defined.
AB 2099 (Cedillo D) Employment:
wage and hour violations. This bill
would increase the fine for a violation of
Labor Code Section 1199 from not less
than $100 to not less than $250. Passed
the Assembly!
AB 2674 (Swanson D) Employment
records: right to inspect. This bill
-9-
PLAINTIFF’S VERDICT IN TAYLOR v LONG BEACH MEMORIAL HOSPITAL
On December 16, 2011, a jury in Los
Angeles County Superior Court, (Case
No. 435221; Judge Abraham Kahn),
returned verdicts in favor of the plaintiff
on causes of action for violation of the
CFRA, retaliation, failure to prevent
associational harassment and discrimination, and negligent supervision, and
awarded damages totaling $287,400.
The jury hung on causes of action for
kin care and associational discrimination. Plaintiff’s attorney and CELA Board
Member Bernard Alexander submitted
the following account of the trial.
In December 2011, Twila White and I
prevailed in a difficult CFRA and kin care
retaliation case involving a single mother
who had been subjected to retaliation
for taking protected leaves of absence
to care for a daughter with chronic
asthma.
There were numerous problems with
the case: (1) although there were multiple adverse actions, there had been no
termination; (2) the plaintiff was an hourly
employee who had held the job for only
two years, and who still held the job at
the time of trial: (3) the damages were
primarily emotional distress; and (4) the
plaintiff was on a nine-month stress
leave at the time of trial.
The plaintiff had taken one week of
CFRA leave to care for her daughter
following a severe asthma attack. Feeling out of patience with the numerous
previous leaves that the plaintiff had
taken, the supervisor drafted a letter to
Human Resources with the intent of
justifying what began as a temporary
transfer but developed into a series of
transfers. We used this key document
for three main purposes: (1) as an admission of the supervisor’s awareness
of the hardship caused by the transfers;
(2) as a demonstration of the pretextual
nature of the reasons given for the transfer, (e.g., “retraining” never occurred);
and (c) as showing inconsistent treatment, since co-workers had been
treated more favorably than the plaintiff
despite more serious rule violations and
poor performance.
by Bernard Alexander
At trial, we showed that the justifications given for imposing discipline involved issues that were remote in time.
Two of the disciplinary actions were
based on errors that had occurred
months earlier, and at those times no
mention had been made of the need for
transfer. In contrast, the letter justifying
the transfers was prepared immediately
after the plaintiff’s return from CFRA
leave. The jury found our time-line blowup to be our most effective visual tool in
proving that the acts of retaliation had
been triggered by the CFRA leave.
Moreover, the predicate measures taken
against the plaintiff had been only oral
warnings, the lowest form of discipline,
designed for incidents that had occurred
only once. Co-workers had received
multiple written warnings before being
suspended, but none of them, with worse
track-records, had ever been transferred
based on a need for retraining. In fact,
several with worse error rates had worked
in the same location for many years
with no retraining, despite serious reprimands. And finally, while the plaintiff,
because of her child care responsibilities, had urgently requested that she
not be transferred, management had
historically granted other employees’
requests for transfers for non-business
reasons.
Employees taking CFRA and Kin Care
leaves were invariably women, often
single mothers, and the plaintiff’s supervisor, believing that they were gaming the system, had resorted to issuing
written disciplinary counseling memos
for “unscheduled absences,” without
clarifying that the reprimands were only
for unprotected absences. This ambiguity allowed the supervisor to discourage employees from taking any form of
leave, whether protected or unprotected.
Although the plaintiff, co-workers, and
the union had complained that protected leave days were being counted
toward discipline, these complaints were
never addressed by either the supervisor or Human Resources.
We were concerned that because the
plaintiff was never terminated the jury
would not recognize and give value to
-10-
the harm caused, so we emphasized
the scheduling dilemmas created by
the repeated transfers. The supervisor
knew that the plaintiff could not drop off
her daughter until 7:30am., but that was
the exact start time associated with
several of the positions to which the
plaintiff was transferred. In effect, the
supervisor created situations that required the plaintiff to choose between
her daughter and her job.
We needed to help the jurors appreciate
that the harm was not just about a
change in the plaintiff’s work day. The
transfers and schedule changes stole
from the plaintiff’s time with her daughter and disrupted her life. In order for her
to arrive at work on time, she had to
wake up at 4:30am, travel across town
to her mother’s house to drop off her
daughter, and then circle back in the
opposite direction, in rush hour morning
traffic on Los Angeles freeways, in order
to arrive at work on time. The transfers
amounted to punishment for taking too
many protected leaves and for complaining about the supervisor to management.
The key to our success at trial was
developing some basic themes: (1) family comes first; (2) people come before
profits; (3) management circled the
wagons to protect the wrongdoer at the
plaintiff’s expense; (4) harassing conduct short of termination, such as setting up an employee to fail, can make a
workplace unbearable. We also focused
on how to recognize the signs of depression, and how to value emotional
distress. Because this was primarily an
emotional distress case, we spent much
of voir dire mining the potential jurors’
experiences with depression—headaches, anxiety, fear, sleeplessness,
distraction, irritability—and reinforcing
their awareness that depression can
result when the daily healthy activities
that enhance our lives are blocked.
Before trial, Twila conducted multiple
mock voir dires in order to test different
questions designed to elicit the desired
discussions and responses from pro(Cont'd on Page 11, TAYLOR)
TAYLOR
LEGISLATION
spective jurors. With Twila’s guidance,
we also conducted a focus group using
methods taught at Gerry Spence’s Trial
Lawyer’s College. With TLC volunteers,
we grappled with the tough issues in our
case in order to develop, distill, and
convey the clear themes of liability and
harms caused.
would require an employer to maintain
personnel records for three years and to
provide a current or former employee, or
his or her representative, an opportunity
to inspect and receive a copy of those
records, except during the pendency of
a lawsuit filed by the employee or former
employer relating to a personnel matter. In addition, in the event an employer
violates these provisions, the bill would
permit a current or former employee or
the Labor Commissioner to recover a
penalty of $750 from the employer, and
would further permit a current or former
employee to obtain injunctive relief and
attorney’s fees. Passed the Assembly!
(From Page 10)
Our objective was to spark a genuine
conversation during the voir dire about
our themes. Some of the questions we
posed in order to plant the seeds of our
case were: “How much workplace abuse
should a person have to endure, short of
termination, before he or she is justified
in suing?” “Is there some amount of
abuse that is bad enough to be the
same or worse than termination?” “When
should a person not have to just ‘suck it
up’ to keep his or her job?” “Is an
employer ever justified in forcing an
employee to choose between work and
family?”
One of our most important tasks was to
identify the underpinnings of the case
through the use of a TLC technique
called “discovering the story.” This helped
us to understand and teach our client
how to open up and testify, without
being combative or defensive.
Our client was a person who had cloaked
herself in a tough exterior, partially due
to a childhood with a verbally abusive
stepfather who treated her differently
than his biological child, and who mistreated her mother. As an adult, she
tends to project toughness and stoicism, which can make it appear that
she has a chip on her shoulder. We
made progress in helping her break free
from that hard exterior, so that the jury
could connect and sympathize with her
plight as a single mother.
Low economic damage cases are winnable if we help the jury recognize all the
ways that harm arises. There are many
ways in which an employer can make a
workplace unbearable, and jurors are
well aware of them. We need to prompt
the jurors to remember what they themselves have seen and experienced, in
order to prepare them for testimony
about what the plaintiff endured. The
jurors will then recognize the harm because they have already seen or experienced it.
(From Page 9)
Bills Held or
Defeated in Committee
AB 1450 (Allen D) Employment: discrimination: status as unemployed.
This bill would make it unlawful, unless
based on a bona fide occupational qualification or any other provision of law, for
an employer, an employment agency,
or a person who operates an Internet
Web site for posting jobs in this state to
take specified employment actions relating to employment status, as defined, including, among other things,
refusing to hire a person because of that
person’s employment status and publishing an advertisement or announcement for any job that includes provisions pertaining to an individual’s current employment or employment status, as specified. Held in Appropriations Committee.
AB 1740 (V. Manuel Pérez D) Employment protections: victims of
domestic violence, sexual assault,
or stalking. This bill would prohibit an
employer from discharging or in any
manner discriminating or retaliating
against an employee because of the
employee’s known status as a victim of
domestic violence, sexual assault, or
stalking, and require the employer to
provide reasonable accommodations for
such a victim. Held in Appropriations
Committee.
AB 1954 (Nestande R) Legal advertising: class actions. This bill would
require an advertisement soliciting plaintiffs for a class action to include a
disclosure stating that a plaintiff in a
class action may be financially liable for
-11-
the attorney’s fees of the defendant
where the defendant is the prevailing
party. Defeated!
AB 2377 (Huber D) Enforcement of
judgments: appeals. This bill would
give discretion to the court, after notice
and hearing, and for good cause shown,
to reduce the amount of an appeals
bond. Defeated!
SB 1115 (Dutton R) Flexible work
schedules. This bill would permit an
individual nonexempt employee employed by an employer with ten or fewer
employees to request an employeeselected flexible work schedule providing for workdays up to 10 hours per day
within a 40-hour workweek, and would
allow the employer to implement this
schedule without any obligation to pay
overtime compensation. Defeated!
SB 1374 (Harman R) Liability: good
faith reliance on administrative
regulation. This bill would provide that
any employer who relies upon a written
order, ruling, approval, interpretation, or
enforcement policy of a state agency
shall not be liable or subject to punishment for a violation of a civil statute or
regulation in a judicial or administrative
proceeding if the employer pleads and
proves to the trier of fact that, at the time
the alleged act or omission occurred,
the person had sought an applicable
written order, ruling, approval, interpretation, or enforcement policy from the
state agency charged with interpreting
that area of law, and relied upon and
conformed to that order, ruling, approval,
interpretation, or enforcement policy.
Defeated!
SB 1478 (Harman R) Appeals: undertaking. This bill would provide that the
appeals bonds shall not exceed
$25,000,000, and, if the party posting
the undertaking is an individual or small
business, as defined, the undertaking
shall not exceed $1,000,000. Defeated!
For more information on these bills go to
www.legin.cal.gov/bilinfo. To see all of
the bills CELA is tracking, go to
www.cela.org/legislation. If you have
any input, stories, or cases, related to
these bills, please email me at
mariko@cela.org.
CELA COMMITTEE CORNER
by Christina Krasomil, CELA’s Administrative Director
CELA’s Committees, made up of member volunteers, are an integral part of our
organization, providing a forum to network, seek advice, and discuss issues
of mutual concern.
This is the first in a regular monthly
series of reports highlighting the committees’ work. “CELA Committee Corner” will provide information about each
committee, and an update on committee meetings, projects, and events.
CELA has ten active volunteer committees. We encourage you to get involved.
If you are interested in joining one,
please contact me at christina@
cela.org.
The DFEH/EEOC Committee works to
make the Department of Fair Employment and Housing and the Equal Employment Opportunity Commission more
responsive to employees and their advocates.
The Diversity Outreach Committee’s
purpose and function is to recruit and
retain members, with an emphasis on
increasing broad diversity in our organization. Through scholarships, outreach,
and educational programs, the Committee looks to diverse communities to
expand our membership base and train
new leadership within CELA, and works
to foster sensitivity and understanding
of diversity issues in our practices. The
committee welcomes and encourages
the representation of traditionally under-represented groups within its membership and board, including persons of
color, women, the LGBT community,
and people with disabilities. The committee meets the second Thursday of
every month at 4pm.
Co-Chairs: Supreeta Sampath and
Bryan Schwartz.
The Immigrant Employment Rights
Committee expands the membership’s
awareness of unique issues facing immigrant clients and their legal representatives. The committee shares information on available remedies for undocumented workers, emphasizing the irrelevance of immigration status to the
recovery of wages and other employment disputes; updates a bank of pretrial and trial materials on immigrationrelated litigation issues; and collaborates with immigrant worker advocates
outside of CELA, including non-profits,
worker centers, and unions. The committee meets the fourth Wednesday of
every month at 4pm.
Chair: Kate Hege.
The Law Practice Management
Committee plans roundtable discussions, webinars, and seminars, covering topics such as opening and managing a small law practice, marketing,
phone systems, obtaining business licenses, finding office space, managing
case flow, law firm software, hardware
and information technology, properly
retaining clients and declining representation, and hiring and retaining employees. The committee meets the first
Thursday of every month at 4pm.
Co-Chairs: Alex Hartounian and Sarah
Schlehr.
The Legislative Committee carries
out CELA’s mandate to advance the
rights of California employees. Committee members, (limited to regular CELA
members), are involved in a number of
activities, including drafting legislation
concerning employee rights, monitoring bills introduced in the California
Legislature that may significantly affect
employees’ rights, providing technical
assistance to legislators and their aides,
and communicating with legislators
about reasons to support or oppose
bills affecting California employees.
Committee members may also testify
at legislative hearings. The committee
meets the second Wednesday of every
month at 4pm.
Co-Chairs: Scot Bernstein, Steve
Pingel, and Pamela Pitt.
Political Director: Mariko Yoshihara.
Co-Chairs: Sarah Schlehr and Traci
Hinden.
The Public Employment Committee
works on issues of particular importance to federal and public sector employees, including maximizing due process on the job. The committee encourages members to represent public employees, educates members regarding
representing public employees, and
aims to make this area of employment
law less mystifying to our fellow members. The committee also plans seminars on such topics as the administrative requirements specific to the representation of state and federal workers.
The committee meets the first Wednesday of every month at 3:00pm. (Membership is limited to regular CELA members.)
Co-Chairs: Dale Brodsky, Mary-Alice
Coleman, Wendy Musell, and Henry
Willis.
The Technology Committee promotes
the use of technology to support CELA’s
goals. The committee identifies existing technology to assist members in
various aspects of litigation, including
discovery, settlement presentations,
trial presentations, and law practice
management. It also facilitates educational seminars, webinars, and presentations. The committee, which has a
Wiki subcommittee, meets the first
Tuesday of every month at 3pm.
Chair: Laura Horton.
The Wage and Hour Committee provides resources to enable members to
effectively pursue wage and hour claims.
The committee helps to educate CELA
The Listserv Monitoring Committee members about class action litigation,
coordinates and monitors CELA’s e- and works closely with the Amicus
mail discussion forum on the Internet, Committee in opposing the publication
where CELA members ask questions, of negative opinions and supporting the
get answers, and share practical ad- publication of positive ones.The comvice. 0HPEHUVKLSLVOLPLWHGWRUHJXODU mittee also networks with other associations, legal groups, and public agenmembers.) The committee meets the
secondTuesday of every month at 4pm. cies that may be involved in wage and
Co-Chairs: Amy Semmel and Arthur hour litigation or legislation. Subcommittees include: Bench & Bar, Practice
Siegel.
in Federal Courts, Jury Instructions,
The Mentor Committee establishes a Compendium of Venues, and Prevailing
supportive community and network for Wage. The committee, (whose memnew CELA members by helping them bership is limited to regular CELA memdevelop relationships with more experi- bers), meets the last Thursday of every
enced CELA members. The committee month at 4:00pm.
meets the first Thursday of every month Co-Chairs: Jonathan Gertler, Jennifer
Reisch, and Steven Pearl.
at 3pm.
-12-
Published
Monthly
BULLETIN
UNITED STATES
SUPREME COURT
PHARMACEUTICAL SALES
REPRESENTATIVES ARE
“OUTSIDE SALESMEN” EXEMPT
FROM FLSA’S OVERTIME PAY
REQUIREMENTS
CHRISTOPHER v SMITHKLINE
BEECHAM CORPORATION. A 5-4
majority opinion by Alito filed on June
18 reads in part as follows:
“The [FLSA] imposes minimum wage
and maximum hours requirements on
employers, ... but those requirements
do not apply to workers employed ‘in
the capacity of outside salesman,’ [29
U.S.C.] § 213(a)(1). This case requires
us to decide whether the term ‘outside
salesman,’ as defined by Department
of Labor regulations, encompasses
pharmaceutical sales representatives
whose primary duty is to obtain nonbinding commitments from physicians
to prescribe their employer’s prescription drugs in appropriate cases. We
conclude that these employees qualify
as ‘outside salesm[e]n.’
“Petitioners brought this action in the
United States District Court for the
District of Arizona... Petitioners alleged
that respondent violated the FLSA by
failing to compensate them for overtime, and they sought both backpay
JOE POSNER AWARD NOMINATIONS
from Dolores Leal
The upcoming fall CELA Conference
promises to be yet another great conference. Sadly, it will also mark the 12th
anniversary of Joseph Posner’s last
presentation to our group. Joe passed
away just six weeks after our 2000
Conference, and ever since, at each
Annual Conference, CELA has presented the Joe Posner Award in his
memory.
The Joe Posner Award Committee,
(Nancy Bornn, Dolores Leal, Cliff
Palefsky, and Jim Stoneman), is soliciting nominations for the 2012 hon"Finding an Expectation
oree.
Because
CELA’s membership
Networks,"
by CELA has
grown
tremendously
in the years
member Eugene
Lee, since
Joe’s passing, and many of our current
begins on Page 16.
members never had the privilege of
knowing Joe or working with him, it may
be helpful to describe the qualities that
Joe exemplified, and that we try to
honor each year with the award in his
name.
Joe co-founded this organization at the
dawn of the development of the rights of
non-unionized employees in California.
He and others did so in the belief that,
collectively, plaintiff’s employment attorneys could match and defeat their
better financed opponents. The success of CELA and its members has
definitely proven the correctness of this
vision.
Joe was a zealous advocate, not only
for his own clients, but ultimately for all
employees in the state. His legacy
(Cont'd on Page 11, NOMINATIONS)
June 2012
Vol. 26, No. 6
EMPLOYEE JUSTICE
FELLOWSHIP
from CELA’s Diversity
Outreach Committee
Despite California’s being one of the
most diverse states in the nation, diversity within the California Bar remains
staggeringly low. With numerous under-served communities lacking access
to legal resources and attorneys who
understand their unique situations,
California has an urgent need to recruit
and train attorneys who can meet this
demand. To this end, CELA created the
Employee Justice Fellowship with the
goal of increasing diversity within the
plaintiffs’ employment bar.
Founded by the CELA Diversity Outreach Committee, and administered by
the Foundation for Advocacy, Inclusion, and Resources (FAIR), the Employee Justice Fellowship is awarded
to diverse students from California law
schools. The fellowship has afforded
numerous students the opportunity to
learn invaluable skills alongside a CELA
member. One such recipient is Eric
Barba, now a CELA member and firstyear associate at Hoffman & Lazear, a
plaintiffs’-side employment firm in Oakland. Eric had this to say about his
experience as an Employee Justice
Fellow:
Before being awarded the fellowship, I knew I wanted to pursue a
career focused on attaining justice
for traditionally under-served comThis issue
of the
munities.
However,
I didCELA
not know
what
practice
area that
would lead
Bulletin
is being
distributed
meto
to.Judges
After interviewing
with CELA
and Justices
members for the Employee Justhroughout California, as
tice Fellowship and learning about
(Cont'd on Page 10, FELLOWSHIP)
DECISIONS
(From Page 1)
and liquidated damages as relief. Respondents moved for summary judgment, arguing that petitioners were ‘employed ... in the capacity of outside
salesman’ ... The District Court agreed...
[¶] The Court of Appeals for the Ninth
Circuit affirmed. [See Christopher v
Smithkline Beecham (2011) 635 F.3d
383, summarized in CELA Bulletin,
Feb 2011, p.11]. The Court of Appeals
agreed that the DOL’s interpretation
was not entitled to controlling deference... It held that, because the commitment that petitioners obtained from
physicians was the maximum possible
under the rules applicable to the pharmaceutical industry, petitioners made
sales within the meaning of the regulations...
“The Ninth Circuit’s decision conflicts
with the Second Circuit’s decision in In
re Novartis Wage and Hour Litigation,
611 F.3d 141, 153-155 (2010) (holding
that the DOL’s interpretation is entitled
to controlling deference). We granted
certiorari to resolve this split, ... and we
now affirm the judgment of the Ninth
Circuit.”
In dissent, Justice Breyer wrote in part
as follows, joined by Ginsburg,
Sotomayor, and Kagan:
“Where in this process does the detailer
sell the product? At most he obtains
from the doctor a ‘nonbinding commitment’ to advise his patient to take the
drug (or perhaps a generic equivalent)
as well as to write any necessary prescription.... [T]o obtain a commitment
to advise a client to buy a product is not
to obtain a commitment to sell that
product, no matter how often the client
takes the advice (or the patient does
what the doctor recommends).
“The detailer’s work, in my view, is more
naturally characterized as involving
‘[p]romotional activities designed to
stimulate sales ... made by someone
else,’ § 541.503, e.g., the pharmacist or
the wholesaler, than as involving
‘[p]romotional activities designed to
stimulate’ the detailer’s ‘own sales.’”
[Note: Three consolidated cases pending in the Ninth Circuit will address the
applicability of the similar exemption
under California law. In those three decisions the Central District held that
PSRs are “outside salesmen” under
California law: D’Este v Bayer (CD Cal
2007) 2007 WL 6913682; Barnick v
Wyeth (CD Cal 2007) 522 FS2d 1257;
Menes v Roche Laboratories (CD Cal
2008) 2008 WL 6600518.]
For petitioners: Michael R. Pruitt, Otto
S. Shill III, Jackson White, Mesa Az;
Jeremy Heisler, David W. Sanford,
Katherine M. Kimpel, Sanford Wittels &
Heisler, Washington DC; Thomas C.
Goldstein, Counsel of Record, Kevin K.
Russell, Amy Howe, Goldstein &
Russell, Washington DC; Eric B.
Kingsley, Liane Katzenstein, Kingsley
& Kingsley, Encino CA.
For United States as amicus supporting petitioners: Malcolm L. Stewart.
For respondent: Neal D. Mollen, Paul
Hastings, Washington DC; Mark E.
Richardson, GlaxoSmithKline, Research Tri. Pk. NC, Paul D. Clement,
Counsel of Record, Jeffrey M. Harris,
Stephen V. Potenza, Bancroft PLLC,
Washington DC.
USSC, 6/18/12; opinion by Alito
joined by Roberts, Scalia, Kennedy,
and Thomas; dissenting opinion by
Breyer joined by Ginsburg,
Sotomayor, and Kagan; 2012 DAR
8040, 2012 WL 2196779.
CALIFORNIA
SUPREME COURT
SUPREME COURT DISMISSES
REVIEW IN SEVERAL CASES IN
LIGHT OF KIRBY v IMMOOS
On June 21, the California Supreme
Court ordered the case transferred to
the Second District, Division Two, for
reconsideration in light of Kirby v Immoos
Fire Protection, Inc. (2012) 53 C4th
1244, in which the Supreme Court held
that the legislature intended rest break
claims to be governed by the “American
Rule” according to which each side
must cover its own attorneys’ fees.
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Toni Jaramilla
Suite. 300
Tel: (310) 551-3020
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
Mariko Yoshihara
Tel: (916) 442-5788
EXECUTIVE BOARD
(Santa Monica)
Jean K. Hyams
(Oakland)
Scot Bernstein
(Folsom)
Noah Lebowitz
(San Francisco)
David DeRubertis
(Studio City)
Cynthia Rice
(San Francisco)
Maria Diaz
(Fresno)
Mika Spencer
(San Diego)
David Duchrow
(Santa Monica)
Deborah Vierra
(Ventura)
Wilmer Harris
(Pasadena)
Christopher Whelan
(Gold River)
Phil Horowitz
(San Francisco)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
(Kirby v Immoos was summarized in
CELA Bulletin, April 2012, p.3.) The
Court of Appeal’s December 21, 2011
decision appeared at 202 CA4th 117,
134 CR3d 643, and was summarized in
CELA Bulletin, Dec 2011, p.5. The
Court of Appeal held that the plaintiff
employees were not entitled to “reporting time” or “split shift” pay, but that
because the claims were governed by
Labor Code section 1194 the trial court
erred in awarding attorneys’ fees to the
prevailing defendant. Review was granted
on March 14, 2012.
Andre E. Jardini, K. L. Myles.
For defendant Jones Day, Deborah C.
Cal SC, 6/21/12; 2012 DAR 8444 (transferring to Court of Appeal for reconsideration).
Barrett was filed on October 24, 2011,
and appeared at 2011 WL 5037411.
The Court of Appeal held that the prevailing defendant was not entitled to
attorneys’ fees despite the inclusion in
the plaintiff’s complaint of additional
causes of action not explicitly covered
by Labor Code section 1194.
For plaintiff: Arthur Charles Chambers,
San Francisco.
For defendant: Alan Sam Levins,
Rachelle Lee Wills, Littler Mendelson,
San Francisco.
Cal SC, 6/20/12; 2012 DAR 8444 (dismissing review).
CASES ARE TRANSFERRED TO
COURTS OF APPEAL FOR
RECONSIDERATION IN LIGHT OF
BRINKER
UNITED PARCEL SERVICE WAGE
AND HOUR CASES. On June 20, the
Supreme Court dismissed review in
light of Kirby v Immoos. In its September 26, 2011 opinion, the Second District, Division Eight, reiterated its view
that the prevailing employer was not
entitled to attorneys’ fees for the successful defense of meal and rest break
claims. The Court of Appeal’s decision
appeared 2011 WL 4444083, and was
summarized in CELA Bulletin, Sept
2011, p.12. The Supreme Court also
dismissed review in a related opinion
filed on February 24, 2011, United Parcel Service Wage and Hour Cases
(2011) 12 CR3d 827.
On June 20, the Supreme Court transferred the following cases to the Courts
of Appeal for reconsideration in light of
Brinker Restaurant Corp. v Superior
Court (2012) 53 C4th 104: Brinkley v
Public Storage (2008) 84 CR3d 873;
Muldrow v Surrex Solutions (2012) 202
CA4th 1232, 136 CR3d 382; Tien v
Tenet HealthCare (2011) 192 CA4th
1055, 121 CR3d 773; Flores v Lamps
Plus, Inc. (2011) 195 CA4th 389, 125
CR3d 590; Hernandez v Chipotle Mexican Grill, Inc. (2010) 189 CA4th 751,
118 CR3d 110; Brookler v Radioshack
Corp. (2010) 2010 WL 3341816 (unpublished).
For plaintiffs: John A. Furutani.
For defendants: Paul, Hastings,
Janofsky & Walker, George W. Abele
and Jessica Pae Boskovich.
Cal SC, 6/20/12; 2012 DAR 8443.
CALIFORNIA COURTS
OF APPEAL
ZELASKO-BARRETT v BRAYTONPURCELL. On June 20, the Supreme
Court dismissed review in light of Kirby
v Immoos Fire Protection, Inc. (2012)
53 C4th 1244, in which the Supreme
Court held that the legislature intended
rest break claims to be governed by the
“American Rule” according to which
each side must cover its own attorneys’
fees. The unpublished opinion by the
First District, Division Three, in Zelasko-
FILED THROUGH DFEH’S
ONLINE SYSTEM IS PROPERLY
VERIFIED DESPITE ABSENCE OF
PHYSICAL SIGNATURE
RICKARDS v UNITED PARCEL SERVICE, INC. “Appellant George Rickards
sued [UPS] for violating [FEHA],” the
Second District, Division Four, began in
a June 19 opinion by Epstein. “The trial
-3-
court [Judge William F. Fahey] granted
UPS’s summary judgment motion on
the sole ground that Rickards did not file
a verified complaint with the [DFEH] and
thus failed to satisfy this jurisdictional
prerequisite for filing a lawsuit under
FEHA... In the published portion of this
opinion, we conclude that the complaint
Rickards’ attorney filed through DFEH’s
online automated system was sufficient
under FEHA. In the unpublished portion..., we affirm the summary judgment
because Rickards failed to raise a triable issue of material fact on his FEHA
claims against UPS. We also conclude
in the unpublished portion of the opinion
that the trial court did not abuse its
discretion in awarding respondent Bob
Esqueda $40,000 in attorney fees upon
granting Esqueda’s unopposed summary judgment motion and finding that
Rickards’ refusal to dismiss the age and
disability harassment claims against
Esqueda was unreasonable...
“The trial court granted UPS’s summary
judgment motion on the ground that
Rickards’ failure to file a verified DFEH
complaint was a jurisdictional defect. It
is undisputed that Rickards’ attorney
filed a form complaint through DFEH’s
automated online system on Rickards’
behalf and received an immediate rightto-sue letter. At his deposition, Rickards
testified he did not know anything about
the DFEH complaint. In declarations,
Rickards and his attorney state that the
attorney was authorized to file the complaint on Rickards’ behalf. The parties
disagree whether the complaint was
properly verified under the circumstances. We conclude that it was...
“The question of who may verify a DFEH
complaint was addressed in Blum [v
Superior Court (2006)] 141 CA4th 418...
[¶] The Blum court reasoned that Government Code section 12960, subdivision (b) does not expressly require that
the complainant personally verify the
information in the complaint, nor does
DFEH require complaints to be filed only
on personal knowledge... It approved the
practice of attorney verification of a DFEH
complaint for a client, so long as the
attorney signs the complaint with his or
DECISIONS
(From Page 3)
her own name, rather than the client’s
name...
“In 2008, DFEH announced its online
automated system for issuing right-tosue letters, ‘designed for complainants
with private counsel who wish to proceed directly to court on employment
discrimination, harassment and retaliation complaints.’
“With the exception of the introductory
phrase, ‘[b]y submitting this complaint
I am declaring,’ the declaration on the
electronically filed complaint in this case
was the same as the one printed on the
paper form used in Blum. But unlike the
paper complaint in Blum, the online
complaint did not have a line for
‘COMPLAINANT’S SIGNATURE.’
“In 2010, DFEH proposed regulations
designed to replace its procedures of
general application for processing discrimination complaints, known as DFEH
Directives... The regulations became
effective in 2011. Several of them make
clear that an online verified complaint
need not be signed...
“UPS does not challenge the holding in
Blum, the validity of the DFEH’s online
complaint procedure, or the 2011 regulations. It only argues the regulations do
not dispense with the requirement that
an attorney may verify a DFEH complaint only by signing his or her own
name, and if the regulations do dispense with the signature requirement
for online complaints, they do not apply
retroactively. The 2011 regulations confirm what DFEH’s automated system
for online complaints has permitted since
2008—that verification of online complaints is permissible without a physical signature. Under Blum, attorneys
may verify DFEH complaints so long as
they personally are subject to penalties
for perjury... Since online complaints
were not at issue in that case, the court
did not address how an attorney goes
about verifying such a complaint.
record or electronic signature is attributable to a person if it was the act of the
person. The act of the person may be
shown in any manner...’ (Id., § 1633.9,
subd. (a).) In the same way, the
attorney’s verification of an online complaint is the act of the attorney.
“The instructions on DFEH’s automated
system make clear that requests for an
immediate right-to-sue letter are accepted from complainants who have
decided to go directly to court without
an investigation by DFEH, and such a
decision is advisable only if the complainant has an attorney. The right-tosue letter that can be immediately
printed after inputting information into
the automated system is accompanied
by a notice to complainant’s attorney.
Since the system is essentially intended to be used by complainants who
have counsel, such complainants should
not be penalized for retaining counsel...
[FN4. We suggest that, to remove any
confusion, DFEH consider modifying
its automated system to allow input of
the name of complainant’s counsel on
the online form complaint.]
“We conclude that the attorney verification of the online DFEH complaint in this
case was sufficient. UPS is not entitled
to summary judgment on the ground
that Rickards failed to fulfill a jurisdictional prerequisite to filing a FEHA lawsuit.”
For defendant UPS: Paul Hastings,
George W. Abele, Michele A.
Freedenthal, and Kelly Hsu.
For defendant Bob Esqueda: Melanie
C. Ross.
Second Dist Div Four, 6/19/12; opinion by Epstein with Willhite and
2012 WL 2308206.
EMPLOYER WAIVED RIGHT TO
COMPEL ARBITRATION BY
PREJUDICIAL DELAY, AND
ARBITRATION PROVISION DID
NOT COVER STATUTORY WAGE
CLAIMS
HOOVER v AMERICAN INCOME LIFE
INSURANCE COMPANY. In a May 16
opinion by Codrington, ordered for publication on June 13, the Fourth District,
Division Two, wrote in part as follows:
“In September 2009, [co-plaintiffs] filed
a class action complaint ... alleging that
AIL had hired them to sell insurance as
employees, not as independent contractors, and failed to reimburse them
for business expenses and to pay minimum wage during training and earned
wages due after termination. The complaint alleged violations of statutory rights
under the Labor Code and for alleged
unfair business practices...
“Between September 2009 and December 2010, the parties conducted active
litigation, including two removals to federal court by AIL, AIL’s demurrer, an
unsuccessful mediation, discovery disputes, and plaintiffs seeking and AIL
opposing a [TRO]...
“On December 7, 2010, almost 15
months after the complaint was filed,
AIL filed a motion to compel arbitration
and to stay litigation of Hoover’s individual claims based on the arbitration
provision in the agent contract....
“The trial court [Judge Richard
Oberholzer] denied the motion to compel, ruling that Hoover’s ‘statutory wage
claims are not subject to arbitration
because neither the arbitration agreement nor the CBA refers to the arbitration of statutory rights’ and because
‘AIL has waived its rights to arbitrate ...
through its participation in the litigation
process.’...
“At the outset, we conclude AIL waived
the right to seek arbitration by actively
litigating this action for more than a year
and causing prejudice to Hoover... [¶]
“Under the Uniform Electronic Transactions Act, (Civil Code, § 1633.1 et seq.),
an electronic record satisfies the requirement that a record be in writing.
(Id., § 1633.7, subd. (c).) ‘An electronic
-4-
DECISIONS
(From Page 4)
Where no deadline for demanding arbitration is specified in the agreement, a
party who does not demand arbitration
within a reasonable time is deemed to
have waived the right to arbitration.
[cites omitted.] What constitutes a ‘reasonable time’ is a question of fact depending on the situation of the parties,
the nature of the transaction, and the
facts of the particular case, including
any prejudice suffered by the opposing
party because of the delay. [cite omitted.]
“There is no fixed state in a lawsuit
beyond which further litigation waives
the right to arbitrate... [¶] ... But, a
defendant’s removal of a case to federal
court, coupled with several months of
litigation, waives the right to arbitrate
because electing to proceed in federal
court on an arbitrable dispute is a presumptive waiver of the right to arbitrate.
[cite omitted.]
“Prejudice sufficient for waiver will be
found where instead of seeking to compel arbitration, a party proceeds with
extensive discovery that is unavailable
in arbitration proceedings. [cites omitted.] ... [¶] The two failed efforts to
remove the case to federal court and
AIL’s recalcitrant responses to discovery suggest its policy has been one of
delay rather than seeking a more prompt
and expeditious resolution through arbitration... During that time, AIL availed
itself of discovery mechanisms like depositions not available in arbitration. AIL
also solicited putative class members,
in an effort to reduce the size of the
class... Hoover was certainly strongly
affected and prejudiced by AIL’s delay,
causing significant legal expenses.
[cites omitted.] Especially in class actions, the combination of ongoing litigation and discovery with delay in seeking
arbitration can result in prejudice. [cite
omitted.] We deem the record supplies
substantial evidence to support the trial
court’s finding that AIL waived any right
to arbitrate the present dispute by prejudicial delay.
“Even if AIL had not waived its right to
assert arbitration, we would decide AIL
could not compel arbitration in the
present case. Hoover’s civil complaint
is based on various California Labor
Code statutes. Section 1194 requires
an employer to pay minimum wage.
Sections 2802 and 2804 provide an
employee cannot waive the right to reimbursement from an employer for necessary employment-related expenses.
Sections 203, 219, and 229 provide that
the right to timely payment of earned
wages upon termination cannot be contravened by private agreeement.
“Citing federal preemption and the strong
national policy favoring arbitration, AIL
argues Hoover’s statutory wage claims
under the Labor Code and the Business
and Professions Code are subject to
arbitration under the [FAA]. The question before us is whether the parties
agreed to resolve an employee’s state
statutory labor claims by arbitration.
“As a general rule, state statutory wage
and hour claims are not subject to
arbitration, whether the arbitration clause
is contained in the CBA or an individual
agreement... [¶] Based on this record, it
cannot be said the subject agreement
involves interstate commerce. AIL had
the burden to demonstrate FAA coverage by declarations and other evidence.
[cites omitted.] The only established
facts are that Hoover is a California
resident who sold life insurance policies. Even though AIL is based in Texas,
there was no evidence in the record
establishing that the relationship between Hoover and AIL had a specific
effect or ‘bear[ing] on interstate commerce in a substantial way.’ [cite omitted.]
“AIL further contends that Hoover agreed
to arbitrate her statutory wage claims
under the agent contract and the CBA.
AIL maintains that the broad language
of the arbitration provision covers any
disputes..., including those which involve statutory wage claims...
“[T]he rights accorded by sections 203,
1194, and 2802 may not be subject to
negotiation or waiver. [cites omitted.]
AIL points to no contractual provision
under which Hoover expressly agreed to
arbitrate any violations of statutory
rights...For an arbitration clause to operate for individual statutory claims, there
-5-
must be a clear and unmistakable waiver
of a judicial forum. [cites omitted.] ... [¶]
The agent contract does not mention
the arbitration of statutory claims or
identify any statutes...
“In summary, Hoover’s dispute with AIL
does not arise under the agent contract
or the CBA. Regardless of whether the
agent contract and the CBA include a
broad arbitration provision, the arbitration provision did not encompass
Hoover’s statutory claims. The agent
contract and the CBA do not require
Hoover to arbitrate her statutory labor
claims. [¶] In this fluid and volatile area
of the law, the trial court assessed AIL’s
motion properly and correctly denied
the petition to compel arbitration of
Hoover’s individual statutory wage
claims.”
For plaintiff: James M. Gilbert; Joseph
Antonelli and Janelle Carney; Darren D.
Daniels.
For defendant: SNR Denton U.S. LLP,
Joel D. Siegel, David Simonton, and
Leanna M. Anderson.
Fourth Dist Div Two, 5/16/12, publication ordered 6/13/12; opinion by
Codrington with McKinster and King
2126892.
LABOR CODE SECTION 206.5
DOES NOT PRECLUDE A PARTY
FROM WAIVING ITS RIGHT TO A
JURY TRIAL BY ENTERING INTO
AN AGREEMENT CONTAINING AN
ARBITRATION PROVISION
PULLI v PONY INTERNATIONAL.
“Kyle Pulli filed this action against his
former employer; appellant Pony International, two entities that allegedly established Pony...; and an employment
recruiting firm...,” the Fourth District,
Division One, began in a June 19 opinion by Aaron. “In his complaint, Pulli
alleged that the defendants fraudulently
induced him to enter into an employment agreement with Pony, and that
Pony wrongfully terminated his employment.
DECISIONS
(From Page 5)
“Pony filed a motion to compel arbitration in which it argued that all of Pulli’s
claims against it were subject to an
arbitration provision in Pulli’s employment agreement. Pulli filed an opposition in which he contended, among
other claims, that the employment agreement was unenforceable pursuant to
Labor Code section 206.5, which prohibits an employer from requiring an
employee to execute ‘a release of a
claim or right on account of wages
due...’ The trial court [Judge Joan M.
Davis] denied Pony’s motion to compel,
concluding that the employment agreement was void under section 206.5 and
that the arbitration provision contained
in the employment agreement was
therefore unenforceable.
“On appeal, Pony contends that the trial
court erred in failing to permit the arbitrator to determine whether section
206.5 rendered the arbitration provision
... unenforceable. On the merits, Pony
contends that the trial court erred in
determining that the arbitration provision was unenforceable pursuant to
section 206.5.
“We conclude that Pony waived its right
to have the arbitrator determine the
section 206.5 issue. On the merits, we
conclude that the arbitration provision is
not unenforceable pursuant to section
206.5. Accordingly, we reverse the order denying the motion to compel.
“In its reply, Pony did not request that
the court order Pulli to arbitrate his
contention that the October 2007 agreement was void under section 206.5.
Instead, Pony addressed Pulli’s section 206.5 claim on its merits... [¶] An
application of the factors outlined by the
Supreme Court in Saint Agnes Medical
Center [v PacifiCare of California (2003)
31 C4th 1187] makes it clear that Pony
waived its right to arbitrate. By submitting the section 206.5 issue to a judicial
forum, Pony acted in a manner ‘inconsistent with the right to arbitrate,’ and
‘substantially invoked the litigation machinery.’
“Pony contends that the trial court erred
in concluding that section 206.5 renders unenforceable the arbitration provision in the October 2007 Agreement.
Pony argues that section 206.5 prohib-
its an employer from requiring an employee to execute a release of a claim
for wages under specified circumstances, and that the statute does not
preclude a party from waiving its right to
a jury trial by agreeing to an arbitration
provision. Pony’s contention raises a
question of statutory interpretation...
“Pony ... implicitly argues ... that a
party’s waiver of a right to a jury trial
contained in an arbitration provision
does not constitute the release of a
claim for wages due. In contrast, Pulli
contends that section 206.5 precludes
an employer from requiring an employee
to either agree to an arbitration provision
and release his right to a jury trial or
forfeit wages that the employee has
earned. Pony has the better argument...
"Any contention that the Legislature
intended section 206.5 to preclude an
employer from requiring that an employee agree to an arbitration provision
related to a wage dispute ‘unless payment of those wages had been made’ ...
is untenable in light of the fact that the
Legislature had already declared in section 229 that agreements to arbitrate
wage disputes were wholly enforceable...
“Accordingly, we conclude that section
206.5 ... does not preclude a party from
waiving its right to a jury trial by entering
into an agreement containing an arbitration provision.”
For plaintiff: Charles Moore and Sean D.
Simpson.
For defendant: Drinker, Biddle & Reath,
David Howard Raizman, Paul M. Gelb,
and Elena S. Min.
by Aaron with McDonald and Irion
2308136.
TRIAL COURT SHOULD HAVE
STRUCK AS SLAPP SUIT
EMPLOYER’S DEFAMATION
CLAIMS AGAINST FORMER
EMPLOYEE IN CONNECTION
WITH HIS CRITICAL CRAIGSLIST
POSTINGS
SUMMIT BANK v ROGERS. “Summit
Bank sued its former employee Robert
-6-
Rogers for posting allegedly defamatory messages on a section of [Craigslist]
entitled ‘Rants and Raves,’” the First
District, Division Four, began in a May
29 opinion by Ruvolo. “The Bank alleged
that Rogers, ‘under the guise of anonymity, made false and libelous statements about [the bank’s] operations,
the integrity of its [CEO] and founder,
the safety of the depositors’ funds and
made false statements about audits
and regulatory actions.’ Rogers moved
to strike the Bank’s complaint pursuant
to Code of Civil Procedure section
425.16, California’s ‘anti-SLAPP’ statute, on the ground that the suit was
brought for the illegitimate purpose of
chilling Rogers’s right to speak freely
about the Bank. Rogers’s appeal is
from the trial court’s order denying his
motion to strike after finding: (1) the
statements were not protected speech
within the meaning of the anti-SLAPP
law..., and (2) the Bank had shown a
probability of success on the merits of
its defamation claim.
“We conclude that the trial court erred in
both findings. In so holding, we reject
the Bank’s threshold argument that
Rogers was precluded from using the
anti-SLAPP law to strike the Bank’s
action because Rogers’s ‘underlying
conduct was illegal as a matter of law’
and thus ‘falls outside protected speech
and petition rights.’ (Flatley v. Mauro
(2006) 39 Cal.4th 299, 320, 324.) Specifically, the Bank claims Rogers’s posts
on Craigslist were illegal under Financial Code section 1327, which imposes
criminal liability when an untrue ‘statement or rumor’ is made that is ‘directly
or by inference derogatory’ to a bank’s
financial condition. We find that, even if
Rogers’s speech violated the statute, it
cannot be deemed ‘illegal as a matter of
law’ because Financial Code section
1327 is an impermissible content-based
restriction on speech protected by federal and state constitutional free speech
guarantees. (Flatley, supra, 39 Cal.4th
at p. 320; U.S. Const., 1st Amend.; Cal.
Const. Art. I, § 2.) Therefore, the antiSLAPP statute applies to the Bank’s
defamation action against Rogers.
“We further find that Rogers met his
burden of showing that the Bank’s defamation action arose from an act in
DECISIONS
(From Page 6)
furtherance of his constitutional right of
free speech in connection with ‘an issue
of public interest’ (§ 425.16, subd. (e)(3)).
Because the Bank failed to satisfy its
burden of showing a probability of success on the merits, Rogers’s antiSLAPP motion should have been
granted. Consequently, we reverse and
remand for further proceedings...
“Although the general language used in
Financial Code section 1327 has been
the law in California since 1917..., there
are no reported cases interpreting this
provision... Apparently, over a century
ago, the [American Bankers] Association lobbied Congress and state legislatures to make the dissemination of
untrue statements and rumors about
the financial condition of commercial
banks a criminal offense after several
bank runs were ignited or exacerbated
by published statements that occurred
during the Bank Panic of 1907-1908...
While the Association’s lobbying efforts proved to be unsuccessful at the
federal level, numerous state legislatures, including California, adopted the
proposed law...
“Even if the Bank is correct that at least
one of Rogers’s posted comments violates Financial Code section 1327, we
conclude that this statute cannot provide the foundation for an argument that
Rogers’s conduct is not protected under section 425.16. As we will explain,
when analyzed under modern constitutional jurisprudence, the broad provisions of Financial Code section 1327,
on their face, impermissibly sweep within
their proscriptions speech that cannot
be criminally punished. (Flatley, supra,
39 Cal.4th at p. 320.)
“Financial Code section 1327 is unconstitutional on its face for the same
reason similar statutes have been found
to be unconstitutional—it does not contain a clear requirement of actual malice
or any statutory language limiting its
reach to those banks which are not
considered public figures... [¶] We further conclude that Financial Code section 1327 is constitutionally defective
on its face because of its vagueness...
“We cannot accept the Bank’s position,
echoed by amicus California Bankers
Association, that because of the growing number of insolvent banks, we should
be especially solicitous of preventing
statements ‘derogatory to, or [that] affect the solvency or financial standing of
a bank.’ Rather, it is precisely because
of the current financial climate that we
believe the public should be given broad
latitude to express a wide range of viewpoints on matters relating to the operation and solvency of our financial institutions. That debate not only contributes
ultimately to a proper understanding of
the role and function of financial institutions in our society, but also furthers the
search for solutions leading to the
strengthening of the banking sector, and
therefore, to our economy as a whole.
Therefore, the public interest in the dissemination of this type of information is
legitimate and substantial.
“A claim is subject to the anti-SLAPP
statute if it arises from one of the four
categories of protected activity set forth
in section 425.16, subdivision (e)... One
these categories ... describes an ‘act in
furtherance of a person’s right of petition
or free speech under the United States
or California Constitution in connection
with a public issue’ as including: ‘(3) any
written or oral statement or writing made
in a place open to the public or a public
forum in connection with an issue of
public interest.’
“Without doubt, Internet message boards
are places ‘open to the public or a public
forum’ for purposes of section 425.16...
[And] we reject the Bank’s characterization of Rogers’s posts as merely the
musings of a disgruntled employee about
private matters which are of no interest
to anyone but the participants. The fact
that Rogers’s posts drew numerous
comments, including comments vehemently disagreeing with Rogers, suggests that the broad topic of the financial
stability of our banking system, and the
narrow topic of the Bank and its personnel and activities, are matters of public
discourse and are of considerable public
interest.
“Having determined that the Bank’s
claims against Rogers arise from activity protected by section 425.16 and that
Rogers’s communications do not fall
within the exception for illegal activity,
we now proceed to determining whether
the Bank has carried its burden of establishing that it will probably prevail on its
cause of action for defamation.
-7-
“Initially, we point out that because
Rogers’s alleged defamatory statements appeared in a section of the
Craigslist Web site entitled ‘Rants and
Raves,’ the reader of the statements
should be predisposed to view them
with a certain amount of skepticism,
and with an understanding that they will
likely present one-sided viewpoints
rather than assertions of provable facts...
“Despite the Bank’s invitation to do so,
the law does not require Rogers to
justify the literal truth of every word...
Where an imputation is substantially
true so as to justify the ‘gist or sting’ of
the remark, the truth defense is established. [¶] Here, there is evidence that
the verifiable facts in Rogers’s posts
were basically true...
“Applying these principles here, we
conclude that the statements on which
the Bank’s defamation claim is based
are nonactionable statements of opinion, rather than verifiable statements of
fact... Because the Bank has failed to
establish a probability of prevailing...,
the trial court erred in denying the
motion to strike.”
For employee: Sweeney, Mason, Wilson & Bosomworth, Kurt E. Wilson,
Scott A. Mangum.
For bank: Steven B. Piser, J. Scott
Isherwood; Esner, Chang & Boyer,
Andrew N. Chang.
First Dist Div Four, 5/29/12; opinion
by Ruvolo with Reardon and
Sepulveda concurring; 2012 DAR
7051, 2012 WL 1925535.
CONCEPCION INVALIDATED THE
GENTRY TEST, AND D.R.
HORTON “DOES NOT
WITHSTAND SCRUTINY”
ISKANIAN v CLS TRANSPORTATION
LOS ANGELES. “This is the second
appeal in this case,” the Second District, Division Two began in a June 4
opinion by Boren. “We issued our opinion on the first appeal soon after the
California Supreme Court decided Gentry v. Superior Court (2007) 42 Cal.4th
443, which held that a class waiver
provision in an arbitration agreement
should not be enforced if ‘class arbitra(Cont'd on Page 8, DECISIONS)
DECISIONS
(From Page 7)
tion would be a significantly more effective way of vindicating the rights of
affected employees than individual arbitration.’ (Id. at p. 450.) In our prior
opinion, in light of Gentry, we directed
the trial court to reconsider its order
granting a motion to compel arbitration
and dismissing class claims. [2008 WL
2171792.]
“In this appeal, we are faced with an
essentially identical order—defendant’s
renewed motion to compel arbitration
was granted and class claims were
dismissed. The legal landscape, however, has changed. In April 2011, in AT
& T Mobility LLC v. Concepcion (2011)
___U.S.___ [131 S.Ct. 1740], the United
States Supreme Court, reiterating the
rule that the principal purpose of the
[FAA] is to ensure that arbitration agreements are enforced according to their
terms, held that ‘[r]equiring the availability of classwide arbitration interferes
with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA.’ (Id. at p. 1748.)
Applying this binding authority, we conclude that the trial court properly ordered this case to arbitration and dismissed class claims.
“On August 4, 2006, Iskanian filed a
class action complaint against CLS,
alleging that it failed to pay overtime,
provide meal and rest breaks, reimburse business expenses, provide accurate and complete wage statements,
and pay final wages in a timely manner.
In its March 2007 order granting CLS’s
motion to compel arbitration, the trial
court found that the arbitration agreement was neither procedurally nor substantively unconscionable. Gentry, however, was decided soon after the trial
court rendered its order, and we issued
a writ of mandate directing the superior
court to reconsider its ruling in light of
the new authority.
“Apparently, following remand, CLS voluntarily withdrew its motion to compel
arbitration, making it unnecessary for
the trial court to reconsider its prior
order. The parties proceeded to litigate
the case... [¶] After conducting discovery, Iskanian moved to certify the class.
CLS opposed the motion... By order
dated October 29, 2009, the trial court
granted Iskanian’s motion, certifying
the case as a class action.
“On April 27, 2011, the [USSC] decided
Concepcion. Soon after, CLS renewed
its motion to compel arbitration and
dismiss the class claims, arguing that
Concepcion was new law that overruled
Gentry... The trial court found in favor of
CLS. On June 13, 2011, it entered an
order requiring the parties to arbitrate
their dispute and dismissing the class
claims...
“[W]e find that the Concepcion decision
conclusively invalidates the Gentry
test... [¶] Accordingly, we find that the
trial court here properly applied the
Concepcion holding—and properly declined to apply the Gentry test—by
enforcing the arbitration agreement according to its terms...
“After Iskanian’s opening brief on appeal was filed, the [NLRB] issued a
decision analyzing whether and how
Concepcion and related authority apply
to employment-related class claims. In
his reply brief, Iskanian contends that
this decision, D.R. Horton (2012) 357
NLRB No. 184 [2012 NLRB LEXIS 11],
mandates a finding that the class waiver
in the CLS arbitration agreement cannot be enforced...
“We decline to follow D.R. Horton. In
reiterating the general rule that arbitration agreements must be enforced according to their terms, Concepcion
(which is binding authority) made no
exception for employment-related disputes. Furthermore, the NLRB’s attempt
to read into the NLRA a prohibition of
class waivers is contrary to another
recent [USSC] decision [CompuCredit
Corp. v Greenwood (2012) 132 S Ct
665].
“The D.R. Horton decision identified no
‘congressional command’ in the NLRA
prohibiting enforcement of an arbitration
agreement pursuant to its terms. D.R.
Horton’s holding ... elevates the NLRB’s
interpretation of the NLRA over section
2 of the FAA. This holding does not
withstand scrutiny in light of Concepcion
and CompuCredit...
“The arbitration agreement ... contains
a waiver of both class and representative claims. In addition to bringing the
case as a class action, Iskanian also
brought his claims for Labor Code violations in a representative capacity under
-8-
the PAGA. He contends that the claims
brought pursuant to the PAGA are
inarbitrable... [¶] Iskanian’s view is supported by Division Five’s majority opinion in Brown v. Ralphs Grocery Co.
(2011) 197 Cal.App.4th 489... [¶] Respectfully, we disagree with the
majority’s holding in Brown... [¶] Following Concepcion, the public policy
reasons underpinning the PAGA do not
allow a court to disregard a binding
arbitration agreement. The FAA preempts any attempt by a court or state
legislature to insulate a particular type
of claim from arbitration. [¶] Therefore
...Iskanian may not pursue representative claims against CLS. The law prohibiting such claims applies to both
Iskanian’s PAGA claims and his UCL
claims...
“Reviewing the evidence and the history
of this case, we find that the trial court
did not err by declining to impose the
disfavored penalty of waiver. Substantial evidence supported a finding that
CLS acted consistently with its right to
arbitrate. CLS originally moved to compel arbitration soon after the case was
filed. It likely would have been successful in that effort if not for the issuance of
Gentry while the case was on appeal.”
For plaintiff: Initiative Legal Group, Raul
Perez, Glenn A. Danas, Katherine W.
Kehr.
For defendant: Fox Rothschild, David F.
Faustman, Yesinia M. Gallegos, Namal
Tantula.
Second Dist Div Two, 6/4/12; opinion by Boren with Doi Todd and
Chavez concurring; 2012 WL
1979266.
