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Wednesday, September 17, 2014

Castaneda v. The Ensign Group: Parent Corporation May Be Employer of Wholly Owned Subsidiary's Employees

In Castaneda v. The Ensign Group, Inc. (9/15/14) --- Cal.App.4th ---, plaintiff John Castaneda sued The Ensign Group, Inc. (Ensign) in a class action lawsuit alleging wage and hour violations. He alleged that Ensign was the alter ego of the Cabrillo Rehabilitation and Care Center (Cabrillo), the nursing facility where he worked. The trial court granted summary judgment for Ensign, holding that it was not Castaneda's employer as a matter of law. The Court of Appeal reversed, holding as follows:

Under Martinez v. Combs (2010) 49 Cal.4th 35, Castaneda raised a triable issue of material fact as to whether Ensign was his joint employer by introducing, inter alia, evidence of the following:

Ensign was the sole shareholder of Cabrillo and other companies involved in Cabrillo's operations; these entities shared the same corporate address; they used "centralized information technology, human resources, accounting, payroll, legal, risk management, educational and other key services"; they shared corporate officers; Ensign supervised and controlled Cabrillo's employees' job functions; Ensign provided mandatory policy and training videos at Cabrillo; and Ensign handled employee discipline issues at Cabrillo. 
Slip op. at 5-9. 

The opinion is available here.

Monday, September 15, 2014

Sheet Metal Workers’ Int'l Assn., Local 104 v. Duncan: Offsite Material Fabricators Not Subject to Prevailing Wage Law

A very quick note on this case.

In Sheet Metal Workers’ International Association, Local 104 v. Duncan (Russ Will Mechanical, Inc.) (8/27/14) --- Cal.App.4th ---, the Court of Appeal held that the prevailing wage law does not apply to an employee of a subcontractor who conducts offsite material fabrication if the work "takes place at a permanent, offsite manufacturing facility and the location and existence of that facility is determined wholly without regard to the particular public works project." Slip op. at 24.

The opinion is available here

Friday, September 12, 2014

Cruise v. Kroger: In Absence of Arbitration Policy Applicable to Employee, Arbitration Would Be Conducted Pursuant to California Arbitration Act

In Cruise v. Kroger Co. (8/27/14) --- Cal.App.4th ---, the plaintiff filed suit against her former employer for harassment, discrimination, retaliation, and related claims. The trial court denied the defendants' motion to compel arbitration, and the defendants appealed. The Court of Appeal reversed, holding as follows:

The plaintiff had signed an employment application that included a broadly-worded arbitration clause, which constituted an enforceable agreement to arbitrate. 
Slip op. at 9-10. The plaintiff's employment-related claims all fell within the scope of that agreement. 

Even though the defendants could not establish the precise terms of the applicable arbitration policy, which was incorporated by reference into the employment application's arbitration clause, the plaintiff was not relieved of her obligation to arbitrate her claims. Slip op. at 10-11. Instead, the arbitration would be conducted pursuant to the procedures set forth in the California Arbitration Act. As a result, the plaintiff could not argue that the arbitration clause was procedurally or substantively unconscionable. 

The Court concluded: 
Nothing herein should be construed as enabling an employer to enforce a missing arbitration agreement. We merely hold the language of the arbitration clause in the instant employment application, standing alone, was sufficient to establish an agreement by the parties to arbitrate employment-related disputes. While the parties’ agreement to arbitrate is enforceable, the employer’s inability to establish the contents of its Arbitration Policy precludes the employer from enforcing the provisions of said policy. Instead, the arbitration proceeding is to be conducted in accordance with the procedures set forth in the CAA as well as applicable case law.
The opinion is available here.

Thursday, September 11, 2014

Yau v. Santa Margarita Ford: Employee States Cause of Action for Wrongful Discharge, but not IIED

In Yau v. Santa Margarita Ford, Inc. (8/26/14) --- Cal.App.4th ---, Eddie Yau sued his former employer, Santa Margarita Ford (SM Ford) for wrongful termination in violation of public policy (WTVPP), alleging that he was terminated after complaining about allegedly fraudulent warranty repair claims being filed. He also sued several coworkers and supervisors for intentional infliction of emotional distress (IIED). The trial court sustained demurrers without leave to amend and dismissed the case. The Court of Appeal reversed in part and affirmed in part, holding as follows:

Yau stated a cause of action for WTVPP against SM Ford by alleging that it terminated him because he complained to his superiors that his supervisor and coworkers were submitting fraudulent warranty claims. Slip op. at 10-18. If true, Yau’s allegations "could be construed" as complaints of potential violations of criminal statutes proscribing theft and fraud.