NINTH CIRCUIT
DISTRICT COURT ERRED IN
FINDING STATISTICAL EVIDENCE
INSUFFICIENT TO ESTABLISH
PRIMA FACIE CASE OF AGE
DISCRIMINATION, BUT PLAINTIFFS
FAILED TO RAISE ISSUE OF
PRETEXT
SCHECHNER v KPIX-TV. “Plaintiffs
[Schechner and Lobertini] were televi(Cont'd on Page 9, DECISIONS)
DECISIONS
(From Page 8)
sion news reporters at KPIX-TV...,” the
Ninth Circuit began in a May 29 opinion
by B. Fletcher. “They were laid off after
CBS issued a directive requiring each of
its affiliates to reduce its annual budget
by ten percent. Schechner and Lobertini
were sixty-six and forty-seven years
old, respectively, when they lost their
jobs. They brought suit alleging that
KPIX discriminated against them on the
basis of age and gender, in violation of
California law. The district court [Northern District Judge Marilyn H. Patel]
granted KPIX’s motion for summary
judgment, dismissing all of Plaintiffs’
claims. We affirm. We write to clarify
that a plaintiff can make out a prima
facie case of disparate-treatment age
discrimination using statistical evidence,
even where that evidence does not account for the defendant’s legitimate nondiscriminatory reason for the discharge.
“This case demonstrates that reduced
advertising revenues ... have taken a
significant toll on local television news
stations. Schechner and Lobertini were
performing their jobs well... Both are
experienced reporters with distinguished
careers that include numerous awards.
KPIX does not allege that performance
issues played any role in the decision to
lay off either Schechner or Lobertini...
“Schechner and Lobertini submitted
reports by expert statistician William
Lepowsky ... [who] ... concluded that
‘those individuals laid off, as a group,
are older than the group not laid off, and
the disparity between the two groups is
statistically significant.’ ... Based on
his statistical analyses, Lepowsky
opined that the age of KPIX’s on-air
talent ‘correlates closely’ with those
selected for layoff. He acknowledged
that his analyses assumed that all onair talent had an equal probability of
being laid off ... and did not account for
contract expiration date. KPIX’s statistical expert ... opined that Lepowsky’s
report failed to account for obvious, valid
and important factors because it failed
to account for the decision-making process that KPIX said it followed.
“[T]he district court concluded that where
a plaintiff’s statistical analysis fails to
preemptively account for a defendant’s
legitimate non-discriminatory reason for
discharge, the statistical results cannot show a stark pattern of discrimina-
tion. We disagree and write to clarify
that a plaintiff who relies on statistical
evidence to establish a prima facie case
of disparate treatment bears a relatively
low burden of proof. Nonetheless, we
affirm because Plaintiffs have not carried their burden at step three of the
McDonnell Douglas analysis.
“Because the district concluded that
Plaintiffs failed to establish one of the
elements of a prima facie case, it did not
complete the remainder of the McDonnell
Douglas analysis with respect to their
disparate treatment claims... We may
affirm the district court on any grounds
supported by the record. [cite omitted.]
“We clarify that a plaintiff’s statistical
evidence need not necessarily account
for an employer’s proffered non-discriminatory reason for the adverse employment action to make a prima facie case
of discrimination... [¶] A plaintiff laid off
during a reduction in force will generally
have to rely on evidence giving rise to an
inference of discrimination—often statistical evidence—because the plaintiff
is unlikely to have been replaced. [cite
omitted.]
“Our resolution of the Diaz [v Eagle
Produce Ltd. P’Ship (9th Cir 2008) 521
F3d 1201] and Coleman [v Quaker Oats
Co. (9th Cir 2000) 232 F3d 1271] cases
at step three of the McDonnell Douglas
framework is consistent with our admonition that ‘[t]he requisite degree of
proof necessary to establish a prima
facie case ... on summary judgment is
minimal and does not even rise to the
level of a preponderance of the evidence.’ Wallis [v J. R. Simplot Co. (9th
Cir 1994) 26 F3d 885 at 889]. Consistent with our precedents, we conclude
that a plaintiff who submits statistical
evidence that shows a stark pattern of
age discrimination establishes a prima
facie case at step one the McDonnell
Douglas framework. We hold that statistical evidence does not necessarily
fail to establish a prima facie case
because it does not address the
employer’s proffered non-discriminatory
reasons for the discharge. We do not
hold that any statistical evidence of
disparate treatment, regardless of its
strength, will be sufficient to establish a
prima facie case.
“Here, Schechner and Lobertini submit-9-
ted analyses showing stark age disparities between the on-air talent who were
retained and those who were laid off.
This evidence was sufficient to carry
their minimal burden at step one of the
McDonnell Douglas framework.
“KPIX met its burden at step two by
offering a legitimate, non-discriminatory reason for its lay-offs: that it laid off
general assignment reporters based on
date of contract expiration. We now turn
to whether Schechner and Lobertine
have shown that this was mere pretext... We conclude that they have not.
“Schechner and Lobertini argue that
KPIX did not actually follow the process
... described to make layoff decisions...
[¶] We conclude ... that even viewing
the disputed facts in the light most
favorable to Schechner and Lobertini,
they do not support a finding of pretext.
This is true largely because KPIX is
entitled to a favorable ‘same-actor inference.’ ... [¶] KPIX is entitled to a favorable same-actor inference because
Longinotti and Rosenheim signed
Schechner and Lobertini to new contracts no long before they laid off
Schechner and Lobertini.”
For plaintiffs: Carolyn Salmon and John
A. McGuinn, McGuinn Hillsman &
Palefsky, San Francisco.
For defendants: Maureen E. McClain,
John J. Cliffe, and Matthew P. Vandall,
Littler Mendelson, San Francisco.
Ninth Circuit, 5/29/12; opinion by B.
Fletcher joined by Noonan and Paez;
2012 DAR 7027, 2012 WL 1922088.
•
•
•
FELLOWSHIP
(From Page 1)
the fantastic work that they do on a
daily basis, I knew that I had found
something special. After a rigorous
summer working with CELA member Bryan Schwartz, I knew that I
had attained much more than a set
of legal skills. Indeed, I found a
passion for being an advocate for
workers throughout California who
had suffered injustice at the hands
of their employers. Since that time,
I have pursued a career in employment law and look forward to giving
back to CELA after all that they
have done for me.
Success stories such as Eric’s are not
possible without the generous support
of CELA members like you. Each year,
the Employee Justice Fellowship provides employment opportunities to law
students as well as thousands of dollars
in scholarships.
Below is an overview of the Fellowship
program:
z In the fall of 2012, CELA Diversity
Outreach Committee members will interview students at law schools around
California. At the interview, the CELA
members will provide the candidates
with information about CELA member
firms that are interested in hiring summer law clerks and have agreed to pay
their clerks a wage of at least $6,000 for
a total of ten weeks. Firms may, at their
discretion, pool together to share the
costs and services of a Fellow.
z CELA will compile candidate profiles,
including a resume, transcript, and general impressions and comments from
the interview, and send them to the
CELA member firms to which the candidate has expressed an interest in applying.
z Participating firms will then review the
candidate applications and interview
students who they are considering hiring as summer law clerks. Participating
firms should make their offer directly to
the applicant by the end of November.
z Candidates who are selected as summer clerks, who also establish that they
are from a diverse background and have
a demonstrated interest in pursuing a
career in social justice and/or plaintiffs’side employment work, will be eligible
to receive a Fellowship of an amount up
to $4,000 in funding to supplement their
summer salary from the member firm.
Students apply separately for the Fellowship on their own after being selected by a CELA Firm.
The Employee Justice Fellowship award
is not guaranteed once an offer is made
by a firm, but is provided as an additional benefit to the student. Offers to
law clerk candidates and all Fellowship
application materials MUST be submitted by the Fellowship program’s deadlines for candidates to be
considered. Once Fellowships are
awarded, late submissions cannot be
considered.
By participating in the Employee Justice Fellowship, you can help increase
diversity in our practice area while providing an opportunity for a qualified student to contribute to your practice at a
reduced cost to you. If you are not able
to hire a Fellow, your contributions will
assist CELA in providing funding for
Fellowship recipients. All contributions
are tax deductible. For more information, please contact one of the Diversity
Committee Co-Chairs, Bryan Schwartz
(Northern California), bryan@bryanschwartzLaw.com, or Supreeta
Sampath (Southern California),
supreeta@sampathlaw.com.
•
•
•
BIG CHANGES IN CELA’S WAGE
AND HOUR COMMITTEE
by Christina Krasomil
CELA is delighted to announce two new
Chairs of our Wage and Hour Committee, and thanks the Committee’s founding member, Rene Barge, as she steps
down after twelve years of leadership.
Rene started the Wage and Hour Committee in 2002. Under her leadership,
the committee quickly grew to CELA’s
largest working committee, with almost
160 members. Through breakout sessions at CELA Annual Conferences,
yearly Advanced Wage and Hour Seminars, and a dynamic listserv, the committee educates CELA members about
current and upcoming wage and hour
issues, new employer strategies, trial
techniques, legislation, and developments in class action litigation. The
committee works closely with CELA’s
Amicus Committee to discourage publication of negative opinions and support publication of positive ones.
Two active members of the Wage and
Hour Committee, Jon Gertler and Jennifer Reisch, now join Steve Pearl as
additional Co-Chairs. Jon and Jennifer
both responded with enthusiasm to the
Board’s recruitment search earlier this
year. They will share committee responsibilities with Steve until his active
cases resolve and he transitions to fulltime mediation practice.
Jon Gertler, (Chavez & Gertler, Mill
-10-
Valley), has been handling wage and
hour cases since 2000, primarily class
and representative actions. He is Past
President of the San Francisco Trial
Lawyers Association, and Past President of the Consumer Attorneys of Marin.
Jon currently serves or has served on
the boards of the Consumer Attorneys
of California, Legal Aid of Marin, Bay
Area Legal Aid, and the Consumer Federation of California.
Jennifer Reisch, (Talamantes Villegas
Carrera, San Francisco), represents lowwage and immigrant workers in wage
and hour class actions and employment discrimination cases. She is a
founding member of CELA’s Immigrant
Employment Rights Committee and an
Adjunct Professor at UC Hastings College of the Law, teaching a course on
“Representing Spanish-Speaking Workers.”
The Wage and Hour Committee is organizing two sessions at CELA’s 2012
Annual Conference. An introductory
“101” panel will explore key differences
between California and federal wage
and hour law. The second session is a
more advanced program focusing on
the future of wage and hour representative cases including class actions, unfair competition, and unfair labor practices.
NOMINATIONS
(From Page 1)
lives on in the notable decisions in
which he was plaintiff’s counsel, and
those in which he wrote wonderful amicus briefs—-Rojo v Kliger (1990) 52
C3d 65; Pugh v See’s Candies (1988)
203 CA3d 743; City of Moorpark v Superior Court (1988) 18 C4th 1143; Commodore Home Sys., Inc. v Superior Court
(1982) 32 C3d 211; Tameny v Atlantic
Richfield Co. (1980) 27 C3d 167; Davaris
v Cubaleski (1993) 12 CA4th 1583. As
these cases (and many others) reflect,
Joe’s amicus work had a tremendously
beneficial impact on the developing law
that we use every day to the advantage
of our clients.
His zealousness as an advocate was
equaled by his desire to educate and
develop other plaintiff’s attorneys. Joe
was a prolific lecturer, and was generous to a fault with his time—always
available to pick up the phone and give
advice. He was humble even in success, always eager to learn from others. He had great wit and charm. He
appreciated music, wine, colorful jackets, fast cars, the Hollywood Bowl, and
the company of CELA members. Joe
loved and appreciated life to an extent
that few do.
Because of his great work, Joe will
never be forgotten. Because we can
draw inspiration from his life, we continue to honor others who remind us of
him in their values and dedication.
If you know of a person you believe to
have some of the qualities that made
Joe such a special person and lawyer,
he or she should be considered for this
award. (Past honorees are listed on the
nomination form, enclosed with this
issue of the CELA Bulletin. And please
note that we try to give the award to
persons other than CELA Board members.) Please send your nomination
form to me directly at: dleal@
amglaw.com; fax (323) 653-1660, on or
before July 31, 2012.
•
•
•
by Christina Krasomil, CELA Administrative Director
Here’s what some of CELA’s committees are up to this summer:
Immigrant Employment Rights Committee. The committee is organizing a
session for the 2012 Annual Conference on how to prevent and remedy
retaliation against all California workers.
Public Employment Committee. The
committee is organizing a session for
the 2012 Annual Conference on employee privacy rights.
Technology Committee. Get Your
Head in the Clouds! Join us for a Cloud
Computing webinar on Thursday, July
26, from noon-1:15pm. CELA members J. Scott Bonagofsky (San Francisco), James Dal Bon (San Jose) and
Kathryn Burkett Dickson (Oakland) will
explain cloud computing and describe
some of the benefits and pitfalls of using
the internet to store, retrieve and access data. Learn about cloud service
providers such as Google Apps/Docs,
MS Office 365, Feng Office and other
service providers. For further information and to register, go to www.cela.org.
And save the date for the next Technology Committee webinar: Practice and
Case Management Programs, on Thursday, September 6, noon-1:15pm.
We encourage you to get involved. If you
are interested in joining one of CELA’s
ten active committees, please contact
me at christina@cela.org. The ten are:
DFEH/EEOC Committee
Diversity Outreach Committee
Immigrant Employment Rights Committee
Law Practice Management Committee
Legislative Committee*
Listserv Monitoring Committee*
Mentor Committee
Public Employment Committee*
Technology Committee
Wage and Hour Committee*
*Open to CELA Regular members only.
CONFERENCE SCHEDULE
Our 25th Annual Conference at the Hilton Orange County, Costa Mesa, is only
about three months away. If you would like to get a head start on planning, here’s
a summary of the schedule and hotel information:
Thursday, October 4
1:30 to 6:00pm:
Half-Day Seminar: “Conducting Focus Groups”
Friday, October 5
8:00am-9:00am:
Registration and Continental Breakfast
9:00am-12:30pm: General and Concurrent Sessions
12:30pm-2:00pm: CELA Diversity Outreach Committee Luncheon: Keynote
Speech by Kate Kendell, Nat'l Center for Lesbian Rights
2:15pm-5:00pm:
Concurrent and General Sessions
5:00pm-7:30pm:
Reception and Silent and Live Auctions
Saturday, October 6
8:00am-9:00am:
Registration and Continental Breakfast
9:00am-Noon:
General Session
Noon-1:45pm:
Annual Conference Luncheon: Keynote Speech by Erwin
Chemerinsky, and Presentation of Joe Posner Award
1:45pm-3:00pm:
Concurrent Sessions
3:15pm-4:30pm:
General Session
CELA’s guestroom rate is $159 for a single/double. (Group Code: CELA.) For
reservations, call (714) 540-7000, or (800) 445-8667. The hotel is located at
3050 Bristol Street, Costa Mesa CA, 92626. There is complimentary airport
transportation to and from Orange County Airport, and free high speed internet
for all CELA overnight guests. Self-parking is $10 per night.
-11-
NELA NEWS
newsletters “@NELA” and “On The Hill.”
—The Paycheck Fairness Act failed,
on June 5, to get the required 60 votes
to proceed to final consideration in the
Senate. The PFA would have barred
companies from retaliating against workers who inquire about pay disparities,
and would have permitted employees to
sue for punitive damages upon finding
evidence of wide differences in compensation between male and female employees. The bill would have also bolstered reforms enacted in the Lilly
Ledbetter Fair Pay Act of 2009. (Lilly
Ledbetter herself watched the vote on
the PFA from the Senate gallery.)
The final vote was 52-47, with all Republicans voting along party lines in opposition.
NELA and our advocacy partners are
already contemplating alternative interim
initiatives to promote, including the potential issuance of a presidential executive order that would protect the 26
million employees who work for federal
contractors from retaliation for pay disparity inquiries. Amending currently introduced legislation with provisions similar to the PFA’s may also be a viable
option.
—The Civil Rights Tax Relief Act of
2011, NELA’s signature legislation, was
introduced in the House by Representatives John Lewis (D-GA), and Jim
Sensenbrenner (R-WI), and in the Senate by Jeff Bingaman (D-NM) and Susan Collins (R-ME). No other Republicans have signed on to the legislation.
In an effort to attract more bi-partisan
support, NELA has reached out to several Republican members of the House
Committee on Ways and Means, including Chairman Dave Camp (R-MI).
NELA will be on the Hill over the next
several weeks to discuss the CRTRA
with Republican offices and to meet
with Republican co-sponsors of the previous session’s version of the CRTRA,
to try to re-enlist their support. We
continue to shop the bill around the
House for more co-sponsors, and to
take advantage of our meetings with tax
counsel to educate them on the CRTRA’s
pragmatic approach to amending the
Internal Revenue Code’s disparate tax
treatment of non-economic damages
for employees who suffer from discrimination, and to permit income averaging
of lump-sum front pay awards received
to compensate workers for multiple
years of unlawful treatment.
—The Arbitration Fairness Act shows
little sign of getting traction this Congressional session, but a study by the
Consumer Financial Protection Bureau
may help. Of the 87 studies required by
the Dodd-Frank Act, this one may get a
bump up the priority list thanks to the
recent USSC decision in CompuCredit
v Greenwood (2012) 132 S Ct 665,
which upheld the right of companies to
include forced arbitration clauses in
their user agreements. Section 1028 of
Dodd-Frank directs the CFPB to conduct a study and report to Congress on
restricting pre-dispute forced arbitration, although Congress set no deadline
for completing the study. Once the
study is completed, the CFPB will have
the authority to “prohibit or impose conditions or limitations” (via regulation) on
arbitration agreements.
—The Domestic Partnership Benefits and Obligations Act, which would
extend benefits to gay and lesbian partners of federal employees, was passed
by the Senate Homeland Security and
Government Affairs Committee only a
week after President Obama publicly
C O M I N G
proclaimed his support of same-sex
marriage. The bill, passed by the committee on a voice vote, is intended to
give the same benefits to same-sex
partners that spouses of straight federal
workers receive.
—The Employment Non-Discrimination Act (ENDA) will be the subject of a
hearing on July 12 before the Senate
Health, Labor, and Pensions Committee. Senator Tom Harkin, Committee
Chair, agreed to hold a hearing following
calls from lawmakers to hear testimony
on workplace discrimination against
LGBT employees. NELA is a member
of the ENDA Coalition, which is led by
the Human Rights Campaign and includes several national LGBT organizations.
—NLRB Addresses Concerted Activity and Social Media. On June 18, the
NLRB made public a webpage that
describes the rights of all employees to
act together for mutual aid and protection. See www.nlrb.gov/concerted-activity. And on May 30, the NLRB’s
Acting General Counsel, Lafe Solomon,
issued a report on findings from cases
addressing the legality of various employers’ social media policies. The report provides examples of policy provisions determined to be unlawful because they could be interpreted to restrict employees’ Section 7 rights. That
report also appears at www.nlrb.gov.
E V E N T S
July 26, 2012
CELA Technology Committee’s Webinar
Cloud Computing for the Law Office
(see www.cela.org and p.11 for info)
October 4, 2012
CELA’s Pre-Conference Half-Day Seminar
Conducting Focus Groups and Mock Trials
October 5-6, 2012
-12-
•
•
•
Published
Monthly
BULLETIN
CALIFORNIA
SUPREME COURT
WAGE LEVELS OF CONTRACT
WORKERS CONSTRUCTING
PUBLIC WORKS FOR CHARTER
CITIES ARE EXEMPT FROM
STATE’S PREVAILING WAGE
LAW
STATE BUILDING AND CONSTRUCTION TRADES COUNCIL v CITY OF
VISTA. A 5-2 majority opinion by
Kennard, (dissenting opinions by
Werdegar and Liu), affirmed a Fourth
District decision that was filed in April
of 2009, (173 CA4th 567, 93 CR3d 95).
The majority opinion reads in part as
follows:
“A charter city entered into certain
contracts for the construction of public
buildings. A federation of labor unions
then petitioned the superior court for a
peremptory writ of mandate, asserting
that the city must comply with
California’s prevailing wage law notwithstanding local ordinances stating
otherwise. The prevailing law requires
that certain minimum wage levels be
paid to contract workers constructing
public works.
“Under the state Constitution, the ordinances of charter cities supersede
state law with respect to ‘municipal
affairs’ (Cal.Const., art. XI, § 5), but
state law is supreme with respect to
matters
of ‘statewide
concern’ (Cali"Finding
an Expectation
fornia Fed. Savings & Loan Assn. v.
City of Los Angeles (1991) 54 Cal.3d 1,
Networks,"
by CELA
17.) Here,
petitioner contends
that the
member
subject
matter ofEugene
the state’sLee,
prevailing
wage law
is a ‘statewide
concern’
begins
on Page
16. over
which the state has primary legislative
authority. (Ibid.) The city responds that
the matter is a municipal affair and
therefore governed by its local ordinances. We agree with the city...
“Here, we reaffirm our view—first expressed 80 years ago (see City of
Pasadena v. Charleville (1932) 215 Cal.
384, 389—that the wage levels of contract workers constructing locally funded
public works are a municipal affair (that
is, exempt from state regulation), and
that these wage levels are not a statewide concern (that is, subject to state
legislative control)...”
In dissent, Werdegar wrote in part: “The
majority’s approach to this case is
neither fair nor reasonable. Instead, the
majority goes astray by making a series of analytical missteps. First..., the
majority places unjustified weight on
Vista’s financial interest in saving
money on the construction of public
buildings, and relies on an outmoded
Depression Era decision that interpreted
a different law ... long ago eclipsed by
more modern economic ideas.
“Second, by failing to appreciate the full
impact of the prevailing wage law, the
majority significantly undervalues the
statewide economic concerns the law
addresses, and fails to accord appropriate weight to the Legislature’s express findings and declarations that the
prevailing wage law should apply to
charter cities and that it addresses a
matter of statewide concern. Finally,
the majority fails to recognize the difference—critical in the context of municipal governance and independence—
between state regulations affecting
public employees and those affecting
private employees who contract with
July 2012
Vol. 26, No. 7
LEGISLATIVE UPDATE
by Mariko Yoshihara
CALIFORNIA BUDGET
NEW FAIR EMPLOYMENT AND
HOUSING COUNCIL
On June 27th, Governor Brown signed a
new California Budget to try to plug a
$15.7 billion deficit. For two years now,
his plans have included eliminating the
Fair Employment and Housing Commission (Commission) and transferring all of its functions to the Department of Fair Employment and Housing
(Department). CELA was able to help
save the Commission from elimination
last year, but when it was back on the
table again we knew that concessions
would have to be made, or else the
Governor could unilaterally line-item
veto the Commission, or refuse to make
appointments to it. This year, CELA
worked diligently with legislative and
budget staff to help come up with a
compromise proposal that was ultimately adopted by the Legislature and
signed by the Governor. Here are some
key features of the new plan:
z The Commission will be replaced by
the Fair Employment and Housing
Council.
z The Council will consist of seven
members, appointed by the Governor
and approved by the Senate. The Director of the Department will serve as a
non-voting ex officio member of the
This issue of the CELA
Council.
Bulletin is being distributed
toCouncil
Judgeswilland
Justices
z The
have
independent
rule-making
authority
to issue regulathroughout
California,
as
DECISIONS
(From Page 1)
the city.”
Liu joined Werdegar’s dissent, and wrote
separately “...to highlight additional
shortcomings in the court’s analysis
that prevent it from properly resolving
this case.”
For plaintiff and appellant: Altshuler
Berzon, Stephen P. Berzon, Scott A.
Kronland, and Peter E. Leckman.
For various amici on behalf of plaintiff
and appellant: Edmund G. Brown, Jr.,
and Kamala D. Harris, Attorneys General, et al; Davis, Cowell & Bowe; Law
Offices of Carroll & Scully; Law Office of
Lawrence Kay; Weinberg, Roger &
Rosenfeld.
For defendants and respondents: Darold
D. Pieper, City Attorney, Jonathan B.
Stone, Deputy City Attorney; McDougal,
Love, Eckis, Smith, Boehmer & Foley;
Lounsbery, Ferguson, Altona & Peak;
Richards Watson & Gerson.
Cal SC, 7/2/12; opinion by Kennard
with Cantil-Sakauye, Baxter, Chin,
and Corrigan concurring; dissenting opinion by Werdegar joined by
Liu; dissenting opinion by Liu joined
by Werdegar; 2012 DAR 9223, 2012
WL 2508036.
CALIFORNIA COURTS
OF APPEAL
DESPITE LANGUAGE OF
FRANCHISE AGREEMENT, FACT
ISSUES WERE RAISED AS TO
FRANCHISOR’S DEGREE OF
CONTROL FOR PURPOSES OF
IMPUTING LIABILITY FOR SEX
HARASSMENT BY FRANCHISEE’S
EMPLOYEE
PATTERSON v DOMINO’S PIZZA. In a
June 27 opinion by Gilbert, the Second
District, Division Six, wrote in part as
follows, reversing summary judgment
that had been granted by Judge Barbara
A. Lane of the Ventura County Superior
Court:
“Patterson was a teenage employee of
Sui Juris, a Domino’s Pizza franchise.
Renee Miranda was the assistant man-
ager of that restaurant. Patterson
claimed Miranda sexually harassed and
assaulted her at work.
“Patterson filed an action against
Miranda, Sui Juris, and the franchisor
Domino’s, alleging causes of action for
sexual harassment in violation of FEHA,
failure to prevent discrimination, retaliation for exercise of rights, infliction of
emotional distress, assault, battery and
constructive wrongful termination. She
claimed Sui Juris and Domino’s were
Miranda’s employers and were vicariously liable for his actions under the
doctrine of respondeat superior.
“Domino’s answered the complaint and
filed a cross-complaint against Miranda
seeking ‘indemnity’ and ‘apportionment
of fault.’ Sui Juris filed for bankruptcy
relief.
“Daniel Poff, the Sui Juris owner, testified at his deposition that Claudia Lee,
a Domino’s ‘area leader,’ told him to fire
Miranda. He said he had to comply with
the instructions of the Domino’s area
leaders because ‘[i]f you didn’t, you
were out of business very quickly.’ He
said Lee also told him to fire another
employee because of his performance...
Poff had no choice; he had to follow
Lee’s instructions and fire that employee. His operation was monitored by
the Domino’s inspectors, and their decisions determined whether he could
maintain his franchise.
“Domino’s filed a motion for summary
judgment claiming that: 1) Sui Juris was
an idependent contractor pursuant to
the terms of a written franchise agreement, and 2) there was no principalagency relationship between Sui Juris
and Domino’s. The notice of motion
indicated that summary judgment on all
causes of action was based on the
ground that ‘DOMINO’S was not
PATTERSON’S employer and was not
involved in the training, supervision or
hiring of any employees of Defendant
SUI JURIS.’
“Patterson opposed the motion and attached, among other things, Poff’s depo(Cont'd on Page 3, DECISIONS)
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Toni Jaramilla
Suite. 300
Tel: (310) 551-3020
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
Mariko Yoshihara
Tel: (916) 442-5788
EXECUTIVE BOARD
(Santa Monica)
Jean K. Hyams
(Oakland)
Scot Bernstein
(Folsom)
Noah Lebowitz
(San Francisco)
David DeRubertis
(Studio City)
Cynthia Rice
(San Francisco)
Maria Diaz
(Fresno)
Mika Spencer
(San Diego)
David Duchrow
(Santa Monica)
Deborah Vierra
(Ventura)
Wilmer Harris
(Pasadena)
Christopher Whelan
(Gold River)
Phil Horowitz
(San Francisco)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
sition. She claimed Domino’s exercised
substantial control over Sui Juris, and
consequently there are triable issues of
fact relating to Domino’s liability.
“The trial court granted summary judgment. It noted that the franchise agreement between Domino’s and Sui Juris
provides that Sui Juris is responsible for
‘supervising and paying the persons
who work in the Store.’ It ruled that there
is no triable issue of fact because
Domino’s has no role in Sui Juris’s
employment decisions. The court also
found that even if Domino’s is considered to be the employer, Patterson
could not prevail on the remaining issues. It entered summary judgment in
favor of Domino’s on all causes of action.
“The trial court found that Sui Juris was
an independent contractor and that
Miranda was ‘not an employee or agent
of ... Domino’s ... for purposes of imposing vicarious liability.’ [¶] Whether a
franchisor is vicariously liable for injuries to a franchisee’s employee depends on the nature of the franchise
relationship...
“The franchise agreement provides, in
relevant part, that Sui Juris ‘shall be
solely responsible for recruiting, hiring,
training, scheduling for work, supervising and paying the persons who work in
the Store and these persons shall be
your employees, and not [Domino’s]
agents or employees.’ Domino’s claims
this provision, as a matter of law, removes its control over franchisee-employee matters.
“Patterson contends the language relied on is limited or qualified by other
provisions of the agreement that vest
substantial control in Domino’s. The
agreement provides that Domino’s sets
both the ‘qualifications’ for the
franchisee’s employees and the standards for their ‘demeanor.’ ... [¶]
Domino’s Manager’s Reference Guide
(MRG) describes the specific hiring
requirements for all ‘personnel involved
in product delivery...’
“Domino’s claims the franchise agreement grants Sui Juris the freedom to
conduct its own independent business.
But provisions of the agreement substantially limit franchisee independence
in areas that go beyond food preparation standards... [¶] Domino’s also decides the franchisee’s book and record
keeping methods... [¶] These requirements raise reasonable inferences supporting Patterson’s claim that Sui Juris
is not an independent contractor. [cites
omitted.]
“Domino’s relies on foreign state decisions that suggest the language of the
franchise agreement is dispositive on
control. But California courts have concluded that the provisions of the agreement are relevant, but not exclusive
evidence of the relationship. [cites omitted.]
“Domino’s suggests that the evidence
shows: 1) Sui Juris made all the decisions regarding the employees of that
franchise; 2) Domino’s assumed no
role and exercised no actual control
over employee discipline; and 3) Poff,
the owner of Sui Juris, made his own
voluntary decision to terminate Miranda.
“Patterson responds that she presented
evidence supporting reasonable inferences that, apart from the provisions of
the franchise agreement: 1) Domino’s
exercised extensive local management
control over Sui Juris, 2) it had control
over employee conduct and discipline,
3) a Domino’s area leader was deciding
which Sui Juris employees should be
fired, 4) Domino’s ordered Poff to terminate Miranda, and 5) Poff complied as
he had no choice given the extensive
control Domino’s exercised over his
franchise. Patterson claims there are
triable issues of fact about the extent of
Domino’s control.
Domino’s is considered the employer,
there was no triable issue of fact showing that it had notice of, ratified, or
condoned Miranda’s conduct... These
issues are relevant where an employee
claims harassment by another employee. [¶] But a different standard applies where the harasser is the
employee’s supervisor... [¶] The trial
court erred by applying a negligence
standard. It did not consider the issue of
the employer’s strict liability for a
supervisor’s sexual harassment of a
child employee...
“The trial court’s finding that Domino’s
made a sufficient evidentiary showing to
support its motion is not supported by
the record... [¶] The judgment is reversed. Costs on appeal are awarded to
Patterson.”
For plaintiff: Winer & McKenna, Alexis
S. McKenna, Kelli D. Burritt, Kent F.
Lowry, Jr.
For defendants: Elizabeth L. Kolar.
Second Dist Div Six, 6/27/12; opinion
by Gilbert with Yegan and Perren
2402640.
DENYING MOTION TO CERTIFY
CLASS OF NEWSPAPER
CARRIERS AND DISTRIBUTORS
WHO ALLEGED
MISCLASSIFICATION AS
INDEPENDENT CONTRACTORS
SOTELO v MEDIANEWS GROUP. In a
May 31 opinion by Lambden, the First
District, Division Two, wrote in part as
follows:
“[I] reviewing a summary judgment, we
do not resolve factual disputes... Poff’s
testimony, if believed by a trier of fact,
supports reasonable inferences that
there was a lack of local franchisee
management independence. Patterson
met her burden to show triable issues of
fact involving the extent of Domino’s
control over Sui Juris.
“Cynthia Sotelo [et al.] appeal from the
trial court’s denial of their motion for
class certification in a suit alleging that
respondents engaged them, and those
similarly situtated, to work as independent contractors though they were actually employees, and that as a result of
this misclassification, respondents are
liable under several causes of action....
We affirm the order of the trial court.
“The trial court found that even if
-3-
DECISIONS
(From Page 3)
“The complaint specifies the class as
‘all persons who, between September
1, 2002, and the present, worked at any
time for on behalf of any California newspaper owned by MEDIANEWS GROUP,
INC., in folding, inserting advertising
material into, bagging, bundling, loading, and/or delivering said newspaper to
its residential subscribers, and/or in
overseeing such work by other individuals on any such newspaper’s behalf ...
and whom no defendant has acknowledged to be its employee in the performance of such work...
“In 2010, appellants moved for class
certification. In support of their motion,
appellants submitted the declarations
of the named plaintiffs and 11 additional
contractors. Respondents submitted
111 declarations, including 101 contractor and 10 employee declarations.
In addition, the evidence submitted in
support of and in opposition to the
motion contains portions of deposition
transcripts, various documents produced during discovery, and attorney
declarations.
“The evidence in the record indicates
that members of the proposed class
accomplished their work in a variety of
arrangements... [¶] Respondents’
records indicated approximately 5,000
individuals who had signed a contract
with a newspaper. However, because
putative class members retained the
assistance, with or without a contract,
of others who remained unknown to
respondents, the actual size of the
proposed class is unknown.
“After the parties had briefed the motion
for class certification, the trial court
issued a tentative ruling that apparently
was much the same as the final order.
During the hearing, appellants attempted
to address the court’s concerns. In
response to the court’s ascertainability
concerns, they proposed restricting the
class to those who had signed a contract with a newspaper, those who had
subcontracts with a distributor, and
those who had been issued 1099 forms.
They made clear that they were dropping their request to certify a subclass
of minors; and they proposed to satisfy
the court’s concerns over the prepon-
derance of common issues of fact and
law by creating other subclasses. They
also proposed some procedural methods to address the court’s manageability concerns. [¶] The trial court denied
appellants’ motion for class certification and appellants timely appealed.
“II. Ascertainability of the Proposed
Class
The court’s primary concern was that
there were no objective criteria by which
class certification could be determined...
[¶] Appellants argue here that the court
erred in finding that the proposed class
was not ascertainable... Appellants first
rely on language in some authorities
that suggests that the ability to identify
oneself as a member of a proposed
class is sufficient for ascertainability...
(Estrada v. FedEx Ground Package
System, Inc. (2007) 154 Cal.App.4th
1,14...) ... The court ... distinguish[ed]
the instant case: ‘Here, we are not
faced with a speculative administrative
burden but (as the class is defined) an
actual obstacle to identifying persons
who contend that they folded and bagged
papers during the class period...: a lack
of objective evidence (such as business
records) that indicate class membership.’
“The trial court’s observations about
Estrada are apt. We note, as well, that
the class in Estrada presented no notice issues, because it involved class
members with recorded relationships to
the defendant... Here, however, ... a
serious notice issue results...
“For those not already identified by
respondents’ records, there is not an
objective means of determining whether
an individual is a member of the proposed class. Both the class originally
proposed and the restricted class proposed during the hearing on class certification present serious issues for provision of notice, the interest that the
ascertainability requirement is designed
to meet. We discern no abuse of discretion in the trial court’s finding that the
proposed class is not ascertainable.
“III. The Trial Court’s Failure to Restrict
the Class to an Ascertainable Subset
Appellants argue that ... the class of
-4-
carriers and distributors that had been
identified from respondents’ records,
numbering at least 5,000, is itself an
ascertainable class and the court should
have restricted the class to those individuals in order to achieve
ascertainability... [¶] [B]ecause we find
no error, as discussed below, in the
court’s treatment of the remaining requirements, the court did not abuse its
discretion when it did not resolve the
ascertainability issue by restricting the
class to those already identified.
“IV. Predominance of Common Issues
of Law and Fact
[T]he trial court observed that Appellants’ motion for class certification failed
to address the individual causes of action... Nonetheless, the trial court examined the question of whether common questions predominate with regard
to several of the individual causes of
action and with regard to the overarching
issue of whether class members are
employees or independent contractors.
We examine each of these in turn.
“A. Overtime, Meal Break, and Rest
Break Causes of Action
Appellants argue that the issues identified by the trial court go to damages and
[appellants] primarily rely on Jaimez v.
Daiohs USA, Inc. (2010) 181
Cal.App.4th 1286... [¶] [T]he Jaimez
court [found] that ‘[t]he trial court misapplied the criteria, focusing on the
potential conflicting issues of fact or law
on an individual basis, rather than evaluating ‘whether the theory of recovery
advanced by the plaintiff is likely to
prove amenable to class treatment.’
[cite omitted.]
“The difference between Jaimez and
this case is that in Jaimez, the plaintiff
actually presented the court with a theory
of recovery that specified the uniform
policies and practices of the defendant
that acted to establish liability for overtime... In contrast to Jaimez, appellants have not alleged that respondents
have a uniform policy that requires putative class members to work overtime...
DECISIONS
(From Page 4)
“B. Fraud and Concealment Causes of
Action
Because appellants have the burden of
supporting each of the requirements for
class certification with a factual showing, there can be no abuse of discretion
when a court finds a lack of commonality because the plaintiff has not even
attempted to meet that burden, as appellants here failed to do in their motion.
Appellants’ belated attempts to address
the fraud and concealment causes of
action at the hearing were not sufficient
to remedy the failure of their motion to
mention them.
“C. Predominance of Common Questions on the Issue of Employee Status
Even though the court found variability
among the class in only a few of the
factors, the court observed that the
multi-factor test ‘requires that the factors be examined together.’ Thus, even
if other factors were able to be determined on a class-wide basis, those
factors would still need to be weighed
individually, along with the factors for
which individual testimony would be
required. We find no failure to use proper
criteria or improper legal assumptions
in this determination.
“V. Failure of the Court to Consider the
Relevant IWC Work Order
Under Martinez [v Combs (2010) 29
C4th 25]..., the trial court should not
have limited itself to the test for a
common law employment relationship
because appellants’ third cause of action, for violation of minimum wage and
overtime laws, comes under Labor Code
section 1194. The assumption that the
common law test was the only applicable test of an employer/employee
relationship for the causes of action in
this case was flawed. However, this
error was harmless... [C]onsideration of
Martinez would not have affected the
trial court’s conclusions.
“VI. Failure of the Court to Impose
Subclasses or Other Creative Devices
Here, the court considered appellants’
proposals, fulfilling its obligation, and
found them deficient because they failed
to discuss how they would cure the
issues the court had identified. There
was no abuse of discretion.”
For plaintiffs: Niki B. Okcu, Cotchett,
Pitre & McCarthy, Burlingame; Roger
William Stuckey, Carcione, Cattermole,
Dolinski, Stucky, Markowitz & Carcione,
Redwood City.
For defendants: Sue Stott, Perkins &
Coie, San Francisco; Andrew E.
Moriarty, Perkins Coie, Seattle.
by Lambden with Kline and Richman
1955054.
COMMISSION PAYMENTS WERE
ADVANCES, NOT WAGES, AND
CHARGE BACK PROVISION
THEREFORE DID NOT VIOLATE
LABOR CODE SECTION 223.
DeLEON v VERIZON WIRELESS. The
Second District, Division Three, wrote in
part as follows in a July 10 opinion by
Aldrich:
“Plaintiff Saul DeLeon, on behalf of himself and other aggrieved employees,
appeals from the judgment following the
trial court’s order granting summary
judgment in favor of defendant... DeLeon
was a former retail sales representative
... and filed a complaint seeking civil
penalties under the Labor Code Private
Attorneys General Act of 2004 (PAGA)
(Lab.Code § 2698) for a violation of
section 223, which prohibits the secret
underpayment of wages. DeLeon’s compensation plan included commission
payments, which Verizon Wireless could
recover, or charge back against future
commissions, if certain conditions were
not met. We must determine whether
the chargeback provision violates section 223 by ‘secretly pay[ing] a lower
wage while purporting to pay the wage
designated by statute or by contract.’
Based upon the undisputed facts, we
conclude the commission payments
were advances, not wages, and the
chargeback provision did not violate the
Labor Code because Verizon Wireless
may legally advance commission payments to its retail sales representatives
before completion of all conditions for
payment, and charge back any excess
advance over commissions earned
against future advances should the conditions not be satisfied. Thus, we affirm.”
-5-
For plaintiff: Initiative Legal Group APC,
Miriam Schimmel, Glenn A. Davis, and
Katherine Den Bleyker.
Saxe, Claire S. Lux, and Brian M.
Jorgensen.
Second Dist Div Three, 7/10/12; opinion by Aldrich with Croskey and
Kitching concurring; 2012 DAR 9513,
2012 WL 2765812.
CORRECTNESS OF ORDER
GRANTING MOTION TO COMPEL
ARBITRATION UNDER
AGREEMENT CONTAINING CLASS
ACTION WAIVER
NELSEN v LEGACY PARTNERS RESIDENTIAL, INC. “Lorena Nelsen filed a
putative class action lawsuit against
her former employer ... alleging multiple
violations of the California Labor Code,”
the First District, Division One, wrote in
a July 18 opinion by Margulies. “Based
on an arbitration agreement she signed
when LPI hired her, LPI moved to compel Nelsen to submit her individual claims
to arbitration. Nelsen purports to appeal
from the ensuing order granting LPI’s
motion. Although Nelsen fails to meet
her burden to show the court’s order is
appealable, we exercise our discretion
to treat the appeal as a petition for writ
of mandate. We find (1) the arbitration
agreement is not unconscionable; and
(2) notwithstanding that the agreement
precludes class arbitration by its own
terms, Nelsen fails to show that compelling her to individual arbitration violates state or federal law or public policy.
Accordingly, we deny Nelsen’s petition
and affirm the correctness of the trial
court’s order [by Judge Charlotte Walter
Woolard].
“A. Appealability
Orders granting motions to compel arbitration are generally not immediately
appealable. [cites omitted.] ... Nelsen
claims this case comes within an exception to the general rule recognized in
Franco [v Athens Disposal Co. Inc.
(2009) 171 CA4th 1277] based on the
so-called ‘death knell’ doctrine. Franco
permitted an immediate appeal from an
order made in a putative class action
DECISIONS
(From Page 5)
requiring arbitration of individual claims
and waiving class arbitration because
such an order is effectively the ‘death
knell’ of the class litigation...
“‘The death knell doctrine [applies] when
it is unlikely the case will proceed as an
individual action.’ (Szetela v. Discover
Bank (2002) 97 Cal.App.4th 1094,
1098)... Here, Nelsen fails to explain or
demonstrate how the trial court’s order
makes it impossible or impracticable
for her to proceed with the action at all...
However ... we need not decide whether
[Nelsen’s] appeal comes within the
death knell doctrine. As the Court of
Appeal did in Szetela, we exercise our
discretion to treat Nelsen’s appeal as a
petition for a writ of mandate...
“B. Unconscionability
Several factors support a finding LPI’s
arbitration agreement is procedurally
unconscionable... [¶] Relying on
Armendariz v. Foundation Health
Psychcare Services, Inc. (2000) 24
Cal.4th 83 at page 113, Nelsen claims
the arbitration agreement is substantively unconscionable because it lacks
bilaterality. Citing language identical to
that found in Nelsen’s arbitration agreement, the Little [v Auto Stiegler, Inc.
(2003) 29 C4th 1064] court rejected the
same bilaterality argument Nelsen
makes here...
“C. Violation of California Public Policy
As in Kinecta [Alternative Financial
Solutions, Inc. v Superior Court (2012)
205 CA4th 506], the arbitration contemplated ... in this case involves only two
parties... All of the relevant contractual
language thus contemplates a two-party
arbitration. No language evinces an intent to allow class arbitration... [¶] We
therefore conclude the agreement does
not permit class arbitrations. We turn
now to the question of whether the
agreement is enforceable in that respect, notwithstanding Gentry...
“[W]e need not decide whether
Concepcion abrogates the rule in Gentry. By its own terms, Gentry creates no
categorical rule applicable to the enforcement of class arbitration waivers in
all wage and hour cases.... The record
is ... wholly insufficient to apply Gentry
even assuming for the sake of analysis
Gentry has not been vitiated by
Concepcion... Having relied on Gentry
in her opposition to the motion to compel in the trial court, it was Nelsen’s
burden to come forward there with factual evidence supporting her position
classwide arbitration was required... She
is not entitled to remand for the purpose
of affording her a second opportunity to
produce such evidence, as she now
requests.
“D. Violation of Federal Law
Finally, Nelsen cites a recent administrative decision of the [NLRB], D. R.
Horton, Inc. (2012) 357 NLRB No. 184...
[¶] For a number of reasons, we decline
to follow Horton here. Since we are not
bound by the decisions of lower federal
courts on questions of federal law, it
follows we are also not bound by federal
administrative interpretations... Although
we may nonetheless consider the
Horton decision for whatever persuasive
value it has, several factors counsel
caution in doing so. Only two Board
members subscribed to it, and the subscribing members therefore lacked the
benefit of dialogue with a full board of
dissenting colleagues. The subject
matter of the decision—the interplay of
class action litigation, the FAA, and
section 7 of the NLRA—falls well outside the Board’s core expertise in collective bargaining and unfair labor practices... [B]efore Horton was decided,
two federal district courts had specifically rejected arguments that class
action waivers in the labor context violated section 7 of the NLRA. [cites
omitted]... [¶] [And] at least two federal
district court cases rejected Horton after it was decided. [cites omitted.]
“The Second District Court of Appeal in
Iskanian [v CLS Transportation Los
Angeles, LLC (2012) 206 CA4th 949]
has rejected Horton based on the
CompuCredit analysis and because the
decision goes well beyond the scope of
the NLRB’s administrative expertise...
“Even if we ignored all of these authorities and found Horton persuasive, it
would be inapplicable to this case in
any event... There is no evidence in the
record as to the nature of Nelsen’s
duties at LPI. Her title as ‘Property
Manager’ suggests she would not even
be covered by the NLRA. Decisional law
generally excludes ‘managerial employees’ from the coverage of the NLRA...
“E. Injunctive Relief Claim
In her complaint, Nelsen requested injunctive relief for LPI’s alleged violations
of the UCL. She contends this claim is
non-arbitrable under the Broughton-Cruz
doctrine. LPI maintains (1) Nelsen waived
her Broughton-Cruz argument by failing
to raise it in the trial court; and (2)
Broughton-Cruz has, in any event, been
abrogated in the wake of Concepcion.
We agree with LPI on both counts... [¶]
We agree with Kilgore [v KeyBank, Nat.
Assn. (9th Cir 2012) 673 F3d 947] that
Concepcion adopts a sweeping rule of
FAA preemption... Hoover v. American
Income Life Insurance Co. (2012) 206
Cal.App.4th 1193, cited by Nelsen following oral argument, does not convince us otherwise. Hoover does not
mention Kilgore or analyze
Concepcion’s potential relevance to the
continued application of BroughtonCruz. Moreover, the court in Hoover
found the arbitration agreement in issue
was not subject to the FAA and did not
encompass state statutory claims...
That is not our case.”
For plaintiff: R. Rex Parris Law Firm, R.
Rex Parris, Alexander R. Wheeler, Jason P. Fowler, Kitty Szeto, Douglas
Han; Lawyers for Justice and Edwin
Aiwazian.
For defendant: Rutan & Tucker, Mark J.
Payne and Brandon L. Sylvia.
by Margulies with Marchiano and
Dondero concurring; 2012 DAR 9956,
2012 WL 2913809.
NINTH CIRCUIT
ERISA PLAN ADMINISTRATOR
DID NOT ABUSE DISCRETION IN
CONSTRUING EMPLOYEE’S
LUMP SUM ROLLOVER AS
“RECEIPT” OF PENSION
BENEFITS AND IN THEREFORE
REDUCING HIS LTD BENEFITS
BY AMOUNT OF ROLLOVER
DAY v AT & T DISABILITY INCOME
PLAN. “David Day, an ERISA plan beneficiary, elected to roll over his pension
benefits into an [IRA] upon separation
from his employer,” the Ninth Circuit
-6-
DECISIONS
(From Page 6)
began in a July 3 opinion by Fisher.
“Exercising its discretion, the plan’s
claims administrator construed Day’s
lump sum rollover as the equivalent of
his having ‘received’ his pension benefits and, according to the terms of to
AT & T’s Disability Income Benefit Plan,
reduced Day’s long-term disability (LTD)
benefits by the amount of the rollover.
Day argues that having his pension
payout deposited directly into an IRA
subject to tax penalties for early withdrawals meant he did not actually receive the funds, an interpretation that
finds support in Blankenship v. Liberty
Life Assurance Co. of Boston, 436 F.3d
620, 624-25 (9th Cir. 2007). Reviewing
the claims administrator’s decision for
an abuse of discretion, however, we
must defer to the administrator’s reasonable interpretation of the plan. We
also reject Day’s further contentions
that AT & T failed to sufficiently disclose
the possibility that his LTD benefits
would be reduced by his receipt of
pension benefits, and that the
administrator’s actions violate [ADEA].
Accordingly, we affirm the judgment of
the district court [Northern District Judge
James Ware].
“Day first challenges the district court’s
ruling that [Administrator] Sedgwick’s
interpretation of the Plan is reviewed for
an abuse of discretion... [¶] Because
the Plan conferred full discretion on
Sedgwick, unless Day’s allegations of
bias and misconduct are both true and
warrant less deference, the district
court correctly reviewed for an abuse of
discretion. See Abatie [v Alta Health &
Life Ins. Co (9th Cir 2006)], 458 F3d
[955] at 967 (9th Cir. 2006) (holding
abuse of discretion review is required
whenever an ERISA plan grants discretion to the plan administrator, but such
review is informed by any conflict of
interest appearing in the record.) The
district court did not err in finding no
inherent or structural conflict of interest... Nor did the court err in rejecting
Day’s allegations of actual conflict of
interest...
“Day’s chief arguments are that the
Plan language prohibited the offset of
the pension plan benefits against the
LTD benefits ... and that Blankenship
barred the offset. We disagree. ... [¶]
[Nor did] AT & T ... breach its fiduciary
duties by failing to disclose information.
“Finally, Day contends that offsetting
LTD benefits by pension benefits violates [ADEA] and runs afoul of
Kalvinskas v. California Institute of Technology, 96 F.3d 1305 (9th Cir. 1996). [¶]
As a preliminary matter, ... AT & T
argues that Day was only 39 at the time
any ADEA violation may have occurred...
[¶] Because AT & T failed to raise this
issue during administrative review, in the
district court or in its response brief to
this court, the age issue is waived...
“Applying the ADEA, we hold that the
offset does not violate the ADEA or our
decision in Kalvinskas. Kalvinskas involved employer Caltech’s attempt to
offset an employee’s LTD benefits with
monthly retirement benefits for which
the employee was eligible, but which he
could not actually receive unless he
retired, which he had not yet done... [¶]
The circumstances here are distinguishable...”
For appellant: Robert Nichols, San Jose.
For appellee: Stephen H. Harris, Caroline
L. Elkin, and Melinda A. Gordon, Paul,
Hastings, Janofsky and Walker, Los
Angeles.
Ninth Circuit, 7/3/12; opinion by Fisher
joined by Rawlinson and Timlin; 2012
WL 2550597, 2012 DAR 9299.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
WHERE POSSIBLE UNDERLYING
CONTRACT CLAIMS REMAINED
UNRESOLVED, AWARD OF
ATTORNEYS’ FEES TO PLAINTIFF
WHO DEFEATED MOTION TO
COMPEL ARBITRATION WAS
PREMATURE
WHERRY v AWARD, INC. “This is the
third time this case has been before us,”
the Fourth District, Division Three, began in an unpublished June 28 opinion
by Rylaarsdam, relative to underlying
FEHA claims for sex harassment, gender discrimination, and retaliation. “In
the most recent opinion, we affirmed the
denial of a motion to compel arbitration... (Wherry v. Award, Inc. (2011) 192
-7-
Cal.App.4th 1242, 1245; Wherry I. ) [As
summarized in CELA Bulletin, Feb
2011, p.3, the Fourth District held that
the arbitration agreement was unenforceable because of its fees and costs
provision and a shortened limitations
period.] After the remittitur was issued,
the trial court [Judge Kirk H. Makamura]
granted the motion filed by plaintiffs ...
for attorney fees incurred in defeating
the motion.
“Defendants appeal on several grounds,
claiming the contractual provision that
was the basis of the fee award was
unenforceable because we found it unconscionable in Wherry I; the award
was [barred by] judicial and collateral
estoppel; the motion was premature
absent a prevailing party in the underlying action; the motion was untimely;
and the amount of the award was excessive... We conclude that, although
the attorney fees provision is not unconscionable but is enforceable, plaintiffs are not entitled to fees at this stage
of the case.
“A main premise of defendants’ appeal
is the claim that in our prior opinion we
completely invalidated the attorney fees
paragraph in the agreement. That is a
misreading of Wherry I... [¶] As we
explained, in a FEHA action, a plaintiff
who prevails generally is entitled to
attorney fees but a prevailing defendant
may recover fees only if the court finds
the case was filed in bad faith or frivolous... The attorney fees provision ...
did not limit defendants’ right to recover
fees, thus making the arbitration requirement unconscionable and as a
result
unenforceable
under
Armendariz... We did not, however,
rule that the attorney fees provision was
unenforceable generally. In the context
of the entire agreement, there are disputes that would be subject to an award
of attorney fees, including, perhaps,
the one at hand.
“Nor is the award barred by judicial or
collateral estoppel or the law of the
case doctrine... Defendants assert that
in the writ petition in the trial court and
in their respondents’ brief in Wherry I
plaintiffs argued that the fee provision
was unenforceable but actually they
merely claimed what we ultimately held,
DECISIONS
(From Page 7)
that defendants’ contractual unlimited
right to attorney fees was a factor in
holding the arbitration provision unconscionable.
“The other issue in this appeal is whether
plaintiffs are entitled to attorney fees as
the prevailing parties. Plaintiffs assert
they are, pointing to the language of the
agreement and Civil Code section 1717.
We review the issue de novo...
“The dispute here is whether plaintiffs
may recover fees before the main action
is resolved. Relying on several cases,
including Hsu v. Abbara (1995) 9 Cal.4th
863, defendants claim plaintiffs have
not yet ‘prevailed’ because the lawsuit
is still pending... We conclude that the
award of attorney fees to plaintiffs at this
stage of the proceedings was premature... ‘[A]ttorney fees should be
awarded to the party who prevails on a
petition to compel arbitration only when
the resolution of that petition terminates
the entire ‘action on the contract.’ (Frog
Creek Partners, LLC v. Vance Brown,
Inc. (2012) 206 Cal.App.4th 515, 531532.
“Plaintiffs point to cases that allow recovery of attorney fees before the case
is concluded... [cites omitted.] But they
are all distinguishable. [discussion
omitted.]
“Plaintiffs also maintain that, because
this is a FEHA action, there are no other
contract issues in the case and thus
defendants will not be entitled to attorney fees even if they prevail. They again
rely on [Benjamin, Weill & Mazer v]Kors
[(2011) 195 CA4th 40], where, in a
FEHA action, the plaintiff defeated a
petition to compel arbitration and was
awarded fees before the underlying action was fully litigated. We have already
disagreed with the holding in Kors... But
there is another reason this argument
does not persuade.
“Defendants assert their affirmative defense that plaintiffs are independent
contractors is based on a provision in
the agreement ... and thus is a defense
based on the contract... [¶] Without
deciding that dispute, it may be that
there are no more contract issues to be
determined, but it is certainly possible
that plaintiffs or defendants will amend
their pleadings to include a contract
claim. Frog Creek held ‘that, under ...
section 1717, there may only be one
prevailing party entitled to attorney fees
on a given contract in a given lawsuit.’
(Frog Creek, supra, 206 Cal.App.4th at
p.520, fn. omitted.) Awarding fees now
would allow for the possibility of two
prevailing parties if defendants succeeded on any additional contract
claims.
“Of course, if the matter is tried without
any additional contract claims, then
plaintiffs are the prevailing parties on the
contract. But if there are additional
claims, the court must determine who
prevailed on contract claims as a whole,
if anyone, and decide on a fee request
accordingly.
“Because we reverse the fee award we
have no need to decide whether plaintiffs timely filed the motion. If they are
entitled to fees after the case is resolved
they will need to file another motion. For
the same reason, the objection to the
amount of fees is moot at this juncture
in the case.”
For plaintiffs: Jason L. Oliver and John
W. Dalton.
For defendant: Michael A. Conger and
Richard H. Benes.
Fourth Dist Div Three, 6/28/12; opinion by Rylaarsdam with Aronson
and Ikola concurring; 2012 WL
2498847.
PLAINTIFF ALLEGING VIOLATION
OF GOV CODE § 12945 FAILED
TO RAISE ISSUE OF FACT AS
TO DEFENSE THAT SHE WAS
LAID OFF WHILE ON MATERNITY
LEAVE DUE TO ECONOMIC
CONDITIONS
DERRY v RENUANCE AESTHETIC
CARE, INC. In an unpublished opinion
by McKinster filed on July 11, the Fourth
District, Division Two, wrote in part as
follows:
“Plaintiff and appellant Dayna Derry
appeals from a summary judgment on
her second amended complaint, alleging employment discrimination and other
causes of action based on the failure of
her former employers to reinstate her to
-8-
her former position when she attempted
to return to work following maternity
leave.
“Defendants and Derry had agreed that
Derry would take 12 weeks of maternity
leave and would return to work on April
6, 2009. Before Derry could return to
work, however, general economic conditions caused a slowdown in defendants’ business, and defendants decided to return to their former practice of
having only one full-time receptionist
and administrative assistant...
“Dr. Eichenberg’s declaration that economic conditions did not permit staffing
at the previous level is sufficient to meet
defendants’ initial burden of producing
evidence of a complete defense, i.e.,
that the decision not to reinstate Derry
was for a legitimate business reason
unrelated to her pregnancy. Consequently, the burden shifted to Derry to
produce evidence showing that a triable
issue of material fact actually exists as
to that defense. [Cite omitted.]
“Derry contends that there is a triable
issue of fact because there is evidence
which shows that her position was not
eliminated but was instead filled in her
absence and following her scheduled
return to work by Layla Naasz...
“This contention is untenable, part because Derry, in her separate statement
of material facts, agreed with defendants’ statements that before Derry
could return to work, general economic
conditions caused a slowdown in defendants’ business... By conceding that
defendants decided to return to their
former practice of having only one full
time receptionist/administrative assistant, Derry conceded that defendants
did eliminate her position...”
For plaintiff: Law Offices of Don
Featherstone and Mark N. Strom.
For defendants: Creason & Aarvig,
Maria K. Aarvig and Diane K. Huntley.
Fourth Dist Div Two, 7/11/12; opinion by McKinster with Richli and
King concurring; 2012 WL 2833959
(unpublished).
LEGISLATION
(From Page 1)
tions under the Fair Employment and
Housing Act (FEHA).
z The Council will holding hearings, and
issue publications, results of inquiries
and research, and reports to the Governor and the Legislature that will help
minimize or eliminate unlawful discrimination and advance civil rights in California.
z Beginning on January 1, 2013, the
Department will prosecute cases in
Superior Court instead of administratively.
z Before the Department files a civil
action, all parties must participate in
mandatory dispute resolution, free of
charge, in the Department’s internal
dispute resolution division.
z The Department will receive attorneys’ fees when it is the prevailing
party.
BUDGET CUTS TO THE COURTS
AND STATE WORKERS
Unfortunately, the newly enacted budget also included significant cuts to
state workers and the courts. The budget reduces state employee compensation by $839.1 million, equivalent to a
five percent reduction in pay. To achieve
these reductions, the Administration
negotiated with most the state’s 21
bargaining units for a one day per month
unpaid Personal Leave Program (PLP).
Bargaining units without negotiated
agreements will be subject to a corresponding level of savings through either
a negotiated agreement including PLP
provisions or furlough.
The budget also slashes court funding
by over half a billion dollars as follows:
z Trial Court Funding Offsets. A onetime decrease of $486 million in General Fund support, to be offset by:
—The use of $235 million of trial court
reserves based on each court’s available reserve.
—A direction of $11 million from the
Administrative Office of the Courts.
—A reduction of $240 million from court
construction funds to support trial court
operations. Those savings are achieved
by pausing the design activities for
approximately 38 court projects for up
to one year.
z Trial Court Funding. A $50 million
reduction to all trial courts on a proportional basis. The ongoing reduction to
the trial courts is $111 million, of which
$50 million will be offset by redirecting
funds from court construction to support trial court operations.
z Judicial Branch State-Level Operations. A reduction of $8 million General Fund and a redirection of $11 million other funds to the trial courts. The
Judicial Council will identify reductions
and efficiencies implemented to achieve
this level of savings.
z Court Fees. An increase of $50
million Trial Court Trust Fund as a result
of civil court fee increases to offset
ongoing reductions to the trial courts.
z Trial Court Reserves. A reserve
equal to two percent of the statewide
allocation to trial courts will be held at
the state level, and local reserves will be
reduced to one percent of the courts’
operating budget by June 30, 2014. The
Judicial Council will be authorized to
allocate funds from the statewide reserve to individual courts as necessary
to address emergencies and unavoidable budget shortfalls.
RESPONSE BY CHIEF JUSTICE
TANI G. CANTIL-SAKAUYE
“Yet another austere state budget, affecting all Californians and all public
sectors of the state, forces the judicial
branch to absorb another $544 million
cut in the coming fiscal year, representing a fourth straight year of cuts. I
opposed these cuts because, when
added to the judiciary’s cuts of prior
years, I fear they will have a deleterious
impact on the ability of the courts to
provide timely due process to the people
of California. However, the impact of
these additional cuts may be mitigated
somewhat by a number of changes now
reflected in the final budget. The Gover-9-
nor and the Legislature faced hard
choices in balancing the state budget,
and I appreciate their working with us in
these very difficult circumstances. I
thank the judicial branch leaders and
the lawyer groups who advocated tirelessly and collaboratively for judicial
branch resources.”
[For more details on the budget, go to
the California Department of Finances
website, or email me at: mariko@
cela.org.]
CIVIL JURY INSTRUCTIONS:
INVITATION FOR
PUBLIC COMMENT
The Judicial Council Advisory Committee on Civil Jury Instructions has just
posted proposed revisions, additions,
and revocations to the Judicial Council
Civil Jury Instructions (CACI), many of
which affect labor and employment law
practice. Instructions being reviewed
include ones pertaining to wrongful termination, the Fair Employment and
Housing Act, the California Family
Rights Act, Labor Code actions, Contracts, Evidence, and Pretrial. For more
information, go to www.courts.ca.gov/
documents/CACI 12-02.pdf, or email
me at: mariko@cela.org.
UPDATES ON BILLS WE’RE
FOLLOWING
AB 1450 (ALLEN-D). Employment:
discrimination: status as unemployed. This bill would make it unlawful, unless based on a bona fide occupational qualification or any other provision of law, for an employer, an employment agency, or a person who operates
an Internet Web site for posting jobs in
this state to take specified employment
actions including, among other things
refusing to hire a person because of that
person’s employment status or publishing an advertisement or announcement for any job that includes provisions pertaining to an individual’s current employment or employment status.
PASSED SENATE LABOR COMMITTEE.
LEGISLATION
(From Page 9)
AB 1831 (DICKINSON-D). Local government: hiring practices. This bill
would prohibit a local agency from inquiring into or considering the criminal
history of an applicant or including any
inquiry about criminal history on any
initial employment application. The bill
would authorize a local agency to inquire into or consider an applicant’s
criminal history after the applicant’s
qualifications have been screened and
the agency has determined the applicant meets the minimum employment
requirements.
HELD IN SENATE GOVERNANCE
AND FINANCE COMMITTEE.
AB 1844 (CAMPOS-D). Employer use
of social media. This bill would prohibit an employer from requiring or requesting an employee or applicant to
disclose a user name or password for
accessing personal social media or to
access social media. This bill would
also prohibit an employer from discharging or otherwise retaliating against an
employee or applicant for exercising
any right under these provisions.
AB 1875 (GATTO-D). Civil procedure:
deposition of any one person to one day
of seven hours, except under specified
circumstances.
THIS BILL WAS AMENDED TO EXCLUDE EMPLOYMENT CASES. CELA
WILL FORM A WORKING GROUP
THIS FALL TO DISCUSS FOLLOWUP LEGISLATION TO ADDRESS
WHETHER AND HOW EMPLOYMENT
CASES SHOULD BE INCLUDED.
AB 1964 (YAMADA-D). Discrimination in employment: reasonable
accommodations. This bill would include a religious dress practice or a
religious grooming practice as a belief
or observance covered by FEHA’s protections against religious discrimination.
PASSED SENATE JUDICIARY COMMITTEE.
AB 1999 (BROWNLEY-D). Employment: family caregiver status protection. This bill would include “family
caregiver status” as an additional protected category under the Fair Employment and Housing Act
AB 2039 (SWANSON-D). Family and
medical leave. This bill would increase
the circumstances under which an
employee is entitled to protected leave
under the CFRA by (1) eliminating the
age and dependency elements from the
definition of “child,” thereby permitting
an employee to take protected leave to
condition, (2) expanding the definition of
“parent” to include an employee’s parent-in-law, and (3) permitting an employee to also take leave to care for a
AB 2674 (SWANSON-D). Employment records: right to inspect. Under
current law, an employee has the right
to inspect the personnel records that
his or her employer maintains relating
to the employee’s performance or to
any grievance concerning the employee.
This bill would require an employer to
maintain personnel records for a specified period of time and to provide a
C O M I N G
current or former employee, or his or her
representative, an opportunity to inspect
and receive a copy of those records
within a specified period of time, except
during the pendency of a lawsuit filed by
the employee or former employee relating to a personnel matter. In addition,
the bill would permit recovery of a penalty of $750 for a violation, and would
further permit a current or former employee to obtain injunctive relief and
attorney’s fees.
SB 1255 (WRIGHT-D). Employee compensation: itemized statements. This
bill would help preserve the itemized
wage statement requirements of the
Labor Code, after several misguided
court decisions, by providing a statutory definition of what constitutes “suffering injury” for purposes of recovering
damages.
AMENDED. NOW ON THE SENATE
FLOOR.
to www.leginfo.ca.gov. To see all of the
bills CELA is tracking, go www.cela.org/
legislation. If you have any input, stories, or cases related to these bills,
please email me at: mariko@cela.org.
E V E N T S
August 8, 2012
Brown-bag lunch discussion co-sponsored by NELA
Forced Arbitration: Where We Stand Today
Lieff Cabraser Heimann & Bernstein, San Francisco
register at www.alj.convio.net
September 6, 2012
CELA Technology Committee Webinar
“Practice and Case Management Programs”
Noon-1:15pm
October 4, 2012
October 5-6, 2012
-10-
NELA NEWS
“On The Hill.”
—Our Annual Convention. NELA held
its 2012 Annual Convention from June
20-23 in San Diego. This year’s theme,
“Full Speed Ahead: From Inspiration to
Action,” was apropos considering a
workplace in transition due to the economic crisis, a Supreme Court that
protects the interests of corporations, a
polarized Congress, and a Senate moving at a glacial pace in confirming judicial nominees.
The Convention opened with an inspirational plenary session honoring Mary
Rose Diefenderfer, John Hithon, and
Kim Bobo. In 2011, Ms. Diefenderfer
settled her whistleblower case against
the Federal Aviation Authority for $2.5
million, after 16 years of litigation. The
case involved the FAA’s falsification of
safety inspections. John Hithon pursued his discriminatory non-promotion
claim against Tyson Foods for 15 years
before the Eleventh Circuit, after a Supreme Court reversal, grudgingly acknowledged that a supervisor’s use of
“boy” in addressing an African-American worker was evidence of racial bias.
And in 1996, Kim Bobo launched the
National Interfaith Committee for Worker
Justice, using a $5,000 inheritance from
a grandmother. By 1998, the organization had 29 affiliates throughout the
country. By 2005, under its new name
Interfaith Worker Justice (IWJ), the organization had 59 local affiliates and a
full-time staff of ten. IWJ has been active
in many workers’ rights and employee
justice issues, and Kim’s book Wage
Theft in America played a key role in
putting that issue on the national radar.
Professor Anita F. Hill delivered the
Convention Keynote Address to a
packed house, candidly discussing the
highs and lows of her involvement in the
Clarence Thomas confirmation hearings and her subsequent trajectory as
an important voice on sexual harassment issues. Introduced by NELA member Joseph M. Sellers, her colleague at
Cohen Milstein Sellers & Toll (D.C)
where she serves as Of Counsel, Professor Hill commended NELA members for their outstanding work and dedication to workers’ rights.
—2012 Convention Materials. See
www.nela.org for information on ordering the 2012 Convention Manual on CD,
or audio recordings of each session
available on audio CDs or loaded onto a
USB thumb drive.
—Call for Proposals for NELA’s 2013
Annual Convention. NELA is inviting
proposals for our 2013 Annual Convention, to be held June 26-29 at the
Sheraton Denver Downtown. In addition
to three Plenary Sessions, the Convention will have 30 concurrent sessions of
75-90 minutes each, with a moderator
and two speakers. The deadline for
submission of proposals is Friday, September 7, 2012.
—The “NELA Exchange” Is
Launched. At its fall meeting, the NELA
Executive Board enthusiastically voted
to invest in upgrading and enhancing
NELA’s online services. The scope of
this project involves how members collaborate, strategize, and network, the
goal being to re-imagine how members
share information online. Earlier this
year, we partnered with Higher Logic,
and their “Connected Community” is
the platform for NELA’s new centralized site for all of our online member
services. Our new online community is
called “The NELA Exchange,” and as of
July 16 it replaced NELANet and our
former online Membership Directory.
For full information on these changes,
see www.nela.org.
—Amicus Brief in Escriba v Foster
Poultry Farms. On July 13, NELA joined
the National Partnership for Women &
Families, A Better Balance, California
Women’s Law Center, Equal Rights
Advocates, National Women’s Law
Center, and the National Association of
Working Women, on a Ninth Circuit
amicus brief. The plaintiff, fired while
caring for her father who suffered from a
serious illness, is appealing from a
defense verdict that was premised on a
flawed interpretation of the FMLA’s notice requirement. (Escriba v Foster
Poultry Farms (ED Cal 2011) 2011 WL
4565857.) The employee is represented
by NELA members Elizabeth Kristen
and Sharon Terman of the Legal Aid
Society-Employment Law Center in San
Francisco.
—Amicus Brief in Chen-Oster v
Goldman Sachs. On July 2, NELA,
along with a coalition of employee rights
and civil rights organizations, filed an
-11-
amicus brief urging the Second Circuit
to affirm the district court’s refusal to
enforce an arbitration agreement containing a class action waiver. The plaintiff-appellees in Chen-Oster v Goldman
Sachs, pending sub nom Parisi v
Goldman Sachs, allege that Goldman
Sachs maintained a pattern or practice
of gender discrimination in compensation and promotion. The district court
denied Goldman Sachs’s motion to
compel arbitration, concluding that because the plaintiffs could not pursue
their Title VII pattern or practice claims
in individual arbitration, the arbitration
agreement was unenforceable because
it would preclude effective vindication of
the plaintiffs’ statutory rights. ChenOster v Goldman Sachs & Co. (SDNY
2011) 785 F Supp 2d 894. For their
terrific work in writing the brief on behalf
of NELA and our co-amici, we are grateful to NELA member Joseph M. Sellers
and Abigail E. Shafroth (Cohen Milstein
Sellers & Toll, Washington DC).
—The Institute’s 2011 Annual Report. The Employee Rights Advocacy
Institute for Law and Policy is pleased
to announce the publication of its 2011
Annual Report, which documents The
Institute’s steadfast and creative pursuit of the mission it shares with NELA.
Through its National Litigation Strategy
Project, Wal-Mart Task Force, and campaign to end forced arbitration of employment claims, The Institute is helping to ensure that aggrieved workers
have meaningful access to the civil
justice system. The Annual Report also
highlights the growth of The Employee
Rights Advocacy Scholarship Program,
and the important work of our Paul H.
Tobias Attorney Fellow. Our achievements are possible only because of the
extraordinary commitment of talented
volunteers and an ever-growing network
of generous donors. The Annual Report
can be downloaded from www.employeerightsadvocacy.org.
—NELA Participates in Meeting on
EEOC’s SEP. On July 18, the EEOC
held a public meeting focusing on the
Commission’s Strategic Enforcement
Plan. The Commissioners heard from
five roundtables of invited guests discussing how the agency should formulate its national priorities for the next
three years in order to have the greatest
impact on discrimination in the workplace. Representing NELA was Daniel
(Cont'd on Page 12, NELA)
NELA
(From Page 11)
B. Kohrman, Executive Board Member
and Vice President of Public Policy.
Dan also moderated the discussion of
the Commission’s SEP at the Members Forum during NELA’s recent Annual Convention. The EEOC was represented at that Forum by Commissioner
Chai Feldblum, Cathy Ventrell-Monsees
(Attorney Advisor to EEOC Chair
Jacqueline A. Berrien), and Jennifer S.
Goldstein (Senior Attorney Advisor to
EEOC General Counsel P. David Lopez).
NELA members used the Forum to
share their views on the SEP, and to
raise areas of concern with the agency.
to study the use of pre-dispute arbitration clauses in consumer financial markets, and gave the Bureau the power to
issue regulations for the protection of
consumers consistent with the study.
—CFPB Inquiry on Arbitration
Clauses. NELA has submitted comments to the Consumer Financial Protection Bureau in connection with its
public inquiry into how consumer financial services are affected by arbitration
and arbitration clauses. Via the DoddFrank Act, Congress required the CFPB
—POWADA Gains Bipartisan Support. The bill entitled Protecting Older
Workers Against Discrimination Act (S.
2189) has recently gained additional bipartisan support. POWADA would overturn Gross v FBL Financial Services,
Inc. (2009) 129 S Ct 2343, the 5-4
decision that held that a mixed-motive
instruction is never proper in an ADEA
case. NELA, along with our advocacy
partners, negotiated the introduction of
S. 2189 in this year’s Congress. Cosponsors now include Senators Scott
Brown (R-MA), Patty Murray (D-WA),
Sheldon Whitehouse (D-RI), Al Franken
(D-WI), Robert Casey, Jr. (D-PA), Barbara Mikulski (D-MD), Jon Tester (DMT), and Jeff Merkley (D-OR). Accord-
CELA COMMITTEE
CORNER
tice and Case Management Programs,”
on Thursday, September 6, from noon1:15pm.
by Christina Krasomil,
CELA Administrative Director
Mentor Committee Seeks
New Co-Chair
What Committees Are Up
To This Summer
Sarah Schlehr (Studio City) will be leaving her position as one of the two cochairs of CELA’s Mentor Committee,
and we’re looking for her Southern California replacement. The new co-chair
will share duties with Traci Hinden (San
Francisco).
Diversity Outreach Committee. In
August and September, committee volunteers will be conducting on-campus
interviews at many California law schools
for students interested in FAIR’s Employee Justice Fellowship Program. If
you would like further information about
the program or would like to be a participating member-firm, please contact me.
(An article about the program appeared
on page one of last month’s issue of the
CELA Bulletin.)
Immigrant Employment Rights Committee. The committee has plans to
produce a Spanish language deposition
preparation video, and is organizing fall
lunch/mixers with the Immigration Bar
in Southern and Northern California.
Public Employment Committee. The
committee is organizing a whistleblower
webinar for sometime in September.
Stay tuned for details.
Technology Committee. Save the date
for the committee’s next webinar, “Prac-
The Mentor Committee’s mission is to
establish a supportive community and a
network for new CELA members by
helping them to develop relationships
with more experienced CELA members. The Co-Chair’s responsibilities
will include: matching new and experienced CELA members in Southern
California; proposing and organizing
educational events; organizing the Mentor Breakfast at our Annual Conference;
and conducting monthly committee
meetings. It is recommended that applicants for the position be familiar with the
CELA community in Southern California community, its firms, and its members’ experience levels.
Letters of interest should be sent by
Friday, August 17, 2012, to the Mentor
Committee, in care of CELA’s Administrative Director Christina Krasomil,
-12-
ing to a recent AARP survey, more than
one in four Massachusetts voters over
50 say that they, or someone they
know, has faced age discrimination in
the workplace. About 76 percent of
survey respondents, including both selfidentified liberals and conservatives, were
in favor of S. 2189 after reading a
summary.
—Forced Arbitration: Where Workers Stand Today. On August 8, 2012,
a brown-bag lunch discussion, co-sponsored by NELA, will take place at the
offices of Lieff Cabraser Heimann &
Bernstein, 275 Battery Street, San Francisco. The panel will include Leslie
Bailey, Cliff Palefsky, and Cynthia Rice,
and the discussion will be moderated
by NELA’s Program Director Rebecca
M. Hamburg Cappy. For more information and to sign up, see the website of
the
Alliance
For
Justice,
www.alj.convio.net.
(christina@cela.org). Letters should
explain the nature of your interest in the
Mentor Committee, and your expected
contributions to its work. Please include a short description of your law
practice and its location. The Committee will select from the applicants based
on the Committee’s needs, and some
interviews may be conducted.
As in the case of all CELA committee
positions, we aim for diversity with respect to race, gender, national origin,
age, sexual orientation, disability, religion, office size, legal concentration,
length of practice, and more.
To Get Involved
CELA has the following ten active committees. (The asterix denotes a committee open to CELA Regular members
only.) We encourage you to get involved! Please contact me at
christina@cela.org.
DFEH/EEOC Committee
Mentor Committee
Published
Monthly
BULLETIN
CALIFORNIA COURTS
OF APPEAL
ON REMAND, SECOND DISTRICT
AGAIN CONCLUDES THAT
PLAINTIFF CLAIMS ADJUSTERS
ARE NON-EXEMPT AND THAT
CLASS SHOULD BE CERTIFIED
HARRIS v SUPERIOR COURT (LIBERTY MUTUAL INS. CO.) “These writ
proceedings are before us on remand
from the Supreme Court following the
court’s decision in Harris v. Superior
Court (2011) 53 Cal.4th 170,” the Second District, Division One, began in a
July 23 opinion by Mallano. “The court
reversed our previous decision in this
case, concluding that we had ‘misapplied the substantive law.’ (Id. at p.
175.) The court remanded for us to
reconsider the matter in light of the
correct legal standard.” [Editor’s note:
The Supreme Court’s decision, sum-
marized in CELA Bulletin, Dec 2011,
p.1, said that the Court of Appeal had
over-relied on the so-called “administrative/production worker dichotomy” in
concluding that the adjusters are not
exempt employees as a matter of law.]
“Defendants are insurance companies,
the employers of plaintiffs, the companies’ claims adjusters, who seek damages based on overtime work for which
they allege they were not properly paid...
“Employers claim that the administrative exemption ... applies to claims
adjusters. Adjusters claim that the exemption does not apply. In addition,
Adjusters contend that the issue of
whether their work duties are of the kind
required for application of the administrative exemption is a predominant issue common to the claims of all putative class members, warranting class
certification. The trial court initially
ANNUAL CONFERENCE INFORMATION
—CELA’S Annual Conference is only
weeks away! It will be held at the Hilton
Orange County, Costa Mesa, October
5 and 6, with a half-day skills seminar,
“Conducting Focus Groups and Mock
Trials,” on Thursday, October 4, from
1:30 to 6pm.
Highlights will include the keynote
speech by Kate Kendell at the Diversity Outreach Committee Luncheon
on Friday, October 5. Kate is Execu"Finding an Expectation
tive Director of National Center for Lesof Privacy
in Social
bian Rights.
And a keynote
speech by
CELA
ErwinNetworks,"
Chemerinsky,by
Dean
of the UC
Irvinemember
Law School,
at
our
Annual
Eugene Lee, Conference
Luncheon
Saturday,
begins on on
Page
16. October 6.
For information about the seminar, the
Conference schedule, and on-line registration, go to www.cela.org and click
on “Upcoming Events.” Early Bird registration ends September 14.
Be sure to reserve your room at the
Hilton Orange County by September
20. And take advantage of the discounted room rates for the limited block
of rooms that CELA has reserved, ($159
single/double).
For those flying in: there is complimentary airport transportation to and from
Orange County Airport (SNA).
August 2012
Vol. 26, No. 8
LEGISLATIVE UPDATE
by Mariko Yoshihara
Legislative Session Wraps Up
In August, the legislature ramped up
business in order to push through hundreds of bills before the session ended
on August 31st. Here are some key
labor and employment issues that the
legislature focused on during the last
few weeks of the session.
Domestic Workers’ Bill of Rights.
AB 889, authored by Assemblymember
Ammiano and sponsored by the California Domestic Workers Coalition,
would enact the Domestic Work Employee Equality, Fairness, and Dignity
Act to regulate the wages, hours, and
JOHN WEISS IS
NAMED THIS YEAR’S
JOE POSNER AWARD
RECIPIENT
CELA is proud to announce that John
Weiss has been selected as this year’s
recipient of the Joe Posner Award, to
be presented on October 6 at our Annual Conference. The award is given
annually in Joe Posner’s memory to a
member of our organization who has
demonstrated qualities that embody
Joe’s philosophy and practice. Joe
devoted his heart and soul to educating
and energizing
other
to pursue
This issue
oflawyers
the CELA
effective advocacy on behalf of our cliBulletin is being distributed
ents. He was one of CELA’s coto Judges
Justices
founders,
and thisand
will be
the 12th annithroughout
California,
as
versary of his passing.
(Cont'd on Page 16, POSNER AWARD)
DECISIONS
(From Page 1)
agreed and certified Adjusters’ proposed
class. Later, however, the court revisited the issue and decertified the class
for all claims arising after October 1,
2000, on the ground that under Wage
Order 4-2001, but not under Wage Order 4-1998, the work duties issue is
neither dispositive nor a predominant
issue that would justify class treatment
of Adjusters’ claims.
“Both sides petitioned for writ review.
Employers seek decertification of the
portion of the class that remains certified. Adjusters seek recertification of
the decertified portion of the class and
also challenge the trial court’s denial of
their motion for summary adjudication
of Employers’ affirmative defense based
on the administrative exemption. We
grant Adjusters’ petition and deny Employers’ petition because Adjusters’
primary work duties are the day-to-day
tasks of adjusting individual claims not
directly relating to management policies or general business operations.
“[In our original decision, 154 CA4th
164, 64 CR3d 547, filed on August 16,
2007] [w]e issued an order to show
cause, ordered that the petitions be
consolidated, and ... granted Adjusters’
petition and denied Employers’ petition. We directed the trial court to grant
Adjusters’ motion for summary adjudication and to deny in its entirety Employers’ motion to decertify the class...
“The Supreme Court granted review and
reversed... The court directed us on
remand to ‘review the trial court’s denial
of the summary adjudication motion’
but did not expressly direct us to review
the class certification issue as well...
The court did indicate, however, that the
parties remained ‘free to raise the issue
on remand’ ..., and the parties have
done so in their supplemental briefing in
this court...
“The undisputed facts show that Adjusters are primarily engaged in work that
fails to satisfy the qualitative component of the ‘directly related’ requirement
because their primary duties are the
day-to-day tasks involved in adjusting
individual claims...
“We acknowledge, however, that Employers did introduce evidence that some
Adjusters might do some work at the
level of policy or general operations...
[¶] The work described ... might well
satisfy the qualitative component... But
it is still insufficient to carry Employers’
burden ... because no evidence shows
that even a single Adjuster primarily
engages in such work... [¶] Accordingly, Adjusters cannot be exempt administrative employees under either
Wage Order 4-1998 or Wage Order 42001...
“Employers [also] rely heavily upon the
... language in Federal Regulations
former part 541.205(b) (2000)... We
conclude that Employers’ argument fails
because not all activities that involve
advising management, planning, negotiating, and representing the company
satisfy the qualitative component of the
‘directly related’ requirement...
“Employers argue that Adjusters do not
produce Employers’ product because
Employers’ product is the transference
of risk, not claims adjusting. On that
basis, Employers conclude that Adjusters work must not be production
work but rather is administrative and
consequently satisfies the qualitative
component of the ‘directly related’ requirement.
“The argument fails for two reasons.
First, as Employers’ own evidence
shows, adjusting claims is an important
and essential part of transferring risk...
[¶] Second..., workers who not produce
their employer’s product can still do
work that fails to satisfy the qualitative
component of the ‘directly related’ requirement... The qualitative component
... distinguishes between kinds of office
or nonmanual work; it does not classify
all office work as administrative...
“Employers argue that they should prevail under Federal Regulations former
part 541.205(c)(5) (2000), which provides that ‘[t]he test of ‘directly related
to management policies or general business operations’ is also met by many
persons employed as advisory special(Cont'd on Page 3, DECISIONS)
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Toni Jaramilla
Suite. 300
Tel: (310) 551-3020
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
Mariko Yoshihara
Tel: (916) 442-5788
EXECUTIVE BOARD
(Santa Monica)
Jean K. Hyams
(Oakland)
Scot Bernstein
(Folsom)
Noah Lebowitz
(San Francisco)
David DeRubertis
(Studio City)
Cynthia Rice
(San Francisco)
Maria Diaz
(Fresno)
Mika Spencer
(San Diego)
David Duchrow
(Santa Monica)
Deborah Vierra
(Ventura)
Wilmer Harris
(Pasadena)
Christopher Whelan
(Gold River)
Phil Horowitz
(San Francisco)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
ists and consultants of various kinds,
credit managers, safety directors, claims
agents and adjusters, ... and many
others.’ (Italics added.) The argument
fails because the Supreme Court has
rejected it. The only element of the
administrative exemption that is at issue in these proceedings is the qualitative component of the ‘directly related’
requirement. (Harris, supra, 53 Cal.4th
at p. 182.) Federal Regulations former
part 541.205(c) (2000) relates only to
the quantitative component. (Harris, at
p. 182.)
“Employers urge us to defer to a 2002
opinion letter issued by the federal Department of Labor, which concludes
that claims adjusters are exempt administrative employees. Adjusters urge
us instead to rely on opinion letters
issued in 1998 and 2003 by the [DLSE],
the California agency charged with enforcing IWC wage orders. The Supreme
Court instructs, however, that ‘it is ultimately the judiciary’s role to construe
the language’ of the applicable statutes
and regulations. (Harris, supra, 53
Cal.4th at p. 190.) We therefore do not
rely upon any of the agency opinion
letters... [¶] [A]nd we conclude that the
federal cases involving claims adjusters
are not persuasive. [cites omitted.]
“Employers present one argument we
have not yet addressed. According to
them, the qualitative component ... cannot be dispositive , and class treatment
cannot be appropriate because the certified class is so heterogeneous... Employers’ argument fails because the
fact that the class is heterogeneous in
certain respects does not undermine
our conclusion that no evidence shows
that any class members primarily engage in work at the level of management
policy or general business operations...
“Finally, we address Employers’ assertion that the question presented ... is
whether ‘every insurance adjuster in
California, without exception, from the
most senior to the most junior, and
regardless of the adjuster’s duties’ is
nonexempt. (Italics added.) The assertion is mistaken. [¶] Application of the
administrative exemption ... requires
case-specific factual analysis of the
work duties actually performed by the
particular employees involved... Reliance on a job title like ‘claims adjuster’
is no substitute.
“Plaintiffs’ petition for writ of mandate is
granted. We direct the trial court to
vacate its October 18, 2006 order ...
and to enter a new and different order (1)
granting plaintiffs’ motion for summary
adjudication of defendants’ affirmative
defense based on the administrative
exemption and (2) denying in its entirety defendants’ motion to decertify
the class...”
For petitioners: Robbins Geller Rudman
& Dowd, Patrick J. Coughlin, Theodore
J. Pintar, Steven W. Pepich, Kevin K.
Green, Steven M. Jodlowski; Cohelan
Khoury & Singer, Timothy D. Cohelan,
Isam C. Khoury; Spiro Moss, Ira Spiro,
Dennis F. Moss; Michael L. Carver.
For Real Parties: Sidley Austin, Douglas R. Hart, Geoffrey D. Deboskey;
Sheppard Mullin Richter & Hampton,
Robert J. Stumpf, Jr., Karin Dougan
Vogel.
Second Dist Div One, 7/23/12; opinion by Mallano with Johnson concurring and Rothschild concurring
and dissenting; 2012 DAR 10103,
2012 WL 2990020.
TRIAL COURT CORRECTLY
DENIED MOTION TO COMPEL
ARBITRATION WHERE CLAUSE
WAS “BURIED” IN HANDBOOK
AND HAD MULTIPLE OTHER
ELEMENTS OF
UNCONSCIONABILITY
SPARKS v VISTA DEL MAR CHILD
AND FAMILY SERVICES. “Defendant
... appeals from an order [by Judge
Elizabeth Allen White] denying its petition to compel arbitration of the wrongful
discharge claims of its former employee
Perry Sparks,” the Second District,
Division Five, began in a July 30 opinion
by Mosk that was certified for partial
publication. “Defendant relies upon an
arbitration clause in its 2006 employee
handbook, which plaintiff acknowledged
he received. We hold that plaintiff is not
bound by the arbitration clause be-3-
cause that clause was included within a
lengthy employee handbook; the arbitration clause was not called to the
attention of plaintiff, and he did not specifically acknowledge or agree to arbitration; the handbook stated that it was not
intended to create a contract; the handbook provided that it could be amended
unilaterally by defendant and thus rendered any agreement illusory; the specific rules referred to in the arbitration
clause were not provided to plaintiff; and
the arbitration clause is unconscionable.
“According to plaintiff, he was terminated after he complained of various
employee practices that he asserted
violated federal and state reporting and
compensation laws. Plaintiff sought damages for termination in violation of fundamental public policy; unfair business
practices...; violation of Labor Code section 1102.5, subdivision (a); and [IIED].
“The language in the Handbook here,
like the language at issue in Mitri [v Arnel
Management Co. (2007) 157 CA4th
1164], suggests that the Handbook,
which was ‘distributed’ to all employees, was informational rather than contractual. Thus, because defendant failed
to point out or call attention to the
arbitration requirement in the Acknowledgment, plaintiff should not be bound to
arbitrate.
“No authorities have been cited to us
that support defendant’s position. On
the contrary, whatever authorities there
are support plaintiff’s position. [cites
omitted.] To support a conclusion that
an employee has relinquished his or her
right to assert an employment-related
claim in court, there must be more than
a boilerplate arbitration clause buried in
a lengthy employee handbook given to
new employees. At a minimum, there
should be a specific reference to the
duty to arbitrate employment-related
disputes in the acknowledgment of receipt form signed by the employee at
commencement of employment. The
increasing phenomenon of depriving
employees of the right to a judicial forum
should not be enlarged by imposing
upon employees an obligation to arbitrate based on one obscure clause in a
DECISIONS
(From Page 3)
large employee handbook distributed to
employees for informational purposes.
“Plaintiff signed a form acknowledging
receipt of the Handbook, which Handbook contained ‘important information
about [defendant’s] general personnel
policies’ and included an ‘understanding’ he would be ‘governed’ by its contents. That should not, under the circumstances, qualify as an agreement
to be bound by the arbitration clause. At
best, it expressed the employee’s understanding that he must comply with
personnel policies and obligations,
rather than an agreement to arbitrate.
“Moreover, the Handbook expressly provides: ‘This Handbook is not intended to
create a contract of employment...’ ...
Also suggesting the non-contractual
aspect of the Handbook is defendant’s
acknowledgment that it ‘distributed’ the
Handbook to all of its employees.
“The arbitration clause is unenforceable
for other reasons. An agreement to
arbitrate is illusory if, as here, the employer can unilaterally modify the handbook. [cites omitted.] ... [And] [i]n
Trivedi v. Curexo Technology Corp.
(2010) 189 Cal.App.4th 387, 393, the
court said: ‘Numerous cases have held
that the failure to provide a copy of the
arbitration rules ... supported a finding
of procedural unconscionability.’ ...
Thus, the arbitration clause is procedurally unconscionable.
“The arbitration clause is also substantively unconscionable in that it requires
the employee to relinquish his or her
administrative and judicial rights under
federal and state statutes (cf. Ajamian
v. CantorCO2e [(2012) 203 CA4th 771]
at pp.798-799) and it makes no express
provision for discovery rights (Armendariz
v. Foundation Health Psychcare Services, Inc. [(2000) 24 C4th 83] at p.104.)
As the [AAA] rules specified by the
clause were not provided to plaintiff, and
according to defendant those rules gave
the arbitrator the discretion to deny any
discovery, the provision for discovery is
insufficient. Accordingly, the clause is
unenforceable as unconscionable. [¶]
For all of the foregoing reasons, the trial
court correctly denied the petition to
compel arbitration.”
For plaintiff: Karl Gerber.
For defendant: Hill, Farrer & Burrill,
James A. Bowles and E. Sean
McLoughlin.
Second Dist Div Five, 7/30/12; opinion by Mosk with Armstrong concurring and Turner dissenting; 2012 DAR
10494, 2012 WL 3075896.
WHERE EMPLOYEE’S APPEAL
TO SUPERIOR COURT
FOLLOWING BERMAN HEARING
WAS DISMISSED AS UNTIMELY,
EMPLOYER WAS NOT ENTITLED
TO RECOVER ATTORNEYS’ FEES
UNDER LABOR CODE § 98.2(c)
ARIAS v KARDOULIAS. In a July 26
opinion by Aldrich, the Second District,
Division Three, wrote in part as follows:
“Labor Code section 98.2, subdivision
(c) states that if a party files an appeal
in the superior court seeking review of
the California Labor Commissioner’s
decision and is ‘unsuccessful in the
appeal,’ the court shall determine the
reasonable attorney fees and costs incurred by the other parties to the appeal
and assess that amount as a cost upon
the party filing the appeal. ‘An employee is successful [on appeal] if the
court awards an amount greater than
zero.’ The commissioner awarded
Rebecca C. Arias $6,310.69 in unpaid
wages, but her untimely appeal to the
superior court was dismissed on jurisdictional grounds. The superior court
considered Arias ‘unsuccessful on appeal,’ and assessed $6,395 in attorney
fees and costs against Arias, the party
filing the appeal.
“In this case of first impression, we
must determine whether the dismissal
on jurisdictional grounds of an untimely
appeal from the commissioner’s decision is equivalent to an ‘award of zero’...
Unlike a conventional case, when a
party timely appeals the commissioner’s
decision, the superior court conducts a
new trial on the merits of the employee’s
wage claim. (§ 98.2, subd. (a).) The
statutory right to recover attorney fees
-4-
under section 98.2, subdivision (c) depends upon success at trial. Because
the purpose behind the one-way feeshifting provision is to discourage
unmeritorious appeals, based upon the
statutory language and the legislative
intent, we hold that section 98.2, subdivision (c) does not become operative
unless the superior court has jurisdiction to conduct a trial on the merits of
the employee’s wage claim. We therefore reverse the attorney fees and costs
assessed in this action...
“A dismissal of the appeal from the
commissioner’s decision on jurisdictional grounds is not the equivalent of
the superior court’s determination, after
conducting a trial de novo, that the
employee is entitled to ‘zero.’ ... Because Arias did not timely appeal, she
has a collectible judgment against her
employer for $6,319.69 in unpaid
wages..., but she has been assessed
attorney fees and costs ... as if the trial
court’s order of dismissal concluded
that she had no right to recover those
unpaid wages. Unlike the dismissal of a
civil action, the dismissal of Arias’s
appeal only precluded a new trial on her
wage claim; her award of unpaid wages
was not ‘thrown out completely’ or nullified. The employer remains liable for
$6,319.69 in unpaid wages.”
For plaintiff: Rebecca C. Arias, in pro
per.
For defendant: Paul H. Nankivell II.
Second Dist Div Three, 7/26/12; opinion by Aldrich with Klein and Kitching
concurring; 2012 DAR 10297 , 2012
WL 3039170.
ALTHOUGH “RELUCTANTLY”
BOUND BY GENTRY DESPITE
CONCEPCION, FOURTH DISTRICT
HOLDS THAT PLAINTIFFS FAILED
TO ESTABLISH GENTRY
FACTORS, BUT REMANDS FOR
DETERMINATION WHETHER
PARTIES IMPLIEDLY AGREED TO
CLASS ARBITRATION
TRULY NOLEN v SUPERIOR COURT
DECISIONS
(From Page 4)
(MIRANDA). In an opinion by Haller filed
on August 9 and certified for publication
on August 13, the Fourth District, Division One, wrote in part as follows relative to proceedings in mandate after the
Superior Court had granted an
employer’s motion to compel arbitration but had denied the employer’s
request that it order individual rather
than classwide arbitration:
“Alvaro Miranda and Danny Luna filed a
class action complaint ... alleging violations of California’s wage and hour laws.
Truly Nolen moved to compel arbitration
of the claims under arbitration agreements signed by the parties and requested that the court order plaintiffs to
arbitrate on an individual and not a class
basis. The arbitration agreements did
not contain a specific provision pertaining to the availability or unavailability of
classwide arbitration. After briefing and
a hearing, the court granted the motion
to compel arbitration, but rejected Truly
Nolen’s request that the court order
individual arbitration, relying on Gentry
v. Superior Court (2007) 42 Cal.4th 443.
“Truly Nolen filed a writ of mandate
petition challenging the court’s refusal
to order individual arbitration. We issued an order to show cause and provided the parties an opportunity to submit supplemental briefing. In its briefs,
Truly Nolen contended the trial court
erred in relying on Gentry because Gentry has been overruled by the United
States Supreme Court in AT & T Mobility LLC v. Concepcion (2011)
___U.S.___, [131 S.Ct. 1740] and, even
if Gentry remains viable, the factual
record did not support the application of
the Gentry factors in this case. Plaintiffs
countered that Concepcion did not overrule Gentry, and substantial evidence
supported the trial court’s decision that
Gentry applied in the case. Plaintiffs
raised many additional arguments, many
of which were never raised before the
trial court.
“Although Concepcion’s reasoning
strongly suggests that Gentry’s holding
is preempted by federal law, the United
States Supreme Court did not directly
rule on the class arbitration issue in the
context of unwaivable statutory rights
and the California Supreme Court has
not yet revisited Gentry. Thus, we continue to be bound by Gentry under
California’s stare decisis principles.
However, we conclude the trial court’s
application of the Gentry elements was
unsupported on the factual record before it.
“In reaching these conclusions, we recognize the court did not address one
foundational matter: whether the parties
impliedly agreed in their arbitration contract to permit class arbitration. [I]f such
an agreement existed, there would be
no need to reach the Gentry issues and
a court order refusing to require individual arbitration would have been warranted. Although plaintiffs did not specifically raise this issue in the trial court,
we shall remand the matter to the trial
court and allow the parties to submit
additional evidence and/or argument on
this issue.
“We thus grant Truly Nolen’s petition
and order the trial court to (1) vacate the
portion of the order denying Truly Nolen’s
motion to order individual arbitration;
and (2) provide the parties the opportunity to submit additional evidence and/
or argument on the issue of whether the
arbitration contract reflects a mutual
intent to permit classwide arbitration...
“[M]ost federal courts and at least one
state court have concluded that
Concepcion’s broad language and reasoning undermines Gentry’s rationale.
[cites omitted.] ... [¶] A minority of
courts have posited (mostly in dicta)
that Gentry remains viable because Discover Bank was a particular application
of California’s unconscionability doctrine, whereas Gentry was based on
Armendariz’s public policy rationale.
[cites omitted.] [¶] We agree with the
majority view, and find the latter distinction unpersuasive...
“Plaintiffs argue that we should adhere
to Gentry until the California Supreme
Court has the opportunity to review the
decision in light of ... Concepcion and
Stolt-Nielsen. We find this argument
persuasive...
“Although a court has broad discretion
-5-
in evaluating the Gentry factors, plaintiffs presented no evidence with respect
to the application of these factors to the
circumstances in this particular case.
The only evidence relevant to this case
was contained in the declarations of the
two named plaintiffs, whose statements
tended to negate any concerns expressed by the attorneys. Both plaintiffs acknowledged they were aware of
their rights under wage and hour laws,
and expressly notified their manager
that their rights were being violated, but
Truly Nolen refused to remedy the situation or remind the employees that they
had signed an arbitration agreement.
Further, the arbitration agreements at
issue contain a specific provision prohibiting Truly Nolen from retaliating for
making a complaint under the employer’s
dispute resolution system. Additionally, the arbitration agreement provides
numerous protections to employees who
bring individual claims, including that
Truly Nolen bears the cost of the arbitration proceeding (regardless who prevails) and that if the employee chooses
not to be represented by counsel, Truly
Nolen must also appear without legal
representation. Moreover, without any
evidence of the amount of damages at
stake, it is far from clear that it would be
cost prohibitive for plaintiffs to arbitrate
their claims on an individual basis.
“If we were to uphold the trial court’s
determination that the Gentry factors
were met based on a counsel’s generic
discussion of the benefits of classwide
arbitration and disadvantages of individual arbitration, we would be ignoring
the United States Supreme Court’s pronouncements and essentially permit
classwide arbitration in every case alleging wage and hour violations. Assuming the Gentry standard survives
the United States Supreme Court’s
holdings, the factual analysis as to
whether the Gentry factors apply in any
particular case must be specific, individualized, and precise.
“In responding to Truly Nolen’s writ petition in this court, plaintiffs devote much
of their briefs to urge us to uphold the
trial court’s order on grounds other than
the Gentry decision. Specifically, plain(Cont'd on Page 6, DECISIONS)
DECISIONS
(From Page 5)
tiffs contend: (1) the trial court’s order
was proper because the parties’ arbitration contract contained an implied agreement to permit class arbitration; (2) the
court was precluded by the [NLRA] from
ordering individual arbitration; and (3)
the trial court had no jurisdiction to rule
on any class arbitration issue... [W]e
reject each of these contentions... We
remand the matter to permit the court to
rule on plaintiffs’ assertion there is an
implied agreement to permit classwide
arbitration... [¶] Relying on Stolt-Nielsen,
the courts have recognized that an implied agreement may be sufficient to
support class arbitration. [cites omitted.]
“As have other courts, we find the NLRB’s
conclusion [in D. R. Horton] to be
unpersuasive and we decline to follow it.
[cites omitted.]
“[P]laintiffs argue that ... the trial court
had no authority to decide any issues
involving class arbitration, and instead
these issues are solely for the arbitrator. The argument is without merit on
the record before us... [¶] By failing to
ask the court to defer the class arbitration issues to the arbitrator, plaintiffs
cannot now complain about the court’s
authority to rule on those issues...”
For petitioner: Ronald W. Novotny, San
Diego.
For Real Parties: Norman B. Blumenthal,
La Jolla; Alexander Isaac Dychter, San
Diego.
Fourth Dist Div One, 8/9/12, cert’d for
pub 8/13/12; opinion by Haller with
Benke and Aaron concurring; 2012
DAR 11207, 2012 WL 3222211.
DOCTOR CLAIMING LOSS OF
HOSPITAL PRIVILEGES AS
WHISTLEBLOWER RETALIATION
UNDER HEALTH AND SAFETY
CODE § 1278.5 WAS NOT
REQUIRED TO EXHAUST JUDICIAL
REMEDY VIA PETITION FOR WRIT
OF MANDATE
FAHLEN v SUTTER CENTRAL VALLEY HOSPITALS. A Fifth District opinion by Wiseman filed on August 14
reads in part as follows:
“Health and Safety Code section 1278.5
is a whistleblower protection law designed to encourage health care workers to notify authorities of ‘suspected
unsafe patient care and conditions.’ (§
1278.5 subd. (a).) One of the issues we
must decide is whether a doctor claiming he lost his hospital privileges as a
form of whistleblower retaliation must
exhaust his judicial remedy of pursuing
review, via writ of mandate, of the
hospital’s action before he can file a
whistleblower lawsuit under section
1278.5. A section 1278.5 claim cannot
be asserted in writ proceedings, so
applying the exhaustion requirement
would delay relief for a whistleblower.
“In two recent cases interpreting the
California Whistleblower Protection Act
(Gov. Code § 8547 et seq.), the California Supreme Court held that a state
employee sanctioned by an agency
need not file a mandate petition against
the agency before suing it under the
whistleblower statute. The court recognized the Legislature’s intent to encourage employees to report threats to public health without fear of retribution.
(Runyon v. Board of Trustees of California State University (2010) 48 Cal.4th
760, 763, 774; State Bd. of Chiropractic
Examiners v. Superior Court (2009) 45
Cal.4th 963, 977-978.) For the same
reason, prior filing of writ proceedings
also is not required here...
“On March 9, 2011, Fahlen filed a complaint for damages and injunctive and
declaratory relief... The first cause of
action alleged retaliation in violation of
section 1278.5... The second cause of
action requested a declaratory judgment ‘pursuant to ... Business and
Professions Code Section 803.1.’ The
third cause of action is for interference
with the right to practice an occupation.
The fourth cause of action is for intentional interference with ... contractual
relations. The fifth cause of action is for
interference with prospective economic
advantage... The sixth cause of action
is for retaliation against Fahlen for
‘advocat[ing] for appropriate care for
[his] patients,’ in violation of Business
and Professions Code sections 510
-6-
and 2056. The seventh cause of action
is for wrongful termination of Fahlen’s
hospital privileges.
“This appeal is from an order denying
the hospital’s anti-SLAPP motion... The
critical issue is presented by the
hospital’s contention that the motion
should have been granted because
Fahlen’s whistleblower claim will be
defeated on the merits due to his failure
to pursue writ relief. In light of our holding on the exhaustion issue, we reject
that contention. We conclude the trial
court correctly denied the motion with
respect to the section 1278.5 cause of
action and one other. As to the remaining causes of action, however, we must
reverse, because the exhaustion requirement does apply to them...
“Fahlen contends that if he is not required to exhaust judicial writ remedies
prior to his civil action under section
1278.5, he should not be required to do
so in order to maintain his remaining
causes of action because such a requirement would violate the rule against
splitting causes of action. We disagree,
with the exception of the second cause
of action [for declaratory relief pursuant
to Business and Professions Code section 803.1]. As to the third, fifth, sixth,
and seventh causes of action, these
involve common law and statutory
causes of action to which the Westlake
requirement for judicial exhaustion is
applicable (see Westlake [Community
Hosp. v Superior Court (1976)] 17 Cal.
3d [465] at pp. 485-486) and in which
there is no legislative intent demonstrated to create an exception to that
requirement...”
For plaintiff: Stephen D. Schear, Jenny
Huang.
For defendants: Arent Fox, Lowell C.
Brown, Debra J. Albin-Riley, and
Jonathan E. Phillips.
Fifth Dist, 8/14/12; opinion by
Wiseman with Cornell and Detjen
WL 3292405.
DECISIONS
(From Page 6)
CAUSE OF ACTION FOR
WRONGFUL TERMINATION IN
VIOLATION OF PUBLIC POLICY
DOES NOT LIE IF EMPLOYER
DECIDES NOT TO EXERCISE
OPTION TO RENEW CONTRACT
TOUCHSTONE TELEVISION PRODUCTIONS v SUPERIOR COURT
(SHERIDAN). “Touchstone Television
Productions hired actress Nicollette
Sheridan to appear in the first season of
the television series Desperate Housewives,” the Second District, Division
Four, began in an August 16 opinion by
Willhite. “The agreement gave Touchstone the exclusive option to renew
Sheridan’s services on an annual basis
for an additional six seasons. Touchstone renewed Sheridan’s services up
to and including Season 5. During Season 5, Touchstone informed Sheridan it
would not renew her contract for Season 6.
“Insofar as is relevant to this writ proceeding, Sheridan sued Touchstone for
wrongful termination in violation of public policy. Sheridan alleged that Touchstone had fired her because she had
complained about a battery allegedly
committed upon her by Desperate
Housewives creator Marc Cherry. The
jury deadlocked on this claim and the
trial court declared a mistrial. Touchstone moved for a directed verdict, contending that it had not terminated
Sheridan, but rather had simply not
renewed her contract for an additional
season. The trial court [Judge Elizabeth
Allen White] denied the motion.
“Touchstone petitioned this court for
extraordinary relief. We stayed the pending retrial and issued an alternative writ
of mandate. Having reviewed the parties’ pleadings and heard oral argument, we conclude that the trial court
erred in denying Touchstone’s motion
for a directed verdict. A cause of action
for wrongful termination in violation of
public policy does not lie if an employer
decides simply not to exercise an option to renew a contract. In that instance, there is no termination of employment but, instead, an expiration of
a fixed-term contract. (Daly v. Exxon
Corp. (1997) 55 Cal.App.4th 39.) To hold
otherwise would require the creation of a
new tort for nonrenewal of a fixed-term
employment contract in violation of public policy. We decline to do so. However,
we conclude also that Sheridan should
be permitted to file an amended complaint alleging a cause of action under
Labor Code section 6310 that Touchstone retaliated against her for complaining about unsafe working conditions (e.g., Cherry’s conduct) by deciding not to exercise its option to renew
her contract. (But see fns. 5 & 6, infra.)
“FN5. Muller v. Automobile Club of So.