Yau did not state a cause of action for IIED, which he alleged only against the individual defendants. Slip op. at 19-21. The claim was barred by the exclusivity provisions of the Workers’Compensation Act. California law no longer recognizes an exception for emotional distress caused by conduct that violates a fundamental public policy.

The opinion is available here.

Wednesday, September 10, 2014

Slayman v. FedEx Ground: FedEx Drivers Are Employees Under "Economic Realities" Test

In Alexander v. FedEx Ground Package System, Inc., ___ F. 3d. ___ (9th Cir. 8/27/14) (discussed here) the Ninth Circuit held that FedEx drivers were employees under California law, which focuses primarily on "whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired." 

In Slayman v. FedEx Ground Package System, Inc., ___ F.3d ___ (9th Cir. 8/27/14), the Court held that the same result applies under the "economic realities" test. The Court reasoned as follows:

As in Alexander, the drivers were employees under the "right to control" test. 
Slip op. at 15-23.  

The drivers also were employees under the economic realities test, which encompasses situations "situations where the worker is not directed or controlled by the employer but, nevertheless, as a matter of economic reality, depends on the employer." Slip op. at 24.

All but one named plaintiff stopped working for FedEx before suit was filed and lacked Article III standing to seek prospective relief. Remaining named plaintiff stopped working for FedEx before class certification decision, and his claim for prospective relief became moot at that time. Under these circumstances, district court should not have certified prospective relief claims. Slip op. at 25-27.

The opinion is available here

Tuesday, September 9, 2014

Alexander v. FedEx Ground: Delivery Drivers Are Employees Under California Law "Right to Control" Test

In Alexander v. FedEx Ground Package System, Inc., ___ F. 3d. ___ (9th Cir. 8/27/14), individuals who drove delivery routes for FedEx Ground and FedEx Home (FedEx) in California sued for unpaid wages, reimbursement of business expenses, and violation of the Family and Medical Leave Act (FMLA), alleging that they were employees, rather than independent contractors. The case was consolidated with cases from a number of other states for multidistrict litigation (MDL) proceedings.

The MDL Court certified the expense reimbursement and unpaid wage claims, but not the FMLA claims. The parties then made cross-motions for summary judgment, asking the MDL Court to determine whether the drivers were employees or independent contractors as a matter of law. The MDL Court determined that the drivers were independent contractors as a matter of law in each state in which common-law agency principles govern employment status, including California.

The Ninth Circuit reversed, holding that the plaintiffs were employees as a matter of California law.

Under the test set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989) (which the Court referred to as the "right to control test"), “The principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” Because FedEx exercised all "necessary control" over the drivers, including their appearance, the appearance of their vehicles, the timing of work and deliveries, the packages to be delivered and the service areas in which to deliver them, the right to control factor strongly favored deeming the plaintiffs to be employees. Slip op. at 14-26. The Court characterized this as "powerful evidence" of employee status.

The "secondary indicia" set forth in Borello did not strongly favor either employee or independent contractor status. Slip op. at 26-31.

The opinion is available here.

Thursday, August 28, 2014

Patterson v. Domino's Pizza: Franchisor Not Responsible for Acts of Franchisee's Employee

In Patterson v. Domino's Pizza, --- Cal.4th --- (8/28/14), an employee, Patterson, alleged that her supervisor subjected her to sexual harassment. She sued her direct employer, a franchisee of Domino's Pizza, as well as Domino's itself, the franchisor. Patterson alleged that Domino's was liable because it was her joint employer and because the franchisee was its agent. The trial court granted summary judgment for Domino's, the Court of Appeal reversed, and the California Supreme Court reversed the judgment of the Court of Appeal, holding as follows:

Potential liability of a franchisor depends upon whether it has "retained or assumed a general right of control over factors such as hiring, direction, supervision, discipline, discharge, and relevant day-to-day aspects of the workplace behavior of the franchisee‘s employees." Slip op. at 30-31.

Although Domino's "vigorously enforced" standards for general operations, it "lacked the general control of an 'employer' or 'principal' over relevant day-to-day aspects of the employment and workplace behavior" of the franchisee's employees. Slip op. at 33.
According to the testimonial evidence, [the franchisee] exercised sole control over selecting the individuals who worked in his store. He did not include Domino's in the application, interview, or hiring process. Nor did anyone attempt to intervene on Domino's behalf. It was [the franchisee's] decision to hire Patterson as a new employee and to otherwise retain the existing staff when he bought the franchise.
Slip op. at 35-36. The franchisee also controlled its own sexual harassment policies and training. Slip op. at 36. Evidence that Domino's told the franchisee to "get rid of" the alleged harasser did not raise an inference that Domino's was in charge of employment decisions. Slip op. at 38.

The opinion is available here.