California (1998) 61 Cal.App.4th 431
suggests that a section 6310 claim
requires that the workplace ‘actually
[be] unsafe within the meaning of Labor
Code sections 6310 and 6402.’ On the
other hand, Cabesuela v. BrowningFerris Industries of California, Inc. (1998)
68 Cal.App.4th 101 found it sufficient if
the employee makes ‘a good faith complaint about working conditions which
[s]he believes to be unsafe.’ (Id. at p.
109.) We need not resolve that conflict in
this writ proceeding.
“FN6. At oral argument, Touchstone
indicated that it did not oppose giving
Sheridan an opportunity to file an
amended complaint, but that it would
challenge such a pleading in the trial
court. Whether the facts of this case
support a cause of action under section
6310, subdivision (b) is for the trial court
to decide in the first instance.”
For petitioner: Mitchell Silberberg &
Knapp, Aaron M. Wais and Adam Levine.
For real parties: Baute Crochetiere &
Wang, Mark D. Baute and David P.
Crochetiere.
Second Dist Div Four, 8/16/12; opinion by Willhite with Epstein and
2012 WL 3525609.
NINTH CIRCUIT
FORMER EEOC EMPLOYEE
ALLEGING REHAB ACT
VIOLATIONS DID NOT FAIL TO
EXHAUST ADMINISTRATIVE
REMEDIES BY FILING SUIT IN
DISTRICT COURT LESS THAN
180 DAYS AFTER FILING AND
THEN WITHDRAWING
ADMINISTRATIVE APPEAL
BULLOCK v BERRIEN. “Plaintiff Mary
Bullock, a former employee of the
[EEOC], appeals from the district court’s
dismissal of her disability discrimination suit under the Rehabilitation Act of
1973,” the Ninth Circuit began in a July
30 opinion by W. Fletcher. “[Southern
District Judge William Q. Hayes] dismissed Bullock’s complaint for failure
to exhaust administrative remedies.
“Prior to filing suit, Bullock filed an
administrative complaint that was adjudicated by an [ALJ]. After the ALJ
denied relief in part, Bullock filed an
optional administrative appeal with the
[EEOC]. She subsequently withdrew
her appeal without waiting 180 days as
specified in 29 C.F.R. § 1614.407(d),
and filed suit in district court based on
the same claims... The district court
held that under Rivera v. United States
Postal Service, 830 F.2d 1037 (9th Cir.
1987), cert. denied, 486 U.S. 1009
(1988), it lacked jurisdiction because
Bullock had not waited 180 days after
filing her administrative appeal...
“In its initial briefing to us, the EEOC
argued, based on Rivera, that Bullock
had failed to exhaust. We asked for
supplemental briefing discussing our
decision in Bankston v. White, 345
F.3d 768 (9th Cir. 2003), which had not
been cited by either party. In its supplemental brief, the EEOC now concedes
that Bullock has exhausted her administrative remedies, but contends that
she has waived any exhaustion argument based on Bankston.
“We hold, based on Bankston and on a
post-Rivera regulation, that Bullock has
-7-
DECISIONS
(From Page 7)
exhausted her administrative remedies.
We reverse and remand to the district
court for further proceedings.
“Bullock, who suffers from Multiple Sclerosis and Systemic Lupus, worked as
an ALJ for the EEOC from 1999 to 2007.
In January 2003, Bullock filed an informal complaint based on alleged violations of the Rehabilitation Act, which
incorporates the administrative exhaustion procedures of Title VII... Bullock
filed a formal complaint in May 2003.
“A hearing was held before a contract
ALJ... [who] found that Bullock ... could
not perform the essential functions of
her job even with accommodation. However, the ALJ found that the EEOC had
retaliated against Bullock for filing her
discrimination complaint. The ALJ
awarded Bullock $25,000 in nonpecuniary damages, $108,680 in attorney’s
fees, and $7,823.24 in costs.
“Both Bullock and the EEOC filed administrative appeals. Bullock filed her
appeal on August 18, 2006. She withdrew it on September 18, stating her
intent to file a civil suit. On October 18,
Bullock filed suit in district court...
“The district court dismissed Bullock’s
complaint without leave to amend because she had not filed suit within 180
days of filing her administrative appeal...
Bullock appealed the dismissal. We
reverse and remand.
“The district court relied upon Rivera in
concluding that Bullock had failed to
exhaust her administrative remedies
prior to filing a civil suit. However, the
parties now agree that Rivera is no
longer good law, and that Bullock did
not need to wait 180 days... For the
reasons that follow, we agree.
“In Bankston..., [w]e noted that a regulation promulgated after our decision in
Rivera required dismissal of the administrative appeal in the event an employee filed suit in district court... [W]e
held that ‘a rule based on administrative
efficiency should not be applied punitively where there are no simultaneous
administrative and judicial proceedings
and where the plaintiff no longer has the
right to administrative review of his claim.’
Bankston, 345 F.3d at 772.
“The rationale of Bankston applies to
the case before us... [A]llowing an employee to change her mind after filing an
optional administrative appeal does not
significantly impair administrative efficiency because, pursuant to 29 C.F.R.
§ 1614.409, the Commission will terminate any pending administrative appeal
upon the employee’s filing of a civil
action...
“The EEOC contends that ... Bullock ...
has waived any argument that Bankston
and 29 C.F.R. § 1614.409 supercede
Rivera. Prior to our request for supplemental briefing, neither party had cited
Bankston. ‘We will not ordinarily consider matters on appeal that are not
specifically and distinctly argued in
appellant’s opening brief.’ [cite omitted.] However, our consideration of the
Bankston issue does not prejudice the
government. The issue is purely legal
and the parties have ‘fully briefed it in
their supplemental brief[s] to the court...’
[cites omitted.] Moreover, the factual
record is fully developed, and the EEOC
agrees with our substantive legal conclusion.”
For plaintiff: Gastone Bebi, San Diego.
For defendant: Timothy C. Stutler,
Katherine L. Parker, U.S. Attorney’s
Office, San Diego.
Ninth Circuit, 7/30/12; opinion by W.
Fletcher joined by Kozinski and
Reinhardt; 2012 DAR 10389, 2012 WL
3064862.
BOUND BY PRECEDENT WITH
WHICH IT DISAGREES, NINTH
CIRCUIT PANEL HOLDS THAT
POLICE OFFICER’S
WHISTLEBLOWING SPEECH WAS
OUTSIDE PROTECTION OF FIRST
AMENDMENT
DAHLIA v RODRIGUEZ. In an opinion
by Wardlaw filed on August 7, a Ninth
Circuit panel wrote in part as follows:
“Four days after Angelo Dahlia, a detective in the City of Burbank Police De-8-
partment, disclosed the alleged use of
abusive interrogation tactics by his colleagues to the Los Angeles Sheriff’s
Department, he was placed on administrative leave by Chief of Police Tim
Stehr. That decision prompted Dahlia to
file a 42 U.S.C. § 1983 suit against
Stehr and lieutenants, sergeants, and a
detective of the Burbank Police Department, alleging that his placement on
administrative leave was unconstitutional retaliation for the exercise of his
First Amendment rights. The district
court [Judge Margaret M. Morrow] dismissed the suit, concluding that our
decision in Huppert v. City of Pittsburg,
574 F.3d 696 (9th Cir. 2009), controlled
Dahlia’s case ‘unless and until overruled’ and that, therefore, Dahlia’s
speech was not protected by the First
Amendment... Although we have significant reservations about the validity of
the Huppert decision, we must agree
with the district court that, under Huppert,
Dahlia’s disclosure ... was made in the
course of his official duties, and thus
falls outside the protection offered by
the First Amendment. We therefore
affirm the judgment of the district court.
“The distinction drawn in our First
Amendment doctrine between private
and official speech is rooted in the
Supreme Court’s decision in Garcetti v.
Ceballos [(2006) 547 US 410]... [¶]
Three years after the Supreme Court’s
decision in Garcetti, a divided threejudge panel of our court decided Huppert
v. City of Pittsburg, 574 F.3d 696 (9th
Cir. 2009)... [T]he panel majority ... held
as a matter of law that California police
officers are required, as part of their
official duties, to disclose information
regarding acts of corruption...
“The panel majority reached its conclusion ... by relying on language from a
single California Court of Appeal decision from 1939, [Christal v Police
Comm’n of City and County of San
Francisco (1939) 33 CA2d 564] obviously decided long before the Supreme
Court’s decisions in Pickering [v Bd. of
Educ. (1968) 391 US 563] and Garcetti...
[¶] The Christal decision was barely
apposite to the facts presented in
DECISIONS
(From Page 8)
Huppert, and is even less so here...
Thus, the holding in Huppert is entirely
unsupported by the sole California case
it purports to rely upon....
“We feel compelled, like the district
court, to follow Huppert, despite our
conclusion that it was wrongly decided...
The Huppert holding, which determines
the scope of a police officer’s professional duties as a matter of California
law in the First Amendment retaliation
context, conflicts with the Supreme
Court’s instruction in Garcetti that we
make a practical, factual inquiry into the
job responsibilities of each public employee plaintiff...
“The conclusion, as a matter of law, that
whistleblowing on fellow officers is part
of a police officer’s official duties not
only conflicts with Garcetti, but also
with our own post-Garcetti case law in
the First Amendment retaliation context, which consistently holds that determining the scope of a plaintiff’s professional duties requires a factual inquiry tailored to the plaintiff’s individual
circumstances. [cites omitted.]
“The upshot of Huppert is a rule, binding
only in our circuit, that the act of
whistleblowing is itself a professional
duty of police officers, thus stripping
such speech of the First Amendment’s
protection. Where we draw the line
between professional duty and private
speech has significant implications for
potential whistleblowers...
“The district court dismissed Dahlia’s
suit on the alternative ground that placement on administrative leave is not an
adverse employment action. We disagree. We conclude that under some
circumstances, placement on administrative leave can constitute an adverse
employment action.
“Although we believe that Huppert was
wrongly decided, we are bound to follow
it. Miller [v Gammie (9th Cir 2003) 335
F3d 889]. We therefore affirm the district court’s grant of defendants’ motion
to dismiss Dahlia’s complaint.”
For plaintiff: Michael A. McGill, Michael
A. Morguess, and Russell M. Perry,
Lackie, Dammeier & McGill, Upland.
Wardlaw joined by Paez and
Rawlinson; 2012 DAR 10898, 2012
WL 3185693.
NINTH CIRCUIT REVERSES
DISMISSAL OF QUI TAM AND
RETALIATORY DISCHARGE
CLAIMS UNDER FEDERAL FALSE
CLAIMS ACT
HOOPER v LOCKHEED MARTIN CORPORATION. In a lengthy opinion by
Pregerson filed on August 2, relative to
a former employee’s claims under the
False Claims Act’s qui tam and retaliatory discharge provisions, the Ninth Circuit summarized its conclusions asa
follows:
“We REVERSE and REMAND [Central
District Judge Dale S. Fischer’s] dismissal of Hooper’s wrongful discharge
claim under 31 U.S.C. § 3730(h) as
barred by California’s two-year statute
of limitations. We hold that in a case
arising under federal question jurisdiction, when a federal statute directs federal courts to borrow the most closely
analogous state statute of limitations, a
transferee district court must apply the
state statute of limitations that the transferor district court would have applied
had the case not been moved on forum
non conveniens grounds... Therefore,
Maryland’s three-year statute of limitations applies here.
“We also REVERSE and REMAND the
district court’s dismissal of Hooper’s
claim that Lockheed violated the FCA
by knowingly underbidding the contract.
Having determined that FCA liability
may be premised on false estimates,
we hold that there is a genuine issue of
material fact whether Lockheed acted
either knowingly, in deliberate ignorance
of the truth, or in reckless disregard of
the truth when it submitted its bid for the
Air Force ... contract.”
For plaintiff-appellant: Joseph A. Black,
Daniel E. Cohen, and James A. Moody,
The Cullen Law Firm, Washington DC;
Mark I. Labaton, Motley Rice, Los An-9-
geles.
For defendant-appellee: Mark R. Troy
and Mana Elihu Lombardo, Crowell &
Moring, Los Angeles.
Pregerson joined by Graber and
Berzon; 2012 DAR 10679, 2012 WL
3124970.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
MULTIPLE ELEMENTS OF
UNCONSCIONABILITY RENDERED
UNENFORCEABLE, INCLUDING
ABSENCE OF ANY EXPRESS
AGREEMENT BY EMPLOYER TO
BE BOUND
JARA v JPMORGAN CHASE BANK.
“JPMorgan Chase Bank, N.A. appeals
from an order [by San Luis Obispo
County Superior Court Judge Charles
S. Crandall] denying its motion to compel arbitration of Dixie Jara’s employment claims,” the Second District, Division Six, began in a July 30 opinion by
Gilbert. “We conclude, upon de novo
review, that the arbitration agreement
was both procedurally and substantively unconscionable and the trial court
did not abuse its discretion when it
refused to enforce the entire agreement
rather than severing the unconscionable
provisions. We affirm.
“In February 2001, Washington Mutual
Bank hired Dixie Jara as an assistant
manager. She signed a two page document entitled ‘BINDING ARBITRATION
AGREEMENT,’ in which she agreed to
arbitrate all disputes related to her employment with Washington Mutual, or
its successor.
“JPMorgan Chase acquired Washington Mutual’s assets in 2008. Jara became an employee of JPMorgan Chase.
In December of 2010, JPMorgan Chase
terminated Jara’s employment.
DECISIONS
(From Page 9)
“Jara filed a complaint against JPMorgan
and her supervisor, Scott Doi, for discrimination, harassment, and wrongful
termination under [FEHA]. She alleged
that JPMorgan Chase discriminated
against her in the terms and conditions
of her employment because she is of
Mexican and Filipino ancestry and is
over 60 years old...
“Jara contends the arbitration provision
was substantively unconscionable because it was not mutual, it excluded
claims for injunctive relief favored by
employers, limited discovery to one
request for production and two depositions absent relief from the arbitrator on
a finding of good cause, and imposed
upon her the risk of costs unique to
arbitration.
“The absence of an employer’s signature on an arbitration provision raises an
issue of mutuality that is presently pending before the California Supreme Court.
(Wisdom v. Accent Care, Inc. (2012)
202 Cal.App.4th 591, review granted
March 28, 2012, S200128.) . The question under review in Wisdom is whether
an arbitration clause in an employment
application that provides, ‘I hereby agree
to submit to binding arbitration...’ is
unenforceable as substantively unconscionable for lack of mutuality... In Roman v. Superior Court (2009) 172
Cal.App.4th 1462, division seven of this
court decided that similar language created an implied mutual agreement ...
notwithstanding the absence of the
employer’s express agreement or signature... We conclude under
Armendariz that the absence of any
express agreement by JPMorgan Chase
to be bound by the arbitration agreement rendered it non-mutual.
“The agreement is also substantively
unconscionable because it reserves
court access for claims for injunctive
relief... It also does not require the
employer to bear the burden of costs
that are unique to arbitration... Here, the
agreement requires the ‘party initiating
arbitration’ to pay any filing fee, and only
requires the employer to ‘advance any
required administrative or arbitrator’s
fees.’ [¶]The limitation of discovery also
renders the agreement substantively
unconscionable...
“We conclude that the agreement is
procedurally unconscionable because
it was presented on a take it or leave it
basis and did not include copies of the
arbitration rules. This minimal showing
of procedural unconscionability is sufficient because of the high degree of
substantive unconscionability...
“The arbitration agreement was permeated with unconscionability and the court
did not abuse its discretion when it
refused to compel arbitration...”
For plaintiff: David P. Warren.
For defendant: Jackson Lewis, Theresa
M. Marchlewski, Sherry L. Swieca, and
Debra N. Barsom; Adamski Moroski
Madden Cumberland & Green, Martin
P. Moroski.
Second Dist Div Six, 7/30/12; opinion by Gilbert with Yegan and Perren
AFTER RECONSIDERATION
ORDERED BY BRINKER, SECOND
DISTRICT AGAIN AFFIRMS
SUMMARY ADJUDICATION ON
PAYSTUB AND MEAL AND REST
PERIOD CLAIMS
BRINKLEY v PUBLIC STORAGE, INC.
Affirming an order by Los Angeles County
Superior Court Judge Charles C. Lee
granting defendant summary adjudication on the plaintiff’s Labor Code section
226 and 226.7 causes of action, the
Second District, Division Three, wrote
in part as follows in an unpublished
August 2 opinion by Kitching:
“Plaintiff asserts class action and individual claims for violations of the Labor
Code. He alleges that defendant, his
former employer, provided paystubs
containing misstatements in violation of
Labor Code section 226. An employer,
however, cannot be liable for misstatements on paystubs unless it knowingly
and intentionally makes such misstatements and an employee suffers injury
as a result. Plaintiff cannot prove either
element in this case.
-10-
“Plaintiff also asserts causes of action
based on section 226.7 on the ground
defendant failed to ensure that plaintiff
and other class members took all meal
and rest periods they were entitled to
take. California law, however, only requires that employers make available
such periods, which defendant did here.
(Brinker Restaurant Corp. v. Superior
Court (2012) 53 Cal.4th 1004, 1017.)
“Certain of plaintiff’s paystubs erroneously stated $11.20 per hour as the rate
for associated mileage instead of the
actual rate of $0.19 per hour. The number of associated mileage hours and the
dollar amount paid for associated mileage, however, were accurately stated in
these paystubs.
“An outside payroll service, ADP, Inc.,
prepared defendant’s paychecks and
paystubs based on information provided
by defendant. After plaintiff commenced
this action, ADP corrected the rate for
associated mileage stated on the
paystubs pursuant to defendant’s instructions. Defendant claims that it did
not know of this error prior to the lawsuit
and that the error was inadvertent...
“On October 28, 2008, we issued an
opinion affirming the trial court’s order
granting defendant summary adjudication of plaintiff’s third, fifth and sixth
causes of action. We modified the opinion without changing the judgment on
November 5, 2008. On January 9, 2009,
while the Brinker case was pending, the
California Supreme Court granted
plaintiff’s petition for review.
“On June 20, 2012, the California Supreme Court ordered this court to vacate its previous opinion and reconsider
the cause in light of Brinker [Restaurant
Corp. v Superior Court (2012) 53 C4th
1004], which was issued on April 12,
2012. In compliance with this directive,
we issued an order vacating our previous opinion on July 19, 2012. Having
considered Brinker, we now issue this
opinion...
“Defendant met its burden of production
by filing a declaration stating that the
DECISIONS
(From Page 10)
misstatement of the associated mileage rate was inadvertent and, when
discovered, corrected... The burden of
production thus shifted to plaintiff. Plaintiff, however, produced no evidence of
knowing or intentional conduct by defendant.
“In addition, plaintiff cannot show that
he or other paystub subclass members
suffered any injury. This, too, is an
essential element of plaintiff’s third
cause of action... [¶] Plaintiff argues
that the receipt of an inaccurate paystub
ipso facto constitutes injury within the
meaning of section 226, subdivision (e).
This interpretation, however, renders
the words ‘suffering injury’ surplusage
and meaningless... We hold that section 226 means what it says: a plaintiff
must actually suffer injury to recover
damages or statutory penalties...
“Finally, plaintiff argues that even if he
cannot prove injury, the trial court erred
in granting summary adjudication ...
because he is entitled to injunctive relief. Plaintiff, however, did not pray for
injunctive relief in his First Amended
Complaint... It is undisputed, moreover,
that defendant has corrected the error in
the paystubs. Accordingly, there are no
grounds for injunctive relief.
“Plaintiff argues that California law requires that employers ... must ensure
that employees actually stop working
during [meal] periods. This argument
was rejected by Brinker... [¶] In the
present case, defendant produced substantial evidence that it provided meal
periods to plaintiff and other meal period
subclass members... [¶] Plaintiff ... produced no admissible evidence that he
or other meal period subclass members
were denied the opportunity to take
meal periods...
“Plaintiff argues that defendant violated
section 512 because plaintiff and other
class members ‘did not always have
meal breaks within the first five hours of
a shift.’ In Brinker, the court held that,
‘absent waiver, section 512 requires a
first meal period no later than the end of
an employee’s fifth hour of work, and a
second meal period no later than the
end of an employee’s 10th hour of work.’
[cite omitted.] Here, nonexempt property managers scheduled their meal
periods at their discretion. Merely because some managers, including plaintiff, at times did not actually take their
meal periods within the first five hours
does not mean defendant violated section 512. Plaintiff filed no evidence showing defendant precluded him or other
employees from taking meal periods
within the first five hours of work. The
trial court thus correctly ruled in
defendant’s favor on this issue.
“Finally, plaintiff claims that he and
other employees were not allowed to
leave the premises or lock the office
during their meal periods. Such meal
periods, plaintiff contends, were effectively ‘on duty,’ and thus entitled employees to one hour of wages per meal
period... Plaintiff, however, did not raise
these facts or this argument in his brief
or separate statement... We therefore
deem the argument forfeited.
“California law does not require an employer to ensure that employees take
rest periods. An employer need only
make rest periods available. (Cf. Brinker,
supra, 53 Cal.4th at p. 1035...) [¶]
Defendant produced evidence showing:
(1) defendant had a written policy permitting employees to take rest periods
in substantial compliance with Wage
Order No. 4-2001; (2) plaintiff received a
copy of this policy; and (3) defendant
advised plaintiff and other employees at
a meeting that they were required to
take rest periods. This evidence ...
shift[ed] the burden of production to
plaintiff.
“Plaintiff failed to meet his burden. Plaintiff stated in a declaration: ‘I rarely if ever
took timely rest breaks... I was generally the manager on duty and could not
take breaks.’ We agree with the trial
court that ‘[t]his is not an unequivocal
statement that he was not authorized or
permitted to take a ten-minute break
every four hours.’ ... [¶] Moreover,
plaintiff’s statement ... is a conclusory
allegation and does not raise a triable
issue of material fact.
“The order granting defendant summary
adjudication of plaintiff’s third, fifth, and
-11-
sixth causes of action is affirmed. Defendant is awarded costs on appeal.”
For plaintiff: Joseph Antonelli and Janelle
C. Carney; Kevin T. Barnes and Gregg
Lander.
For defendant: Freeman, Freeman &
Smiley, Bradley D. Ross and Azadeh
Allayee.
Second Dist Div Three, 8/2/12; opinion by Kitching with Croskey and
Aldrich concurring; 2012 WL 3126606
(unpublished).
BECAUSE OF CONFLICTING
EVIDENCE AS TO RALPHS’S
STATUS AS JOINT EMPLOYER,
DENIAL OF MOTION TO CERTIFY
CLASS OF SECURITY GUARDS
ON MISCLASSIFICATION CLAIMS
BARRUETA v RALPHS GROCERY
COMPANY. In an unpublished opinion
by Suzukawa filed on August 16, the
Second District, Division Four, wrote in
part as follows:
“Putative class representative Mark
Barrueta is one of 250 off-duty or retired
peace officers (ODO’s) who entered
into independent contractor engagement
agreements with defendant International
Protective Services, Inc., doing business as International Services, Inc. (ISI),
a ‘private patrol operator’ licensed ... to
furnish security guards... ISI hired the
ODO’s specifically to work as armed
security guards at various facilities of
defendant Ralphs Grocery Company
during the ‘Southern California Supermarket Strike of 2003-2004...
“The complaint alleged that ISI and
Ralphs violated the Unfair Competition
Law (Bus. & Prof. Code § 17200) by
misclassifying the ODO’s as independent contractors rather than employees
and failing to pay statutorily required
overtime wages. Barrueta moved to
certify the proposed class of ODO’s,
but the trial court [Judge Richard L.
Fruin, Jr.] granted the motion only as to
the claim against ISI. Based on the
DECISIONS
(From Page 11)
parties’ conflicting evidence concerning
Ralphs’s liability as a joint employer,
the trial court concluded that it was
neither feasible nor desirable to litigate
the claim against Ralphs on a classwide
basis. In this appeal from the order
denying class certification as the claim
against Ralphs, we affirm, finding no
abuse of discretion or legal error.”
For plaintiffs: Joseph M. Herbert and
Louis H. Kreuzer II.
For defendants: Reed Smith, Margaret
M. Grignon, Remy Kessler, and Anne
M. Grignon.
Second Dist Div Four, 8/16/12; opinion
by Suzukama with Epstein and Willhite
GENTRY ANALYSIS WAS
IRRELEVANT WHERE
AGREEMENT DID NOT PERMIT
CLASSWIDE ARBITRATION
ROCHA v KINECTA FEDERAL CREDIT
UNION. In an unpublished opinion by
Turner filed on August 22, the Second
District, Division Five, wrote in part as
follows:
“Plaintiff, Eva Rocha, appeals from a
November 15, 2011 order [by Judge
Richard L. Fruin, Jr.] compelling arbitration of her individual wage and hour
causes of action but dismissing her
class claims. We conclude: the order[s]
under review are appealable; both defendants ... may compel arbitration; the
agreement to arbitrate does not permit
classwide arbitration; any issue concerning title 29 United States Code
section 157 [per Horton] has been forfeited; and the trial court did not abuse
its discretion in refusing to continue the
hearing date on the motion to compel
arbitration. We affirm the order under
review. [¶]The arbitration agreement
contains no provision which permits an
employee to pursue a class action in
the arbitral forum...
“First, defendants argue that plaintiff
may not appeal. Because all of her
class claims have been dismissed, the
orders under review are appealable.
[cites omitted.] There is no merit to
defendants’ argument the Federal Arbitration Act appeal provisions preempt
the state’s class action appealability
jurisprudence. The limited preemptive
effect of the [FAA] has not been extended beyond title 9 United States
Code section 2. [cites omitted.]
“Second, plaintiff argues that Kinecta
Alternative Financial Solutions, Inc. is
not a party to the arbitration agreement.
The arbitration agreement is between
plaintiff and Kinecta Federal Credit Union
and its wholly owned subsidiaries. The
complaint alleges that Kinecta Federal
Credit Union is a subsidiary of Kinecta
Alternative Financial Solutions, Inc.
Thus, the arbitration agreement extends
to Kinecta Federal Credit Union. Even if
the express language of the arbitration
agreement did not apply to Kinecta
Federal Credit Union, agency and equitable estoppel principles support the
trial court’s order to arbitrate. [cites
omitted.]
“Third, plaintiff argues that the trial court
erred in failing to apply the class action
waiver analysis in Gentry v. Superior
Court (2007) 42 Cal.4th 443, 453-456.
To begin with, plaintiff has no right to
seek classwide arbitration as defendants never agreed to permit such.
[cites omitted.] Gentry, with its
classwide arbitration analysis, is irrelevant and thus has no application here...
“Fourth, plaintiff argues the arbitration
agreement which in effect serves to bar
class-based relief, violates title 29 United
States Code section 157. This contention was not presented in the trial court.
It has thus been forfeited. [cites omitted.]
“Fifth, plaintiff argues the trial court
should have continued the hearing on
the motion to compel arbitration. Citing
federal decisions, plaintiff argues she
should have been permitted to propound
a limited number of discovery devices
concerning the Gentry factors. The trial
court did permit limited discovery on the
issue pertinent to the motion to compel
arbitration... Plaintiff has failed to demonstrate an abuse of discretion occurred. As noted, the present case
-12-
cannot involve the Gentry factors as
there was no agreement to arbitrate
class claims...”
For plaintiff: Rene Barge and Gary S.
Bennett.
For defendants: Jackson Lewis, David
G. Hoiles, Jr., and Karen D. Simpson.
Second Dist Div Five, 8/22/12; opinion by Turner with Armstrong and
Kriegler concurring; 2012 WL
DISMISSING WHISTLEBLOWER
CLAIM FOR FAILURE TO
EXHAUST ADMINISTRATIVE
REMEDIES WITHOUT ALLOWING
TIME FOR STATE PERSONNEL
BOARD TO ISSUE FINDINGS
MOSLEY v. ORANGE COUNTY FAIR
AND EVENT CENTER. In an unpublished opinion by Fybel filed on August
22, the Fourth District, Division Three,
wrote in part as follows:
“Plaintiffs ... filed an amended complaint which contained, inter alia, a
claim for violation of Labor Code section
1102.5 ... against their former employers. Plaintiffs alleged they were
whistleblowers and were retaliated
against by defendants...
“Defendants demurred to the section
1102.5 claim on the ground plaintiffs
had failed to exhaust their administrative remedies, as required by Government Code section 8547.8, subdivision
(c) of the California Whistleblower Protection Act ... before seeking damages
against defendants for violation of Labor
Code section 1102.5. Government Code
section 8547.8, subdivision (c) requires
that a state employee file a complaint
with the State Personnel Board and that
the Board issue or fail to issue findings
as to the complaint within the timeframe
set forth in the Act before the employee
may pursue a claim for damages. Here,
the amended complaint alleged plaintiffs had filed complaints with the Board,
but did not allege whether the Board had
issued findings.
DECISIONS
(From Page 12)
“The trial court [Judges Randell L.
Wilkinson and Thierry Patrick Colaw]
sustained defendants’ demurrer without leave to amend and ultimately entered judgment dismissing the section
1102.5 claim with prejudice based on
that ruling. On appeal, plaintiffs argue
the trial court erred by sustaining the
demurrer without leave to amend and
further argue the court should have
stayed the action or dismissed the
section 1102.5 claim without prejudice
to enable plaintiffs to complete the process of exhausting their administrative
remedies and litigate the section 1102.5
claim on the merits.
“We reverse. The trial court erred by
sustaining the demurrer to the section
1102.5 claim without leave to amend,
thereby triggering the entry of judgment
of dismissal of the section 1102.5 claim
with prejudice... [T]he trial court should
have either dismissed the section 1102.5
claim without prejudice or stayed the
action to enable the Board to issue
findings within the statutory timeframe
of the Act and permit plaintiffs to litigate
the section 1102.5 claim on the merits.”
For plaintiffs: Gary S. Bennett.
For defendants: Murtaugh Meyer Nelson
& Treglia, Thomas J. Skane and Mark
P. LaScola.
Fourth Dist Div Three, 8/22/12; opinion by Fybel with Aronson and Ikola
SUMMARY JUDGMENT ON
GENDER DISCRIMINATION AND
HARASSMENT CLAIMS BY
DEPUTY SHERIFF APPLICANT
WHO WAS ASKED SEXUALLY
EXPLICT QUESTIONS DURING
BACKGROUND INTERVIEW
LOGEROT v COUNTY OF LOS ANGELES. In an unpublished opinion by Turner
filed on August 21, the Second District,
Division Five, wrote in part as follows:
“Plaintiff ... appeals from a summary
judgment entered [by Judge Richard E.
Rico] on her [FEHA] and [IIED] complaint... Plaintiff alleged she was injured
during an interview for a position as a
deputy sheriff when [individual defendant] Deputy Morien asked a number of
inappropriate questions of a sexual nature. We affirm...
“The undisputed evidence established
that during the background interview,
Deputy Morien asked plaintiff a number
of unwelcome sexually based questions. And defendants did not dispute
that the language was sexual and private in nature. Nevertheless, defendants
met their summary judgment burden by
showing there was no merit to the sexual
harassment claim because the severe
and [sic] pervasive element could not be
established... Rather, the undisputed
evidence shows an isolated incident
over the course of several hours in which
approximately 10 questions of a sexual
nature were asked. Under the totality of
the circumstances, Deputy Morien’s
conduct was not ‘severe in the extreme’
under the [relevant] standards...
“Plaintiff contends the trial court erred in
summarily adjudicating her gender discrimination cause of action... [¶] To
begin with, given the sensitivity of employment as a deputy sheriff, these are
neutral nondiscriminatory inquiries.
Deputy Morien’s inquiries were pertinent to potential violations of law including illegal pornography possession and
public sexual misconduct. Peace officers are held to high standards of conduct... The inquiries were neutral nondiscriminatory questions which the undisputed evidence indicates Deputy
Morien asked of others. Considering
the risks and benefits, such questions
of peace officer candidates is at least an
act to which section 820.2 immunity
applies. [cites omitted.]
“Plaintiff claims the [IIED] claim was
sufficient... Morien’s alleged conduct
did not exceed all bounds that is usually
tolerated in a civilized society...”
For plaintiff: Leo James Terrell.
For defendants: Lawrence Beach Allen
& Choi and Michael D. Allen.
Second Dist Div Five, 8/21/12; opinion by Turner with Armstrong and
-13-
Kriegler concurring; 2012 WL
ON REMAND FOR
BRINKER, SECOND DISTRICT
AGAIN AFFIRMS ORDER DENYING
CLASS CERTIFICATION OF MEAL
AND REST BREAK CLAIMS
LAMPS PLUS OVERTIME CASES.
Following a grant of review and remand
for reconsideration in light of Brinker
(2012) 53 C4th 1004, the Second District, Division Eight, held that its original
decision was consistent with Brinker,
and again affirmed the trial court’s order
[by Judge Carl J. West] denying class
certification of meal and rest break
claims. The Second District’s original
decision appeared at 195 CA4th 389,
125 CR3d 590. and was summarized in
CELA Bulletin, May 2011, p. 4.
For plaintiffs: Krutcik & Georggin, James
A. Krutcik, A. Nicholas Georggin, and
Joo Hee Kershner.
For defendants: Sidley Austin, Douglas
R. Hart and Beth Ann Scheel.
Second Dist Div Eight, 8/20/12; opinion by Grimes with Bigelow and
Flier concurring; 2012 WL 3587610
(unpublished).
•
•
•
LEGISLATION
(From Page 1)
working conditions of domestic work
employees. This bill would establish
specific employment rights for domestic work employees, including:
z Right to overtime compensation
z Right to meal and rest periods
z Right to uninterrupted sleep periods and compensation for interruptions
The amended bill passed the legislature
and the Governor now has until September 30 to sign or veto it.
Heat and Overtime Protections for
Farm Workers. In the last few hours of
the session, the Assembly failed to
pass AB 1313, a measure authored by
Assemblymember Allen that would have
extended overtime and meal and rest
break protections to agricultural workers. Opponents argued that the bill
would put farmers out of business, raise
food prices, and hurt laborers who need
to work long hours during harvest season in order to make a living.
The Legislature did, however, pass legislation to help improve the working
conditions of farm workers. AB 2676 by
Assemblymember Calderon would require anyone directing or supervising a
farm work to ensure “continuous, ready
access” to shade, and to enough “suitably cool” water for each employee to
drink one quart per hour throughout a
work shift. Violators will be guilty of a
misdemeanor and subject to a sixmonth jail term and a fine of up to
$10,000. If a worker suffers injury, the
potential penalties would increase to a
one-year jail term and a $25,000 fine.
Workers Compensation Reform. Over
the past several months, the California
Labor Federation and employer groups
have been negotiating a reform package
that would substantially alter the current workers’ compensation system in
California. The plan was endorsed by
the Department of Industrial Relations
as “a comprehensive reform proposal
that protects workers and employers by
improving benefits and ending wasteful
litigation.” The bill attempts to cut costs,
in part by providing a more direct process between the injured worker, the
doctor, and the employer. The California Applicant Attorneys Association
(CAAA) is strongly opposed to the plan,
arguing that the bill contains “provisions
that make it extremely difficult for injured workers to qualify for the disability
ratings needed to access the increased
compensation.”
With both the Labor Federation and
employer groups pushing this bill forward, it passed overwhelmingly in both
houses with bipartisan support. For more
information, see www.leginfo.ca.gov,
and enter SB 863. And see www.CAAA
.org for information on their position on
SB 863.
Public Employee Pension Reform.
The Legislature negotiated a package
of bills to overhaul the state’s public
employee pension system. It is estimated that the overhaul will save the
system between $42 billion and $55
billion over the next 30 years. The legislation will increase the retirement age
for new employees, cap the annual
payout at $132,120, eliminate pension
“spiking,” and require workers who are
not contributing half of their retirement
costs to pay more.
Public employee labor unions were
strongly opposed to the package, but it
was ultimately passed by the Legislature in the last hours of the session, with
bipartisan support. The unions were
able, however, to roll back several provisions of the original proposal, including the hybrid pension plan proposed by
the Governor. And state retiree health
care vesting will remain subject to collective bargaining. For more information, see www.calpers.ca.gov.
private agreements for a fixed salary
that includes both regular and overtime
pay for non-exempt employees. AB
2103 would clarify that “payment of a
fixed salary to a nonexempt employee
shall be deemed to provide compensation only for the employee’s regular,
non-overtime hours, notwithstanding any
private agreement to the contrary.” The
Governor will have twelve days to sign or
veto the bill once it gets to his desk.
AB 1999 (Family caregiver discrimination). Unfortunately, our family
caregiver discrimination bill was held in
the Senate Appropriations Committee
because of fiscal concerns. The Senate
and Assembly Appropriations Committees held hundreds of bills this year,
illustrating the tremendous difficulties
our current budget woes are creating in
trying to pass meaningful legislation.
CELA and our co-sponsors, Equal
Rights Advocates and the Center for
Work Life Law, are committed to continuing this fight in the next legislative
session.
SB 1255 (Itemized wage statements). In the last week of the session,
SB 1255, a bill we are co-sponsoring
with the California Rural Legal Assistance Foundation (CRLAF), passed both
houses of the Legislature and was sent
to the Governor for final approval. This
bill will help preserve the Labor Code’s
itemized wage statement requirements,
after several misguided court decisions,
by providing a statutory definition of
“suffering injury” for purposes of recovering damages.
Updates on Key Bills
We’re Following
Update on CELA
Sponsored Legislation
AB 2103 (Explicit mutual wage
agreements). Earlier this month, the
Legislature approved and sent to the
Governor AB 2103, which would abrogate the Second District’s February
2011 decision in Arechiga v Dolores
Press (2011) 192 CA4th 567. Arechiga
ignored the plain language of Labor
Code § 515(d) and weakened state
overtime laws by validating the use of
AB 1450 (ALLEN-D). Employment:
discrimination: status as unemployed. This bill would make it unlawful, unless based on a bona fide occupational qualification or any other provision of law, for an employer, an employment agency, or a person who operates
an Internet Web site for posting jobs in
actions including refusing to hire a person because of that person’s employment status, and publishing an adver(Cont'd on Page 16, LEGISLATION)
-14-
BRINKER
(From Page 14)
CELA COMMITTEE CORNER DECISIONS
(From Page 11)
Diversity Outreach Committee. Kate
Kendell, Executive Director of the National Center for Lesbian Rights, will be
the keynote speaker at the Committee’s
luncheon on Friday, October 5, at
CELA’s Annual Conference in Costa
Mesa.
On-campus interviews have begun for
FAIR’s Employee Justice Fellowship
Program. Please contact me if you
would like information about the program, or would like to be a participating
member-firm.
Immigrant Employee Rights Committee. The Committee will present a
break-out session at our Annual Conference, on Saturday, October 6, from
1:45 to 3pm: “Beyond Wrongful Termination: How To Prevent and Remedy
Retaliation Against All California Workers.”
Law Practice Management Committee and Mentor Committee. The two
are collaborating on a breakout session
at the Annual Conference, “Practice
Tips for New Lawyers.” Topics to be
covered will include: how to use CELA
resources; issue-spotting and deadlines; opposing your first summary judgment motion; and dealing with opposing
counsel. The session will take place on
Saturday, October 6, from 1:45 to 3pm.
Listserv Monitoring Committee. On
August 2, the Committee submitted to
all on-topic, off-topic, Law Practice
Management, and Wage and Hour
listserv subscribers, a revised CELA
Listserv Protocol and Joint Prosecution
Agreement. One objective of the protocol is to provide better protection for
CELA listserv messages, and prevent
the disclosure of messages outside
CELA, either by members or by way of
subpoena. To this end, messages exchanged on any listserv will be treated
as attorney work product communications. All participants have been asked
to promptly review, sign, and return the
signature page to the CELA administrative office. You can find the signature
page via the “CELA Administrative Docu-
ments” link in the Members Only section of the CELA website. Listserv access is to be denied, and members will
be unsubscribed, as of Friday, August
31, if the signed protocol agreements
have not been returned.
Get Involved. CELA has the following
ten active committees, and you are
encouraged to get involved. (An asterix
indicates a committee that’s open only
to regular CELA members.) Please
contact me at: christina@cela.org.
Public Employment Committee. On
Thursday, September 27, form 2:00 to
3:15pm, the Committee is presenting a
webinar, “What You Should Know About
Representing State and Federal
Whistleblowers.” And on Friday, October 5, from 2:15pm to 3:30pm , at our
Annual Conference, the Committee will
present a break-out session entitled
“Employee Privacy Rights: How To
Defend Your Clients’ Rights While Keeping Others’ Rights from Wrecking Your
Case.”
DFEH/EEOC Committee
Mentor Committee
•
•
Wage and Hour Committee. Two
break-out sessions are planned for the
Annual Conference: a “Wage and Hour
101” panel on identifying and navigating
key differences between Federal and
California wage and hour laws; and a
201-level panel on the future of wage
and hour class actions.
C O M I N G
E V E N T S
September 27, 2012
CELA Public Employment Committee Webinar
“What You Should Know About Representing State and
Federal Whistleblowers”
2:00 to 3:15pm
October 4, 2012
October 5-6, 2012
October 12-13
NELA Fall Seminar
Bias 2.0: What Every Employee Advocate Should Know
Westin Peachtree Plaza, Atlanta
(see www.nela.org for details)
-15-
•
LEGISLATION
POSNER AWARD
(From Page 14)
(From Page 1)
tisement or announcement for any job
that includes provisions pertaining to an
individual’s current employment or employment status.
Passed the Legislature. Awaiting the
Governor’s approval.
AB 1844 (CAMPOS-D). Employer use
of social media. This bill would prohibit an employer from requiring or requesting an employee or applicant to
disclose a user name or password for
accessing personal social media or to
access social media. This bill would
also prohibit an employer from discharging, disciplining, threatening to discharge
or discipline, or otherwise retaliating
against an employee or applicant for
exercising any right under these provisions.
Amendments were taken to tighten
worker protections when an employer is
investigating alleged worker misconduct. The bill is now awaiting the
Governor’s approval..
AB 1875 (GATTO-D). Civil procedure:
deposition of any one person to one day
of seven hours, except under specified
circumstances.
This bill was amended to exclude employment cases. CAOC indicated to us
that they would not be able to amend
the employment provision in the bill, but
they will be adding language to state the
following:
“It is the intent of the Legislature that
any exclusions made by this section
shall not be construed to create any
presumption or any substantive change
to existing law relating to the appropriate time limit for depositions falling
within any such exclusion. Nothing in
this section shall affect the existing
right of any party to move for a protective order, or the court’s discretion to
make any order that justice requires to
limit a deposition in order protect any
party, deponent, or other natural person
or organization from unwarranted annoyance, embarrassment, oppression,
undue burden or expense.”
AB 1964 (YAMADA-D). Discrimination
in employment: reasonable accommodations. This bill would include a
religious dress practice or a religious
grooming practice as a belief or observance covered by FEHA’s protections
against religious discrimination.
AB 2039 (SWANSON-D). Family and
medical leave. This bill would increase
the circumstances under which an employee is entitled to protected leave
under the CFRA by (1) eliminating the
age and dependency elements from the
definition of “child,” thereby permitting
an employee to take protected leave to
condition, (2) expanding the definition of
“parent” to include an employee’s parent-in-law, and (3) permitting an employee to also take leave to care for a
Held in Senate Appropriations Committee.
AB 1744 (Lowenthal-D). Employee
compensation: itemized statements.
Current law requires every employee,
semi-monthly or at the time of each
payment of wages, to furnish each employee with an accurate itemized statement in writing showing specified information. This bill would additionally require, on and after July 1, 2013, that the
itemized statement include, if the employer is a temporary services employer,
the rate of pay and the total hours
worked for each assignment.
to www.leginfo.ca.gov. To see all of the
bills CELA is tracking, see www.cela.
org/legislation. If you have any input,
stories, or cases related to these bills,
please email me at: mariko@cela.org.
•
•
-16-
•
John Weiss unquestionably embodies
Joe’s spirit. For many years, John and
Joe shared an office, becoming friends
and kindred spirits. Joe was a mentor to
countless plaintiff employment attorneys, and John picked up that torch.
John’s name came up often when the
Posner Award Committee was receiving nominations. One member wrote:
“He helps, he gives, he shares, he
mentors, and he never asks for or seeks
recognition. He is such a humble man
with a great intellect and soulful presence.”
You are encouraged to share your CONGRATULATIONS in this year’s CELA
Conference Journal. An Ad Order Form
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The Joe Posner Award Committee
Nancy Bornn, Dolores Leal, Cliff
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BULLETIN
CALIFORNIA
SUPREME COURT
CALIFORNIA COURTS
OF APPEAL
SECOND DISTRICT DECISION
THAT HELD THAT CONCEPCION
INVALIDATED GENTRY AND
THAT D. R. HORTON “DOES
NOT WITHSTAND SCRUTINY”
WITHOUT DECIDING WHETHER
GENTRY SURVIVED
CONCEPCION, SECOND
DISTRICT REVERSES DENIAL OF
MOTION TO COMPEL
ARBITRATION ON GROUND THAT
PLAINTIFF FAILED TO MAKE
FACTUAL SHOWING OF GENTRY
FACTORS
ISKANIAN v CLS TRANSPORTATION LOS ANGELES. On September
19, the California Supreme Court announced that it will review the Second
District’s June 4, 2012 decision that
held that Concepcion invalidated the
Gentry test, and that D.R. Horton “does
not withstand scrutiny.” The Court of
Appeal’s decision appeared at 206
CA4th 949, 142 Cal.Rptr.3d 372, and
June 2012, p.7. The case involves
class claims alleging failure to pay
overtime, provide meal and rest breaks,
reimburse business expenses, provide accurate and complete wage statements, and pay final wages in a timely
manner.
For plaintiffs: Initiative Legal Group,
Raul Perez, Glenn A. Danas, Katherine
W. Kehr.
For defendant: Fox Rothschild, David
F. Faustman, Yesinia M. Gallegos,
Namal Tantula.
Cal SC, 9/19/12; granting review.
Networks," by CELA
member Eugene Lee,
begins on Page 16.
REYES v LIBERMAN BROADCASTING, INC. “Jesus Reyes filed a class
complaint alleging wage and hour violations,” the Second District, Division
One, began in an August 8 opinion by
Johnson. “LBI appeals from the trial
court’s order denying its motion to compel arbitration. We reverse.
“The Arbitration Agreement is expressly
governed by the [FAA]... [It] provides
that LBI and Reyes ‘agree to submit to
final and binding arbitration all claims,
disputes and controversies arising out
of, relating to or in any way associated
with’ Reyes’s employment or its termination. Specific claims identified in the
Arbitration Agreement include wage
claims, unfair competition claims, and
claims for violation of federal, state,
local, or other governmental law. The
Arbitraton Agreement does not contain
an express class arbitration waiver.
However, [it] does provide that ‘each
party to the arbitration may represent
himself/herself, or may be represented
by a licensed attorney.’ The Arbitration
Agreement provides for ‘discovery sufficient to adequately arbitrate [the par(Cont'd on Page 2, DECISIONS)
September 2012
Vol. 26, No. 9
LEGISLATIVE UPDATE
by Mariko Yoshihara
Governor Signs Two
CELA-Sponsored Bills
September 30 was the deadline for
Governor Brown to take action on the
hundreds of bills that had been sent to
his desk during the previous month.
Included in that group were two CELAsponsored measures to strengthen
employer accountability for wages owed
to workers. AB 2103 and SB 1255 were
signed into law by Governor Brown, and
will take effect on January 1, 2013.
AB 2103, authored by Assemblymember Ammiano and co-sponsored by
CELA and the Teamsters Public Affairs
Council, will overturn the Second
District’s February 2011 decision in
Arechiga v Dolores Press (2011) 192
CA4th 567, and clarify that “payment of
a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee’s regular, nonovertime hours, notwithstanding any private agreement to the contrary.”
SB 1255, authored by Senator Wright
and co-sponsored by CELA and the
California Rural Legal Assistance Foundation, will help preserve the itemized
wage statement requirements of the
Labor Code after several misguided
court decisions, by providing a statutory definition of what constitutes “suffering injury” for purposes of recovering
damages.
DECISIONS
(From Page 1)
ties’] claims,’ but authorizes the ‘arbitrator to impose ... appropriate limits on
discovery.’ Reyes signed an acknowledgment of his receipt of the Arbitration
Agreement in both English and Spanish.
“On May 27, 2010, Reyes filed a complaint on behalf of a class asserting
seven causes of action arising out of
alleged wage and hour violations... On
July 13, 2010, Reyes filed a first amended
complaint adding a representative claim
pursuant to the [PAGA]... LBI answered
the FAC on August 5, 2010, asserting
22 affirmative defenses. LBI did not
assert the existence of an arbitration
agreement as an affirmative defense.
“The same day, Reyes propounded discovery on LBI. On September 1, 2010,
LBI took the first session of Reyes’s
deposition. On October 11, 2010, LBI
responded to the discovery requests by
raising objections to each request. The
parties then engaged in lengthy meet
and confer efforts whereby LBI agreed
to produce some class-wide discovery
and statistically representative samples
of certain requested information. The
parties also scheduled a class-wide
mediation for July 1, 2011.
“On October 6, 2010, the trial court held
a case management conference. On
December 17, 2010, the trial court held
a second status conference. On March
25, 2011, the trial court entered a stipulation between the parties to extend the
deadline for class certification...
“On June 2, 2011, LBI informed Reyes
that it intended to move to compel
arbitration and had reserved a July 27,
2011 hearing date. LBI filed the underlying motion to compel arbitration on July
5, 2011. On July 27, 2011, the trial court
[Judge Debre Katz Weintraub] denied
the motion on the ground that LBI had
waived its right to arbitration by its
‘failure to properly and timely assert it.’
LBI timely appealed from this order.
“I. LBI did not waive its right to
compel arbitration.
“A. LBI’s actions were not inconsistent with the right to arbitrate.
“1. The Arbitration Agreement does
not authorize class arbitration.
“‘[A] party may not be compelled under
the FAA to submit to class arbitration
unless there is a contractual basis for
concluding that the party agreed to do
so.’ (Stolt-Nielsen S.A. v. AnimalFeeds
Int’l Corp. (2010) 599 U.S. ___ [130
S.Ct. 1758, 1775]...) As the Arbitration
Agreement explicitly covers the type of
claims that are the subject of Reyes’s
lawsuit and provides only for bilateral
arbitration, there is no contractual basis
for concluding the parties agreed to
submit to class arbitration... [¶] The
Arbitration Agreement, like the arbitration provision in Kinecta [Alternative
Financial Solutions, Inc. v. Superior
Court (2012) 205 Cal.App.4th 506], bars
class arbitration because the parties
did not agree to class arbitration.
“2. California case law potentially
barred enforcement of the Arbitration Agreement.
“Reyes correctly notes that Discover
Bank and Gentry dealt with express
class arbitration waivers, not arbitration
agreements silent as to class arbitration. However, in light of Stolt-Nielsen ...
and Kinecta..., arbitration agreements
silent on the issue of class arbitration
nevertheless have the same effect of
precluding class arbitration so long as
there is no evidence that the parties
agreed to class arbitration. In other
words, an arbitration agreement silent
on the issue of class arbitration may
have the same effect as an express
class waiver. We believe that Discover
Bank and Gentry would have applied in
such a situation because both kinds of
arbitration contracts would be, under
the Discover Bank reasoning, exculpatory contracts.
“As the Arbitration Agreement is silent
on the issue of class arbitration, applying the Stolt-Nielsen rationale, it impliedly bars class arbitration as did the
express class arbitration waiver at issue in Gentry. The Arbitration Agreement therefore has the same effect as
one potentially barred under the Gentry
test.
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Toni Jaramilla
Suite. 300
Tel: (310) 551-3020
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
Mariko Yoshihara
Tel: (916) 442-5788
EXECUTIVE BOARD
(Santa Monica)
Jean K. Hyams
(Oakland)
Scot Bernstein
(Folsom)
Noah Lebowitz
(San Francisco)
David DeRubertis
(Studio City)
Cynthia Rice
(San Francisco)
Maria Diaz
(Fresno)
Mika Spencer
(San Diego)
David Duchrow
(Santa Monica)
Deborah Vierra
(Ventura)
Wilmer Harris
(Pasadena)
Christopher Whelan
(Gold River)
Phil Horowitz
(San Francisco)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
“3. There is a difference of opinion
whether AT & T Mobility v.
Concepcion impliedly overruled
Gentry.
“Division Two of this district recently
held that Concepcion invalidated the
Gentry test. (Iskanian v. CLS Transportation Los Angeles, LLC (2012) 206
Cal.App.4th 949, 142 Cal.Rptr.3d 372
[review granted 9/19/12]. Several federal district courts in California have
also held that Concepcion, in overruling
Discover Bank, overruled Gentry. [cites
omitted.] ... [¶] There is contrary California authority. [cites omitted.]
“Like the plaintiffs in Kinecta and Nelsen
[v Legacy Partners Residential, Inc.
(2012) 207 Cal. App.4th 1115], Reyes
did not carry his burden to make a
factual showing that the Gentry factors
made the Arbitration Agreement unenforceable... We therefore need not, and
do not, decide whether Gentry remains
good law...
“4. LBI did not waive its right to
arbitration by not moving to compel
arbitration prior to Concepcion.
“A party does not act inconsistently
with a right to arbitrate when it does not
seek to enforce an arbitration agreement unenforceable under existing law.
[cites omitted.] Before Concepcion, LBI
reasonably concluded that it could not
enforce the Arbitration Agreement... [¶]
[T]he futility doctrine does not require
entirely clear, uncontradicted authority
barring the enforcement of an arbitration
agreement... [¶] LBI reasonably perceived that it likely would have been
futile to seek to compel arbitration in
light of Gentry ... and California authority applying Gentry to invalidate class
arbitration waivers. [cites omitted.] ...
“Even if we were to accept Reyes’s
contention that LBI would only have
faced an ‘uncertain outcome’ had it
moved to compel arbitration prior to
Concepcion..., we would still conclude
that LBI’s actions were not inconsistent
with the right to arbitration.... [because]:
[¶] A. The litigation machinery has not
been substantially invoked... [¶] B. LBI
has not delayed for a long period before
seeking a stay... [¶] C. LBI did not file
a counterclaim without seeking a stay...
[¶] D. No important intervening steps
have taken place to justify a finding of
waiver... [¶] E. Reyes has not shown
prejudice from LBI’s delay in moving to
compel arbitration...
“II. The National Labor Relations
Act (NLRA) does not bar enforcement of the Arbitration Agreement
because it is inapplicable to the
instant case. [¶]California authority
finds D. R. Horton [(2012) 357 NLRB
184] unpersuasive. [cites omitted.] We
apply the same reasoning and reject
Reyes’s argument...”
For plaintiff: Strategic Law Practices,
Payam Shahian; Robert Starr, Adam
Rose; Initiative Legal Group and Glenn
A. Danas.
For defendant: Littler Mendelson, Elizabeth Staggs-Wilson, Carlos Jimenez,
and Lauren E. Robinson.
Second Dist Div One, 8/8/12; cert’d
for pub 8/31/12; opinion by Johnson
with Mallano and Rothschild concurring; 2012 DAR 12441, 2012 WL
3775879.
PER BRINKER, EMPLOYER WAS
ONLY REQUIRED TO MAKE
MEAL PERIODS AVAILABLE; AND
CLASS MEMBERS WERE
SUBJECT TO OVERTIME
EXEMPTION FOR COMMISSIONED
EMPLOYEES
MULDROW v SURREX SOLUTIONS
CORPORATION. “In this appeal from a
judgment after a bench trial, we consider two issues,” the Fourth District,
Division One, began in an August 29
opinion by Aaron. “First, we address
whether the trial court [Judge Thomas
P. Nugent] erred in determining that an
employer was not required to pay overtime wages ... to a class of its current
and former employees because they
were subject to the commissioned
employees exemption (Cal. Code
Regs., tit. 8, § 11070, subd. (3)(D)).
Pursuant to this exemption, employers
are not required to pay overtime wages
to employees ‘whose earnings exceed
-3-
one and one-half times the minimum
wage if more than half of that employee’s
compensation represents commissions.’
(Ibid.) Second, we address whether the
trial court erred in denying the class
members’ claim for missed meal periods on the ground that the employer was
required only to provide such periods,
and was not required to ensure that
employees actually took the meal
breaks.
“In our initial opinion in this matter, we
concluded that the trial court properly
determined that the employees were
subject to the commissioned employees exemption. We also concluded that
the trial court had not erred in denying
the meal period claim. The Supreme
Court granted the class’s petition for
review (Muldrow v. Surrex Solutions Corp.
(2012) 202 Cal.App.4th 1232 [summarized in CELA Bulletin, Jan 2012, p.10],
review granted Apr. 11, 2012, S200557)
and deferred further action in the matter
pending its consideration of a related
issue in Brinker Restaurant Corp. v.
25, review granted October 22, 2008,
S166350. The Supreme Court subsequently transferred the case back to this
court with directions to vacate our earlier
decision and to reconsider the case in
light of Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004,
1037. Upon transfer, we issued an order
vacating our prior decision and soliciting
briefing on the effect of Brinker, if any, on
the issues in this case.
“It is undisputed that Brinker does not
affect our prior conclusion that the trial
court properly determined that the class
employees were subject to the commissioned employees exemption. With respect to the class members’ meal break
claim..., we again [per Brinker] reject
the ... claim that the trial court erred ...
and affirm the judgment and a postjudgment order awarding costs to the
employer.
“Appellants claim that they were not
subject to the commissioned employees exemption because they were not
primarily engaged in sales, their com(Cont'd on Page 4, DECISIONS)
DECISIONS
(From Page 3)
missions were not based on price, and
Surrex’s compensation system was not
a bona fide commission system. We
consider each argument in turn.
by Aaron with McConnell and
McIntyre concurring; 2012 DAR
12088, 2012 WL 3711553.
“The evidence ... demonstrates that
appellants’ job, reduced to its essence,
was to offer a candidate employee’s
services to a client in exchange for a
payment of money from the client to
Surrex. Offering a candidate’s employment services in exchange for money
meets the ordinary definition of the word
‘sell’ ...
SECOND DISTRICT AFFIRMS AND
REVERSES IN PART SUMMARY
ADJUDICATION ON TRUCK
DRIVERS’ WAGE AND HOUR
CLAIMS
“Appellants’ contention that the term
‘commissions’ in the relevant regulation
... should be interpreted to include only
those commissions that are based
strictly, and solely, on a percentage of
the price of the product or service rendered constitutes an excessively narrow and wooden application of Keyes
Motors [Inc. v DLSE (1987) 197 CA3d
557] and Ramirez [v Yosemite Water
Co. (1999) 20 C4th 785]. Such a limited
definition would not comport with the
contemporary legal sense of the word
‘commission.’ ... [¶] Accordingly, we
conclude that Surrex’s commissions
were sufficiently related to the price of
services sold to constitute commissions...
“Appellants note that the DLSE’s Enforcement Policies and Interpretations
Manual states, ‘Consistent commission earnings below, at or near the draw
are indicative of a commission plan that
is not bona fide.’ (DLSE Enforcement
Policies and Interpretations Manual
(June 2002) § 50.6.1(4).) ... In light of the
... evidence [that ‘seven to ten’ consulting service managers consistently received payment in excess of their guaranteed draw], we reject appellants’ contention that Surrex’s commission system ‘was not bona fide as a matter of
law.’”
For plaintiffs: Hogue & Belong, Jeffrey
Lee Hogue, Tyler J. Belong, Tony R.
Skogen, Jr.; Law Offices of John S.
Addams, Niddrie, Fish & Addams, and
John S. Addams.
For defendant: Gibbs & Fuerst, Michael
T. Gibbs and Kevin L. Borgen.
BELL v H.F. COX, INC. “Oscar Bell and
other truck drivers filed a class action
complaint ... alleging wage and hour
violations,” the Second District, Division Three began in a September 5
opinion by Croskey. “The trial court
[Judge Ruth A. Kwan] summarily adjudicated three counts in favor of Cox, a
jury found in favor of Cox on another
count and the trial court found that
plaintiffs were exempt from federal overtime compensation requirements. Plaintiffs appeal the judgment challenging
the order granting summary adjudication, the denial of their motion to exclude witnesses from testifying at trial,
the court’s finding on the overtime exemption and the jury instructions. Plaintiffs also appeal an order awarding attorneys fees to Cox as the prevailing party
on certain counts.
“We conclude that (1) summary adjudication was proper as to the count for
failure to pay promised vacation benefits to current employees but improper
as to the count for failure to pay vacation
benefits due upon termination of employment; (2) the denial of plaintiffs’
motion to exclude witnesses from testifying at trial was proper; (3) the finding
that plaintiffs were exempt from federal
overtime compensation requirements
pursuant to the motor carrier exemption
was proper; (4) plaintiffs have shown no
instructional error; and (5) the attorney
fee award to Cox as the prevailing party
must be reversed...
“The trial court granted class certification on plaintiffs’ count for failure to pay
vacation benefits due upon termination
of employment but denied class certification on the other counts... Plaintiffs
petitioned this court for a writ of mandate. We held that the denial of class
-4-
certification on the counts for failure to
pay overtime compensation and failure
to pay promised vacation benefits was
error and directed the court to grant
class certification on those counts. (Bell
v. Superior Court (Nov. 21, 2007,
B19960) opn. ordered nonpub. Apr. 23,
2008...) We concluded that plaintiffs’
count for failure to pay promised vacation benefits was based on the alleged
illegality of Cox’s policy of paying drivers a flat rate of vacation benefits...
“The trial court granted summary adjudication of the first count for failure to
pay overtime compensation, fourth count
for failure to pay promised vacation
benefits and fifth count for failure to pay
of employment... The court concluded
that the counts for failure to pay promised vacation benefits and failure to pay
were preempted by [ERISA]. The court
also found with respect to the count for
failure to pay promised vacation benefits that Cox’s vacation benefits policy
was legal in any event.
“Plaintiffs contend the trial court erred
by (1) finding that the counts for failure
to pay promised vacation benefits and
failure to pay vacation benefits due upon
termination of employment were preempted by ERISA; (2) finding that Cox’s
vacation benefits policy was legal; (3)
denying their motion to exclude witnesses at trial and their oral request to
depose the witnesses prior to trial; (4)
finding that plaintiffs were exempt from
the FLSA’s overtime compensation requirement due to the motor carrier exemption; (5) failing to adequately instruct the jury on the count for failure to
provide meal and rest breaks; and (6)
awarding Cox attorney fees under Labor
Code section 218.5.
“The Existence of a Triable Issue of
Fact as to ERISA Preemption Precludes Summary Adjudication on this
Basis
“ERISA preempts an action under state
law for failure to pay vacation benefits
only if the employer maintains a sepa(Cont'd on Page 5, DECISIONS)
DECISIONS
(From Page 4)
rate account for payment of vacation
benefits and does not pay its employees vacation benefits from its general
assets...
“Plaintiffs Are Exempt from the FLSA’s
Overtime Compensation Requirement
Pursuant to the Motor Carrier Exemption
“Plaintiffs argued ... that ... the Form
5500’s initially filed with the IRS created
a triable issue of fact as to whether the
vacation benefits plan was funded from
Cox’s general assets, as stated in those
forms, or from a separate trust, as
stated in the Mairs declaration and in
the corrected forms. We agree. The fact
that the corrected forms were created
and filed with the IRS only after the filing
of plaintiffs’ complaint would support an
inference that the corrected forms were
false and were created for purposes of
defending against the complaint... [¶]
[But] we conclude that plaintiffs have
shown no error in the trial court’s conclusion that Cox’s vacation benefits
policy was legal as applied to current
employees. We therefore conclude that
although the trial court erred in basing
summary adjudication of the fourth count
on ERISA preemption, its ruling based
on the legality of Cox’s policy was
proper.
“Even drivers who do not transport goods
in interstate commerce are subject to
the jurisdiction of the Secretary of Transportation if, as part of their regular duties, they reasonably could be expected
to be called on to make interstate runs...
“The Denial of Plaintiffs’ Motion to Exclude Witnesses at Trial was Proper
“Plaintiffs moved to exclude witness
testimony at trial as an evidence sanction for misuse of the discovery process... [¶] Plaintiffs filed a motion ... to
exclude from testifying at trial witnesses
who were not identified in Cox’s interrogatory responses... The witnesses
were individual representatives of third
party shippers whom Cox intended to
call regarding the interstate nature of its
business... [¶] Cox argued in opposition that it did not know the names of the
individual witnesses at the time of the
discovery responses and that it neither
willfully withheld those names nor willfully violated any order to disclose such
information... [¶] [W]e conclude that
substantial evidence supports an implied finding that Cox did not willfully
provide false responses. Moreover, absent an order compelling Cox to identify
the individual witnesses and a violation
of such an order or other egregious
misconduct, plaintiffs have shown no
basis for an evidence sanction...
“Plaintiffs challenge the trial court’s finding that their intrastate deliveries are
part of the continuous movement of
goods in interstate commerce. They
also challenge the court’s finding that
Cox’s drivers are indiscriminately assigned to interstate routes and that all of
the drivers reasonably could be expected to be called on to drive an interstate route. Because we conclude that
plaintiffs have shown no error in the
latter finding..., we need not further discuss the finding that plaintiffs’ intrastate
deliveries are part of the continuous
movement of goods in interstate commerce...
“Plaintiffs Have Shown No Instructional
Error
“Plaintiffs contend the instructions given
failed to inform the jury that (1) Cox’s
drivers were entitled to two meal periods
and three rest breaks per shift; (2) employees must be relieved of all job duties
during meal periods and rest breaks; (3)
pursuant to federal regulations, Cox’s
drivers are on duty at all times unless
affirmatively relieved of responsibility for
their trucks; (4) on-duty meal periods
and rest breaks are permitted only if the
nature of the work prevents an employee from being relieved of all duty and
employee and employer agreed in writing to an on-the-job paid meal period.
“[A] party challenging an instruction on
the grounds that the instruction, although legally correct, is too general,
lacks clarity or is incomplete must request the additional or qualifying instruction in order to preserve those
grounds for appeal... [¶] Plaintiffs’ proposed instructions ... also included
questionable legal statements. Because
plaintiffs have not shown that any par-5-
ticular proposed instruction was proper,
we conclude that they have shown no
error in the denial of any of their proposed instructions. [¶] Moreover, our
independent review of the record discloses additional reasons to reject three
of plaintiffs’ claims of instructional error...
“The Attorney Fee Award Must Be Reversed
“Labor Code section 218.5 requires an
attorney fee award to the prevailing
party ‘[i]n any action brought for the
nonpayment of wages, fringe benefits,
or health and welfare or pension fund
contributions,’ except an action for
which attorney fees are recoverable
under Labor Code section 1194 and
certain other actions. Our reversal of the
judgment compels the conclusion that
there is no prevailing party at this time
and therefore no basis for an attorney
fee award under section 218.5. The
order awarding attorney fees to Cox as
the prevailing party on certain counts
therefore must be reversed... The issue
may be revisited on remand, however,
at the conclusion of this litigation.”
For plaintiffs: Antonio M. Lawson, Sheila
Y. Thomas, and Kendra L. Tanacea.
For defendant: Sheppard, Mullin, Richter & Hampton, Charles F. Barker, Richard J. Simmons, and Karin Dougan
Vogel.
Second Dist Div Three, 9/5/12; opinion by Croskey with Kitching and
Aldrich concurring; 2012 WL
3846827.
LABOR CODE 132a PROHIBITING
TERMINATION FOR FILING
WORKERS’ COMPENSATION
CLAIM CANNOT SUPPORT
COMMON LAW CAUSE OF
ACTION FOR WTVPP
DUTRA v MERCY MEDICAL CENTER
MT. SHASTA. “Plaintiff Michelle Dutra
sued her former employer ... for defamation and wrongful termination in violation
of public policy,” the Third District be(Cont'd on Page 6, DECISIONS)
DECISIONS
(From Page 5)
gan in the published portion of a September 26 opinion by Nicholson. “Plaintiff alleged Mercy committed libel per se
by communicating to her and others in
a private meeting its grounds for terminating her employment. She alleged
Mercy discharged her in violation of the
public policy codified at Labor Code
section 132a, which generally prohibits
discharging an employee for filing a
workers’ compensation claim.
“The trial court [Judge Karen L. Dixon]
granted Mercy’s motion for summary
adjudication against the defamation
cause of action. It concluded Mercy’s
communicating its grounds for terminating plaintiff was a conditionally privileged communication under Civil Code
section 47, subdivision (c), and that
plaintiff had failed to introduce triable
issues of material fact that would defeat
the privilege, including showing the publication was motivated by malice.
“After selecting the jury for trial on the
remaining wrongful termination cause
of action, the court granted Mercy’s
motion to dismiss the action on the
ground the Workers’ Compensation
Appeals Board has exclusive jurisdiction to adjudicate claims under Labor
Code section 132a. The court gave
plaintiff an opportunity to amend her
complaint, but she refused.
tended by plaintiff, a union steward, and
Mercy supervisors. Mercy terminated
her for (1) continuing to gossip while on
duty and after being counseled about it;
(2) altering a check that had been issued to her from a discretionary fund
provided by a religious order affiliated
with the hospital, an action the letter
referred to as ‘check fraud;’ and (3)
falsifying her timecard and abandoning
her post by leaving work without clocking out...
“Plaintiff claims the trial court had jurisdiction to try her cause of action for
wrongful termination in violation of Labor
Code section 132a... The Supreme
Court established in City of Moorpark v.
Superior Court (1998) 18 Cal.4th 1143...,
that section 132a’s vesting of jurisdiction in the WCAB to adjudicate violations of its terms did not establish an
exclusive remedy, and that a plaintiff
could also pursue common law remedies. Plaintiff asserts her action for
wrongful termination in violation of public policy—the policy codified in section
132a—is such a common law remedy.
We disagree, as section 132a does not
qualify under case authority as the type
of policy that can support a common
law action fro wrongful termination.
“Plaintiff worked for Mercy as a housekeeper. She injured her back while at
work on January 31, 2008, while pulling
a linen barrel across a snow-covered
alley. She filed a workers’ compensation claim that day.
“Labor Code section 132a extends certain civil rights protections to employees who are injured in the course of their
employment... [¶] The statute grants to
the WCAB jurisdiction to remedy violations. To seek reinstatement and recover lost wages, the employee initiates proceedings by filing a petition
with the WCAB. The statute vests the
WCAB ‘with full power, authority, and
jurisdiction to try and determine finally
all matters specified in this section
subject only to judicial review, except
that the appeals board shall have no
jurisdiction to try and determine a misdemeanor charge.’ (Lab.Code, § 132a.)
Obviously, a trial court has no jurisdiction to hear a civil cause of action for an
employer’s breach of Labor Code section 132a.
“Mercy terminated plaintiff’s employment on March 19, 2008. Mercy informed plaintiff the grounds for her termination in a confidential meeting at-
“Plaintiff asserts her cause of action is
different. She sought recovery under the
common law action of wrongful termination in violation of public policy. She
“Plaintiff contends (1) the trial court
improperly granted the motion for summary adjudication because, she asserts, the issue of malice can be decided only by a jury...; and (2) the trial
court has jurisdiction to hear claims for
wrongful termination in violation of Labor
Code section 132a. [¶]We conclude the
trial court did not err, and we affirm the
judgment.
-6-
claims Labor Code section 132a is the
public policy that was violated, and that
City of Moorpark allows her to seek
recovery notwithstanding the statute’s
vesting of adjudicatory authority in the
WCAB.
“City of Moorpark does not go as far
plaintiff suggests. City of Moorpark did
hold that Labor Code section 132a does
not provide an exclusive remedy against
disability discrimination and does not
preclude an employee from pursuing
remedies under [FEHA] and common
law wrongful termination remedies. (City
of Moopark, supra, 18 Cal.4th at p.
1158...) However, the high court noted
[that] its conclusion that section 132a
did not provide an exclusive remedy
was ‘only half the analysis.’ (City of
Moorpark, supra, at p. 1158...) It also
had to decide in that case whether a
violation of FEHA could serve as a basis
for wrongful termination in violation of
public policy.
“Thus, we still must decide whether a
violation of section 132a can form the
basis of a common law action of wrongful termination in violation of public
policy—an issue City of Moorpark did
not address. We conclude that a violation of section 132a cannot be the basis
of a tort action for wrongful termination.
“City of Moorpark reiterated the high
court’s test for determining whether a
particular policy can support a common
law wrongful termination claim. That
test includes a substantive limitation
that governs this case... ‘[W]hen the
constitutional provision or statute articulating a public policy also includes
certain substantive limitations in scope
or remedy, these limitations also circumvent the common law wrongful discharge cause of action. Stated another
way, the common law cause of action
cannot be broader than the constitutional provision or statute on which it
depends...’ (City of Moorpark, supra, 18
Cal.4th at p. 1159...)
“Section 132a includes limitations on
its scope and remedy that prevent it
from being the basis of a common law
DECISIONS
(From Page 6)
cause of action. The statute establishes a specific procedure and forum
for addressing a violation. It also limits
the remedies that are available once a
violation is established. Allowing plaintiff to pursue a tort cause of action
based on a violation of section 132a
would impermissibly give her broader
remedies and procedures than that provided by the statute. Thus, the statute
cannot serve as the basis for a tort
claim...
“Plaintiff argues she is entitled to seek
recovery ... because her termination fell
outside of the ‘compensation bargain’
or a normal employment relationship...
[¶] The point has no relevance here. We
agree in accordance with City of
Moorpark that section 132a was not
plaintiff’s exclusive remedy for redressing her wrong. There were other remedies she could have pursued for the
alleged discrimination against her, and
indeed the court before dismissing the
action gave plaintiff the opportunity to
amend her complaint to seek those
remedies. Plaintiff, however, chose not
to amend her complaint...”
For plaintiff: Rebecca E. Moore.
For defendants: Kenny, Snowden &
Norine, Kelly J. Snowden and Margaret
Long.
Third Dist, 9/26/12; opinion by
Nicholson with Hull and Duarte concurring; 2012 DAR 13447, 2012 WL
4389528.
REPORTING TIME CLAIMS ARE
SUBJECT TO LABOR CODE
§ 218.5, WHICH ALLOWS
PREVAILING DEFENDANT TO
RECOVER ATTORNEYS’ FEES
On September 20, the Second District,
Division Two, filed a 20-page opinion by
Boren following a grant of review by the
California Supreme Court and an order
transferring the case back to the Court
of Appeal for reconsideration in light of
Kirby v Immoos Fire Protection, Inc.
(2012) 53 C4th 1244. In its original
December 2011 opinion, the Second
District had affirmed summary judg-
ment that had been granted by Judge
William F. Highberger, holding that the
plaintiff class was not entitled to “reporting time” or “split shift” pay, but that the
trial court had erred in awarding attorneys’ fees to the prevailing employer.
(That opinion appeared at 202 CA4th
117, 134 CR3d 643, and was summarized in CELA Bulletin, Dec 2011, p.5.)
In Kirby v Immoos, filed on April 30,
2012, the Supreme Court unanimously
held that the Legislature intended that
meal and rest break claims are to be
governed by the “American Rule,” meaning that each side must cover its own
attorneys’ fees. (The Supreme Court’s
opinion was summarized in CELA Bulletin, Apr 2012, p.3.) The Second
District’s new opinion reaches the same
conclusions as did the first opinion concerning the plaintiffs’ non-entitlement to
“reporting time pay” and “split shift pay.”
Concerning attorneys’ fees, the court
wrote in part as follows:
“Next, we turn to the matter of attorney
fees, which were awarded by the trial
court in favor of AirTouch. In an earlier
opinion, we reversed the trial court’s
fees award. We found that both appellants’ claims were subject to Labor Code
section 1194, a ‘plaintiffs only’ fees shifting statute... Now, reconsidering the
matter, we determine that the split shift
claim is subject to Labor Code section
1194, because the claim seeks to recover unpaid minimum wage compensation. However, a reporting time claim
is brought to recover unpaid wages, and
is therefore subject to Labor Code section 218.5, which allows a prevailing
defendant to recover attorney fees. We
conclude that the trial court must allocate the reasonable fees incurred by
AirTouch in defending the reporting time
claim and award those fees. [¶] Finally,
we decline to consider the putative class
members’ appeal of the trial court’s
denial of a motion for class certification,
since the motion was denied without
prejudice and the matter has not been
finally decided.”
Andre F. Jardini, K.L. Myles.
Second Dist Div Two, 9/20/12; opin-7-
ion by Boren with Ashmann-Gerst
and Chavez concurring; 2012 DAR
13269, 2012 WL 4130520.
NINTH CIRCUIT
REVERSING DISMISSAL, NINTH
CIRCUIT HOLDS THAT EVEN
UNDER PRINCIPLES OF
TWOMBLY AND IQBAL, RULE
8(a)(2) WAS SATISFIED BY
“BRIEF” COMPLAINT ALLEGING
AGE DISCRIMINATION AND
WRONGFUL DISCHARGE
SHEPPARD v DAVID OWENS AND
ASSOCIATES. In an opinion by
Pregerson filed on September 12, a
Ninth Circuit panel reversed the dismissal of a complaint alleging ADEA
and Oregon wrongful discharge causes
of action, holding “that Sheppard’s
amended complaint, while brief, nonetheless satisfies Rule 8(a)(2)’s pleading standard.” The court wrote in part as
follows:
“Federal Rule of Civil Procedure 8(a)(2)
requires that each claim in a pleading
be supported by ‘a short and plain
statement of the claim showing that the
pleader is entitled to relief.’ Under this
rule, a claim must contain ‘more than
labels and conclusions’ or a ‘formulaic
recitation of the elements of a cause of
action.’ Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2009). Instead, to
satisfy Rule 8(a)(2), a ‘complaint must
contain sufficient factual matter, accepted as true, to state a claim for relief
that is plausible on its face.’ Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). Although this standard requires a claim
be ‘plausible on its face,’ it does not
require that a complaint contain ‘detailed factual allegations.’ Iqbal, 556
U.S. at 678. As the text of Rule 8(a)(2)
itself makes clear, even a ‘short and
plain’ statement can state a claim for
relief... Here, as discussed below,
Sheppard’s two-and-one-half page complaint, while brief, nonetheless satisfies Rule 8(a)(2)’s pleading standard.
DECISIONS
(From Page 7)
“Under a ‘disparate treatment’ theory of
discrimination, a plaintiff in an ADEA
case can establish age discrimination
based on: (1) ‘circumstantial evidence’
of age discrimination; or (2) ‘direct evidence’ of age discrimination. [cites
omitted.] Here, Sheppard’s ... amended
complaint, while brief, alleges a plausible claim of age discrimination based
on circumstantial evidence of age discrimination...
“Here, Sheppard’s amended complaint
alleges a ‘plausible’ prima facie case of
age discrimination. Her complaint alleges that: (1) she was at least forty
years old; (2) ‘her performance was
satisfactory or better’ and that ‘she
received consistently good performance
reviews’; (3) she was discharged; and
(4) her five younger comparators kept
their jobs.
“Sheppard’s allegation that her five
younger comparators kept their jobs
gives rise to an ‘inference of age discrimination’ because it plausibly suggests that Evans ‘had a continuing need
for [Sheppard’s] skills and services [because her] various duties were still being performed.’ See Diaz [v Eagle Produce Ltd. P’ship, 521 F.3d 1201 (9th Cir.
2008)] at 1207. It also plausibly suggests that employees outside her protected class ‘were treated more favorably’ than Sheppard. See id.
“As the Seventh Circuit has explained:
[I]n many straightforward cases, it
will not be any more difficult today
for a plaintiff to meet [his or her]
burden than it was before ... Iqbal
and Twombly. A plaintiff who believes that she has been passed
over for a promotion because of her
sex will be able to plead ... that a
promotion was offered, that she
applied and was qualified for it, and
that the job went to someone else.
That is an entirely plausible scenario, whether or not it describes
what ‘really’ went on in [the] plaintiff’s
case.
“Swanson v. Citibank, N.A., 614 F.3d
400, 404-05 (7th Cir. 2010). Like the
Seventh Circuit’s hypothetical,
Sheppard’s complaint puts forward a
‘straightforward’ case of discrimination...
“To prevail on a claim of wrongful discharge [under Oregon law], a plaintiff
‘must establish a causal connection
between a protected activity and the
discharge.’ [cite omitted.] ... [¶] In
Sheppard’s case, ‘common sense’ suggests that there is a ‘causal connection’
between Sheppard’s request for medical leave and her termination. Significantly, Sheppard’s amended complaint
alleges that she was terminated ‘immediately’ after she scheduled her surgery. This allegation, in conjunction
with Sheppard’s allegation that she ‘received consistently good performance
reviews’ gives rise to an inference that
Sheppard was performing her job well
but was nonetheless terminated for requesting medical leave.”
For plaintiff: Glenn N. Solomon, Portland.
For defendant: Victor Kisch, P. K.
Runkles-Pearson, Stoel Rives LLP,
Portland.
Pregerson joined by B. Fletcher and
Donald E. Walter; 2012 DAR 12902,
2012 WL 3983909.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
PLAINTIFF’S VERDICT ON
DISABILITY DISCRIMINATION
CLAIMS
TIFFANY v SMITH. In an unpublished
opinion by McIntyre filed on August 31,
the Fourth District, Division One, wrote
in part as follows:
“Dr. David James Smith appeals from a
judgment in favor of his former employee, Dr. Frank J. Tiffany, on claims of
disability discrimination. On appeal,
Smith contends (1) the evidence was
insufficient to support the jury’s verdict,
(2) the trial court [Judge Frederic L.
-8-
Link] abused its discretion by admitting
evidence regarding his lifestyle, conduct with another employee, and that
he was callous and indifferent, and (3)
the trial court erred by failing to issue a
written statement of decision on Tiffany’s
unfair business practices claim... We
reject Smith’s arguments and affirm the
judgment.
“In 2005, Smith hired Tiffany to work as
a physician at his business, the San
Diego Comprehensive Pain Management Center (SDCPMC). Tiffany had
severe osteoporosis, causing his bones
to be brittle and fracture easily. In 2007,
Tiffany broke his right arm and took
approximately one to two weeks off
from work to recuperate... In Februay
2008, Tiffany suffered a similar injury on
his other arm that required surgery.
“Tiffany’s wife called Paul Hamwey,
SDCPMC’s human resources manager,
to inform him of Tiffany’s injury and to
request that Tiffany be able to use his
sick leave or vacation leave to recover...
Hamwey understood that the request
was for an accommodation due to
Tiffany’s disability. Smith called Tiffany
the day after Tiffany’s surgery and asked
whether Tiffany would be able to return
to work that week. When Tiffany responded that he could not, Smith terminated his employment...
“At trial, Smith claimed that he fired
Tiffany to save money because his
medical practice was losing money...
[¶] In addition to SDCPMC, Smith had
numerous other business ventures, including owning an airplane, a yacht,
and multiple office buildings...
[A]ccording to [Smith’s bookkeeper]
Oertle, SDCPMC was so profitable that
its revenue could support Smith’s unprofitable businesses and his ‘lifestyle.’
In fact, Smith used SDCPMC’s revenue
to cover his other investments and businesses.
“Smith argues the trial court erred in
denying his motion for a new trial based
on his claim that there was insufficient
evidence to support the jury’s verdict...
We disagree. [¶] Smith had a duty to
DECISIONS
(From Page 8)
‘fairly summarize all of the facts in the
light most favorable to the judgment.’
[cite omitted.] ... Smith failed to satisfy
this very basic burden and thus waived
his substantial evidence contention.
“In any event, we conclude the jury’s
verdict ... was supported by substantial
evidence... [¶] Although the parties did
not cite to specific testimony that Tiffany was able to perform his job, the jury
could reasonably infer this element from
the evidence... After his 2007 injury,
Tiffany took one to weeks off and then
returned to work. Thus, Tiffany presumably could have returned to work after
recuperating from nearly the same injury on his other arm. [This conclusion]
was also supported by evidence that
Smith asked Tiffany to fill in while Smith
was on vacation and considered offering
Tiffany part-time employment.
“The evidence was also sufficient to
establish that Smith had a discriminatory motive. Although Smith attempts
to persuade us that the evidence showed
nothing more than a coincidence in the
timing of Tiffany’s termination and his
disability, the evidence went well beyond that to establish discriminatory
intent...
“Assuming Smith adequately rebutted
the presumption of discrimination through
his claim that he fired Tiffany for financial reasons, the burden shifted to Tiffany to demonstrate that Smith’s purported reasons were actually a pretext
for disability discrimination... We conclude Tiffany met that burden. Tiffany
demonstrated that the major factor in
Smith’s alleged financial distress, a
drop in Medicare payments, did not
occur until well after Tiffany’s termination...
“Smith ... argues the trial court erred in
admitting the following evidence: (1) he
made sexual advances to an employee
at a party; (2) he lived in the affluent
community of Rancho Santa Fe; (3) he
owed his prior lawyers $200,000 for
their work on this case; (4) he owned a
boat and a plane and took lavish vacations; and (5) he was callous and indifferent. We address each of these items
in turn.
“First..., Tiffany’s counsel asked
[Tiffany’s wife] whether she knew why
Smith stopped having office parties.
Tiffany’s wife explained that there was
an incident at a party that involved
Smith pulling a female employee onto
his lap... [This] suggests that Smith
stopped having office parties for a reason other than his alleged financial
distress...
“Second..., Tiffany’s counsel asked
[Smith’s bookkeeper] about a document concerning the refinancing of
Smith’s home [in Rancho Santa Fe].
When Tiffany’s counsel attempted to
delve into information concerning
Smith’s assets on that document, the
trial court excluded the evidence...
“Third, Smith’s argument that the trial
court erred in admitting evidence that he
owed his prior lawyers $200,000 for
their work on this case is flawed. Based
on our review of the record, the trial court
excluded that evidence...
“In regard to Smith’s remaining contentions..., he failed to cite the specific
testimony or other evidence that is the
subject of his argument....
“After the jury returned its verdicts, the
trial court held a hearing on the section
17200 claim. At the conclusion of that
hearing, the court found in favor of Smith,
but denied his request for a statement of
decision because ‘the matter was heard
in less than 20 minutes and [was] on the
record.’ ... [¶] The record before us
shows that ... Smith failed to provide a
reporter’s transcript of the hearing. This
deficiency prevents us from adequately
evaluating his claim on appeal because
we are unable to determine whether the
alleged error resulted in prejudice...”
For plaintiff: Leon J. Saad, San Diego.
For defendants: Matthew D. Rifat, San
Diego.
by McIntyre with McDonald and
O’Rourke concurring; 2012 WL
THERE WAS NO AGREEMENT TO
ARBITRATE WHERE EMPLOYEE
HAD SIGNED HANDBOOK BUT
HAD NOT SIGNED SEPARATE
TISOR v MARKETSHARE PARTNERS, LLC. In an unpublished opinion
by Sepulveda filed on September 13,
the First District, Division Four, affirmed
an order by Judge Loretta M. Girogi
denying arbitration of the plaintiff’s
wrongful discharge claim, agreeing with
the employee that there was insufficient
evidence of an arbitration agreement.
Although the employee had signed an
acknowledgment form contained in a
Handbook, she had not signed the arbitration agreement itself, which was contained in an Appendix to the Handbook
and was set out as a separate agreement. The court wrote in part as follows:
“According to MarketShare’s controller, it was MarketShare’s ‘policy and
practice’ to provide all new employees
with a 41-page document titled ‘Employee and Independent Contractor
Handbook’ which is divided into chapters... Chapter 1 of the Handbook, titled
‘Introduction,’ states that the provisions
of the Handbook ‘do not form an employment contract. [MarketShare] reserves the right to revise, modify, delete
or add to any and all policies, procedures, work rules or benefits stated in
this Handbook or in any other document, except for the policy of ‘at will’
employment and the agreement to arbitrate disputes.’
“Chapter 5 of the Handbook, titled ‘Employee Responsibilities,’ includes the
following paragraph: ‘Arbitration [¶] It is
understood and agreed that any and all
disputes ... shall be settled exclusively
by final and binding arbitration. (See
‘[Appendix] B’)... The final page of Appendix B contains lines for dates and
signatures of a MarketShare representative and an employee, neither of which
is signed and dated. No signed copy
appears in the appellate record.
-9-
DECISIONS
(From Page 9)
“Although the opposition is not included
in the appellate record..., we infer from
appellants’ reply that respondent contended that signing the Handbook’s
acknowledgment form (as opposed to
Appendix B to the Handbook, containing the arbitration agreement) was insufficient to show that she agreed to
arbitrate her claims.
“We agree with the trial court that appellants provided insufficient evidence that
the parties entered into a mutual agreement to arbitrate their dispute, as contemplated by appellant Market-Share’s
arbitration agreement contained in Appendix B to the Handbook...
“It is ... true ... that the ‘Acknowledgment and Agreement’ signed by respondent ... refers to the arbitration
agreement, unlike the employee acknowledgments signed by the employees in Romo [v Y-3 Holdings, Inc. (2001)]
87 Cal.App.4th [1153] at page 1159,
and Mitri [v Arnel Management Co. (2007]
157 Cal.App.4th [1164] at page 1168.
The language of the acknowledgment
form in this case nonetheless suggests
that the arbitration agreement was intended to be separate... In other words,
the arbitration agreement, as distinguished from the handbook, created
legal obligations, which were not contemplated by the separate acknowledgment...
“Here, appellants demonstrated, at
most, that MarketShare had a company policy of requiring its employees
to arbitrate, but not that respondent
herself accepted the terms of the arbitration agreement, as contemplated by
the document, and thus did not meet
their burden to show the ‘existence’ of a
written arbitration agreement...”
For plaintiff: Edwin Bradley, San Francisco.
For defendant: Fisher & Phillips, Irvine,
Mark J. Jacobs and John A. Mavros.
by Sepulveda with Reardon and
Rivera concurring; 2012 WL 4026951
(unpublished).
CBAs DID NOT “CLEARLY AND
UNMISTAKABLY” PROVIDE FOR
ARBITRATION OF STATUTORY
WAGE AND HOUR CLAIMS
BARTONI v AMERICAN MEDICAL
RESPONSE WEST. In an unpublished
opinion by Kline filed on August 24, the
First District, Division Two affirmed an
order by Alameda County Superior Court
Judge Robert B. Freedman denying the
employer’s motion to compel arbitration of wage and hour claims. The Court
of Appeal wrote in part as follows:
“Defendant contends the trial court erred
in refusing to compel arbitration of plaintiffs’ wage and hour claims, where it
determined that the collective bargaining agreements between the union and
defendant did not contain a ‘clear and
unmistakable’ waiver of plaintiffs’ right
to a judicial forum for their statutory
claims. [¶] We shall affirm the order on
the sole ground stated by the superior
court... We therefore do not address the
additional bases for affirmance posited
by plaintiffs and disputed by defendant.
“None of the [three relevant] CBAs contains any provision requiring defendant
to comply with the Labor Code or applicable IWC wage order, or with state or
federal law in general...
“Bartoni filed her original complaint ...
on behalf of herself and others similarly
situated, in April 2008. She alleged four
causes of action under California law:
(1) failure to pay overtime...; (2) failure to
provide meal and rest periods...; (3)
violation of Labor Code sections 201
through 203, in failing to promptly pay
all overtime wages owed and to properly
compensate for meal and rest periods
promptly upon the end of employment
of dispatchers who left employment;
and (4) violation of California’s unfair
competition law...
“Nowhere in the agreement is there any
reference to or incorporation of the wage
and hour statutes or orders at issue in
this case or to the waiver of any state or
federal statutory claim... [¶] Moreover,
the two CBAs covering the period from
July 2001 to June 2008, further state
-10-
that ‘[a]ny other complaint that is not
covered by the terms and conditions of
the Agreement may be taken up to step
2 of the grievance procedure. The decision at the Step 2 level may not be taken
to arbitration.’ Such a provision further
supports our interpretation that a ‘complaint’ based on alleged statutory violation is not to be arbitrated. None of the
CBAs at issue here explicitly provides
otherwise.”
For plaintiffs: Andrew Paul Lee,
Schneider, Wallace, Cottrell, Brayton
& Konecky, San Francisco; Aaron David
Kaufmann, Leonard Carder, Oakland;
Theodore Franklin, Weinberg, Roger &
Rosenfeld, Alameda; Kimberly Ann
Kralowec, San Francisco.
For defendant: Michael Stuart Kun,
Epstein Becker & Green, Los Angeles;
James Andrew Sonne, Horvitz & Levy,
Encino.
by Kline with Lambden and Richman
JUDGMENT ON JURY VERDICTS
FOR PLAINTIFF ON SEX
HARASSMENT CLAIMS, BUT
ORDERS NEW TRIAL OR
REMISSION OF AWARDS FOR
NON-ECONOMIC DAMAGES
MORAN v QWEST COMMUNICATIONS INT’L. “Qwest Communications
International, Inc., Qwest Corporation,
and Dennis Sherwood ... appeal the
judgment entered upon a jury verdict in
favor of Amy Moran,” the First District,
Division 2, began in a 40-page unpublished August 27 opinion by Lambden.
“The jury found all defendants liable for
the sexual harassment of Moran and
Qwest liable for failure to take reasonable steps to prevent the sexual harassment and for terminating Moran’s employment in violation of public policy.
The jury awarded Moran $492,710 for
economic damages, a total of $2.8
million for noneconomic damages, and
$1 million in punitive damages. Defen(Cont'd on Page 11, DECISIONS)
DECISIONS
(From Page 10)
dants contend that: (1) the jury’s findings of liability were not supported by
substantial evidence; (2) the trial court
prejudicially abused its discretion when
it admitted evidence that Sherwood
harassed other individuals at Qwest
and had been investigated for sexual
harassment at a previous job; (3) the
award for noneconomic damages is
excessive; and (4) Qwest cannot be
liable for punitive damages because the
jury’s finding that Sherwood was a managing agent of Qwest was not supported by substantial evidence.
“Moran cross-appeals from the order of
the trial court granting summary adjudication to defendants on her first and fifth
causes of action, for gender-based discrimination and for failure to pay wages
on termination, contending that triable
issues of fact exist.
“With the exception of the awards for
noneconomic damages, we affirm the
judgment entered by the trial court. The
awards of noneconomic damages are
reversed and we remand the cause for a
new trial, solely on the issue of noneconomic damages, unless Moran accepts
a remission of noneconomic damages
in the amount of $750,000. We also
affirm the court’s order granting summary adjudication to defendants on
Moran’s first and fifth causes of action.”
For plaintiff: William Gaus, Dillingham
& Murphy, San Francisco.
For defendant Qwest: Steven Arthur
Hirsch, Keker & Van Nest, San Francisco.
For defendant Sherwood: Otis McGee,
Jr., Sheppard, Mullin, Richter & Hampton, San Francisco.
by Lambden with Haerle and
Richman concurring; 2012 WL
SECOND DISTRICT PARTLY
AFFIRMS AND PARTLY
REVERSES ORDER DENYING
CLASS CERTIFICATION OF
MISCLASSIFICATION CLAIMS BY
NEWSPAPER HOME DELIVERY
CARRIERS
AYALA v ANTELOPE VALLEY NEWSPAPERS, INC. “Plaintiffs ... appeal from
an order [by Judge Carl J. West] denying their motion for class certification,”
the Second District, Division Four, wrote
in an unpublished September 19 opinion by Willhite. “Plaintiffs sought to
certify a class of newspaper home delivery carriers..., alleging that AVP improperly classified the carriers as independent contractors rather than employees and violated California labor
laws. The trial court found there were
numerous variations in how the carriers
performed their jobs, and therefore common issues did not predominate. We
conclude, however, that those variations do not present individual issues
that preclude class certification. Instead,
because all of the carriers perform the
same job under virtually identical contracts, those variations simply constitute common evidence that tends to
show AVP’s lack of control over certain
aspects of the carriers’ work. Similarly,
the so-called ‘secondary factors’ that
must be considered when determining
the primary issue in this case ... also
may be established for the most part
through common proof, since almost all
of those factors relate to the type of
work involved, which is common to the
class. Therefore, we hold that the trial
court erred in finding that the independent contractor-employee issue is not
amenable to class treatment.
“Our holding ... does not entirely resolve
the class certification question as to all
of the causes of action plaintiffs allege.
The trial court also found that plaintiffs’
claims of overtime and meal/rest period
violations ... were not amenable to class
treatment because of wide variation in
the amount of time each carrier spent
performing the required work, and their
varied use of helpers or substitutes...
We agree, and affirm the trial court’s
-11-
denial of class certification as to the
first, second, and third causes of action. We reverse the order ... as to the
remaining causes of action because
the court’s denial as to those claims
was based solely upon its determination that the independent contractoremployee issue is not suitable for class
treatment. Unless the trial court determines, on remand, that the remaining
causes of action present predominately
individual issues as to liability (as opposed to damages), the court shall
certify the class for the fourth through
eighth causes of action.”
For plaintiffs: Callahan & Blaine, Daniel
J. Callahan, Jill A. Thomas, Michael J.
Sachs, Kathleen L. Dunham, and Scott
D. Nelson.
For defendant: Perkins Coie, William C.
Rava and Sue J. Scott.
Second Dist Div Four, 9/19/12; opinion by Willhite with Manella and
Suzukawa concurring; 2012 WL
AFTER REMAND FOR
BRINKER, SECOND DISTRICT
AGAIN AFFIRMS DENIAL OF
CLASS CERTIFICATION OF MEAL
BREAK CLAIMS
HERNANDEZ v CHIPOTLE MEXICAN
GRILL, INC. “Plaintiff ... appealed from
the order [by Judge Terry A. Green]
denying his motion for class certification...,” the Second District, Division
Eight, began in an unpublished August
21 opinion by Grimes. “We held that the
trial court did not abuse its discretion
and affirmed. In doing so, we concluded
that employees must provide employees with breaks, but need not ensure
employees take breaks. (Hernandez v.
Chipotle Mexican Grill, Inc. (2010) 189
Cal.App.4th 751, [summarized in CELA
Bulletin, Oct 2010, p.3], review granted
Jan. 26, 2011.) We issued our decision
while awaiting the California Supreme
Court’s decision in Brinker Restaurant
Corp. v. Superior Court... The California
Supreme Court granted review of our
DECISIONS
(From Page 11)
case, issued its decision in Brinker,
and has since remanded the case “with
directions to vacate [our] decision and
to reconsider the cause in light of Brinker
(2012) 53 Cal.4th 1004...’ Following
remand, the parties submitted supplemental briefs about the impact of Brinker
on this case. Finding that our decision
is consistent with Brinker, we affirm the
trial court’s order denying class certification.”
For plaintiff: Altshuler Berzon, Michael
Rubin, James M. Finberg, Eve H.
Cervantez, Danielle E. Leonard;
Rastegar & Matern, Matthew J. Matern
and Douglas W. Perlman.
For defendant: Sheppard, Mullin, Richter & Hampton, Richard J. Simmons
and Geoffrey D. DeBoskey, Derek R.
Havel, Jason W. Kearnaghan, and
Daniel j. McQueen.
Second Dist Div Eight, 8/21/12; opinion by Grimes with Bigelow and
Flier concurring; 2012 WL 3579567
(unpublished).
GIVING “MOTIVATING REASON”
INSTRUCTION ON FEHA
PREGNANCY DISCRIMINATION
AND RETALIATION CLAIMS, NOR
IN REFUSING TO GIVE
EMPLOYER’S PROPOSED “MIXED
MOTIVE” INSTRUCTION
ALAMO v PRACTICE MANAGEMENT
INFORMATION CORP. “Appellant
[PMIC] appeals from a judgment in favor
of its former employee ... following a jury
trial on ... causes of action for pregnancy discrimination and retaliation in
violation of [FEHA] and [WTVPP],” the
Second District, Division Seven, began
in an unpublished September 24 opinion by Zelon. “On appeal,” the court
continued, “PMIC argues that the trial
court [Judge Rex Heeseman] committed prejudicial error in (1) instructing the
jury pursuant to CACI Nos. 2430, 2500,
2505, and 2507 that Alamo had to prove
her pregnancy-related leave was ‘a
motivating reason’ for her discharge,
and (2) refusing to instruct the jury
pursuant to BAJI No. 12.26 that PMIC
could avoid liability under a mixed motive defense by proving it would have
made the same discharge decision in
the absence of any discriminatory or
retaliatory motive. PMIC also argues
that the trial court erred in awarding
attorney’s fees to Alamo as the prevailing plaintiff under FEHA where the general verdict form failed to specify whether
the jury’s verdict was based on the
statutory FEHA claim or the common
law wrongful discharge claim. For the
reasons set forth below, we affirm...
“As the parties acknowledge, the question of the proper standard of causation
in a FEHA claim, including the availability of a mixed motive defense, is currently pending before the California Supreme Court in Harris v. City of Santa
Monica [(2010) 181 CA4th 1094, 106
CR3d 6], review granted April 22, 2010,
S181004. Pending further guidance on
this issue by the Supreme Court, we
conclude that the trial court did not
commit any instructional error in this
case... [¶] A review of the language and
legislative purpose of FEHA, as well as
the relevant case law, does not support
PMIC’s position...
“[A]lthough this issue ultimately may
be decided by the court in Harris, [t]he
Supreme Court has suggested in dicta
... that ‘a motivating reason’ or ‘a motivating factor’ is the proper standard
under FEHA. [See] Guz v. Bechtel
National, Inc. (2000) 24 Cal.4th 317...
[¶] Over the years, the California appellate courts likewise have used the phrase
‘a motivating factor’ or ‘a motivating
reason’ in describing the standard of
causation in a FEHA discrimination or
retaliation claim. [cites omitted.]...
“Alternatively, PMIC contends that the
trial court erred in refusing its request to
instruct the jury on the mixed motive
defense with BAJI No. 12.26... As discussed, the question of whether a mixed
motive defense is available under FEHA
is currently pending before the California Supreme Court in Harris. However,
we need not decide that issue here.
Even if we assume ... that the mixed
motive defense applies to FEHA claims,
the trial court did not err ... because this
-12-
case was tried by both parties as a
single motive, not a mixed motive, case...
“On appeal, PMIC also challenges the
trial court’s order awarding attorney’s
fees to Alamo as the prevailing plaintiff
under FEHA... [¶] First, PMIC’s assertion of error ... is barred by the doctrine
of invited error... [¶] [I]t is clear that
PMIC invited the purported error as a
matter of trial strategy... [B]y its
counsel’s own admission, PMIC agreed
to a general verdict form as a deliberate
tactical choice so that it could later
challenge any attorney’s fees ordered
by the trial court on the basis of an
alleged ambiguity in the verdict form
itself...
“Second..., PMIC’s argument fails on
the merits... [¶] Because Alamo’s common law claim for [WTVPP] was derivative of her statutory claim for violation of
FEHA, the public policy claim would
either rise or fall with the FEHA claim...
Consequently, if the jury found in favor of
Alamo in her claim for [WTVPP], then it
must have found that PMIC’s termination of her employment was in violation
of FEHA...”
For plaintiff: Employment Lawyers Group
and Karl Gerber.
For defendant: Neufeld, Marks & Gralnek
and Paul S. Marks.
Second Dist Div Seven, 9/24/12; opinion by Zelon with Perluss and Woods
•
•
•
NELA NEWS
electronic newsletter “@NELA.”
—Amicus Brief in D. R. Horton. On
September 11, NELA and its charitable
public interest arm, The Employee
Rights Advocacy Institute for Law &
Policy, joined with two dozen workers’
rights organizations in filing an amicus
brief in support of the NLRB in D. R.
Horton, Inc. v. National Labor Relations
Board, currently pending before the Fifth
Circuit.
The brief discusses the well-settled principle that workers have a substantive
right under the NLRA to use the judicial
forum to achieve more favorable terms
or conditions of employment. The brief
also points out that the availability of
class actions not only makes vindicating the claims of low-wage workers
cost-effective, but it also provides an
additional layer of protection against
retaliation. The brief further argues that
the Board’s conclusions do not create a
conflict with the FAA.
The Supreme Court long ago recognized that federal courts may not enforce provisions of a contract that violate
the NLRA, and more recently the Supreme Court has held that arbitration
agreements cannot strip employees of
any of their substantive statutory rights.
The issues are thus distinguishable
from those at stake in Concepcion,
where the plaintiffs did not allege the
violation of any substantive federal statutory right.
The brief was authored by Michael C.
Subit of Frank Freed Subit & Thomas,
who also authored our amicus brief
before the Board. NELA Amicus Advisory Council Co-Chair Victoria W. Ni
and Cliff Palefsky provided valuable feedback during the drafting process, and
reviewed the brief on NELA’s behalf.
The
brief
is
available
at
www.exchange.nela.org.
—Amicus Brief re Misclassification.
On August 10, NELA joined Interfaith
Worker Justice, the Southern Poverty
Law Center, and the National Employment Law Project as amicus curiae in
Scantland v Knight Enterprises, Inc.
(Case No. 12-12614), pending before
the Eleventh Circuit, urging reversal of a
grant of summary judgment in an FLSA
independent
contractor
misclassification case.
The brief focuses on the statutory language and the historical underpinnings
of the FLSA, specifically the breadth of
the statute’s definition of “employ.” The
brief also advances strong public policy
arguments supporting the FLSA’s broad
application, especially in this era of
increasing abuse of the independent
contractor designation. This issue has
important implications for millions of
workers in a wide variety of jobs, for lawabiding employers, and for local and
state government budgets. The brief
was written by Catherine K.
Ruckelshaus and Eunice Cho of NELP,
and Kristi Graunke of the Southern
Poverty Law Center.
—Amicus Brief re Definition of “Supervisor” under Title VII. On September 5, NELA, joined by AARP, filed
an amicus brief supporting Petitioner
Maetta Vance in Vance v Ball State
University, currently pending in the
United States Supreme Court. Our brief
was drafted by Professor Michael L.
Foreman of the Penn State University
Dickinson School of Law, with support
from his students in the Civil Rights
Appellate Clinic, and input from Professor Eric Schnapper and Margaret A.
Harris.
Ms. Vance alleged numerous instances
of racially motivated conduct in support
of her hostile environment and retaliation claims, some of which was engaged in by employees with a role in
directing her work activities. The Seventh Circuit, in an opinion by Judge
Diane Wood, affirmed summary judgment, holding that the definition of “supervisor” is limited to those with the
power to “hire, fire, demote, promote,
transfer, or discipline an employee.”
(646 F3d 461.) By contrast, the EEOC’s
guidance embraces a broader definition
of “supervisor” that includes those with
the authority to direct the daily activities
of other employees.
-13-
NELA’s brief argues forcefully that the
EEOC’s definition is consistent not only
with Ellerth and Faragher, but also with
the USSC’s more recent decisions in
Burlington Northern and Staub v Proctor. The brief argues that an unduly
restrictive definition of who qualifies as
a “supervisor,” and whose conduct is
automatically imputed to the employer,
would discourage employers from implementing internal anti-harassment policies. Adopting the EEOC’s definition
will provide employers with an incentive
to develop procedures to deter those
most likely to engage in harassment.
The
brief
is
available
at
www.exchange.nela.org.
—The Institute’s Quarterly Newsletter. The Employee Rights Advocacy
Institute for Law & Policy and NELA
have recently released the Summer
2012 edition of VISION + ACTION, our
quarterly newsletter about The Institute’s
activities.
(See
www.employeerightsadvocacy.org.) Included are:
• Top 10 Tips To Make Your Case
Summary Judgment Proof.
• The Future of Forced Arbitration and
Class Actions in Employment Litigation.
• Scholarships Increase Access to
NELA’s 2012 Continuing Education
Programs.
• Preserving the Right to a Jury: The
Institute Urges Courts To Reject Class
Action Waivers in Arbitration Cases.
• The Institute’s 2011 Annual Report
Highlighting Expanding Programs and
Initiatives.
—Bias 2.0 Seminar. Our upcoming
seminar “Bias 2.0: What Every Employee Advocate Should Know,” (October 12-13 in Atlanta), closes with “Lessons Learned at Trial: Dos & Don’ts for
Handling ‘Hidden Bias’ in Employment
Claims.” Veteran litigators Alicia K.
Haynes, Yona Rozen, and J. Brian
Wood will share their best practice tips
on handling “hidden bias.” Their seminar paper can be downloaded from
exchange.nela.org.
LEGISLATION
(From Page 1)
Updates on Other Key Bills
We’ve Been Following
The following other labor and employment bills were also acted on this month
by Governor Brown. For more information on any of them, or for a complete list
of bills that CELA has been monitoring,
email mariko@cela.org.
AB 889 (Ammiano D) Domestic work
employees. This bill would have enacted the Domestic Work Employee
Equality, Fairness, and Dignity Act to
regulate the wages, hours, and working
conditions of domestic work employees. VETOED.
AB 1450 (Allen D) Employment: discrimination: status as unemployed.
This bill would have made it unlawful,
unless based on a bona fide occupational qualification or any other provision of law, for an employer, an employment agency, or a person who operates
an internet web site for posting jobs in
actions, including refusal to hire a person because of that person’s employment status, and publishing an advertisement or announcement for any job
that includes provisions pertaining to an
individual’s current employment or employment status. VETOED.
AB 1744 (Lowenthal, Bonnie D) Employee compensation: itemized
statements. Current law requires every
employer, semi-monthly or at the time
of each payment of wages, to furnish
each employee with an accurate itemized statement in writing showing specified information. This bill additionally
requires, on and after July 1, 2013, that
the itemized statement include, if the
employer is a temporary services employer, the rate of pay and the total
hours worked for each assignment.
SIGNED INTO LAW.
AB 1844 (Campos D) Employer use
of social media. This bill prohibits an
employer from requiring or requesting
an employee or applicant to disclose a
user name or password for accessing
personal social media or to access
social media. This bill also prohibits an
employer from discharging, disciplin-
ing, threatening to discharge or discipline, or otherwise retaliating against an
employee or applicant for exercising
any right under these provisions.
SIGNED INTO LAW.
AB 1855 (Torres D) Employment:
contractors: sufficient funds. Current
law prohibits a person or entity from
labor services with specified types of
with all applicable local, state, and federal laws and regulations governing the
labor or services to be provided. This
bill, in addition, makes these provisions
applicable with regard to warehouse
contractors. SIGNED INTO LAW.
AB 1875 (Gatto D) Civil procedure:
depositions. This bill limits a deposition of any person to seven hours of total
testimony, except under specified circumstances, and with the provision that
the court will be required to allow additional time if necessary to fairly examine the deponent, or if any other circumstance impedes or delays the examination. SIGNED INTO LAW.
AB 1964 (Yamada D) Discrimination
in employment; reasonable accommodations. This bill includes a religious dress practice or a religious grooming practice as a belief or observance
covered by FEHA’s protections against
religious discrimination. SIGNED INTO
LAW.
AB 2346 (Butler D) Agricultural employee safety: heat-related illness.
This bill prescribed specified duties on
employers to reduce the risk of heat
illness among agricultural employees,
including the adopted heat illness prevention regulatory requirements. The
bill provided for specified civil penalties,
and imposed a state-mandated local
program because certain violations of
the bill’s requirements would constitute
crimes under current provisions of law.
The bill required the Director of Industrial Relations to provide an annual report to the Legislature regarding enforcement. VETOED.
-14-
records: right to inspect. Current law
requires an employer to keep a copy of
an itemized wage statement and the
record of deductions on file for at least
three years at the place of employment
or at a central California location. This
bill provides that the term “copy,” for
purposes of these provisions, includes
a duplicate of the itemized statement
provided to the employee or a computer-generated record that accurately
shows all of the information that current
law requires to be included in the itemized statement. SIGNED INTO LAW.
contract requirements. Current law
requires that whenever an employer
enters into a contract of employment
with an employee for services to be
rendered within this state and the contemplated method of payment involves
commissions, the contract must be in
writing and set forth the method by
which the commissions are to be computed and paid. This bill exempts from
this requirement temporary, variable
incentive payments that increase, but
do not decrease, payment under the
written contract. SIGNED INTO LAW.
AB 2676 (Calderon, Charles D) Agricultural employee safety. This bill
would have made it a crime for any
person who directs an agricultural employee to perform, or supervises an
agricultural employee in the performance
of, outdoor work without providing the
employee with shade and potable water, punishable by imprisonment not
exceeding six months in a county jail,
by a fine not exceeding $10,000, or
both; or if that violation results in injury
to an agricultural employee, by imprisonment not exceeding one year in a
county jail, by a fine not exceeding
$25,000, or both. By creating a new
crime, the bill would have imposed a
state-mandated local program. VETOED.
SB 863 (De Leon D) Workers’ compensation. This bill modifies the requirements of a qualified medical evaluator with respect to doctors of chiro(Cont'd on Page 16, LEGISLATION)
LEGISLATION
NELA NEWS
practic, and would prohibit a qualified
medical evaluator from conducting qualified medical evaluations at more than
ten locations. SIGNED INTO LAW.
—NELA Welcomes New Staff. Please
join us in welcoming two new members
to the NELA family:
(From Page 14)
(From Page 13)
Legislative Agenda for 2013
Our Legislative Committee has begun
planning for the 2013 legislative year,
and we are currently soliciting bill ideas
for review. One of priority issues for next
year is to address the employment
exemption in AB 1875. We hope to get
as much feedback as possible from all
CELA members with regard to how
employment cases should be impacted
by the limited deposition rule established in AB 1875. We will soon be
sending out information about how you
can participate. For more information
on AB 1875 follow-up legislation, to
submit a bill idea for next year, or to
become part of the legislative planning
process, please email mariko@cela.org.
•
•
•
Julie M. Strandlie joined NELA as our
Legislative & Public Policy Director on
a part-time basis on October 1, 2012,
and will come on board full-time on
November 1. Before founding Julie M.
Strandlie Advocacy, Julie was the ABA’s
Director of Grassroots Operations, Legislative Counsel, and Lobbyist working
on the Civil Rights Tax Relief Act. She
has also served as the American Association of Law Libraries’ Government
Relations Director, and has extensive
experience advocating on behalf of professional associations, engaging members and chapters, and leading successful Lobby Days. She has practiced
employment law, and has advised clients in matters involving the Family and
Medical Leave Act, the Americans with
Disabilities Act, the Employment Retirement Income Security Act, discrimination, wrongful termination, and severance agreements. Julie is based in our
Washington DC office, and her email
address is jstrandlie@nelahq.org.
Timothy Sherrill, Administrative Assistant, has extensive experience working with nonprofit organizations. Prior to
joining NELA, Tim worked with Sharper
Future, a nonprofit with a mission to
help individuals deal with mental health
impairments and unwanted behaviors
to increase life satisfaction. Generous
with his time outside of work, Tim has
volunteered with AIDS Lifecycle, AIDS
Walk, Sunday Streets, and Health Initiatives for Youth. He received his undergraduate degree in Creative Writing
and English Literature from San Francisco State University. Tim is now part
of NELA’s headquarters in San Francisco, and can be reached at
tsherrill@nelahq.org.
•
•
•
COMING EVENTS
October 4, 2012
October 5-6, 2012
October 12-13
NELA Fall Seminar
Bias 2.0: What Every Employee Advocate Should Know
Westin Peachtree Plaza, Atlanta
-15-
Published
Monthly
BULLETIN
CALIFORNIA
SUPREME COURT
REVIEW IS DENIED IN FIRST
DISTRICT CASE THAT AFFIRMED
ORDER COMPELLING INDIVIDUAL
ARBITRATION OF LABOR CODE
CLAIMS UNDER AGREEMENT
CONTAINING CLASS ACTION
WAIVER
NELSEN v LEGACY PARTNERS
RESIDENTIAL, INC. On October 31,
the California Supreme Court denied
review, letting stand the July 18 decision by the First District, Division One,
that affirmed the correctness of Judge
Charlotte Walter Woolard’s order compelling individual arbitration of Labor
Code claims under an agreement con-
October 2012
Vol. 26, No. 10
LEGISLATIVE UPDATE
taining a class action waiver. The Court
of Appeal’s decision, as modified on
August 14, appears at 207 CA4th 1115,
144 CR3d 198, and was summarized in
CELA Bulletin, July 2012, p.5. The
court wrote in part, in an opinion by
Margulies: “We find (1) the arbitration
agreement is not unconscionable; and
(2) notwithstanding that the agreement
precludes class arbitration by its own
terms, Nelsen fails to show that compelling her to individual arbitration violates state or federal law or public
policy... [W]e need not decide whether
Concepcion abrogates the rule in Gentry [because] the record is ... wholly
insufficient to apply Gentry... [And] for
a number of reasons, we decline to
follow Horton... The subject matter of
[that] decision ... falls well outside the
AB 1354 (Huber). Civil procedure:
discovery: objections. The Civil Discovery Act permits a party to a civil
action to obtain discovery, as specified, by inspecting documents, tangible things, and land or other property
in the possession of any other party to
the action. The Act provides for procedures that must be followed when the
responding party objects to all or part of
an inspection demand. This bill requires the responding party, when the
by Mariko Yoshihara
KEY 2012 LABOR AND
EMPLOYMENT BILLS
SIGNED INTO LAW
FIVE REFLECTIONS ON ANOTHER GREAT CELA CONFERENCE
Christopher Hayes, San Diego
Kudos to the Education Committee
and CELA staff members for putting
together yet another informative and
inspiring Annual Conference. The venue
was comfortable with well-appointed
and reasonably priced accommodations. Wireless internet was conveniently provided throughout.
Toni Jaramilla opened the Conference
by laying out a vision for more transparency in CELA governance, and by
announcing the appointment of no less
an Expectation
that"Finding
four new Board
Members—inspired
of all.
Privacy
in Social
choices
[see page
8.]
Networks," by CELA
The concurrent
sessions were
member Eugene
Lee,great,
with hard decisions as to which to
begins on Page 16.
attend. The Tribute to Clients presen-
tation was very cool. Andrew Freeman,
this time joined by Pat Goldman, gave
a thoroughly entertaining presentation
on recent case law. Every year we look
forward to Andrew’s evisceration of
poorly decided (and poorly litigated)
cases, and this year he even gave out
t-shirts!
It’s always great to see friends and
colleagues from all over the state gathered in one place, to meet new friends,
and to put faces to the names of helpful
listserv participants. A high point, for
sure, was the very-deserving John
Weiss’s acceptance of the Posner
Award from Joe’s daughters, and John's
moving speech.
And who can forget “The Hoot”—an
experience not to be missed. Where
else can you strum chords with the
likes of John Weiss, while sitting next
to the broadly grinning Gene Moscovitch
laying down a groove on the bongos?
Very cool and very fun. Thanks to Gene
and PMA for hosting.
Eagerly looking forward to next year’s
conference in San Jose, and even more
so to the following year’s conference in
San Diego.
___________________
Michael Marsh, CRLA, Salinas
I have been an attorney for eight years
now, and a member of CELA for nearly
all that time. At each successive CELA
Conference I feel a bit less of an out(Cont'd on Page 5, CONFERENCE)
DECISIONS
(From Page 1)
[NLRB’s] core expertise...”
For plaintiff: R. Rex Parris Law Firm, R.
Rex Parris, Alexander R. Wheeler, Jason P. Fowler, Kitty Szeto, Douglas
Han; Lawyers for Justice and Edwin
Aiwazian.
For Defendant: Rutan & Tucker, Mark J.
Payne and Bruce L. Sylvia.
Cal SC, 10/31/12 (denying review).
REVIEW BUT ORDERS
DEPUBLICATION OF SECOND
DISTRICT DECISION THAT HELD
THAT CLAIMS ADJUSTERS ARE
NON-EXEMPT AND OVERTIME
CLASS SHOULD BE CERTIFIED
HARRIS v SUPERIOR COURT (LIBERTY MUTUAL INS. CO.). On October
24, the Supreme Court filed an order
denying review but depublishing the
Second District’s July 23, 2012 decision that again held, after remand, that
the plaintiff claims adjusters seeking
overtime compensation are non-exempt
and that the class should be certified.
The Court of Appeal’s decision appeared
at 207 CA4th 1225, 144 CR3d 289, and
Aug 2012, p.1.
In Harris v Superior Court (2011) 53
C4th 170, (summarized in CELA Bulletin, Dec 2011, p.1), the Supreme Court
had reversed the Second District’s original decision, (154 CA4th 164, 64 CR3d
547), and remanded the case for reconsideration, holding that the Court of
Appeal had over-relied on the so-called
“administrative/production worker dichotomy.”
For petitioners: Robbins Geller Rudman
& Dowd, Patrick J. Coughlin, Theodore
J. Pintar, Steven W. Pepich, Kevin K.
Green, Steven M. Jodlowski; Cohelan
Khoury & Singer, Timothy D. Cohelan,
Isam C. Khoury; Spiro Moss, Ira Spiro,
Dennis F. Moss; Michael L. Carver.
For Real Parties: Sidley Austin, Douglas R. Hart, Geoffrey D. Deboskey;
Sheppard Mullin Richter & Hampton,
Robert J. Stumpf, Jr., Karin Dougan
Vogel.
Cal SC, 10/24/12; 2012 DAR 14842.
CALIFORNIA COURTS
OF APPEAL
AFTER RECONSIDERATION IN
LIGHT OF BRINKER, SECOND
DISTRICT AFFIRMS DENIAL OF
CLASS CERTIFICATION OF WAGE
AND HOUR CLAIMS
TIEN v TENET HEALTHCARE CORP.
In an October 4 opinion by Rubin, the
Second District, Division Eight, affirmed
trial court judge Carl J. West’s denial of
class certification of wage and hour
claims. The court held: (1) the evidence
supported the finding that individual
questions predominated as to whether
employers provided adequate meal periods; (2) the evidence supported the
finding that individual questions predominated as to whether employers
provided adequate rest breaks; (3) the
evidence supported the finding that individual questions predominated as to
employees’ pay stub claims; (4) any
error was harmless in the trial court’s
failure to sua sponte invite supplemental briefing; and (5) the trial court did not
exceed its authority by ruling on the
merits with respect to the class certification motion.
In its original February 16, 2011 decision in the case, the Second District
had held that in denying class certification, the trial court did not err in relying
on the subsequently de-published
Brinkley decision, nor in "correctly" preferring Brinkley’s analysis over that of
Cicairos. (The February 16 opinion appeared at 192 CA4th 1055, 121 CR3d
773, and was summarized in CELA
Bulletin, Feb 2011, p.4.)
On May 18, 2011, the California Supreme Court granted review and deferred further action pending consideration and resolution of a related issue in
Brinker Restaurant v. Superior Court.
On June 20, 2012, the cause was transferred to the Court of Appeal, along with
a number of other cases, with directions
to vacate its decision and reconsider
the cause in light of Brinker Restaurant
Corp. v. Superior Court (2012) 53 Cal.4th
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Toni Jaramilla
Suite. 300
Tel: (310) 551-3020
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
Mariko Yoshihara
Tel: (916) 340-5084
EXECUTIVE BOARD
(Santa Monica)
Noah Lebowitz
(San Francisco)
Scot Bernstein
(Folsom)
Wendy Musell
(San Francisco)
David DeRubertis
(Studio City)
Cynthia Rice
(San Francisco)
Maria Diaz
(Fresno)
Anne Richardson
(Pasadena)
David Duchrow
(Santa Monica)
Supreeta Sampath
(Los Angeles)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
Deborah Vierra
(Ventura)
Laura Horton
(Northridge)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
1004, 139 Cal.Rptr.3d 315. (See CELA
Bulletin, June 2012, p.4.)
For plaintiff and appellant Kevin Tien:
Law Offices of Joseph Antonelli, Joseph
Antonelli, Janelle Carney; Kevin T.
Barnes.
For plaintiffs and appellants Carole
McDonough and Julia Strain: Bonnie E.
Kane; Barry D. Mills.
For defendants and respondents:
Gibson, Dunne & Crutcher and Michele
L. Maryott.
Second Dist Div Eight, 10/4/12; opinion by Rubin with Bigelow and
Grimes concurring; 2012 DAR 13770,
2012 WL 4712520.
INDEPENDENT CONTRACTOR
MISCLASSIFICATION CAUSES OF
ACTION ARE NOT ARBITRABLE
BECAUSE THEY RELATE TO
LABOR CODE VIOLATIONS, NOT
TO APPLICATION OR
INTERPRETATION OF THE
PARTIES’ CONTRACTS
ELIJAHJUAN v SUPERIOR COURT
(MIKE CAMPBELL & ASSOCIATES).
“The difference between an employee
and an independent contractor is significant if for no other reason than employees enjoy benefits not afforded independent contractors,” the Second
District, Division Eight, began in an
October 17 opinion by Flier. “Here,
petitioners alleged that real parties in
interest misclassified them as independent contractors when they were employees. That allegation underlies every
cause of action in this lawsuit.
“The sole substantive issue on appeal is
whether the parties agreed to arbitrate
their dispute. We conclude that the
dispute falls outside the arbitration provision, which applies only to disputes
regarding the ‘application or interpretation’ of the parties’ contracts. The dispute in this case is unrelated to the
substance of the parties’ contractual
obligations, and instead depends on
extra-contractual legal obligations an
employer owes its employees, but does
not owe its independent contractors.
The trial court [Judge Javen V. Sinanian]
granted real parties in interests’ motion
to compel arbitration. We treat this
appeal from a nonappealable order as a
petition for writ of mandate, and grant
the petition.
“According to the FAC, each petitioner
and each member of the proposed class
was misclassified as an independent
contractor instead of an employee. As
a result, real parties committed numerous violations of the Labor Code, violations of the Unfair Business Practices
Act, and negligent misrepresentations...
“Petitioners’ lawsuit does not concern
the application or interpretation of the
Agreements, but instead seeks to enforce rights arising under the Labor
Code benefitting employees but not
independent contractors. No allegation
in the FAC is based on rights afforded
petitioners under the terms of the Agreements. The parties’ dispute therefore
cannot be characterized as regarding
the application or interpretation of the
Agreements...
“Let a peremptory writ of mandate issue
commanding the trial court to vacate its
order compelling arbitration and issue a
new order denying real parties’ motion
to compel arbitration. Petitioners are
entitled to costs in this proceeding.”
For petitioners: Schonbrun DeSimone
Seplow Harris Hoffman & Harrison,
Wilmer J. Harris and Sami N. Khadder.
For real parties: Hanson Bridgett,
Raymond F. Lynch, Sarah D. Mott, and
Molly A. Lee
Second Dist Div Eight, 10/17/12; opinion by Flier joined by Rubin; dissenting opinion by Grimes; 2012
DAR 14409, 2012 WL 4907684.
EMPLOYEE WHO DIDN’T SIGN
ARBITRATION AGREEMENT WAS
NOT ESTOPPED TO DENY THAT
THE AGREEMENT APPLIED TO
HER BECAUSE SHE HAD MISLED
EMPLOYER INTO BELIEVING SHE
HAD SIGNED IT, NOR DID AN
IMPLIED IN FACT CONTRACT
ARISE
GORLACH v THE SPORTS CLUB
-3-
COMPANY. “Defendants The Sports Club
Company and five of its officers appeal
an order [by Judge Susan BryantDeason] denying a motion to compel
arbitration. We conclude that the trial
properly denied the motion to compel,
and thus we affirm.
“Susan Gorlach is the former human
resources director for Sports Club. She
resigned her position on August 6, 2010.
“Prior to 2010, there were no arbitration
agreements between Sports Club and
its employees... In 2010, Sports Club
revised its ‘Team Member Handbook’ to
include an arbitration agreement...
“Gorlach was tasked with presenting the
new handbook to all Sports Club employees and collecting their signatures
to the arbitration agreement... [¶] On
June 30, Gorlach told [CEO] April Morgan that all corporate employees except
four had signed the arbitration agreement, but she did not identify herself as
one of the employees who had not
signed...
“Gorlach resigned her position with
Sports Club on August 6, 2010. It is
undisputed that she never signed the
arbitration agreement.
“Gorlach filed a complaint against Sports
Club and five of its officers on January 7,
2011. The complaint alleged causes of
action for wrongful termination, retaliation, paramour sexual harassment,
[IIED], defamation, breach of contract,
and negligence.
“Sports Club answered the complaint on
February 23, 2011, generally denying
the complaint’s allegations and asserting 26 affirmative defenses. In its twentysecond affirmative defense, Sports Club
asserted that the court lacked jurisdiction to resolve the dispute ‘due to the
existence of a mandatory, binding arbitration agreement that Plaintiff agreed to
be bound by.’
“On April 15, 2011, Sports Club moved
to compel arbitration.... [¶] Sports Club
contended that even though Gorlach did
not sign the arbitration agreement, she
DECISIONS
(From Page 3)
is bound by it as a matter of law because she continued to work for Sports
Club after learning that signing the agreement was a condition of employment.
The arbitration agreement was thus an
implied-in-fact contract between Gorlach
and Sports Club. Further, Gorlach is
estopped from claiming the arbitration
agreement does not apply to her because she deliberately misled Sports
Club into believing that she signed it,
and Sports Club relied on her misrepresentations to its detriment. Sports Club
also contended that it did not through its
conduct waive the arbitration agreement, and the agreement is neither
substantively nor procedurally unconscionable.
“[T]he trial court concluded there was
no evidence that Sports Club relied to
its detriment on Gorlach’s implied representations that she had signed the
arbitration agreement, and we agree...
“[T]he trial court found that the evidence
did not permit the inference that plaintiff
had intended to agree to arbitrate disputes... The evidence before the trial
court—including that plaintiff did not
sign the agreement, inquired as to the
consequences of refusing to sign, and
resigned her position with the company—support the trial court’s conclusion that there was no mutual intent to
enter an arbitration agreement.
“In the present case, as in Mitri [v Arnel
Management Co. (2007) 157 CA4th
1164, 69 CR3d 223], the employee
handbook did not purport unilaterally to
impose an arbitration agreement on its
employees; instead, it urged employees to agree to submit to arbitration and
to a representation that ‘I have entered
into the Agreement voluntarily.’ Under
these circumstances, the trial court
properly inferred from Gorlach’s election not to sign the arbitration agreement that she did not intend to be bound
by it.”
For plaintiff and respondent: Shegerian
& Associates and Carney R. Shegerian.
For defendants and appellants: Epstein
Becker & Green, William O. Stein and
Eric A.Cook.
Second Dist Div Four, 10/16/12; opin-
ion by Suzukawa with Epstein and
2012 WL 4882328.
GRANTING SUMMARY
ADJUDICATION AGAINST
EMPLOYER ON DEFENSES
PERTAINING TO “NEARESTTENTH” ROUNDING POLICY
SEE’S CANDY SHOPS INC. v SUPERIOR COURT (SILVA). “Pamela Silva
brought a wage-and-hour action complaint against her former employer, See’s
Candy Shops, Inc.,” the Fourth District
began in an October 29 opinion by
Haller. “After certifying a class of current and former employees, the trial
court [Judge Joel E. Pressman] granted
Silva’s summary judgment adjudication
motion on four of See’s Candy’s affirmative defenses and entered an order dismissing the four defenses. In a writ
petition, See’s Candy challenged the
dismissal of two of the affirmative defenses. These defenses pertained to
See’s Candy’s timekeeping policy that
rounds employee punch in/out times to
the nearest one-tenth of an hour...
“After we summarily denied the petition,
the California Supreme Court granted
See’s Candy’s petition for review and
ordered this court to vacate its prior
order and issue an order to show cause
in the matter. We thereafter issued the
order to show cause and the parties
filed extensive writ briefing. We also
granted requests by several amici curiae to file briefs in the matter.
“We conclude See’s Candy’s petition
has merit. Based on the factual record
before it, the trial court erred in granting
summary adjudication on the two affirmative defenses pertaining to See’s
Candy’s nearest-tenth rounding policy.
We order the court to vacate the summary adjudication order and enter a new
order denying summary adjudication on
See’s Candy’s 39th and 40th affirmative
defenses. Our ruling leaves open the
issue whether the parties will prevail in
proving their various claims and de-4-
fenses relating to See’s Candy’s nearest-tenth rounding policy and a related
grace period policy...
“The court certified a class on Silva’s
claim that See’s Candy’s nearest-tenth
rounding policy violated the employees’
right to full compensation for work performed... See’s Candy alleged this policy
was consistent with federal and state
law...
“Relying on the DOL rounding standard,
we have concluded that the rule in
California is that an employer is entitled
to use the nearest-tenth rounding policy
if the rounding policy is fair and neutral
on its face and ‘it is used in such a
manner that it will not result, over a
period of time, in failure to compensate
the employees properly for all the time
they have actually worked.’ (29 C.F.R.
§ 745.48; see DLSE Manual, §§ 47.1,
47.2.) Applying this legal standard, we
turn to address whether the parties met
their summary adjudication burdens...
“In this case, See’s Candy’s nearesttenth rounding policy rounded both up
and down from the midpoint, and See’s
Candy specifically presented evidence
that over time the rounding policy did
not result in a loss to the employees...
“Let a writ of mandate issue commanding the superior court to vacate the
portion of its summary adjudication order to the extent it granted summary
adjudication in plaintiff’s favor on See’s
Candy’s 39th and 40th affirmative defenses. See’s Candy is entitled to recover its costs incurred in this writ
proceeding.”
For real party Pamela Silva: William B.
Sullivan, Eric K. Yaekel.
For petitioner See’s Candy Shops: Jackson Lewis, David S. Bradshaw, James
T. Jones, Alison J. Cubre, and Paul F.
Sorrentino.
Fourth Dist Div One, 10/29/12; opinon
by Haller with Benke and Aaron
concurring; 2012 DAR 15008.
•
•
•
CONFERENCE
(From Page 1)
sider, a bit less intimidated by all the
experts in the room. My early CELA
Conferences were awkward. It seemed
like everyone knew one another and I
was the odd man out. While I should
have taken strength from being in a
room with so many like-minded individuals, just as often I left feeling
disempowered, realizing all I didn’t know.
As I age, both as a person and as an
attorney, I realize that no one possesses the same combination of skills,
and that, in my own way, I’m good at
what I do. This, ultimately, allows me to
not only learn from the experts that
CELA brings together each year, but to
enjoy the Annual Conference more thoroughly than before.
I enjoyed the annual employment law
updates, parts 1 and 2. It’s a great help
to have so much information condensed
into the written materials and a relatively brief oral presentation. The information presented in the Employee Privacy Rights workshop is useful to my
daily work and was well-presented by
the panel. And while my farmworker
clients are unlikely to ever possess
insider trading information, stretching
beyond my regular workday to learn
about Dodd-Frank was fascinating.
But if there were two highlights of the
Conference for me, they were talking
and drinking beer with all the young and
energetic attorneys at the Conference
Reception, especially those UCLAW
go-getters, and the Legislative Committee meeting, which always seems too
brief given the visionary importance of
the Committee’s work.
See you all next year! And if you happen
to be feeling a tad isolated, and want to
commune with someone who definitely
doesn’t have all the answers, look me
up and I’ll buy you a beer.
_________________
Christine Adams, Santa Barbara
I’ve enjoyed attending the CELA Annual
Conference for many years, and 2012
was incredibly rewarding. Jennifer’s
slideshow kicked off the Conference,
and it’s always a high point for me. It’s
such a proud moment when the room is
filled with much-deserved applause for
our fellow members’ successes over
the past year.
Kate Kendall and Erwin Chemerinsky
were incredible speakers: their call to
action was clear, and the energy in
room during both luncheons was tangible.
Thanks for the heartfelt comments of
many of the participants, and particularly those of John Weiss in accepting
the Joe Posner award, I walked away
with the understanding that we truly are
hand-in-hand, united in pursuing the
vindication of employees’ rights across
the state—committed to excellence and
to each other.
Once again, Christina Krasomil and
Diana Sell knocked it out of the park! My
thanks to each attorney and client who
participated. Awesome job everyone!
See you in 2013!
__________________
Rutger Heymann, San Jose
I always leave the CELA Annual Conference with things to put to use in my
practice right away—cases, best practices, technology, etc. Attending the
Conference in 2010 was, in fact, a key
factor in my decision to open my practice in 2011. And one of the constant
ideas I take away is that personal contacts are as important as abstract principles. In our business, we work a lot
with the latter, but I don’t often get to
meet the people behind them. For example, I use Dee v Vintage Petroleum
all the time, and owe a huge karmic debt
to Joe Lovretovich. Getting to meet him
in person at the Monterey Conference
was like meeting the inventor of the
lightbulb. The same this year. I had
been impressed by big verdicts in
VerdictsSearch, but meeting the attorneys in person brought home what a
brilliant bunch we work with, and what a
gas this practice is. See you in San
Jose!
________________
Tamara Freeze, Irvine
Three years ago, I left the dark side and
joined the army of CELA Jedi Knights,
never looking back. I had a thousand
questions, few resources, and zero reputation. But CELA veterans stood behind
me, guiding me, helping me, taking my
phone calls when I was in need, and in
litigation distress. Every year, I get to
see our CELA heroes and my mentors
at the Annual Conference. This year, I
was lucky to have it take place right in
my Orange County backyard.
The show started with the focus group
presentation, and I came to three conclusions: (1) I don’t do enough focus
groups; (2) they don’t have to be expensive (Craigslist!); and (3) every case of
mine in the future will be focus-grouped
in some way. (Anyway, that’s my 2013
resolution.) Thank you to our CELA
veterans for presenting a clear roadmap,
a list of necessary materials, and an
explanation of several focus-group formats. I’m definitely making new litigation strategy adjustments based on
what I learned.
The rest of the Conference did not disappoint. During the “Tribute to Our Clients” session, if you didn’t have tears in
your eyes listening to my former law
school classmate Monali Sheth telling
her client’s story, then you weren’t listening well. That’s the type of inspirational story that keeps us going when
things get tough.
Other sessions were just as good: the
mentor-mentee breakfast, the
Hootnanny, the fierce bidding war for all
kinds of activities, (I was unsuccessful
in securing a hotly-contested lunch date
with Norm Pine), the entertaining case
updates by Andrew Friedland, the cautiously optimistic address by Cliff
Palefsky, special appearances by wellknow mediators, the touching speech
by our hero John Weiss, and a brutally
realistic look at the legal landscape by
Erwin Chemerinsky.
CELA, I can’t wait until we meet again
next year in San Jose!
-5-
NELA NEWS
newsletter “@NELA.”
—NELA’s Fall Seminar on implicit
bias in the workplace, October 12 and
13 in Atlanta, was a tremendous success. If you were unable to join us in
Atlanta, you can buy the Seminar
Manual on CD. Orders will be filled
within 4-6 weeks. You can preview the
Table of Contents by visiting The Exchange, (exchange.nela.org).
—A Thank You to NELA Members
from The Institute. The Employee
Rights Advocacy Institute For Law &
Policy was founded by NELA in February 2008 to broaden our efforts and
deepen our commitment to advancing
equality and justice in the workplace.
After nearly five years, The Institute has
an impressive track record of helping to
shape employment law to protect workers and to strengthen employee rights.
As NELA’s charitable public interest
arm, The Institute has benefitted greatly
from the generous commitment of
NELA’s extraordinary membership. We
simply want to say “thank you” for all
that you have done for The Institute. The
valuable contributions of time, financial
resources, and expertise of NELA members have positioned The Institute as a
catalyst for positive change.
While NELA members are engaged in
the day-to-day representation of their
clients, The Institute has been conducting research, developing resources, and
educating judges, public policy makers, and others, in order to level the
playing field and promote justice for all
workers. The Institute is proud of our
affiliation with the dedicated employee
rights advocates who comprise NELA’s
membership. (For more information
about The Institute, see www.employee
rightsadvocacy.org.)
—Federal Rules Task Force Update.
In November 2011, the U.S. Judicial
Conference’s Advisory Committee on
Civil Rules adopted the Initial Discovery
Protocols for Employment Cases Alleging Adverse Actions. The Protocols
were the result of over eighteen months
of collaboration among NELA’s Federal
Rules Task Force (FRTF), a committee
composed of management attorneys,
and the federal judiciary. The Federal
Judiciary Center (FJC) is currently conducting a Pilot Project that is designed
to analyze the impact of the Protocols
on the litigation process. The Protocols
are available on both the FJC’s website
and The NELA Exchange.
In the year since the Protocols were
adopted, NELA’s FRTF has been working on a variety of fronts to promote the
widespread adoption of the Protocols
among federal judges. In February 2012,
an article introducing the Protocols was
published in The Third Branch, the official newsletter of the federal judiciary.
That article included commentary by
District Judge John G. Koeltl (S.D.N.Y.),
who facilitated the efforts of the FRTF
and management committees in developing the Protocols.
In addition, members of the FRTF recently drafted an article for the Summer
2012 issue of The Employee Advocate,
NELA’s quarterly journal. The article
describes, inter alia, the manner in which
the Protocols are intended to interact
with the existing Federal Rules of Civil
Procedure, summarizes the Protocols’
benefits for plaintiffs, and suggests ways
NELA members can help ensure that
the Protocols are adopted as widely as
possible. This article, along with the
entire issue of The Employee Advocate,
is currently available on The NELA Exchange, as is a Fact Sheet designed to
answer additional questions about the
Protocols.
NELA is also working with FJC to compile a list of judges who have adopted
the Protocols, so if you are aware of
judges who have done so, or if you would
like more information about either the
Protocols or the work of the FRTF,
please contact Paul H. Tobias Attorney
Fellow Matt Koski at (415) 296-7629, or
mkoski@employeerightsadvocacy.org.
—Have You Joined The Exchange?
Earlier this year, NELA’s online community moved to a new home and was
given a new name. The NELA Exchange
is your place to strategize, collaborate,
and network with NELA members around
-6-
the country.
The Exchange brings all of our online
services under a single sign-on. Harness the power of 2000-plus employee
rights advocates using The Exchange
Discussion Groups. Share sample
briefs, jury instructions, discovery requests, forms, and more in the Resource Libraries. Connect with members from your city and state. Find
members who share your practice
groups or who attended your law school.
Subscribe to the NELA HQ Blog to stay
informed about our work on The Hill and
in the courts. Log in at
exchange.nela.org using your email
address and last name as your default
password. Look for an invitation to an
upcoming online demo of The Exchange.
Join us for a 60 minute tour of The
Exchange and its features, and hear
about what is in store in the coming
months.
You can also contact us if you have
questions or need help using The Exchange. Send your questions to
pvalverde@nelahq.org, or call us at (415)
296-7629, ext. 105.
—Coming Up in 2013
• March 8-9, 2013: NELA Spring Wage
& Hour Seminar; Holiday Inn Chicago
Mart Plaza
• June 26-29, 2013: NELA Annual Convention; The Sheraton Denver Downtown Hotel
• October 17, 2013: Lobby Day, Washington DC
• October 18-19, 2013:: NELA Fall Seminar; L’Enfant Plaza Hotel, Washington
DC
•
•
•
LEGISLATION
(From Page 1)
party objects to a demand on the basis
of privilege or work product, to provide
sufficient factual information in its response for other parties to evaluate the
merits of that claim, including, if necessary, a privilege log. The bill includes
other related provisions.
AB 1744 (Lowenthal, B). Employee
compensation: itemized statements.
Existing law requires every employer,
semi-monthly or at the time of each
payment of wages, to furnish an employee with an accurate itemized statement in writing showing specified information. Existing law provides that a
knowing and intentional violation of this
provision is a misdemeanor. This bill
additionally requires, on and after July
1, 2013, that the itemized statement
include, if the employer is a temporary
services employer, the rate of pay and
the total hours worked for each assignment, with a specified exception.
AB 1844 (Campos). Employer use of
social media. This bill prohibits an
employer from requiring or requesting
an employee or applicant to disclose a
user-name or password for the purpose
of accessing personal social media; to
access personal social media in the
presence of the employer; or to divulge
any personal social media. The bill also
prohibits an employer from discharging,
disciplining, or threatening to discharge
or discipline, or to otherwise retaliate
against an employee or applicant for not
complying with a request or demand by
the employer that violates these provisions.
AB 1855 (Campos). Employment:
contractors: sufficient funds. Existing law prohibits a person or entity from
labor or services with specified types of
with all applicable local, state, and federal laws or regulations governing the
labor or services to be provided. This bill
makes these provisions applicable with
regard to warehouse contractors.
AB 1875 (Gatto). Civil procedure:
depositions. This bill limits a deposition of any person to seven hours of total
testimony, except under specified circumstances. Under the bill, the court is
required to allow additional time if necessary to fairly examine the deponent.
The court is also required to allow additional time if the deponent, another person, or any other circumstance impedes
or delays the examination.
AB 1964 (Yamada). Discrimination in
employment: reasonable accommodations. This bill includes a religious
dress practice or a religious grooming
practice as a belief or observance covered by the protections against religious
discrimination, and specifies that an
accommodation of an individual’s religious dress practice or religious grooming practice that would require that person to be segregated from the public or
other employees is not a reasonable
accommodation. The bill further provides that no accommodation is required
if an accommodation would result in the
violation of specified laws protecting civil
rights.
AB 2103 (Ammiano). Employment:
wages and hours: overtime. This bill
provides that payment of a fixed salary
to a non-exempt employee shall be
deemed to provide compensation only
for the employee’s regular non-overtime
hours, notwithstanding any private agreement to the contrary.
AB 2386 (Allen). Employment and
housing disrimination: sex:
breastfeeding. This bill provides that,
for purposes of the Act, the term “sex”
also includes breastfeeding or medical
conditions related to breastfeeding. It
also states that the changes made by
this bill to the above provisons are declaratory of existing law.
AB 2674 (Swanson). Employment
records: right to inspect. Existing law
requires an employer to keep a copy of
an employee’s itemized wage statement and the record of deductions on file
for at least three years at the place of
employment or at a central location
within the State of California. This bill
provides that the term “copy” for purposes of these provisions includes a
duplicate of the itemized statement provided to an employee or a computergenerated record that accurately shows
all of the information that existing law
requires to be included in the itemized
statement.
SB 863 (De Leon). Workers’ compensation. This bill significantly modifies
the workers’ compensation system, including major changes to the medical
fee schedules, permanent disability ben-7-
efits, the Independent Medical Review
process, and the workers’ compensation lien requirements.
SB 1255 (Wright). Employee compensation: itemized statements. This
bill provides that an employee is deemed
to suffer an injury under Labor Code
Section 226(e) if the employer fails to
provide accurate and complete information, as specified, and the employee
cannot promptly and easily determine
from the wage statement alone the
amount of the gross or net wages paid
to the employee during the pay period
or other specified information, the deductions the employer made from the
gross wages to determine the net wages
paid to the employee during the pay
period, the name and address of the
employer or legal entity that secured
the services of the employee, and the
name of the name of the employee and
only the last four digits of his or her
social security number or an employee
identification number other than a social security number, as specified.
CELA’S 2013 LEGISLATIVE
AGENDA AND FOLLOW-UP
TO AB 1875
During the next couple of months,
CELA’s Legislative Committee will be
planning priorities for 2013. We will be
discussing many potential policy reforms and legislative proposals for the
coming year. These discussions will
lead up to our annual legislative planning meeting, which will take place on
November 30. If you would like to be
involved in this process by joining our
Legislative Committee, please email
me at mariko@cela.org.
We will also be sending out a short
survey to the entire CELA membership
regarding potential follow-up legislation
to AB 1875, CAOC’s newly enacted bill
that limits deposition time limits to
seven hours, with the exception of (1)
complex cases; (2) PMK/PMQ depositions; (3) expert depositions; and (4)
employment cases. We will be turning
to the membership for feedback on this
issue, to make sure that we are inclusive and judicious in our approach.
Please take a few minutes to complete
this survey when it’s distributed, so that
any legislation we come up with accurately reflects the views and opinions of
our membership.
COMING EVENTS
November 30, 2012
CELA Technology Committee Webinar
Practice Management Programs
noon-1:15pm
(see www.cela.org for details)
March 7, 2013
Seminar sponsored by The Institute
Effectively Representing Immigrants in Employment Cases
Holiday Inn Chicago Mart Plaza
March 8-9, 2013
NELA Spring Seminar
Preventing Wage Theft
June 26-29, 2013
NELA Annual Convention
The Sheraton Denver Downtown Hotel
October 4-5, 2013
CELA Annual Conference
Fairmont San Jose
October 17, 2013
NELA Lobby Day
Washington DC
The price of the webinar is $30 for
members and $50 for non-members.
For further information and to register,
go to www.cela.org and click on Upcoming Events.
October 18-19, 2013
NELA Fall Seminar
L’Enfant Plaza Hotel, Washington DC
The CELA Nomination Committee is
pleased to report that the Board has
adopted its nominations of four new
Board Members: Laura Horton, Wendy
Musell, Anne Richardson, and Supreeta
Sampath.
Laura Horton (Northridge) is currently
the Chairperson of the Technology Committee and a long-time member of
Listserv Committee. She has shown a
commitment to our organization both
through her committee work and her
contributions to CELA events such as
our annual Lobby Day.
Wendy Musell (San Francisco) is a cochair of the Public Employee Committee. Wendy is very well-known as a
CELA’s Technology Committee will
present a webinar on Practice Management Programs on Friday, November
30, from noon-1:15pm.
Do you want to spend more time with
family and friends, stay organized, and
keep exact track of your upcoming
litigation deadlines? This webinar is
designed for solos and small firms who
are considering a practice management
program. The webinar will include both
cloud-based and traditional programs,
comparing and contrasting features,
price, and complexity. You will get an
overview of some of the popular programs so you can reduce time spent in
searching for the one that fits the needs
of your practice. Presenters will be
Laura Horton, Chair of our Technology
Committee, and Joseph Lovretovich,
who has successfully implemented a
practice management system in his
offices.
March 18-19, 2013
CELA Committee Conclave and Lobby Day
Sacramento
NEW CELA
BOARD MEMBERS
CELA’S TECHNOLOGY
COMMITTEE WILL
PRESENT WEBINAR ON
PRACTICE MANAGEMENT
PROGRAMS ON
NOVEMBER 30
hardworking, sharing, and supportive
consensus builder.
Anne Richardson (Pasadena) has been
a frequent speaker and contributor to
CELA events and to our organization’s
amicus activities, and she will continue
to help with amicus responsibilities in
the future.
Supreeta Sampath (Los Angeles) has
served as a Co-Chair and a long-time
member of the Diversity Committee.
She has been a contributor and innovator in our outreach efforts, including
outreach to law students. She has also
been a consistent supporter of Lobby
Day.
On May 31, 2012, invitations were sent
to the Listserv and were published in the
CELA Bulletin, seeking nominees to
the CELA Board, and volunteers for the
-8-
Nomination Committee. Ten members
indicated an interest in joining the Nomination Committee, which was ultimately
made up of three current Board Members, three non-Board members, and
the CELA Chair. Those seven were
Barbara Figari, Peter Rukin, Amir
Mostafavi, Maria Diaz, Noah Lebowitz,
and Bernard Alexander. As CELA Chair,
Toni Jaramilla participated as an ex
officio committee member.
Board nominations were accepted until
July 9, 2012, by which time approximately 30 members had received nominations, a list that was then narrowed to
eight candidates who were each individually interviewed. The Nomination
Committee thanks everyone who applied to become Board Members, and
everyone who volunteered for the Nomination Committee.
Published
Monthly
BULLETIN
UNITED STATES
SUPREME COURT
OKLAHOMA SUPREME COURT
DISREGARDED USSC
PRECEDENTS CONCERNING
THE FAA IN ASSUMING
ARBITRATOR’S ROLE BY
DECLARING NON-COMPETITION
AGREEMENT NULL AND VOID
NITRO-LIFT TECHNOLOGIES v
HOWARD. “State courts rather than
federal courts are most frequently called
upon to apply the [FAA], including the
Act’s national policy favoring arbitration,” the USSC began in a November
26 per curiam opinion. “It is a matter of
great importance, therefore, that state
supreme courts adhere to a correct
interpretation of the legislation. Here,
the Oklahoma Supreme Court failed to
do so. By declaring the non-competition agreements in two employment
contracts null and void, rather than
leaving that determination to the arbitrator in the first instance, the state
court ignored a basic tenet of the Act’s
substantive arbitration law. The decision must be vacated...
“The state court reasoned that
Oklahoma’s statute ‘addressing the
validity of covenants not to compete,
must govern over the more general
statute favoring arbitration...’ If that
were so, we would have no jurisdiction
over this case... It is not so, however,
"Finding
an Expectation
because
the court’s
reliance on Oklaof
Privacy
Social
homa law was not in
‘independent’—it
necessarily
depended
a rejection of
Networks,"
byonCELA
the federal
claim...
member Eugene Lee,
begins on Page 16.
“The Oklahoma Supreme Court’s deci-
sion disregards this Court’s precedents
on the FAA... [¶] The trial court found
that the contract contained a valid arbitration clause, and the Oklahoma Supreme Court did not hold otherwise. It
nonetheless assumed the arbitrator’s
role by declaring the noncompetition
agreements null and void... [¶] [I]t is for
the arbitrator to decide in the first instance whether the covenants not to
compete are valid as a matter of applicable state law.”
USSC, 11/26/12; opinion per curiam;
2012 DAR 15843, 2012 WL 5895686.
NATIONAL LABOR
RELATIONS BOARD’S
DIVISION OF JUDGES
CLASS ACTION BAN VIOLATES
NLRA DESPITE OPT-OUT
PROVISION
24 HOUR FITNESS USA, INC. and
ALTON J. SANDERS. On November 6,
Administrative Law Judge William L.
Schmidt of the NLRB’s Division of
Judges, San Francisco Branch Office,
issued a decision that reads in part as
follows:
“I heard this case at San Francisco on
June 28, 2012. The unfair labor practice
charge, filed by Alton J. Sanders, an
individual, on February 15, 2011, alleges that 24 Hour Fitness USA, Inc.
violated Section 8(a)(1) of the [NLRA].
On April 30, 2012, the Regional Director for Region 20 of the [NLRB] issued
a formal complaint alleging that Respondent violated Section 8(a)(1) by
maintaining and enforcing a provision in
the arbitration policy, contained in its
November 2012
Vol. 26, No. 11
employee handbook, that requires employees to forego any rights they have
to the resolution of employment-related disputes by collective or class
action (the class action ban). The complaint also alleges that Respondent
violated Section 8(a)(1) by asserting
the class action ban in the 10(b) period
in eight specific cases brought against
it by employees. The Respondent filed
a timely answer denying that it engaged in the unfair labor practice alleged and interposing a variety of affirmative defenses, including a claim the
Board lacked a quorum when it decided
a case [D. R. Horton] critical to the
outcome here due to the expiration of
the term of one of the Board Members.
“Having now carefully considered the
entire record, including the demeanor
of the witnesses and the reliability of
CELA NOTES
—The Education Committee is gearing up for 2013. Our Annual Conference
will take place in San Jose on Friday
and Saturday, October 4-5, with a skills
seminar on Thursday, October 3. As in
the past, the Conference will offer a
number of concurrent 75-minute sessions.
The Education Committee is also in the
planning stage for three or four full- and
half-day seminars in 2013 and 2014,
covering topics variously directed to
newer attorneys, advanced practitioners, and attorneys of all levels of
experience.
Please let us know what topics would
be of most interest to you at both the
Annual Conference and the seminars.
(Cont'd on Page 14, CELA NOTES)
DECISIONS
(From Page 1)
their testimony, together with the arguments set forth in the extensive briefs
filed on behalf of the Acting General
Counsel, the Respondent, and the
Charging Party as well as the briefs
amicus curiae filed by the Service Employees International Union (SEIU) and
the Chamber of Commerce..., I find that
Respondent violated the Act as alleged...
“Respondent disputes the controlling
effect of Horton on the facts present
here. Instead, Respondent and the
Chamber argue that the opt-out feature
of its arbitration policy ... establishes
that the waiver of collective or class
action is voluntary on the part of the
employee, thereby making this case
fundamentally distinguishable from
Horton... [¶] Concededly, Sanders did
not opt-out of the Respondent’s arbitration policy. When he later learned of a
race and discrimination case another
employee brought against the company [Fulcher v 24 Hour Fitness USA,
Inc., No. RG 10524911, Alameda County
Superior Court] and sought to join in the
case, he was informed that he would
have to proceed individually...
“As counsel for Respondent and the
amicus know full well, I lack authority to
adjudicate any claims that Horton was
wrongly decided, or was decided after
Member Becker’s term expired. Even
so, Horton compiles statutory declarations and case precedent that date
back seven decades that are binding on
me. So regardless of the outcome of
that case, the precedent it details is
clearly binding until overruled...
“The most important beginning point in
the analysis of the issues presented
here is to recognize that this case does
not place in question an employer’s
right to require employees to arbitrate
employment-related disputes... But the
tedious arguments advanced by Respondent and its amicus ally fail to
convince me that the FAA provides
employers with a license to unilaterally
craft arbitration requirements in their
terms and conditions of employment
that serve to sweep away the well recognized statutory rights of employees
to act concertedly by bringing legal
actions against their employer. Quite
plainly, this case presents the altogether different question as to whether
an employer may design and enforce an
arbitration policy that prevents its workers from acting in concert for their mutual aid and benefit by initiating and
prosecuting a good-faith legal action
against their employer.
“If one accepts Respondent’s arguments, the Supreme Court’s recent
decisions involving the FAA have radically empowered employers to limit
employees’ Section 7 activity. Relatively speaking, AT&T Mobility LLC v.
Concepcion, 131 S. Ct. 1740 (2011)
and CompuCredit v. Greenwood, 132 S.
Ct. 665 (2012), which Respondent cites
in support, have little, if anything, to do
with arbitration in the context of the
employer-employee relationship... [¶]
In my judgment, these cases do not
address the fundamental question of
whether, and to what degree, the FAA
may be used as a tool to alter ... the
fundamental substantive rights of workers established by decades old congressional legislation... Though instructive with respect to the FAA’s standing
in the world of general consumer litigation, the arguments Respondent and its
amicus ally have fashioned from
Concepcion and CompuCredit would
require that the decades old statutory
rights of employees be thrown overboard...
“For the purposes of worker rights protected by Section 7, the opt-out process designed by the Respondent is an
illusion. The requirement that employees must affirmatively act to preserve
rights already protected by Section 7
through the opt-out process is, as the
Acting General Counsel argues, an
unlawful burden on the right of employees to engage in collective litigation that
may arise in the future. Board precedent establishes that employees may
not be required to prospectively trade
away their statutory rights. Ishikawa
Gasket American, Inc., 337 NLRB 175176 (2001).
“Even if a worker consciously chooses
to opt-out and completes the separate
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Toni Jaramilla
Suite. 300
Tel: (310) 551-3020
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
Mariko Yoshihara
Tel: (916) 340-5084
EXECUTIVE BOARD
(Santa Monica)
Noah Lebowitz
(San Francisco)
Scot Bernstein
(Folsom)
Wendy Musell
(San Francisco)
David DeRubertis
(Studio City)
Cynthia Rice
(San Francisco)
Maria Diaz
(Fresno)
Anne Richardson
(Pasadena)
David Duchrow
(Santa Monica)
Supreeta Sampath
(Los Angeles)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
Deborah Vierra
(Ventura)
Laura Horton
(Northridge)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
process necessary to do so in a timely
manner, the Respondent can still effectively prevent concerted employee activity between those who opt out and the
vast majority of other employees who
(1) consciously chose not to opt-out; (2)
unconsciously failed to opt-out in a
timely manner; and (3) who were hired
before 2007 and therefore not given an
opportunity to opt out. [FN9. Charging
Party and its amicus ally suggested
that I essentially conclude the Respondent deliberately designed its initial
employment documents in order to,
among other things, dupe new employees into being bound by its arbitration
policy. Although I am not willing to
reach that conclusion based on the
limited evidence in this case, I would be
startled to learn that the number of
employees who made a conscious,
fully-informed decision to be bound by
Respondent’s highly self-serving arbitration policy even came close to the
infinitesimal number of employees who
actually opted out...]
“Having found that the Respondent has
engaged in certain unfair labor practices, I find that it must be ordered to
cease and desist and to take certain
affirmative action designed to effectuate
the policies of the Act.
“In accord with the request of the Acting
General Counsel, my recommended
[remedies] will also require Respondent
to notify ‘all judicial and arbitral forums
wherein the (arbitration policy) has been
enforced that it no longer opposes the
seeking of collective or class action
type relief.’ This will include a requirement that Respondent: (1) withdraw
any pending motion for individual arbitration, and (2) request any appropriate
court to vacate its order for individual
arbitration granted at Respondent’s request if a motion to vacate can still be
timely filed.
“Respondent opposes this added relief.
It argues the Board has no authority to
direct a federal or state court, or an
arbitration tribunal to modify its own
prior orders or awards. In addition, Respondent argues that such retroactive
relief is inappropriate.
“I find the remedial action sought by the
Acting General Counsel is appropriate
here. Respondent’s contention concerning the Board’s lack of authority misapprehends the nature of this relief sought
and granted. The Acting General Counsel seeks no order or directive that
would require any federal or state court,
or arbitral forum to do anything... If the
court or tribunal chooses not to honor
Respondent’s good-faith request [to
withdraw its motion for individual arbitration and to clarify that it no longer
objects to class or collective claims]
then so be it...[¶] Respondent’s further
assertion that such relief is inappropriate as retroactive in nature also misapprehends the nature of the relief...”
For Charging Party: Cliff Palefsky; with
Michael Rubin and Caroline P. Cincotta,
(Altshuler Berzon), and Judith A. Scott,
SEIU, on post-hearing brief.
For Acting General Counsel: Carmen
Leon and Richard J. McPalmer.
For Respondent: Marshall Babson
(Seyfarth Shaw, NYC); Garry G.
Mathiason (Littler Mendelson, SF); and
Daniel L. Nash (Akin Gump Strauss
Hauer & Feld, Wash DC).
For Chamber of Commerce as amicus
for respondent: Willis J. Goldsmith and
Kristina A. Yost (Jones Day, NYC);
Robin S. Conrad and Shane B. Kawka
(National Chamber Litigation Center,
Wash. DC).
NLRB Divsion of Judges, SF Branch
Office, 11/6/12; opinion by Administrative Law Judge William L.
Schmidt; Case 20-CA-035419.
[Editor’s note: The Respondent has
until January 3, 2013, to file with the
NLRB “exceptions” to the remedies
“recommended” by ALJ William L.
Schmidt, after which there may be a
further appeal to the Ninth or D.C.
Circuit. The Supremacy Clause will
then require state courts to abide by the
federal courts’ determination. In a CELA
Listserv posting on November 6, Cliff
Palefsky, attorney for the Charging Party
in 24 Hour Fitness, emphasized the
importance that plaintiffs’ attorneys always file charges with the NLRB in
every case involving a class action
prohibition.
In another decision involving Section 7
rights in non-union workplaces, the NLRB
filed a 2-1 decision on July 30, 2012,
holding that an employer may not have
a blanket policy prohibiting employee
witnesses from discussing ongoing internal misconduct investigations concerning issues such as discrimination
and harassment. Banner Health Systems and James Navarro, 358 NLRB
No. 93.]
CALIFORNIA
SUPREME COURT
FIFTH DISTRICT DECISION THAT
HELD THAT WHISTLEBLOWER DID
NOT HAVE TO PURSUE WRIT
REVIEW BEFORE FILING SUIT
UNDER HEALTH & SAFETY CODE
§ 1278.5
FAHLEN v SUTTER CENTRAL VALLEY HOSPITALS. On November 14,
the Supreme Court announced that it
will review the Fifth District’s August 14
decision that held that a doctor claiming
loss of hospital privileges as a form of
whistleblower retaliation was not required
to exhaust his judicial remedy of pursuing review, via writ of mandate, of the
hospital’s action before filing a
whistleblower claim under Health and
Safety Code § 1278.5. The exhaustion
requirement did apply, however, to the
doctor’s related common law and statutory causes of action to which the
Westlake requirement of judicial exhaustion is applicable. The Fifth District’s
opinion by Wiseman appeared at 208
CA4th 557, 145 CR3d 491, and was
summarized in CELA Bulletin, Aug
2012, p.6.
For plaintiff: Stephen D. Schear, Jenny
Huang.
For defendants: Arent Fox, Lowell C.
Brown, Debra J. Albin-Riley, and
Jonathan E. Phillips.
Cal SC, 11/14/12 (granting review).
-3-
DECISIONS
(From Page 3)
CALIFORNIA COURTS
OF APPEAL
GENTRY SURVIVES STOLTNIELSEN AND CONCEPCION
FRANCO v ARAKELIAN ENTERPRISES, INC. In a 40-page opinion by
Mallano filed on November 26, the Second District, Division One, summarized
its reasoning and conclusions in the
following excerpts:
“In Gentry v. Superior Court (2007) 42
Cal.4th 443, our Supreme Court held
that, in arbitration agreements governing employment, class action waivers
may be unenforceable in ‘some circumstances [because they] ... would lead
to a de facto waiver [of employees’
statutory rights] and would impermissibly interfere with employees’ ability to
vindicate [those] rights’ (id. at p. 457,
italics added).
“More specifically, Gentry addressed
the enforceability of class action waivers in the context of a claim for overtime
compensation. The court grounded its
decision on the conclusion that an
employee’s right to overtime compensation is an unwaivable statutory right.
(Gentry, supra, 42 Cal.4th at pp. 455457.) In determining the validity of class
action waivers, the court stated: (1)
‘individual awards in wage-and-hour
cases tend to be modest’ (id. at p. 457);
‘a current employee who individually
sues his or her employer is at greater
risk of retaliation’ (id. at p.459); (3)
‘some individual employees may not
sue because they are unaware that
their legal rights have been violated’ (id.
at p. 461); (4) ‘class actions may be
needed to assure the effective enforcement of statutory policies’ (id. at p.
462); and (5) there may be ‘real world
obstacles to the vindication of class
members’ rights to overtime through
individual arbitration’ (id. at p. 463)...
“In Franco v. Athens Disposal Co. Inc.
(2009) 171 Cal.App.4th 1277 [summarized in CELA Bulletin, March 09, p.4]
(Franco I), we concluded that Gentry
invalidated a class action waiver where
an employee alleged that his employer
had violated the laws regarding employees’ rights to rest and meal periods—
statutory rights that are also unwaivble...
We further concluded that, with respect
to a claim under the Labor Code Private
Attorneys General Act of 2004..., Gentry invalidated an arbitration clause prohibiting an employee from acting as a
private attorney general...
“After we decided Franco I, the employer filed a second petition to compel
arbitration, arguing that a change in the
law rendered the class action waiver
enforceable. The trial court [Judge John
Kronstadt] denied the petition. That ruling is now before us. The question on
appeal is whether Gentry was overruled
by Stolt-Nielsen S.A. v. AnimalFeeds
International Corp. (2010) 559 U.S. ___
[130 S.Ct. 1758 and AT & T Mobility
LLC v. Concepcion (2011) 563 U.S. ___
[131 S.Ct. 1740]. We conclude that
Gentry remains good law because, as
required by Concepcion, it does not
establish a categorical rule against class
action waivers but, instead, sets forth
several factors to be applied on a caseby-case basis to determine whether a
class action waiver precludes employees from vindicating their statutory rights.
And, as required by Stolt-Nielsen, when
a class action waiver is unenforceable
under Gentry, the plaintiff’s claims must
be adjudicated in court, where the plaintiff may file a putative class action.
Accordingly, we affirm....
“Franco lacks the means, not the incentive, to pursue his rest and meal period
claims on an individual basis in arbitration. The attorney declarations submitted by Franco in opposing the motion to
compel arbitration stated that, based
on his estimated recovery of around
$10,250 in damages and PAGA penalties, it would be highly unlikely that an
attorney would represent him on an
individual basis in either arbitration or
court. Thus, it does not matter that
Athens Services would pay the
arbitrator’s fee and any other expenses
unique to arbitration; Franco’s case is
not viable in either forum unless it can
be brought as a class action.
“As noted, after we decided Franco I ...,
the California Supreme Court held that
-4-
attorney fees are not recoverable by an
employee who prevails on a rest period
claim. (See Kirby v. Immoos Fire Protection, Inc. [2012] 53 Cal.4th [1244] at
pp. 1250-1253, 1255-1259.) The court’s
analysis also appears to apply to employees who prevail on a meal period
claim.
“We conclude that, as established by
the attorney declarations, Franco cannot pursue relief for violations of his
unwaivable statutory rights to rest and
meal period unless his case can be
brought as a class action... [¶] We
therefore conclude that Gentry survives
Stolt-Nielsen and Concepcion...
“Even assuming ... that the vindication
of statutory rights language in Mitsubishi
Motors, Gilmer, and Randolph is limited
to federal law claims, Gentry is distinguishable from those cases and from
Concepcion because it does not invalidate a class action waiver unless (1) a
class ‘is likely to be a significantly more
effective practical means of vindicating
the rights of the affected employees
than individual litigation or arbitration, and (2) the disallowance of the
class action will likely lead to a less
comprehensive enforcement of [wage
and hour laws] for the employees alleged to be affected by the employer’s
violations.’ (Gentry, supra, 42 Cal.4th at
p. 463, italics & boldface added.) ... We
are not aware of any decision that holds
or suggests that a multifactor test like
Gentry is preempted by the FAA.
Concepcion did not sanction arbitration
agreements that deprive an employee
of the means to seek relief for wage and
hour violations, nor did it exempt all
exculpatory contracts from the scope of
the FAA’s savings clause (9 U.S.C. §
2)... [¶] Concepcion does not preclude
a court from declaring an arbitration
agreement unenforceable if the agreement is permeated by an unlawful purpose...
“Which brings us to the subject of
Concepcion’s effect, if any, on PAGA
claims... [¶] We need not go so far as to
say that all PAGA claims are exempt
from arbitration. Rather, when substan(Cont'd on Page 5, DECISIONS)
DECISIONS
(From Page 4)
tive Labor Code claims must be adjudicated under Gentry, the PAGA remedies ‘tag along’ under the same
unwaivable statutory rights analysis that
applies to the substantive claims.
“We therefore conclude the trial court
properly denied Arakelian’s petition to
compel arbitration.”
For plaintiff: Rastegar & Matern, Matthew J. Matern and Thomas S. Campbell.
For defendant: Hill, Farrer & Burrill, Kyle
D. Brown, James A. Bowles, and E.
Sean McLoughlin.
Second Dist Div One, 11/26/12; opinion by Mallano with Chaney and
Johnson concurring; 2012 DAR
15873, 2012 WL 5898063.
FIRST DISTRICT FINDS NO
ERROR IN DENIAL OF CLASS
CERTIFICATION OF LABOR AND
BUSINESS AND PROFESSIONS
CODE CLAIMS
MORGAN v WET SEAL, INC. In a
lengthy opinion by Haerle filed on October 13 and certified for publication on
November 7, the First District, Division
Two, affirmed an order by Superior Court
Judge John E. Munter denying class
certification. The Court of Appeal wrote
in part as follows:
“[Plaintiffs] filed this lawsuit ... alleg[ing]
that Wet Seal violated California law by
requiring employees to (1) purchase
Wet Seal clothing and merchandise as
a condition of employment and (2) travel
between Wet Seal business locations
without reimbursing them for mileage.
“This appeal is from an order denying
plaintiffs class certification on the
grounds that common questions do not
predominate over individual questions
with respect to either of their claims and
that utilizing the class action procedure
is not the superior method for resolving
this lawsuit. Appellants raise a panoply
of issues on appeal but none provides
any basis for reversal. Accordingly, we
affirm the order denying class certification...
“[A]ppellants contend that the trial court
violated Linder [v Thrifty Oil Co. (2000)
23 C4th 429] at page 443, because it
based its decision on an evaluation of
the merits of plaintiffs’ claims without
first giving plaintiffs notice or the opportunity to brief the merits question. To the
contrary, the trial court discussed Linder
in its denial order and properly applied
the Linder principles in its discussion..
[T]he trial court considered the merits of
plaintiffs’ causes of action only for the
limited purpose of assessing whether
substantially similar questions were
common to the class and predominated
over individual questions, something that
Linder expressly allows...
“Appellants contend that the trial court
erred by ignoring their theory of liability
and based its decision on the erroneous
assumption that ‘in order to answer the
central question on liability, one has to
look beyond the written policy to the
practices employed by each manager
at each of the 74 retail stores during a
period of time spanning almost seven
years.’
“The trial court’s observation that the
trier of fact will have to look beyond the
written policies to the practices of each
manager was neither ‘erroneous,’ nor
was it an ‘assumption.’ Rather, the trial
court considered the evidence of Wet
Seal’s written policies during the relevant time period and then made a
finding of fact that those policies do not
constitute substantial evidence that Wet
Seal engaged in either of the unlawful
practices alleged in the TAC. Indeed, for
most of the relevant time period, the
applicable written policies expressly
state that employees are not required to
wear Wet Seal clothing and also that
employees may seek reimbursement
for work-related travel. Despite these
facts, the trial court refrained from making any substantive finding regarding
the merits of plaintiffs’ claims, but rather
made the accurate observation that ...
plaintiffs would have to produce evidence beyond the written policies themselves...
“Wet Seal’s written policies, which do
not state that employees are required to
purchase or wear Wet Seal merchan-5-
dise, do not provide a class-wide method
of proving plaintiffs’ dress code claim.
Therefore, plaintiffs offered other types
of evidence, including the declarations
of putative class members, and they
argued that evidence was probative of a
class-wide illegal practice. Having chosen that litigation tactic, appellants
cannot now complain because the trial
court considered plaintiffs’ proffered evidence and found it lacking.
“Appellants challenge the trial court’s
discretionary determination that a class
action is not the superior method of
resolving this case... [¶] The court acknowledged that putative class members might be dissuaded from pursuing
individual claims because of the small
amount of damages involved, but ultimately it found that this factor was not
sufficient by itself to compel class certification...
“Appellants contend that the trial court
committed reversible error by making a
blanket ruling pursuant to which it overruled all but one of plaintiffs’ objections
to Wet Seal’s evidence... [¶] This claim
of error is void of factual analysis; appellants fail to identify any specific piece of
Wet Seal evidence that was either erroneously admitted or that caused them
prejudice. For this reason alone, this
claim of error fails...
“Furthermore, appellants rely solely on
Nazir v. United Airlines, Inc. (2009) 178
Cal.App.4th 243, which is inapposite...
[¶] We strongly reject appellants’ notion that Nazir requires the trial court to
provide a separate reason for every
evidentiary objection that it overrules
when, as here, the court is inundated
with objections under circumstances
suggesting an abuse of the litigation
process...”
For plaintiffs: Sima Fard, Irvine.
For defendants: Ryan Douglas
McCortney, Sheppard Mullin, Costa
Mesa.
First Dist Div Two, 10/12/12, cert’d
for pub 11/7/12; opinion by Haerle
with Kline and Richman concurring;
2012 DAR 15348, 2012 WL 4841600.
DECISIONS
(From Page 5)
ARBITRATOR COMMITTED CLEAR
LEGAL ERROR AND ABRIDGED
PLAINTIFF’S CFRA RIGHTS BY
DENYING PLAINTIFF’S CLAIM ON
BASIS OF UNFOUNDED “HONEST
BELIEF” DEFENSE
McDaneld v. Eastern Municipal Water
District (2003) 109 Cal.App.4th 702),
the arbitrator concluded, ‘[a]n employer
who honestly believes that it is discharging an employee for misusing
FMLA [leave] is not liable even if the
employer is mistaken.’
RICHEY v AUTONATION, INC. A Second District opinion by Perluss, filed on
November 13, reads in part as follows:
“Grounds for Vacating an Arbitration
Award and Standard of Review
“Although a court generally may not
review an arbitrator’s decision for errors
of fact or law, an arbitrator exceeds his
or her power within the meaning of Code
of Civil Procedure section 1286.2 and
the award is properly vacated when it
violates an explicit legislative expression of public policy [cites omitted], or
when granting finality to the arbitration
would be inconsistent with a party’s
unwaivable statutory rights. [cites omitted.]
“Avery Richey, a sales manager at Power
Toyota of Cerritos, was terminated from
his job four weeks before the expiration
of his approved medical leave under the
[CFRA] because his employer believed
Richey was misusing his leave by working part time in a restaurant he owned.
Richey sued ..., alleging his rights under CFRA had been violated. Richey’s
claims were submitted to arbitration
under the terms of a mandatory employment arbitration agreement...
“The arbitrator denied Richey’s CFRA
claim based on the so-called honest
belief or honest suspicion defense. The
trial court [Judge Malcolm H. Mackey]
denied Richey’s motion to vacate the
arbitrator’s decision and granted
AutoNation’s petition to confirm the
award.
“The honest belief defense accepted by
the arbitrator is incompatible with California statutes, regulations and case
law and deprived Richey of his unwaivable
statutory right to reinstatement under
[Gov Code] section 12945.2, subdivision (a). This clear legal error abridged
Richey’s statutory rights under CFRA—
rights based on, and intended to further,
an important public policy. Accordingly,
under the principles set forth in
Armendariz v. Foundation Health
Psychcare Services, Inc. (2000) 24
Cal.4th 83 and Pearson Dental Supplies, Inc. v. Superior Court (2010) 48
Cal.4th 665, the award must be vacated...
“Relying on federal court decisions applying FMLA, and one California decision affirming the discharge of an employee who played golf and worked on
his lawn during the week he was supposedly caring for his injured father (see
“As in Armendariz, the Court in Pearson
Dental declined to opine broadly as to
the appropriate level of judicial review
required in every case involving an
employee’s unwaivable statutory rights.
However, the Court emphasized the
arbitrator’s written decision should not
be viewed as ‘an idle act, but rather as
a precondition to adequate judicial review of the award so as to enable employees subject to mandatory arbitration agreements to vindicate their rights
under FEHA.’ (Pearson Dental, supra,
48 Cal.4th at p. 679.)
“Absent conflicting extrinsic evidence,
the validity and enforceability of an arbitration clause is a question of law subject to de novo review. [cites omitted.]
Similarly, whether the arbitrator exceeded his or her powers in granting
relief, and thus whether the award should
have been vacated on that basis, is
reviewed on appeal de novo. [cites omitted.]
“The Arbitrator Committed Clear Legal
Error in Basing His Decision Solely on
Power Toyota’s Honest Belief Richey
Had Abused His Leave
“Both CFRA and FMLA guarantee reinstatement following leave: the burden
of proof is on the employer to justify any
refusal to reinstate the employee
-6-
• • •
“The honest belief defense applied by
the arbitrator has been rejected by
most federal jurisdictions; under federal decisional law the employer bears
the burden of proving the employee was
not eligible for reinstatement
“Notwithstanding the clarity of the CFRA/
FMLA statutory scheme, the arbitrator
in this case made a single factual finding it concluded was determinative of
Richey’s CFRA claim as a matter of
law—that is, Richey’s supervisor, after
a ‘superficial investigation,’ held an ‘honest belief’ Richey had violated company
policy barring outside employment during his CFRA leave. In doing so, the
arbitrator improperly imposed the burden of proof on Richey rather than his
employer...
“In sum, we reject AutoNation’s contention an employer may simply rely on an
imprecisely worded and inconsistently
applied company policy to terminate an
employee on CFRA leave without adequately investigating and developing
sufficient facts to establish the employee had actually engaged in misconduct warranting dismissal. Whether the
arbitrator’s ruling resulted from his improper acceptance of the honest belief
defense or the employer’s reliance on a
policy that violated Richey’s substantive right to reinstatement, neither comports with the substantive requirements
of CFRA.
“The Arbitration Award in this Case
Involving Unwaivable Statutory Rights
Must Be Vacated Based on the
Arbitrator’s Clear Legal Error and Failure To Provide Meaningful Findings of
Facts and Conclusions of Law
“Notwithstanding the general rule of limited judicial review of arbitration decisions, the Supreme Court has expressly
recognized ‘public policy exceptions’
warranting greater judicial scrutiny: ‘For
example, when unwaivable statutory
rights are at stake, this court has repeatedly held that review must be ‘sufficient to ensure that arbitrators comply
with the requirements of the statute.’
(Cable Connection [v DIRECTV (2008)]
44 C4th [1334] at p. 1353, fn. 14, quot(Cont'd on Page 7, DECISIONS)
DECISIONS
(From Page 6)
ing Armendariz; accord, Pearson Dental, supra, 48 Cal.4th at p. 679.) In
Pearson Dental, which, as the case at
bar, involved ‘arbitration awards arising
from mandatory arbitration agreements
that arbitrate claims asserting the
employee’s unwaivable statutory rights’
(Pearson Dental, at p. 679), the Court
held the trial court did not err in vacating
an award based on a legal error that
effectively precluded a hearing on the
merits of the employee’s FEHA claims.
(Id. at p. 680.) It did not decide, because
it was unnecessary to resolve the case
before it, whether all legal errors are
reviewable in this context.. Id. at p. 679
[‘Nor need we decide whether the rule
suggested by plaintiff and amicus curiae California Employment Lawyers
Association is correct that all legal
errors are reviewable in this context...
We address only the case before us,
and a narrower rule is sufficient for its
resolution.’]. [FN22. In arguing the
arbitrator’s legal error in applying the
honest belief defense is not subject to
judicial review, AutoNation disingenuously asserts the Supreme Court in
Pearson Dental ‘refused to adopt the
rule that all legal errors are reviewable in
this context.’ It is difficult for us to
accept this as simply an innocent misreading of the Court’s reservation of the
question for another day.]
“We also need not decide whether it is
proper to vacate an arbitration award
based on any legal error in connection
with mandatory arbitration of an
employee’s unwaivable statutory rights.
Here, where the parties have agreed the
arbitrator will resolve any claim ‘solely
upon the law’ and the purported legal
error goes to both express, unwaivable
statutory rights (the guarantee of reinstatement) and the proper allocation of
the burden of proof, judicial review is
essential to ensure the arbitrator has
complied with the requirements of CFRA,
‘granting finality to the arbitrator’s decision would be inconsistent with the
protection of [Richey’s] statutory rights.’
(Pearson Dental, supra, 48 Cal.4th at p.
680, quoting Moncharsh [v Heily & Blase
(1992)] 3 Cal.4th [1] at p. 32.)
“The arbitrator was required to resolve
Richey’s claims according to governing
law
“[T]he arbitration agreement, drafted and
imposed on all employees as a condition of employment ... required the arbitrator to resolve the dispute ‘based solely
upon the law governing the claims and
defenses set forth in the pleadings’ and
specifically to avoid any quasi-legal principles ‘including, but not limited to notions of just cause).’ While this provision
does not authorize judicial review as a
matter of course, ‘contractual limitations on the arbitrators’ powers can alter
the usual scope of review.’ [cites omitted.] In light of this employer-mandated
provision, the arbitrator’s failure to address all of Richey’s statutory CFRA
claims and his reliance on a legally
unfounded equitable defense to vitiate
those claims warrant closer scrutiny of
the award than might otherwise be appropriate.
“The arbitrator’s legal error effectively
denied Richey a hearing on the merits of
his CFRA claims
“The arbitrator’s acceptance of the honest belief defense in this case had a
...preclusive effect on Richey’s ability to
have his nonwaivable CFRA claims heard
on the merits. To be sure, recognition of
this purported equitable defense appears
more substantive than the procedural
determination the claims were timebarred in Pearson Dental. But, as discussed above, the honest belief defense
relieves the employer of any obligation
to establish its employee was, in fact,
misusing family leave and thus subverts
the express statutory guarantee of the
right to reinstatement, as well as the
allocation of the burden of proof in an
interference case.
“Accordingly, as in Pearson Dental, and
particularly in light of the parties’ agreement for claims to be decided ‘solely
upon the law,’ the arbitrator exceeded
his powers within the meaning of Code of
Civil Procedure section 1286.2, subdivision (a)(4), by committing legal error
that effectively denied Richey a hearing
on the merits of his CFRA claims...
“The arbitrator failed to make findings of
fact and conclusions of law sufficient to
ensure he complied with the requirements of the statute
-7-
“As described above, the arbitrator,
while making multiple observations
tending to support Richey’s position,
ultimately failed to make relevant findings of fact and conclusions of law
related to his substantive CFRA
claims... [¶] In addition, the arbitrator
failed to consider Richey’s retaliation
claims under CFRA, that is, whether
Power Toyota applied its CFRA policies consistently to different employees and whether it terminated Richey
because he took CFRA leave...
“The judgment confirming the arbitration award is reversed, and the matter
remanded with directions to deny the
petition to confirm the arbitration award,
grant the petition to vacate the award
and to conduct further proceedings not
inconsistent with this opinion, including, if appropriate, an order requiring
binding arbitration before either a new
or the original arbitrator. Richey is to
recover his costs on appeal.”
For plaintiff: Scott O. Cummings.
For defendants: Snell & Wilmer, Richard A. Derevan and Christoper B. Pinzon.
Second Dist Div Seven, 11/13/12;
opinion by Perluss with Jackson
and Segal concurring; 2012 DAR
15448, 2012 WL 5492902.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
ORDER COMPELLING
ARBITRATION OF RACE
DISCRIMINATION AND RELATED
CLAIMS
GATEWOOD v EL DORADO ENTERPRISES, INC. “Following confirmation
of a 2011 arbitration award,” the Second District, Division Four, began in an
unpublished opinion by Manella filed on
November 6, “appellant DeWayne
Gatewood appeals the 2009 order compelling arbitration, and the order confirming the award, contending the arbitration provision in his employment
DECISIONS
(From Page 7)
agreement was unconscionable and
invalid under California law. We affirm.
“In October 2008, appellant filed a complaint in superior court. The complaint
asserted claims for racial discrimination in employment and harassment
under [FEHA], [WTVPP], [IIED], and
breach of implied contract not to terminate without good cause...
“Appellant opposed the petition to compel arbitration, contending the arbitration agreement contained in the handbook was procedurally and substantively unconscionable. Appellant contended it was procedurally unconscionable because he was forced to sign the
agreement as a condition of employment and was not provided a copy of the
rules... He contended the agreement
was substantively unconscionable because it carved out claims Hustler Casino was likely to pursue and permitted
the casino to unilaterally modify or revoke the agreement, rendering the agreement one-sided and illusory...
“The parties do not dispute that the
enforceability of the arbitration agreement is governed by ... Armendariz v.
Foundation Health Psychcare Services,
Inc. (2000) 24 Cal.4th 83. There, the
Supreme Court set forth four ‘minimum
requirements for the arbitration of
nonwaivable statutory claims’...
“As the court in Armendariz further held,
employer agreements ... meeting these
four ‘minimum requirements’ must then
be scrutinized under the principles of
unconscionability ‘that apply more generally to any type of arbitration imposed
on the employee by the employer as a
condition of employment, regardless of
the type of claim being arbitrated.’
(Armendariz, supra, 24 Cal.4th at p.
113.) The court recently reiterated and
summarized the applicable principles
of unconscionability in Pinnacle Museum Tower Assn. v. Pinnacle Market
Development (US), LLC (2012) 55
Cal.4th 223...
agreement did not provide for adequate
discovery... By failing to this raise this
contention below, appellant forfeited it.
[¶] Moreover, were we to consider his
claim, we would reject it...
“[T]he minimum elements of procedural
unconscionability have been established. We next turn to substantive
unconscionability. In so doing, we adhere to the rule that ‘[w]here ... the
degree of procedural unconscionability
of an adhesion contract is low, ... the
agreement will be enforceable unless
the degree of substantive unconscionability is high.’ [cite omitted.]
“Appellant contends that the language
of the arbitration provision is ... onesided and provides for arbitration of only
those claims an employee is likely to
pursue in court. We are not persuaded...
It lists specific examples ... but states
that the arbitrable claims include, but
are not limited to, those examples...
“Finally, appellant contends that onesidedness/lack of mutuality is established by the language which permitted
Hustler Casino to ‘change in [its] sole
discretion’ all the policies, procedures
and conditions of employment... [¶] We
agree with Peleg [v Neiman Marcus
Group, Inc. (2012) 204 CA4th 1425]
that the covenant of good faith and fair
dealing precludes the casino from modifying the agreement to affect claims of
which it has knowledge. Accordingly,
the arbitration agreement was not unconscionably one-sided, and appellant
has presented no ground to reverse the
court’s order compelling arbitration.”
For plaintiff: Shegerian & Associates,
Inc., Carney R. Shegerian and Donald
Conway.
For defendants: Lipsitz Green Cambria,
and Jonathan W. Brown; Labowe,
Labowe & Hoffman and Mark S. Hoffman.
Second Dist Div Four, 11/6/12; opinion by Manella with Epstein and
Suzukawa; 2012 WL 5397189 (unpublished).
“The arbitration agreement at issue indisputably meets three of the four
Armendariz factors... On appeal, appellant contends for the first time that the
DENIAL OF MOTION TO COMPEL
ARBITRATION, REJECTING
CONTENTION THAT CONCEPCION
OVERRULED ARMENDARIZ
BRENNER v GLENN JOHNSON LAW.
In an unpublished opinion by
Rylaarsdam filed on November 5, the
Fourth District, Division Three, wrote in
part as follows:
“Defendants ... appeal from [Judge Kirk
H. Nakamura’s] denial of their motion to
compel arbitration of the complaint filed
by plaintiff Erika Brenner for [WTVPP],
fraudulent concealment, sexual discrimination in violation of [FEHA], and defamation. They contend the court erred in
finding the arbitration provision in the
partnership agreement between them
and plaintiff was unconscionable and
did not cover plaintiff’s asserted claims.
We conclude the provision is unconscionable and that defendants have not
shown the court abused its discretion in
not severing the unconscionable provisions... [¶] The court denied the motion
[to compel], finding, among other things,
the arbitration clause was unconscionable under Armendariz ... based on
plaintiff’s declaration.
“Because substantial evidence supports
the court’s finding the agreement was
one of employment, we reject defendants’ contention Armendariz does not
apply because the parties entered a
partnership agreement.
“Nor do we agree the United States
Supreme Court in AT & T Mobility LLC
v. Concepcion (2011) ___U.S.___, 131
S.Ct. 1740 overruled ‘the Armendariz
unconscionability analysis for arbitration agreements.’ As explained by
Samaniego [v Empire Today, LLC (2012)
205 CA4th 1138], Concepcion held the
FAA preempts state law prohibiting a
consumer from waiving class action
rights in an arbitration agreement but in
doing so ‘explicitly reaffirmed that the
FAA permits agreements to arbitrate to
be invalidated by generally applicable
contract defenses, such as fraud, du(Cont'd on Page 9, DECISIONS)
-8-
DECISIONS
(From Page 8)
ress, or unconscionability. In short, arbitration agreements remain subject,
post-Concepcion, to the unconscionability analysis employed by the trial
court in this case.’ (Samaniego, supra,
205 Cal.App.4th at p.1150.) The same
applies here.
“According to plaintiff, the arbitration
provision was substantively unconscionable because it did not require the
employer to bear the burden of costs
unique to arbitration and subjected her
to attorney fees and costs prohibited by
FEHA. We agree. [¶] The agreement
here ... does not require the employer to
bear arbitration-unique costs but rather
requires the losing party to do so...
“‘Procedural unconscionability may be
proven by showing oppression, which is
present when a party has no meaningful
opportunity to negotiate terms or the
contract is presented [to them] on a
take it or leave it basis.’ [cite omitted.]
The court found that to be the case here
based on plaintiff’s declaration... [¶]
[T]he court resolved the conflicts in the
parties’ declarations in [the plaintiff’s]
favor. Because we review for substantial
evidence, we disregard the contrary
evidence presented by defendants...
“Defendants maintain that even if the
provision for fees and costs was unconscionable, the court could have severed
it from the agreement... But since defendants never asked the court to exercise its discretion to sever the provision,
they ‘cannot now complain the court’s
decision was erroneous.’ [cite omitted.]
“Moreover, an arbitration provision containing ‘more than one unlawful provision’ may be ‘considered permeated by
unconscionability’ such that the court
may refuse to enforce it. [cite omitted.]
... The agreement here not only failed to
require defendants ... to bear all costs
unique to arbitration but it also contained an unlawful fees provision... [¶]
The order is affirmed...”
For plaintiff: William B. Hanley and
Laura M. Sullivan.
For defendants: Klatte, Budensiek &
Young-Agriesti; Chris M. Heikaus
Weaver.
Fourth Dist Div Three, 11/5/12; opinion by Rylaarsdam with Bedworth
and Moore concurring; 2012 WL
SUMMARY ADJUDICATION OF
CLAIMS FOR GENDER AND
SEXUAL ORIENTATION
HARASSMENT
PARKS v PORT OF OAKLAND. “Appellant Sherri ‘Jean’ Parks is employed
as a plumber by respondent Port of
Oakland,” the First District, Division
Four, began in a lengthy and factually
detailed unpublished opinion by Ruvolo
filed on October 22. “She sued the Port
for harassment on the basis of her
gender and sexual orientation, for failure to prevent such harassment, and for
retaliating against her after she complained of the harassment. The trial
court granted the Port’s motion for summary adjudication of the harassment
and failure to prevent harassment causes
of action, but permitted the retaliation
cause of action to proceed to trial.
“The jury found that the Port did not
retaliate against Parks for complaining
that she was being harassed. Accordingly, the trial court entered judgment in
favor of the Port. It also denied Parks’s
postjudgment motion to tax costs.
“On appeal, Parks argues that the trial
court erred in granting the Port’s motion
for summary adjudication, and in sustaining one of the Port’s objections to
evidence Parks submitted in opposition
to that motion. Parks also contends
that the trial court erred in permitting the
Port to recover certain disputed cost
items. We agree that the excluded
evidence was admissible for a limited
purpose, but reject all of Parks’s remaining contentions, and accordingly
affirm both the judgment and the order
denying the motion to tax costs...
“In short, [detailed discussion of the
evidence omitted,] even viewing the
personnel actions taken against Parks
in light of her direct evidence as to the
-9-
existence of sexism and homophobia in
the Port workplace, we are not persuaded that a reasonable jury could
have found that the Port’s stated reasons for those actions were pretexts for
gender or sexual orientation discrimination. Nor are we convinced that the
direct evidence of sexism and homophobia, standing alone, was sufficient to
convince a reasonable jury that the Port
created or tolerated a hostile work environment for women or lesbians. Accordingly, Parks has failed to show that
she raised triable issues of material fact
as to whether the Port’s personnel harassed her on the basis of her gender or
sexual orientation...”
For plaintiff: Darci Elaine Burrell and
Sharon Rachel Vinick, Oakland.
For defendant: Greggory Christopher
Brandt, Wendel Rosen Black & Dean,
Oaland; Edwin Joshua Wilson Jr., Oakland.
by Ruvolo with Reardon and Rivera
ARBITRATION AGREEMENT WAS
“RIDDLED” WITH SUBSTANTIVE
UNCONSCIONABILITY
ANAGNOS v GGW DIRECT, LLC. In
an unpublished opinion by Johnson filed
on November 21, the Second District,
Division One, wrote in part as follows:
“GGW Direct, LLC and Joe Francis
appeal from a superior court order denying their petition to compel arbitration of
Philip Anagnos’s putative class-action
complaint alleging, among other claims,
breach of contract and violations of
wage and hour laws. We conclude that
the arbitration agreement is procedurally and substantively unconscionable,
and the trial court [Judge Debre Katz
Weintraub] did not abuse its discretion
in refusing to sever the unconscionable
provisions. We therefore affirm...
“On behalf of himself and all others
similarly situated. Anagnos’s complaint
DECISIONS
(From Page 9)
alleged violation of various Labor Code
sections and other laws including the
overtime law, as well as wrongful termination, breach of contract and of the
covenant of good faith and fair dealing,
conversion, and unfair competition.
Anagnos requested restitution, damages, punitive damages, penalties, injunctive relief, and attorney fees, as well
as declaratory and class relief.
“GGW filed a petition to compel arbitration on July 28, 2011... The petition
attached the arbitration agreement as
an exhibit, and argued that as the arbitration agreement did not expressly
include class claims, Anagnos could
arbitrate only his individual claims...
“I. Procedural unconscionability
We agree with the trial court that the
arbitration agreement appears to be a
standardized, preprinted form contract
drafted by GGW without opportunity for
changes by Anagnos, and therefore a
contract of adhesion. GGW does not
argue otherwise.
“In section 3, the arbitration agreement
states: ‘The binding arbitration proceedings will allow for discovery according to
the rules set forth by the applicable
arbitration association.’ The agreement
is entirely silent on which arbitration
rules (or which arbitration association)
apply, and no copy of any arbitration
rules were included with the agreement.
The mere failure to provide a copy of the
arbitration rules binding the employee
supports a finding of procedural unconscionability. (Trivedi v. Curexo Technology Corp. (2010) 189 Cal.App.4th 387,
393.) This arbitration agreement goes
further, however, not only in failing to
provide a copy of the rules but also
giving Anagnos no notice of what rules
would govern any arbitration. As we
describe below, this silence leads to
considerable substantive unconscionability. [¶] We conclude that the arbitration agreement presents at least a
moderate level of procedural unconscionability.
“II. Substantive unconscionability
The arbitration agreement purports to
govern all claims under the Labor Code
and [FEHA], as well as all other state
and federal statutes. The agreement’s
failure to specify at all what arbitration
rules would govern discovery leaves
wide open the possibility that the arbitration agreement would deny Anagnos
discovery he is entitled to under the
statutes...
ment prevents the award of attorneys’
fees to a plaintiff under FEHA under any
circumstances... The arbitration agreement purports to eliminate that statutory protection for employees, which
further contributes to a finding of substantive unconscionability.
“The arbitration agreement’s failure to
disclose what rules would apply also
runs afoul of other requirements for a
valid arbitration agreement. ‘To be valid,
at minimum the arbitration agreement
must require a neutral arbitrator, sufficient discovery, and a written decision
adequate enough to allow judicial review. Further, it must include all remedies available in a judicial action and
the employee may not be required to
pay unreasonable costs or fees. [Citation.] Elimination or interference with
any of these basic provisions makes an
arbitration agreement substantively unconscionable.” (Wherry [v Award, Inc.
(2011)] 192 Cal.App.4th [1242] at p.
1248, italics added.) The agreement
does not meet those minimum requirements. Although the agreement provides that the parties agree ‘any arbitration will be administered [by] a neutral
arbitrator,’ there is no provision for how
such a neutral arbitrator would be selected or challenged. There is absolutely no indication of what discovery
would be allowed under the arbitration
agreement. And although a valid arbitration agreement must require ‘written
decision adequate enough to allow judicial review,’ (ibid.), the arbitration agreement provides for just the opposite. The
agreement states: ‘Employee or Independent Contractor agrees that the
arbitrator will issue a final and binding
written decision on the merits, which
shall not be set aside by any court
proceedings, including any applicable
Appeals.’ (Italics added.) This clause
makes no provision for the adequacy of
the written decision, and then prohibits
the judicial review which an adequate
decision would allow, and which our
cases require. (Ibid.)
“[Another] provision could be interpreted
to allow GGW to reduce its obligation to
pay ‘all types of costs unique to arbitration’ in an amount equal to court filing
fees (when no such fees were incurred).
This requirement that the employee in
effect reimburse GGW (in an amount
equal to court filing fees) for some of the
costs unique to arbitration, adds to the
substantive unconscionability of the
agreement.
“There is more. The agreement states:
‘Employee or Independent Contractor also agrees that the arbitrator shall
not award any attorneys’ fees and/or
costs to either party.’ ... [T]he agree-10-
“The arbitration agreement contains a
moderate level of procedural unconscionability, and it is riddled with substantive unconscionability... [¶] The trial
court did not abuse its discretion in
refusing to sever the unconscionable
provisions and enforce the remainder of
the arbitration agreement.”
For plaintiff: Alireza Alivandivafa and
Morris Nazarian.
For defendants: Aaron D. Aftergood and
Ronald D. Tym.
Second Dist Div One, 11/21/12; opinion by Johnson with Mallano and
Chaney concurring; 2012 WL 5871629
(unpublished).
FIRST DISTRICT REVERSES
DENIAL OF MOTION TO COMPEL
ARBITRATION, HOLDING THAT
HANDBOOK’S DISCLAIMER DID
NOT APPLY TO ARBITRATION
PROVISION
CARRILLO v FANTE, LLC. “Defendant
... appeals from an order denying its
motion to compel arbitration and stay
these proceedings...,” the First District,
Division Three, began in an unpublished
opinion by Pollak filed on November 20.
“The trial court denied the motion on the
ground that the arbitration provisions on
which Fante relies are not enforceable
DECISIONS
(From Page 10)
contractual provisions. We disagree and
shall reverse.
“Plaintiffs, former employees of Fante,
brought this action against Fante alleging numerous claims ... including wage
and hour violations and wrongful termination. When plaintiffs moved for leave
to amend their complaint to add class
action allegations and a claim under
[PAGA], Fante filed a motion to stay the
action and compel arbitration. Fante
asserts that both plaintiffs agreed to
submit all disputes arising out their
employment to binding arbitration. Plaintiffs opposed the motion on several
grounds, including the assertion that
the purported arbitration agreements
are not binding contractual provisions.
“There is no question but that plaintiffs
received the employee handbook containing the [arbitration] provisions, and
that both signed the two pages that
acknowledge receipt and agree to submit all employment-related disputes to
binding arbitration. While the introduction to the handbook does state that
‘the Handbook is not a contract and is
not intended to create any express or
implied contractual obligations,’ this
qualification cannot reasonably be understood to apply to the provisions in
the two forms that plaintiffs were requested to copy and sign, and which
they did sign... [T]he handbook states
explicitly at several places that the
company reserves the right to revise its
policies at any time. Thus, for example,
Fante reserves the right prospectively
to modify its policy of requiring employment disputes to be arbitrated, and to
no longer enter arbitration agreements
with its employees. However, that is not
to say that such a change of policy
would relieve Fante of the obligation to
arbitrate disputes that it has already
agreed to arbitrate with employees.
“The two acknowledgment and agreement forms signed by the plaintiffs do
explicitly and unequivocally bind the
parties to arbitrate their employmentrelated disputes. The language could
not be clearer...
“Plaintiffs assert the arbitration agreements should be enforced for several
other reasons, but none has merit. Fante
was entitled to file its petition to compel
arbitration without having made a prior
demand for arbitration because plaintiffs filed this action in breach of their
contractual obligation to arbitrate...
“Fante did not waive its right to demand
arbitration because it did not file its
petition until some five months after the
complaint was filed... In its answer ...
and its case management statement
..., Fante asserted that plaintiffs’ claims
are subject to arbitration...
“Finally, the arbitration agreements are
not unenforceable because they are
unconscionable, as plaintiffs also contend. Even assuming that there is procedural unconscionability because the
agreements are adhesion contracts...,
and because the plaintiffs were not
given copies of the arbitration rules...,
the agreements contain no provision
that is substantively unconscionable...”
For plaintiffs: Daniel Martinez De La
Vega, San Francisco.
For defendant: David Alexander Hosilyk,
Fine Boggs & Perkin, Half Moon Bay.
First Dist Div Three, 11/20/12; opinion by Pollak with McGuiness and
Siggins concurring; 2012 WL
CORRECTLY GRANTED ON
CLAIM FOR WTVPP BECAUSE
DEFENDANT’S ALLEGED
CONDUCT WAS NOT PROTECTED
ACTIVITY WITHIN MEANING OF
SARBANES-OXLEY ACT
GILLIS v WARNER BROS. HOME
ENTERTAINMENT, INC. “Plaintiff Jason Gillis appeals from a summary
judgment ... in his action for retaliation
in violation of public policy,” the Second
District, Division Seven began in an
unpublished opinion by Jackson filed on
November 20. “He contends triable issues of material fact exist, and the trial
court [Judge Rita J. Miller] erred in
denying him a continuance to complete
discovery. We affirm.
-11-
“In the spring and summer of 2007,
plaintiff began complaining to WHV’s
Human Resources Department about
Patel [vice president of the Customer
Operations Department]. He complained
that Patel was causing morale problems by setting unrealistic deadlines,
imposing an excessive work-load, giving conflicting directives, and blaming
subordinates for his own mistakes...
“Patel met with plaintiff on July 10,
2007... [¶] After the meeting, Patel took
actions which plaintiff interpreted as
being retaliatory. These included not
providing training he had promised to
plaintiff, imposing short deadlines for
work and requiring plaintiff to do work
which plaintiff considered to be unnecessary and a waste of time...
“In granting the summary judgment
motion, the trial court found that plaintiff
could not ‘establish an essential element of his [Tameny] cause of action—
that his complaints were a protected
activity.’ The court explained: ‘Plaintiff
claims that his complaints to defendant
were complaints for violations of the
Sarbanes-Oxley Act, designed to address a fraud on company shareholders
that arose from plaintiff’s supervisors’
alleged conflict of interest and taking of
kickbacks in connection with the
supervisor’s relationship with a company called High Radius, which did
business with defendant and allegedly
was owned by a friend of plaintiff’s
supervisor. [¶] Plaintiff’s complaint was
not sufficiently tethered to the statutory
provisions of Sarbanes-Oxley to be sufficiently ‘public,’ ‘substantial and fundamental’ to support his Tameny claim
here.’
“Nothing ... supports a finding that plaintiff believed in good faith that the conduct complained of constituted shareholder fraud within the meaning of
Sarbanes-Oxley... None of his complaints related to the specific types of
shareholder fraud listed in SarbanesOxley... [¶] Plaintiff’s complaints, which
essentially were that Patel’s conduct
was costing the company money and
aiding the company’s competitors, do
DECISIONS
(From Page 11)
not support an objectively reasonable
belief that shareholders have been or
are likely to be defrauded... [¶] The trial
court therefore did not err in granting
summary judgment on his Tameny
cause of action...”
For plaintiff: Victor L. George and Wayne
C. Smith.
For defendant: Manatt, Phelps &
Phillips, Ezra Acikalin Hudson, Joanna
S. McCallum, and Joanna H. Sattler.
Second Dist Div Seven, 11/20/12;
opinion by Jackson with Perluss and
Zelon concurring; 2012 WL 5862834
(unpublished).
SECOND DISTRICT REVERSES IN
PART AND AFFIRMS IN PART
SUMMARY ADJUDICATION
ORDER, AND REVERSES JNOV
ON DISABILITY HARASSMENT
CLAIM
BETSON v RITE AID CORPORATION.
“Doreen Betson sued her former employer ... for wrongful termination, discrimination, retaliation and harassment,
and defamation,” the Second District,
Division Four, began in a long and factually detailed unpublished opinion by
Epstein filed on November 27. “On appeal she challenges the summary adjudication of her causes of action for
discrimination (based on age, disability, and taking [CFRA] leave; retaliation
on the basis of disability and taking
leave, harassment based on age, and
compelled self-defamation. Her causes
of action for disability harassment, failure to accommodate, failure to engage
in the interactive process, and defamation were tried to a jury. Rite Aid prevailed on each of these causes of action
except disability harassment, as to
which Betson prevailed. The trial court
granted judgment notwithstanding the
verdict on the disability harassment
cause of action. Betson appeals from
that order as well.
“We find triable issues of fact regarding
the role played by Betson’s supervisor
in the decision to terminate her. She
raised a triable issue of material fact as
to both direct and circumstantial evi-
dence of disability discrimination. She
also raised triable issues of fact precluding summary adjudication of her
causes of action for discrimination and
retaliation for taking medical leave. We
conclude that summary adjudication
was proper on the causes of action for
retaliation on the basis of disability
under [FEHA] and compelled self-defamation, as well as the claim for punitive
damages. Betson informs us she is not
pursuing her causes of action for age
discrimination and harassment, and we
treat them as abandoned. We reverse in
part and affirm in part the summary
adjudication order.
“Based on evidence presented at trial
regarding the damages Betson suffered
as a result of her supervisor’s disability
harassment, we conclude the trial court
erred in granting judgment notwithstanding the verdict and reverse that order.”
For defendant: Hodel Briggs Winter,
Glenn L. Briggs, Theresa A. Kading,
and Beth C. Kearney.
Second Dist Div Four, 11/27/12; opinion
by Epstein with Willhite and Suzukawa
EMPLOYER WAS ENTITLED TO
ADD ARBITRATION POLICY
ENFORCEABLE AGAINST AT-WILL
EMPLOYEE DESPITE FACT THAT
HER ORIGINAL INTEGRATED
AGREEMENT LACKED ANY
DISPUTE RESOLUTION
PROVISION; BUT REMAND IS
NECESSARY FOR GENTRY
DISCOVERY
PAPUDESI v NORTHROP GRUMMAN
CORP. In an unpublished opinion by
Chaney filed on November 29, the Second District, Division One, wrote in part
as follows:
“An employee signed an integrated
employment contract with her employer
that had no provision regarding dispute
resolution. Years later, the employer
instituted a mandatory policy calling for
-12-
employees to submit any employment
dispute to arbitration. When the employee filed a class action wage and
hour lawsuit against the employer, the
employer petitioned the trial court to
stay civil proceedings and compel arbitration. The trial court [Judge Richard L.
Fruin, Jr.] denied the motion, finding the
policy mandating arbitration was not a
valid modification of the original employment contract. We conclude the arbitration policy did not modify the original
employment contract but constituted a
separate agreement. The issue is
whether the agreement is enforceable.
Because the trial court did not reach
this issue, we remand the matter for
further proceedings.
“Three years [after the plaintiff’s date of
hire], in September 2006, Northrop distributed to employees by First Class
and electronic mail materials setting
forth its new dispute resolution policy.
In them, policy No. H103 ... set forth
Northrop’s dispute resolution procedure,
the last step of which was binding arbitration. Policy No. H103A ... set forth
Northrop’s arbitration policy... [¶] The
arbitration program ... contained [a] class
waiver...
“Policies Nos. H103 and H103A both
included the following language: ‘By
accepting or continuing employment on
or after November 2006, all covered
employees agree to submit any covered disputes to arbitration... [¶]
Papudesi continued to work for Northrop
until her employment was terminated in
April of 2008.
“In February 2010, Papudesi’s counsel
sent a demand letter to Northrop alleging [WTVPP] and [IIED]. Northrop demanded arbitration and Papudesi complied, submitting a request for mediation and a demand for arbitration to her
former employer. [¶] Eleven months
later, while arbitration proceedings were
ongoing, Papudesi filed the instant class
action lawsuit, alleging Northrop failed
to pay overtime wages, provide meal
and rest periods, pay wages in a timely
manner, or provide itemized wage statements...
DECISIONS
(From Page 12)
“Northrop moved to compel arbitration...
[¶] In opposition to the motion, Papudesi
argued the arbitration policy was unenforceable for four reasons: It constituted
a modification of the employment [contract] that was invalid because it was
not signed, as required by the integration clause of the original employment
contract; it was unconscionable under
Armendariz...; it was invalid under Gentry because it contained a class waiver;
and it was invalid because section 7 or
the [NLRA] prohibits class action waivers in the employment context. [¶] At
some point, Papudesi also filed motions for discovery that would inform a
Gentry analysis.
“[T]he court found policies No. H103
and H103A were invalid because they
constituted an attempt to modify
Papudesi’s original employment contract, but had not been signed ... as
required... The court also found that by
submitting her discrimination and tort
claims to arbitration Papudesi did not
waive the right to file a civil wage and
hour lawsuit because absent an arbitration agreement, an employee is free to
pursue severable claims in different forums. The court denied Northrop’s motion, declined to reach the unconscionability or class waiver issues, and
deemed plaintiff’s motions for discovery
to be moot.
DISCUSSION
“A. Policies H103 and H103A Set
Forth a Separate Agreement
“Northrop contends the trial court erred
in finding the arbitration agreement ...
was an invalid attempt to modify
Papudesi’s original employment agreement. We agree.
“Papudesi’s employment agreement
constituted the parties’ entire agreement ‘with respect to the subject matters covered’ by it, and could not be
modified except by a written agreement
signed by the parties. The ‘matters
covered’ by the agreement included the
at-will nature of Papudesi’s employment and her duty to comply with
Northrop’s safety rules and policies and
work any shift or job necessitated by
operations. Although Papudesi’s compliance with Northrop’s ‘policies’ was a
‘matter covered’ by the contract, nothing prohibited Northrop from introducing
new policies without a signed writing.
“On the contrary, because at-will employment permits an employer to discharge or demote an employee without
cause, it necessarily also ‘authorizes
an employer unilaterally to alter the
terms of employment, provided the alteration does not violate a statute or
breach an ... agreement.’ [cites omitted.]... Papudesi was an at-will employee. Northrop was therefore entitled
to alter the terms of her employment by
instituting new policies as it saw fit...
“B. The Arbitration Policy Is Not Unconscionable
“Because the arbitration agreement is
adhesive but does not cause surprise or
oppression, Papudesi must show substantial substantive unconscionability
exists for it to be unenforceable. [cite
omitted.]
“Papudesi argues Northrop’s arbitration
policy is [substantively] unconscionable
because it limits discovery and remedies. We disagree... [¶] Northrop’s
arbitration policy requires any party
seeking more than three depositions to
participate in a joint meeting with the
arbitrator to discuss discovery issues,
limitations and scheduling. It also gives
the arbitrator ‘authority to decide any
disputes regarding discovery.’ JAMS
and AAA discovery rules, which come
into play in situations not covered by the
policy’s discovery rules, limit discovery
but give the arbitrator authority to order
any discovery necessary for a full exploration of issues in dispute. This is permissible... [¶] [U]nlike in Fitz v. NCR
[Corp. (2004) 118 CA4th 702], Northrop’s
arbitration policy places no limit on the
arbitrator’s discretion to expand discovery.
“Papudesi argues because the arbitration policy allows a prevailing party to
recover attorney fees in arbitration,
whereas the Labor Code allows only
prevailing employees to recover attorney fees in court, it does not allow for
the same remedies as would be available in court. The argument is without
merit... [¶] [T]he arbitration policy pro-13-
vided: ‘[i]f ... any party prevails on a
claim, which (if brought in a court) affords the prevailing party attorneys’ fees
and/or costs, then the arbitrator may
award reasonable fees and/or costs to
the prevailing party to the same extent
as would apply in court.’ This provision
grants the same relief as would be
available in a civil lawsuit.
“C. Class Waiver
“A question exists as to whether Gentry
remains good law after the U.S. Supreme Court’s ruling in Concepcion...
For reasons set forth in Franco v.
Arakelian Enterprises, Inc. (case No.
B232583), [2012 WL 5898063; see p.4
supra this issue] we conclude Gentry
survives Concepcion... [¶] Because a
Gentry analysis is fact intensive, and
because Gentry discovery was curtailed
in this case, we will remand the matter
for further proceedings...
“D. NLRA
“We decline to follow Horton... The
[NLRA’s] provision that an employee
may engage in ‘concerted activities for
the purpose of collective bargaining or
other mutual aid or protection’ does not
constitute a congressional command
that the employee may disregard an
agreement prohibiting class treatment
of employment claims.
CONCLUSION
“We conclude Northrop’s arbitration
policy constituted an agreement that
was separate from and independent of
Papudesi’s employment contract. The
agreement is not unconscionable, but
its class waiver provision may yet be
unenforceable under Gentry. Because
the trial court did not reach this issue,
we remand the matter for further proceedings.”
For plaintiff: Cohelan Khoury & Singer,
Michael D.Singer, J. Jason Hill; Aegis
Law Firm and Kashif Haque.
For defendant: Gibson, Dunn & Crutcher,
Scott A. Kruse, Eugene Scalia, Jesse
A. Cripps, and Lynn Hang.
Second Dist Div One, 11/29/12; opinion by Chaney with Mallano and
Johnson concurring; 2012 WL
COMING
EVENTS
March 7, 2013
March 8-9, 2013
NELA Spring Seminar
March 18-19, 2013
Sacramento
June 26-29, 2013
October 4-5, 2013
CELA's 26th Annual Conference
Fairmont San Jose
(skills seminar on October 3)
October 17, 2013
NELA Lobby Day
Washington DC
October 18-19, 2013
NELA Fall Seminar
October 10-11, 2014
Hilton San Diego Resort and Spa
CELA NOTES
(From Page 1)
The Committee welcomes your suggestions for topics involving demonstrations, or pertaining to substantive law,
practical skills, or any other category.
Please e-mail or fax your ideas for
Conference sessions and seminar topics, including any speaker recommendations, to Christina@cela.org, or via
fax (818) 907 7474, by December 31,
2012.
—FEHC’s New Pregnancy Regulations. On November 30, the Office of
Administrative Law announced its approval of the FEHC’s new Pregnancy
Regulations, to take effect on Decem-
ber 30. Our organization was instrumental in making sure that these new
regulations are as good as possible,
working closely with coalition partners
LAS-ELC, Equal Rights Advocates,
Golden Gate Womens Employment
Rights Clinic, and others. Much credit
is due to Noah Lebowitz, the CELA
Board’s liaison concerning FEHC
rulemaking, and the other CELA members who participated in drafting multiple rounds of written comments and
attending public hearings: Sarah
Schlehr, Raven Sarnoff, Elisa Ungerman,
Jean Hyams, and Jim Stoneman.
-14-
All written comments submitted on behalf of CELA are available for review at
the Members Only side of the CELA
website, under the “CELA Administrative Documents” folder in the Brief Bank.
Among the important changes is section 7291.14, which makes clear that a
pregnant employee may be entitled to a
leave of absence as a reasonable accommodation under ordinary disability
law, separate and apart from rights
under the PDL.
•
•
•
LEGISLATION
NELA NEWS
The following notices and information
appeared during the past month in
NELA’s electronic newsletter “@NELA,”
and in “Vision + Action,” the newsletter
of The Employee Rights Advocacy Institute for Law & Policy.
intended for employee rights practitioners who represent workers in individual, class, collective, and joint actions. Topics will include recent legal
developments under the FLSA, forced
arbitration, proving wage theft, worker
misclassification, retaliation, employer
abuse of FLSA exemptions, defeating
FLSA defenses, the use of experts, trial
advocacy, ethical considerations, and
more.
(From Page 14)
—NELA’s and The Institute’s March
2013 CLE Programs. In urging Congress to pass the Fair Labor Standards
Act of 1938, President Franklin D.
Roosevelt insisted that “a self-supporting and self-respecting democracy can
plead ... no economic reason for chiseling workers’ wages or stretching workers’ hours.” More than seven decades
have passed since the FLSA was enacted, but violations of wage and hour
laws continue to run rampant, particularly at the expense of our more vulnerable populations like immigrant workers. The Institute and NELA are proud to
present two cutting-edge programs designed to bring together employee rights
advocates from the private bar, nonprofit, legal services and public interest
organizations, and government agencies to learn from and network with each
other to help fulfill the promise of our
worker protection laws. Join us on March
7-9 for the following programs at the
Holiday Inn Chicago Mart Plaza:
Thursday, March 7, 2013: United We
Stand: Effectively Representing Immigrants in Employment Cases. The
Institute’s program will focus on the
tremendous opportunities and particular challenges in representing immigrant workers, including practical strategies for successfully turning back
employers’ attempts to use immigration status, abusive discovery, and counterclaims; navigating cultural and linguistic issues during litigation; tackling
the unique issues faced by immigrant
clients in sexual harassment cases;
and building innovative methods of collaboration to get favorable results for
your clients.
Friday, March 8 and Saturday March
9, 2013: Preventing Wage Theft: A
Two-Day Guide to Litigating Cases Involving Wages, Hours, and Work. This
NELA seminar will address significant
and emerging issues arising under federal and state wage and hour laws. It is
NELA NEWS
(From Page 13)
The Institute and NELA are pleased to
have the support of several co-sponsors
for these events: Centro de los Derechos
del Migrante, Inc., the Equal Justice
Center, the National Employment Law
Project, the New Orleans Workers’
Rights Center for Racial Justice, and
the Southern Poverty Law Center.
—Strategies for defeating summary
judgment. Through the National Litigation Strategy Project (NLSP), The Institute has been tackling one of the major
obstacles to the enforcement of employees’ rights. To help workers and
their advocates defeat unwarranted summary judgment dismissals, we’ve been
publishing the “Summary Judgment
Toolkit,” a series of white papers on
legal strategies to address the so-called
“problem doctrines”—analytical shortcuts that courts use in employment
cases to grant summary judgment
motions at a higher rate than in cases of
other kinds. Toward the end of November, The Institute will be releasing the
third installment in the “Summary Judgment Toolkit,” addressing “comparator
evidence.” The article will be available
on The Institute’s website,
www.employeerightsadvocacy.org/
NLSP, where the other two installments
of the “Toolkit” can also be downloaded.
—2012 Annual Convention sessions
are available for purchase and
download. If you were unable to join us
in San Diego, you can purchase the
audio for all sessions in our Online
Libarry. Buy individual sessions or focused track bundles on Emerging Issues, Employment Law 101, Trial Advocacy, and California Employment law.
Individual sessions are $20 for NELA
members, and focused tracks are priced
at $100. Purchase includes
-15-
downloadable MP3s and speaker materials in PDF. Check out our available
titles at www.nela.org/seminarweb.
Click on “Self-Paced Online Seminars”
to see the entire library.
—Bias 2.0: What Every Employee
Advocate Should Know. Sessions
from our recent program are now available for purchase and immediate download, Each session is priced at $20, and
includes an MP3 audio file and speaker
materials in PDF. The entire program is
available for $175. The session titles
include: “Understanding the Science of
Bias;” “Engaging the Judiciary;” “Lessons Learned at Trial: Dos and Don’ts
for Handling Hidden Bias in Employment Cases;” and “Using Social Science in Discrimination Class Actions.”
For more information and to purchase
these and other sessions, go to
www.nela.org/bias. Our online library
includes over 150 titles on 53 topics of
concern to employee rights advocates.
View the entire library at www.nela.org/
seminarweb.
—The Summit for Workers’ Rights:
Honoring Courageous Plaintiffs.
NELA is now accepting nominations for
the opening plenary session of NELA’s
2013 Annual Convention. Three individuals, (or a representative if s/he is
part of a class or collective action), will
be selected and invited to attend the
2013 Annual Convention to share their
stories on Thursday, June 27, 2013, the
first day of the Annual Convention at the
Sheraton Denver Downtown Hotel. Look
for further information about the criteria
and nomination procedure appearing
soon at www.nela.org , or contact Timothy Sherrill, NELA’s Administrative Assistant, at tsherrill@nelahq.org. The
deadline for receipt of nominations is
Friday, December 21, 2012.
•
•
•
Published
Monthly
BULLETIN
UNITED STATES
SUPREME COURT
WHEN MSPB DISMISSES
FEDERAL EMPLOYEE’S
DISCRIMINATION COMPLAINT ON
EITHER THE MERITS OR ON
PROCEDURAL GROUNDS,
EMPLOYEE CAN THEN SUE IN
DISTRICT COURT UNDER
APPLICABLE ANTIDISCRIMINATION LAW
KLOECKNER v SOLIS. The Supreme
Court reached the following conclusion in a unanimous opinion by Kagan
filed on December 10, involving a former
Department of Labor employee’s allegation of hostile environment harassment based on age and sex. (The
opinion abrogates Ballentine v MSPB
(Fed Cir 1984) 738 F2d 1244, and
Brumley v Levinson (8th Cir 1993) 991
F2d 801.)
“A federal employee subjected to an
adverse personnel action such as discharge or demotion may appeal her
agency’s decision to the Merit Systems Protection Board. See 5 U.S.C.
§§ 7512, 7701. In that challenge, the
employee may claim, among other
things, that the agency discriminated
against her in violation of a federal
statute. See § 7702(a)(1). The question presented in this case arises when
the MSPB dismisses an appeal alleging discrimination not on the merits,
but on procedural grounds. Should an
of Privacy
in Social
employee
seeking judicial
review then
Networks,"
by of
CELA
file a petition
in the Court
Appeals for
the Federal
Circuit,
or
instead
member Eugene Lee,bring a
suit inbegins
district court
under16.
the applion Page
cable antidiscrimination law? We hold
she should go to district court... [¶]
That is so whether the MSPB decided
her case on procedural grounds or instead on the merits. Kloeckner therefore brought her suit in the right place.
We reverse the contrary judgment of
the Court of Appeals for the Eighth
Circuit [639 F3d 834], and remand the
case for further proceedings consistent
with this opinion.
For petitioner: Eric Schnapper, Seattle;
Larry J. Stein, Fairfax VA; Anthony J.
Franze, R. Reeves Anderson, R.
Stanton Jones, Arnold & Porter, Washington DC.
For respondent: Marleigh D. Dover,
Stephanie R. Marcus, Department of
Justice.
USSC 12/10/12; unanimous opinion
by Kagan; 2012 DAR 16431, 2012 WL
6097022.
CALIFORNIA
SUPREME COURT
REVIEW AND DEPUBLISHES
TWO SECOND DISTRICT
DECISIONS THAT, ON REMAND
FOR RECONSIDERATION IN LIGHT
OF BRINKER, AGAIN AFFIRMED
ORDERS DENYING CLASS
CERTIFICATION OF MEAL AND
REST BREAK CLAIMS
LAMPS PLUS OVERTIME CASES;
HERNANDEZ v CHIPOTLE MEXICAN
GRILL. On December 12, the Supreme
Court denied petitions for review and
ordered the depublication of two Second District decisions that, on remand
for reconsideration in light of Brinker
Restaurant Corp. v Superior Court (2012)
December 2012
Vol. 26, No. 12
53 C4th 1004, again affirmed orders
denying class certification of meal and
rest break claims.
The Second District’s opinion on remand in Lamps Plus appeared at 209
CA4th 35, and was summarized in
CELA Bulletin, Aug 2012, p.13. The
Second District’s original opinion appeared at 195 CA4th 389, and was
summarized in CELA Bulletin, May
2011, p.4.
For plaintiffs: James A. Krutcik, A.
Nicholas Georggin, and Joo Hee
Kershner.
For defendants: Sidley Austin, Douglas R. Hart and Beth Ann Scheel.
Cal SC, 12/12/12; 2012 DAR 16758
(denying review and ordering
depublication).
The Court of Appeal’s opinion on remand in Hernandez appeared at 208
CA4th 1487, and was summarized in
CELA Bulletin, Sep 2012, p.11. The
Second District’s original opinion appeared at 189 CA4th 751, and was
summarized in CELA Bulletin, Oct
2010, p.3.
For plaintiffs: Altshuler Berzon, Michael
Rubin, James M. Finberg, Eve H.
Cervantez, Danielle E. Leonard;
Rastegar & Matern, Matthew J. Matern
and Douglas R. Perlman.
For defendant: Sheppard, Mullin, Richter & Hampton, Richard J. Simmons
and Geoffrey D. DeBoskey, Derek R.
Havel, Jason W. Kearnaghan, and
Daniel J. McQueen.
Cal SC, 12/12/12; 2012 DAR 16758
(denying review and ordering
depublication).
Note: Italicized attorneys' names
indicate CELA membership.
DECISIONS
(From Page 1)
CALIFORNIA COURTS
OF APPEAL
and conclude it was prejudicial. We
thus reverse the judgment and vacate
the attorney fee order...
MULTIPLE INSTRUCTIONAL
ERRORS REQUIRE REVERSAL
OF PLAINTIFF’S VERDICTS ON
PREGNANCY DISCRIMINATION
CLAIMS
“The Instruction on Causation
“Judge [Lynn O’Malley] Taylor instructed
the jury that it should find for Veronese
if her pregnancy was ‘a motivating reason’ for Lucasfilm’s decision... The instruction was based on CACI 2500. [¶]
Lucasfilm’s first claim of instructional
error is that the jury was ‘incorrectly
instructed on causation; the CACI instructions are wrong.’
VERONESE v LUCASFILM LTD. “This
is an employment discrimination case,
specifically pregnancy discrimination,”
the First District, Division Two, wrote in
a December 10 opinion by Richman. “It
is an unusual case in several respects,
including that the interactions between
the plaintiff and defendant’s representatives were relatively brief, over a period
of less than four months; save for four inperson interviews or meetings and a
handful of telephone calls, those interactions were all via email; and plaintiff
never worked one day in defendant’s
employ.
“Plaintiff Julie Gilman Veronese sued
defendant ... alleging six causes of
action. Following 11 days of testimony,
five causes of action were submitted to
the jury in a special verdict form. After
three days of deliberation, the jury found
for Veronese on three claims—pregnancy discrimination, failure to prevent
pregnancy discrimination, and
[WTVPP]. The jury found for Lucasfilm
on the other two claims—retaliation and
failure to accommodate disability. The
jury awarded Veronese $93,830 for past
economic damages and $20,000 for
noneconomic damages, a total of
$113,830. The trial court later awarded
Veronese $1,157,411 in attorney fees.
“Lucasfilm appeals from both the judgment and the fee award. The former
appeal makes two arguments, the first
asserting six separate claims of instructional error: the giving of two erroneous instructions, the refusal to give
two proper instructions, and the failure
to instruct on the elements of two of the
claims submitted to the jury. Lucasfilm’s
second argument is that the damages
awarded were the result of juror misconduct and have no support in the record.
We agree there was instructional error,
“The issue is presently before our Supreme Court, in Harris v. City of Santa
Monica..., which held that giving only
CACI instruction 2500 in a pregnancy
discrimination case was error, as a
‘mixed motive’ defense remains available to employers in appropriate circumstances. We deem it unnecessary
to weigh in on the issue, for even if the
giving of CACI 2500 is held to be proper...,
reversal would be required due to errors
in other instructions...
“It Was Error to Refuse a ‘Business
Judgment’ Instruction
“Numerous California cases contain language similar to that proposed in Special Instruction No. 9. As our colleagues
in Division One have put it, a plaintiff in
a discrimination case must show discrimination, not just that the employer’s
decision was wrong, mistaken, or unwise. (Reeves v. MV Transportation,
Inc. (2010) 186 Cal.App.4th 666, 673674.) ... [¶] [U]nder the law Patel was
entitled to exercise her business judgment, without second guessing. But
Judge Taylor refused to tell the jury that.
That was error.
“The Instruction About Potential
Hazard to a Fetus Was Error
“Veronese proposed, and Judge Taylor
gave, an instruction that said, ‘A potential hazard to a fetus or an unborn child
is not a defense to pregnancy discrimination.’ The sole authority cited below
in support of the instruction was Automobile Workers v. Johnson Controls,
Inc. (1991) 499 U.S. 187. In her brief
here Veronese also cites, without dis(Cont'd on Page 3, DECISIONS)
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Toni Jaramilla
Suite. 300
Tel: (310) 551-3020
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
Mariko Yoshihara
Tel: (916) 340-5084
EXECUTIVE BOARD
(Santa Monica)
Noah Lebowitz
(San Francisco)
Scot Bernstein
(Folsom)
Wendy Musell
(San Francisco)
David DeRubertis
(Studio City)
Cynthia Rice
(San Francisco)
Maria Diaz
(Fresno)
Anne Richardson
(Pasadena)
David Duchrow
(Santa Monica)
Supreeta Sampath
(Los Angeles)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
Deborah Vierra
(Ventura)
Laura Horton
(Northridge)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
cussion, Johnson Controls, Inc. v. Fair
Employment and Housing Comm.
(1990) 218 Cal.App.3d 517. Lucasfilm
contends that giving the instruction was
error. We agree. Neither case supports
giving the instruction here...
“Johnson Controls held that the
employer’s policy could not pass muster, a policy that extended to any woman
‘capable of bearing children.’ (Id. at p.
192.) ... [¶] Lucasfilm had no such
policy, and no policy was involved here,
only one 36-year-old pregnant woman
who had already miscarried one twin.
Thus, no case dealing with any employer policy can support what was said
to the jury here. Nor could the issues in
the case... [¶] [T]he instruction could be
interpreted as telling the jury that any
potential hazard to an unborn child is
necessarily irrelevant to the employer’s
legitimate decisionmaking. That cannot be, as Johnson Controls itself acknowledged: ‘It is correct to say that
Title VII does not prevent the employer
from having a conscience. The statute,
however, does prevent sex-specific fetal-protection policies.’ (Johnson Controls, supra, 499 U.S. at p. 208.)
“The Failure to Instruct on Failure to
Prevent Discrimination Was Error
“As noted, Veronese’s third cause of
action was for ‘Failure to Prevent and
Investigate Discrimination [in] Violation
of FEHA.’ As also noted, the jury found
for Veronese on this cause of action.
How it did so is unclear, as there was no
instruction as to the required elements
of the claim... [¶] The failure to give any
instruction on this claim was error.
[FN14. Veronese accurately observes
that the jury verdict did answer the
questions setting out the elements of
this claim. Thus, any failure to give any
instruction, standing alone, would undoubtedly not have been prejudicial.]
“For some reason, [Lucasfilm’s proposed] instructions regarding the difference between the ‘termination’ claim
and the ‘failure to hire/promote’ claim]
were not given. This, too, was error. [¶]
On a related issue, Lucasfilm requested
instructions on the measure of damages for each claim... [¶] Judge Taylor
refused those requested instructions.
Instead, she gave one pattern instruction, CACI 2433, that told the jury that
Veronese’s damages were what she
‘would have earned up until today, including any benefits and pay increases.’
[¶] Lumping the two claims together
suggested that the damages for both
claims should be the same, which was
not necessarily true...
“As noted, the trial court awarded
Veronese over $1,157,000 in attorney
fees under FEHA. In light of our reversal
of the judgment in favor of Veronese,
any award of attorney fees is premature, and the award must be vacated.
“The judgment and the order awarding
attorney fees are reversed, and the
matter is remanded for retrial on
Veronese’s claims for pregnancy discrimination, failure to prevent pregnancy
discrimination, and wrongful termination in violation of public policy.
Luscasfilm is awarded its costs on
appeal.”
[Editor’s note: As this is written, the
CELA Amicus Committee is considering options regarding this case.]
For plaintiff: Altshuler Berzon, Michael
Rubin, Caroline P. Cincotta; Law Offices of Mayor Joseph L. Alioto and
Angela Alioto, Angela M. Alioto, Joseph Alioto Veronese.
For defendant: Steven Drapkin; Paul,
Hastings, Janofsky & Walker, Paul W.
Cane, Jr.
by Richman with Haerle and
Lambden concurring; 2012 DAR
16464. 2012 WL 6115734.
VIOLATIONS OF MUNICIPAL LAW
ARE NOT DEEMED VIOLATIONS
OF STATE LAW FOR PURPOSES
OF WHISTLEBLOWER CLAIMS
UNDER LABOR CODE § 1102.5
EDGERLY v CITY OF OAKLAND.
“Deborah Edgerly is the former city
administrator of the City of Oakland,”
the First District, Division Four, began
in a December 12 opinion by Baskin.
“Edgerly sued the City in 2009, alleging
-3-
that then-Mayor Ron Dellums wrongfully
terminated Edgerly’s employment in
retaliation for her refusal to violate the
City’s charter, municipal code, and civil
service rules and resolutions.
“Edgerly claims that the trial court [Judge
John M. True] erred when it sustained a
demurrer to the first two of her three
causes of action for violation of the
statewide whistleblower statute set forth
in Labor Code section 1102.5, subdivision (c). Edgerly also claims that the
trial court erred when it dismissed the
third whistleblower cause of action on a
motion for summary adjudication.
“The primary question presented by this
appeal is a question of first impression
under California law: Should alleged violations of a charter city’s municipal law
be deemed violations of state law for
purposes of section 1102.5(c)? Based
on principles of statutory construction
and public policy considerations, we
hold that they should not, and accordingly, we affirm...
“Edgerly’s theory is simple: All local
laws ... have the force and effect of state
laws. Thus, when the Mayor allegedly
violated any charter provision or other
local ordinance or rule, the Mayor also
violated state statutes or state regulations. Similarly, whenever Edgerly refused to violate the Charter or local
ordinances or rules, any act of retaliation because of this refusal is also an act
of retaliation in violation of section 1102.5.
“The City’s argument is equally simple:
The City Charter, municipal laws, and
local civil service rules and procedures
and personnel manual[s] are local laws,
which do not rise to the level of a statewide statute or regulation within the
meaning of section 1102.5(c)...
“Here, the plain language of section
1102.5 provides that it applies to ‘a
violation of state or federal statute, or a
violation or noncompliance with a state
or federal rule or regulation.’ Based on
the unambiguous statutory language,
we presume that the Legislature meant
what it said... [¶] That the Legislature
DECISIONS
(From Page 3)
chose to omit references to ‘local laws’
when drafting section 1102.5 is readily
apparent from its inclusion of ‘local
laws’ in the language of other
whistleblower statutes...
“[T]here is nothing in the City Charter,
ordinances, or rules that even suggests
these have the effect of state statutes.
Edgerly’s argument that these municipal matters must be construed as state
statutes strains logic and offends yet
another rule of construction: city powers are strictly construed. [cite omitted.]
“As noted above, this appeal would
appear to present a question of first
impression. There is analogous case
law, however, dealing more generally
with the question of when personnel
decisions are actionable under section
1102.5(c), and this analogous case law
does not support Edgerly’s theory...
“[I]n Patten v. Grant Joint Union High
School Dist. (2005) 134 Cal.App.4th
1378, 1381-1382, a principal sued a
school district for whistleblower retaliation for disclosing improprieties at her
school... [¶] The court held that except
for the budgetary disclosure, the disclosures concern teachers’ conduct and
lack of staff ‘do not rise to the level of
blowing a whistle’ but were made in ‘the
context of an internal personnel matter
based on a student complaint, rather
than in the context of a legal violation.’
(Patten, supra, 134 Cal.App.4th at p.
1385.)
“[I]t was part of Edgerly’s general job
description to take the actions that she
alleged she took to enforce Oakland’s
municipal laws. Taken to its logical
conclusion, Edgerly’s argument is that
as she routinely acted on each city
official’s expense reimbursement requests, each rejection constituted a per
se violation of section 1102.5(c), no
matter how trivial or routine each rejection was. This interpretation strains logic
and, if adopted, could have a serious
impact on the workings of the City and
other charter cities...
“In granting summary adjudication of
the third whistleblower cause of action,
the trial court ruled that Edgerly had
failed to make a prima facie showing. [¶]
Edgerly claims this was error insofar as
it related to her section 1102.5(c) claim
based on Government Code section
87100 violations. Government Code
section 87100 prohibits a public official
from using his official position to ‘influence a government decision’ in which
he has a financial interest. Edgerly
argues that three reimbursement requests [by Dellums] violated Government Code section 87100... [¶] [But]
the regulations interpreting the statute
clarify that reimbursements of expenses
are specifically excluded from the definition of ‘material financial effect.’
“Moreover..., [t]o the extent Edgerly
maintains that she refused the reimbursement requests, her refusals to
participate in the Mayor’s alleged misconduct were consistent with, if not
required by, her general job description
and duties... Although there are no
California cases directly on point, several federal cases present similar issues... [discussion omitted of McKenzie
v. Renberg’s, Inc. (10th Cir 1996) 94 F3d
1478; Muniz v United Parcel Service,
Inc. (ND Cal 2010) 731 FS2d 961;
Correa v Mana Products, Inc. (ED NY
2008) 550 FS2d 319.]”
For plaintiff: John Houston Scott,
Lizabeth N. de Vries.
For City: Office of the City Attorney of
Oakland, Randolph W. Hall; Foster
Employment Law, Michael William Foster, Jill A. Sprague.
by Baskin with Reardon and Rivera
WL 6194390.
(PENA). In an opinion by Margulies filed
on December 12, the First District,
“Defendant Judith Bjorndal filed this
petition for a writ of mandate after the
trial court [Sonoma County Superior
Court Judge Elliot Lee Daum] overruled
her demurrer to plaintiff Van A. Pena’s
amended complaint. Pena had originally sued Bjorndal in 2002 for retaliatory termination in essentially identical
state and federal lawsuits. While the
state lawsuit languished, Pena pursued
the federal action for nearly 10 years,
twice successfully appealing adverse
judgments. Following the second federal reversal in 2011, he changed his
strategy and filed an amended complaint in the state lawsuit, alleging a
single cause of action under the Whistle
Blower Protection Act, Government
Code section 8547 et seq.
“Bjorndal filed a demurrer contending
Pena’s lawsuit was barred because he
had not filed a timely administrative
complaint, which is a statutory prerequisite to a civil action under the Act. The
trial court overruled the demurrer, concluding the doctrine of equitable tolling
excused Pena’s failure to file the administrative complaint while he was litigating the federal action. Finding equitable
tolling inapplicable in these circumstances to extend the deadline for pursuing an administrative remedy under
the Act, we grant the writ of mandate
and direct the trial court to sustain
Bjorndal’s demurrer.
DOCTRINE OF EQUITABLE
TOLLING DID NOT EXCUSE
FAILURE TO FILE
REQUIRED BY WHISTLEBLOWER
PROTECTION ACT PENDING
LITIGATION OF PARALLEL
FEDERAL LAWSUIT
“The trial court’s application of the doctrine of equitable tolling in these circumstances was unprecedented; equitable
tolling has never been applied to allow a
plaintiff to extend the time for pursuing
an administrative remedy by filing a
lawsuit. Despite broad language used
by courts in employing the doctrine,
equitable tolling has been applied almost exclusively to extend statutory
deadlines for judicial actions, rather
than deadlines for commencing administrative proceedings... [¶]We have found
a small number of cases in which equitable tolling was applied to extend a
BJORNDAL v SUPERIOR COURT
-4-
DECISIONS
(From Page 4)
deadline for complying with an administrative procedure, but in all of them one
administrative deadline was tolled while
the plaintiff pursued an alternative administrative remedy. [cites omitted.]
“For reasons similar to those outlined
above, the doctrine of relation back fails
to save Pena’s claim under the Act.
Relation back is used in the context of
litigation to preserve causes of action
joined by amendment of a complaint
after expiration of the statute of limitations. While it might thereby excuse
Pena’s late filing of his cause of action
in the new first amended complaint, it
does not apply to the filing of an administrative claim. In any event, by preserving Pena’s cause of action despite his
failure to satisfy section 8547.8, its use
here would violate the plain intent of the
Legislature to require such compliance
as a prerequisite to suit under the Act.”
For real party: Lawrence J. King.
For petitioner: Fiel Tigno and Terry
Senne, Deputy Attorneys General.
by Margulies with Marchiano and
Banke concurring; 2012 DAR 16594,
2012 WL 6182732.
DISTINGUISHING CUIELLETTE,
JUDGMENT FOR CITY ON
DISABILITY CLAIMS BY
DISABLED POLICE OFFICER
DENIED ADMINISTRATIVE
POSITION
LUI v CITY AND COUNTY OF SAN
FRANCISCO. “Following a court trial,”
the First District, Division Five, began in
a December 11 opinion by Simons, “the
trial court entered judgment in favor of
defendant and respondent City and
County of San Francisco on causes of
action ... under [FEHA]. Plaintiff, who
had suffered a major heart attack, retired from his position as a police officer
... after the Department informed him
there were no administrative positions
available that did not require him to
perform the strenuous physical duties
regularly performed by patrol officers in
the field. On appeal, plaintiff contends,
among other things, the trial court erred
in finding that strenuous duties—such
as making forcible arrests and chasing
fleeing suspects—are essential functions of the administrative positions he
sought within the meaning of the FEHA.
We affirm, concluding the evidence supports the trial court’s finding that, even
though officers in administrative positions are not frequently required to engage in such activities, the strenuous
duties are essential functions of the
positions because the Department has
a legitimate need to be able to deploy
officers in those positions in the event of
emergencies and other mass mobilizations. On that ground, we reject plaintiff’s
discrimination and failure to accommodate claims under the FEHA. We also
reject plaintiff’s claim that defendant
failed to engage in the interactive process mandated by the FEHA to attempt
to determine a reasonable accommodation.
“Plaintiff principally relies on the decisions in Cripe [v City of San Jose (9th Cir
2001) 261 F3d 877] and Cuiellette [v
City of Los Angeles (2011) 194 CA4th
757] to support his position that DGO
11.12 is contrary to the FEHA. [Editor’s
note: Department General Order (DGO)
11.12, implemented in 2004, eliminated
permanent light duty assignments for
injured officers and limited TMD (Temporary Modified Duty) assignments to
one year.] Although those cases also
involved police departmental policies
regarding the accommodation of disabled police officers still capable of
performing administrative work, they are
materially distinguishable. Indeed, the
distinctions between those cases and
the present case demonstrate why
plaintiff’s appeal lacks merit.
“In Cripe [the Ninth Circuit wrote] ‘[t]he
Modified Duty Policy does not permit
the City to make any individual assessment as to whether an officer, with or
without an accommodation, can perform the essential functions of any job
other than the [highly undesirable] setaside modified duty positions.’ ... [¶]
The Ninth Circuit went on to explain
that, because the number of disabled
police officers was capped at 30, requir-5-
ing that all officers in specialized assignments be able to make forcible
arrests and subdue fleeing suspects
could not be justified by the need for
mass mobilization in the event of an
emergency... [¶] In contrast, in the
present case the evidence demonstrated that before the adoption of DGO
11.12, the Department was accommodating 210 officers in permanent lightduty assignments. Thus, the trial court
here could find that DGO 11.12 was
justified by the need to maximize the
ability of the Department to respond to
emergencies, while the policy in Cripe
was not justified by that objective.
“Critically [in Cuiellette], the trial court
had found that, during the relevant time
period, ‘the City of Los Angeles had a
longstanding policy and practice of allowing sworn officers to perform ‘light
duty’ assignments that did not entail
several essential functions of a peace
officer such as making arrests, taking
suspects into custody, and driving a
police vehicle in emergency situations.’
“Plaintiff contends the Department did
not do enough to find a position in which
he could be accommodated. However,
the undisputed evidence shows that,
under the Department’s policies, there
were no vacancies in sworn police officer positions consistent with plaintiff’s
restrictions, other than the language
liaison position that was given to another disabled officer. Sullivan offered
plaintiff several opportunities to participate in a citywide disability transfer job
search process, but plaintiff declined
those offers.”
For plaintiff: Lawrence D. Murray.
For City: Erik A. Rapoport, Deputy City
Attorney.
First Dist Div Five, 12/11/12; opinion
by Simons with Jones and Needham
WL 6197419.
DECISIONS
(From Page 5)
ON RECONSIDERATION IN LIGHT
OF BRINKER, FOURTH DISTRICT
NOW HOLDS THAT TRIAL COURT
ERRED IN DENYING CLASS
CERTIFICATION OF WAGE AND
HOUR CLAIMS
those policies created an employeremployee relationship, as opposed to
an independent contractor relationship,
is not before us. The critical fact is that
the evidence likely to be relied upon by
the parties would be largely uniform
throughout the class.
BRADLEY v NETWORKERS INTERNATIONAL. “Three plaintiffs filed a class
action complaint ... alleging violations
of wage and hour laws including those
governing overtime pay, rest breaks,
and meal breaks,” the Fourth District,
Division One, began in a 20-page December 12 opinion by Haller. The court
continued in the following excerpts:
V. SPECIFIC CLAIMS
AND DAMAGES
“As an alternate basis for its denial of
plaintiffs’ class certification motion, the
trial court found there were substantial
individual differences in proof pertaining
to damages on the particular claims
alleged by plaintiffs. We review each of
those claims below.
“Plaintiffs moved to certify the class, but
the court denied the motion, concluding
plaintiffs did not meet their burden to
show common factual and legal questions would predominate over individual
issues. Plaintiffs appealed. In February
2009, we filed an unpublished opinion
affirming the trial court’s order... (Bradley v. Networkers International, Inc.
(Feb. 5, 2009, D052365) (Bradley I).)
A. ALLEGED MEAL AND REST
BREAK VIOLATIONS
“Networkers argues Brinker is not controlling because in Brinker the plaintiffs
challenged an express meal and rest
break policy whereas here plaintiffs are
challenging the fact that the employer’s
lack of a policy violated the law. This is
not a material distinction on the record
before us. Under Brinker and under the
facts here, the employer engaged in
uniform companywide conduct that allegedly violated state law.
“In May 2009, the California Supreme
Court granted plaintiffs’ petition for review, and ordered the Bradley I case
held pending the high court’s decision
in Brinker... Three years later, in April
2012, the California Supreme Court issued its Brinker decision... The court
then remanded Bradley I to this court
‘with directions to vacate its decision
and to reconsider the cause in light of
Brinker...’
“After reexamining the record in light of
Brinker, we conclude the trial court
erred in refusing to certify the class with
respect to each of plaintiffs’ claims
except for the claims based on alleged
off-the-clock violations. With respect to
these claims, we remand for the court to
reconsider the certification issues in
light of this opinion and Brinker.
IV. INDEPENDENT CONTRACTOR
ISSUE
“The undisputed evidence showed
Networkers had consistent companywide policies applicable to all employees regarding work scheduling, payments, and work requirements. Whether
“Networkers argues, and we agreed in
our initial opinion, that the issue of
which employees had missed breaks
and how many breaks were missed and
whether those missed breaks were the
result of Networkers’ lack of a break
policy was highly dependent on the
testimony of each plaintiff, essentially
requiring a mini-trial on each class
member’s case to determine the eligibility for recovery and the amount of
damages...
“However, this argument conflicts with
Brinker’s clear holdings that for meal
breaks, an employer has an obligation
to relieve its employee of all duty, permit
the employee to take an uninterrupted
30-minute break, and not to impede or
discourage the employee from doing
so... Similarly, an employer has an
obligation to provide a rest break, and if
the employer fails to do so, the employer cannot claim the employee waived
the break... Under the logic of these
holdings, when an employer has not
-6-
authorized and not provided legally-required meal and/or rest breaks, the
employer has violated the law and the
fact that an employee may have actually taken a break or was able to eat
food during the work day does not show
that individual issues will predominate
in the litigation...
“Moreover, to the extent the amount of
damages may require individual proof,
Brinker reconfirmed that ‘As a general
rule if the defendant’s liability can be
determined by facts common to all
members of the class, a class will be
certified even if the members must individually prove their damages.’ (Brinker,
supra, 53 Cal.4th at p. 1022...)
B. ALLEGED OVERTIME WAGE
VIOLATIONS
“Networkers admitted it paid no overtime wages to any class members from
December 2004 through December
2005. Thus, if plaintiffs prove they were
employees, the fact that Networkers
did not pay overtime wages is a common issue that can be proved classwide.
“Networkers argues the amount of overtime pay damages potentially due each
class member requires individualized
analysis... [But] [t]he existence of time
records showing the amount of hours
worked by each employee could provide a reasonable and straightforward
basis for a court to award damages for
failure to pay overtime wages... [¶] To
the extent that certain workers were
compelled to work off the clock and this
off-the-clock work was required to be
paid at premium overtime wages, as
discussed below this is a separate
issue that can be considered separately from the overtime claim.
C. OFF-THE-CLOCK CLAIMS
“The factual record does not necessarily show Networkers had a uniform policy
requiring each employee to work off the
clock. Instead, there is evidence supporting that the off-the-clock claims
arose from individual actions of particular supervisors and the extent of the offthe-clock work varied substantially for
each worker and for each job. Thus, on
DECISIONS
(From Page 6)
the record before us we cannot conclude that the court abused its discretion in denying certification on this claim.
“However, because ... it is not clear that
the court considered the off-the-clock
issues separately from the overtime
claim, the prudent course is to remand
this issue for the trial court’s reconsideration. In so doing, we decline to rule
on plaintiffs’ contention that the off-theclock violations may be proved by the
use of representative testimony, surveys, and statistical methods. This contention involves factual questions regarding manageability and fairness that
should be considered by the trial court
in the first instance.
D. REMAINING CLAIMS
“[P]laintiffs also brought claims for: (1)
failure to furnish accurate wage statements; (2) failure to keep accurate payroll records; (3) waiting time penalties;
and (4) unfair business practices. To
the extent these claims were based on
plaintiffs’ overtime and/or meal-and-restbreak claims, the court should have
granted class certification on these
claims. To the extent these causes of
action are based on the off-the-clock
claims, the court should reconsider its
ruling based on this opinion and Brinker.”
For plaintiffs: Aiman-Smith & Marcy,
Randall B. Aiman-Smith, Reed W. L.
Marcy, and Hallie Von Rock.
For defendant: Seyfarth Shaw, Jonathan
D. Meer, Brandon R. McKelvey, Ann H.
Qushair, and Dennis R. Hyun.
Fourth Dist Div One, 12/12/12; opinion by Haller with McConnell and
McDonald concurring; 2012 DAR
16577, 2012 WL 6182473.
DISCRIMINATION CLAIMS WERE
BARRED BY PRECLUSIVE
EFFECT OF ADVERSE DECISION
BY IRRIGATION DISTRICT’S
GOVERNING BOARD FOLLOWING
INTERNAL ADMINISTRATIVE
HEARING
BASURTO v IMPERIAL IRRIGATION
DISTRICT. In an opinion by Haller filed
on November 8 and certified for publica-
tion on December 7, the Fourth District,
“Plaintiff Salvador Basurto appeals from
the trial court’s order granting summary
judgment in favor of defendant ... on
Basurto’s damages claims alleging age
and/or race discrimination and wrongful
termination. The trial court determined
that Basurto’s civil claims were barred,
under principles of collateral estoppel
and res judicata, by a prior adverse
administrative decision of the District’s
governing board. In that hearing, the
District Board had concluded, after an
evidentiary adversarial proceeding pursuant to the District’s internal grievance
procedures, that Basurto’s termination
for causing a serious vehicular accident
while affected by alcohol was supported
by the evidence... Basurto did not raise
his discrimination and wrongful termination allegations at that hearing, nor did
he raise issues of claimed bias and due
process violations.
“Basurto challenged the administrative
ruling by means of a petition for writ of
mandate and civil complaint in the superior court. In the writ petition, Basurto
alleged that the District’s internal grievance procedures had denied him due
process and that the District Board could
not be impartial... The trial court ultimately denied the writ petition, finding
that Basurto had waived his due process
and bias claims by failing to raise them
at his administrative hearing. On the
District’s subsequent summary judgment motion on the civil complaint, the
trial court determined that Basurto had
been ‘afforded due process and the opportunity to raise every theory under
which his right to continued employment may have been affected, including
whether he was discriminated against
based on his age and/or race.’ It therefore granted summary judgment in the
District’s favor on the civil complaint...
“On appeal from the trial court’s judgment, Basurto primarily contends that
the District Board’s decision should not
bar his civil claims because the District’s
internal complaint procedures are not of
a sufficient ‘judicial character’ to allow
application of collateral estoppel or res
judicata. We disagree. The administra-7-
tive hearing conducted by the District
Board possessed the critical attributes
of a ‘quasi-judicial’ proceeding, including the ability to be represented by
counsel before an impartial panel, to
raise any and all claims pertinent to his
discharge, and to present evidence and
cross-examine witnesses. We reject
Basurto’s contention that the District
Board could never be impartial as a
decision maker when a ruling in an
employee’s favor could have an adverse
financial consequence to the District. If
that were the case, no administrative
proceeding involving an employment or
disciplinary dispute could ever be valid
and binding. The law does not support
such a categorical invalidation of adjudications by an administrative agency.
Accordingly, we affirm.”
For plaintiff: Lowell F. Sutherland, El
Centro.
For defendant: Andrea Naested, San
Diego.
Fourth Dist Div One, 11/8/12; cert’d
for pub 12/7/12; opinion by Haller
with Huffman and O’Rourke concurring; 2012 DAR 16404, 2012 WL
5448196.
EMPLOYER WAS NOT
EQUITABLY ESTOPPED TO DENY
FAMILY MEDICAL LEAVE
DESPITE DELAY IN
COMMUNICATING DENIAL
OLOFSSON v MISSION LINEN SUPPLY. The First District, Division Four,
wrote in part as follows in an opinion by
Reardon filed on December 13:
“Lars Olofsson appeals from the judgment entered in favor of respondent
after the court, in a bifurcated trial of his
wrongful termination case, ruled against
him on the issue of equitable estoppel.
The events in question take place in the
context of the employee’s request for
family leave under the federal and state
family leave laws. We conclude that
substantial evidence supports the trial
court’s findings that the employer (1)
did not misrepresent by deed that the
DECISIONS
(From Page 7)
employee’s leave had been approved;
and (2) was not silent when it had a duty
to speak under the applicable regulations. Accordingly, we affirm the judgment.
“On Monday, June 14, Olofsson informed [plant manager] Anderson that
he needed seven weeks off, starting
July 12, to care for his mother after her
July 5 surgery. Olofsson testified that
Anderson said he could have the leave
if he filled out the application and submitted a doctor’s certification...
“Anderson testified that he did not tell
Olofsson in June that he was approved
for family leave... [¶] Olofsson spoke to
[payroll clerk] Clark ‘[s]ometime during
June 15 and June 18,’ and she gave him
‘some forms to fill out.’ Olofsson returned the forms to Clark on June 21.
Olofsson had checked the box on the
form indicating that he was eligible for
the leave, testifying he did so because
that was his understanding based on
what Anderson had told him. According
to Clark, Olofsson told her that Anderson, Jr. (an area manager) had already
approved the leave. In any event, she
informed him that it did not matter what
‘Jr.’ said because he could not approve
family leave... Clark also told Olofsson
the leave decision would be made
through HR. Olofsson responded that
‘he didn’t care. He was going anyway.’
[FN4. Olofsson denied that Clark told
him ‘Mr. Anderson would not be in a
position to approve the leave’... Olofsson
also denied that he told Clark he was
going to take the leave regardless of
whether the application was approved.]
“Olofsson did not submit any medical
certification at that time... [¶] He [eventually] contacted [his mother’s] doctor,
who completed the form and faxed it
back. Olofsson took it to Clark on July
9. She told him to fax it to HR, which he
did.
“[O]n July 9, [area manager] Rowley
informed Olofsson that his family leave
request was denied ... [because] he did
not meet the 1,250 hour requirement.
[Area manager] Hearn told him he would
lose his job if he left. Olofsson left for
Sweden on July 10 to care for his
mother, testifying ‘there was nothing
that could be done to change the situation.’
“Olofsson sued Mission Linen for
[WTVPP]. He alleged he was fired in
retaliation for having exercised his rights
under the federal and state leave laws.
He additionally asserted that Mission
Linen was estopped to assert he did not
qualify for family leave because the
company did not inform him that leave
was denied until after his mother had
her surgery, and he was the only one
who could care for her.
days, but clearly and for good reason
the law does not specify the response
must be tantamount to approval or denial... [FN6. As explained above, although more than 10 days may be
required to respond to some requests,
employees and employers alike would
be well served by legislation that clarifies exactly when an employee is entitled to notice that his or her leave
request has been approved or denied.]
[¶] Substantial evidence supports the
trial court’s decision that Mission Linen
did not remain silent when it had a duty
to speak.”
“Olofsson successfully moved to bifurcate the equitable estoppel issue for a
court trial prior to impaneling a jury for
any remaining issues. This appeal followed entry of judgment in favor of Mission Linen.
For plaintiff: Alan Goldberg.
For defendant: Nancy K. Delaney.
by Reardon with Rivera and Baskin
WL 6200336.
“Olofsson first argues that Mission Linen
misrepresented by deed that his leave
had been approved. Specifically, Mission Linen’s managers instructed
Olofsson [to train his temporary replacement]. [¶] We do not see it this
way. [A]s area manager Rowley explained, Mission Linen arranged to have
[the replacement] ride with Olofsson so
he would know the route in the event the
leave was approved...
“Olofsson also argues that an estoppel
claim can be based on the failure to
speak when a party has a duty to
speak... [¶] Olofsson’s argument is this:
The CFRA regulations mandate that
employers respond to leave requests
as soon as possible, with an outside
limit of 10 calendar days after receipt of
a request...
“Without question it is unfortunate that
Mission Linen focused more urgently
on the medical certification, which ultimately turned out to be adequate, instead of the required minimum hours...
Having said that, the real question is
whether Mission Linen was silent here,
such that Olofsson could rely on that
silence to reasonably conclude his leave
was granted. The trial court found that it
was not.... [¶] Under the CFRA regulation, the employer has a duty to respond to the leave request within 10
-8-
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
PROPERLY GRANTED ON
RETALIATION CLAIM IN ABSENCE
OF SUBSTANTIAL EVIDENCE
RAISING TRIABLE ISSUE OF
PRETEXT
BATTLE v JAPAN TOBACCO INTERNATIONAL U.S.A. In an unpublished
opinion by Boren filed on December 10,
the Second District, Division Two, affirmed summary judgment, writing in
part as follows:
“In February 2009, Battle, who is African-American, filed a complaint for race
and age discrimination with the [EEOC].
He alleged that in January 2009 he was
given an unwarranted negative performance review by [his supervisor] Di
Donato. Following mediation, Battle and
JTI settled the EEOC charge. The parties agreed that Battle would receive a
positive adjustment in his performance
review and bonus and salary increase.
DECISIONS
(From Page 8)
The settlement agreement further provided that JTI did not admit to any
violations.
“Battle continued to work as the west
regional sales manager following the
settlement. On June 25 of 2009, Battle
and a subordinate, Jim Jones ... were in
Fresno on a business trip. Battle and
Jones ... got into a heated argument.
The next day, Jones called Anne Binkley,
JTI’s human resources director, to report the incident. He described Battle
as the instigator, stated that Battle was
yelling and swearing at him, and said
that Battle pushed him.
“Binkley initiated an investigation of the
incident, and Di Donato was brought in
to interview Jones and Battle. Following
their investigation, Binkley and Di Donato
met with Douglas Van Staveren, general manager of American operations
for JTI. The three agreed that Battle
should be terminated...
“The trial court [Judge Mary H. Strobel]
heard the motion for summary judgment on June 23, 2011. After argument,
the court granted the motion, finding
that Battle had failed to raise a triable
issue of whether the proffered reason for
termination was pretextual. Its decision
noted that Battle did not dispute that an
argument took place, that he used ‘aggressive language,’ during the argument, or that the incident merited discipline. The court wrote: ‘Plaintiff has not
presented evidence contradicting the
main facts that underlie Defendant’s
reasons for terminating him, namely
that Plaintiff engaged in unprofessional
behavior...’
“In moving for summary judgment, JTI
did not dispute that Battle established a
prima facie case for retaliation based on
the filing of the EEOC charge and his
subsequent termination, which occurred
about five months later. JTI presented
evidence showing a legitimate reason
for Battle’s termination, however, which
shifted the burden back to Battle to
provide substantial evidence that the
reason was pretextual. As correctly
found by the trial court, Battle failed to
meet this burden.
“On appeal, Battle first argues that the
temporal proximity between the EEOC
filing and his termination established a
triable issue of retaliatory motive. This
assertion is plainly incorrect. ‘Where
the employee relies solely on temporal
proximity ... he or she does not create
a triable issue as to pretext, and summary judgment for the employer is
proper.’ (Arteaga v. Brink’s, Inc. (2008)
163 Cal.App.4th 327, 357...)
“Battle next argues that JTI’s proffered
reason for termination was unworthy of
credence... He contends ... that the
evidence presented by JTI was not sufficient to show that the argument was a
valid ground for termination... [¶] It is
unimportant that there may have been
some varying accounts of the details of
the argument. What was important was
that JTI’s management believed that a
heated argument involving swearing and
possible physical contact occurred...
Nothing in the record shows that JTI did
not adequately investigate, or that it
lacked evidence for finding that Battle
engaged in improper conduct warranting termination.
“Battle named a number of JTI employees who, according to Battle, engaged
in misconduct and were not terminated... [¶] [But] [t]he trial court correctly found that Battle failed to show
that [those] other employees were similarly situated... [W]ithout comparator
evidence of any sort of internal complaint, investigation, or discipline, it is
impossible to find that Battle was treated
more severely than similarly situated
employees... [¶] Moreover, none of the
employees identifed by Battle occupied
a high-level position like his...
“On appeal, Battle briefly argues that
both Di Donato and Binkley were either
biased against him, or beholden to
someone biased against him, and therefore should not have been involved in
investigating the incident. [¶] Battle does
not develop this argument. He just plainly
asserts that the investigation was improper. We cannot develop appellant’s
argument for him, and therefore do not
consider it... [¶] We also decline to
address the argument because Battle
failed to raise it in the trial court...
-9-
“In his opening brief, Battle affirmatively
waived the right to appeal the trial court’s
ruling on his cause of action for race
discrimination. Therefore, only Battle’s
claim that JTI failed to maintain a workplace free from discrimination and harassment remains to be addressed.
Battle acknowledges that a finding of
discrimination or harassment is an ‘essential foundational predicate’ of such a
claim. [cite omitted.] Battle did not
pursue his claim for discrimination and
did not establish that any improper
harassment may have occurred, As he
is unable to establish the foundational
predicate, his claim for failure to maintain a workplace free from discrimination and harassment necessarily fails.”
For plaintiff: Joseph M. Lovretovich,
David F. Tibor.
For defendant: Holland & Knight, Linda
Auerbach Allderdice, James W.
Michalski, Timothy F. Fisher.
Second Dist Div Two, 12/10/12; opinion by Boren with Ashmann-Gerst
and Chavez concurring; 2012 WL
JUDGMENT ON JURY VERDICT
FOR PLAINTIFF IS REVERSED
BECAUSE OF GARBLED
INSTRUCTIONS ON DISABILITY
DISCRIMINATION CLAIMS
THOMAS v CITY OF LOS ANGELES.
“Plaintiff Malcolm Thomas, a police officer in the [LAPD], brought suit against
the City of Los Angeles for disability
discrimination and related claims. After
a two-week jury trial, the jury returned a
verdict, finding the City liable to Thomas
for disability discrimination. The City
appeals, arguing the trial court [Judge
Mark V. Mooney] committed reversible
error in giving an incomplete written
instruction on Thomas’s disability discrimination claim, an instruction that
differed from the oral instruction, and
submitting a special verdict form to the
jury that did not conform to either the
oral or written jury instructions.
DECISIONS
(From Page 9)
COMING EVENTS
“We agree with the City that the trial
court committed prejudicial error in its
instruction on Thomas’s disability discrimination claim. Accordingly, the judgment is reversed and the matter is
remanded for a new trial on that cause
of action.
January 18, 2013
Staying True to Your Roots
Full day of CLE Presentations by
National Lawyers Guild S.F. Bay Area Chapter;
co-sponsored by CELA.
(see www.nlgsf.org for information and registration)
“On July 23, 2010, the jury returned its
special verdict..., awarding Thomas
$705,804 in damages. [FN2. The jury
found in favor of the City on all other
claims.]
“‘[T]here is no rule of automatic reversal
or ‘inherent’ prejudice applicable to any
category of civil instruction error, whether
of commission or omission. A judgment
may not be reversed for instructional
error in a civil case ‘unless, after an
examination of the entire cause, including the evidence, the court shall be of
the opinion that the error complained of
has resulted in a miscarriage of justice.’
[Citation]’ (Soule v. General Motors Corp.
(1994) 8 Cal.4th 548, 580).
“It seems that the trial court improperly
comingled two distinct claims based
upon Thomas’s theories of disability
discrimination... [¶] In spite of the distinctions between [a claim for disability
discrimination and a claim for failure to
accommodate], the elements were
conflated in the written jury instructions... [¶] The instructional error was
prejudicial. The written instructions were
confusing and incomplete... With blurred
instructions, the jury was not given the
opportunity to make proper findings.”
For plaintiff: Herb Fox; Alan I. Schimmel
and Michael W. Parks.
For City: Gregory P. Orland, Deputy
City Attorney.
Second Dist Div Two, 12/6/12; opinion by Ashmann-Gerst with Doi Todd
and Chavez concurring; 2012
WL6062656 (unpublished).
•
•
March 7, 2013
March 8-9, 2013
NELA Spring Seminar
March 18-19, 2013
Sacramento
April 5, 2013
CELA Ninth Annual Advanced Wage & Hour Seminar
Hilton Glendale
June 26-29, 2013
October 4-5, 2013
CELA's 26th Annual Conference
Fairmont San Jose
October 17, 2013
NELA Lobby Day
Washington DC
October 18-19, 2013
NELA Fall Seminar
October 10-11, 2014
Hilton San Diego Resort and Spa
•
-10-
NELA NEWS
The following notices and information
appeared during the past month in
NELA’s electronic newsletter “@NELA.”
—The Institute releases “Cracking
the Comparator Code.” The Employee
Rights Advocacy Institute for Law &
Policy, NELA’s associated charitable
public interest organization, is pleased
to announce the publication of “Cracking the Comparator Code,” the third
article in The Institute’s Summary Judgment Toolkit series, an activity of the
National Litigation Strategy Project
(NLSP). The toolkit is a series of white
papers identifying and addressing socalled “problem doctrines”—analytical
shortcuts that courts use in employment litigation to grant summary judgment at a disproportionate rate.
“Cracking the Comparator Code” provides both analysis and practical tools,
including model briefing language, to
support the proper use of comparator
evidence in employment discrimination
cases. It examines how courts have
altered comparator evidence standards,
and suggests ways in which employee
rights advocates can avoid having their
cases derailed. The article also explores whether comparator evidence is
necessary to prove discrimination;
whether plaintiffs should ever be required to present “identical” or “nearly
identical” comparators; and whether the
probative value of comparator evidence
is a jury question.
concerns the appropriate definition of
“supervisor” under Title VII. NELA’s brief,
which was joined by AARP, discusses
how an unduly restrictive definition would
discourage employers from implementing internal anti-harassment policies
and grievance procedures that could
help deter harassment. Our brief was
drafted by Professor Michael L. Foreman of the Penn State University
Dickinson School of Law, with support
from his students in the Civil Rights
Clinic. The brief is available for download on The NELA Exchange.
On November 27, the Supreme Court
heard argument in U.S. Airways, Inc. v
McCutcheon, a case in which NELA
joined an amicus brief drafted by AARP.
An adverse ruling in this case could
have profound consequences for employees who currently participate in
employer-sponsored benefit plans. The
brief was written by Mary Ellen Signorille
of AARP, with the assistance of NELA
ERISA experts Jeffrey Lewis and Ronald
Dean. The brief is available for download
on The NELA Exchange.
And on December 3, the Supreme Court
heard argument in Genesis Healthcare,
Inc. v Symzcyk, a case in which the
employer attempted to moot the plaintiff’s
nascent FLSA collective action claim
by offering the named plaintiff, and her
alone, full relief under Federal Rule of
This most recent white paper in the
series was written by Matthew C. Koski,
The Institute’s Paul H. Tobias Attorney
Fellow, with contributions from members of the NLSP Task Force Matt is
also the author of the first two articles:
“Securing the Right to a Jury Trial: Stray
Remarks and Summary Judgment,” and
“Preserving the Right to a Jury Trial by
Preventing Adverse Credibility Inferences
at Summary Judgment.” Please visit
the NLSP page of the Institute’s website
for more information and to download
copies: www.employeerightsadvocacy
.org.
—Amicus activity. On November 28,
the Supreme Court heard argument in
Vance v Ball State University, which
-11-
Civil Procedure 68. Our brief, which was
joined by a variety of workers’ rights
organizations, discusses the importance
of collective actions in remedying FLSA
violations: allowing employers to “pick
off” individual plaintiffs before other aggrieved workers are allowed to join a
case would permit a wide range of
unlawful behavior to proceed unchecked.
Our brief was drafted by Richard J.
(Rex) Burch (Houston), with assistance
from J. Derek Braziel (Dallas), and Douglas M. Werman (Chicago), and it also
can be downloaded from the The NELA
Exchange.
•
•
•
Diversity Outreach. Fourteen law students have been hired by CELA participating firms for summer 2013. And the
committee is happy to report that Eva
Paterson from the Equal Justice Society will be the keynote speaker at the
Diversity Outreach Committee luncheon
at the 2013 Annual Conference in San
Jose.
Immigrant Employment Rights. The
tentative date for the committee’s gathering with the American Immigration
Lawyers Association (AILA) is Tuesday, January 29, at Machka Restaurant
in San Francisco. This will be an informal gathering so that employment and
immigration attorneys can meet and
greet, since our clients’ needs often
overlap. Stay tuned for further details.
Law Practice Management. Look for
further forthcoming information on the
committee’s 2013 half-day seminar,
“Marketing Your Law Practice.”
Public Employment. The committee
is currently discussing and planning its
2013 webinars.
Technology. Thirteen attended the
committee’s recent “Practice Management Programs” webinar. If you weren’t
able to attend the live session, the selfpaced webinar is available on the CELA
website>Upcoming Events.
Wage & Hour. The committee is now
planning the 2013 “Advanced Wage and
Hour” seminar, which will take place on
Friday, April 5, at the Glendale Hilton.
-12-
Wiki. The committee’s tentative roll out
date is February 1, 2013.
CELA has the following ten active committees, and you are encouraged to get
involved. (An asterix indicates a committee that’s open only to regular CELA
members.) If you are interested in joining a CELA committee, please contact
me at christina@cela.org.
DFEH/EEOC Committee
Law Practice Management
Listerv Monitoring Committee*
Mentor Committee

2012 CELA Bulletins - California Employment Lawyers Association

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