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Thursday, July 17, 2014

Dilts v. Penske Logistics: Ninth Circuit Holds that Federal Law Does Not Preempt California Meal and Rest Period Requirements

The Federal Aviation Administration Authorization Act of 1994 (FAAAA) provides: “States may not enact or enforce a law . . . related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). In Dilts v. Penske Logistics, LLC, ___ F.3d ___ (9th Cir. 7/9/14), the Ninth Circuit considered whether the FAAAA preempts California's meal and rest period requirements. The Court held that it does not, reasoning as follows:

Under Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 (detailed discussion here), state laws allow some flexibility with respect to the timing and circumstances of meal breaks. Slip op. at 7-8.

In determining the preemptive scope of the FAAAA, one must recognize that "everything is related to everything else," and the FAAAA does not go so far as to preempt state laws that affect prices, routes, or services in “only a tenuous, remote, or peripheral manner, such as state laws forbidding gambling.” Slip op. at 9-10.

The legislative history of the FAAAA shows that the principal purpose of the FAAAA was “to prevent States from undermining federal deregulation of interstate trucking” through a “patchwork” of state regulations. Slip op. at 10-18.

"Congress did not intend to preempt generally applicable state transportation, safety, welfare, or business rules that do not otherwise regulate prices, routes, or services." Slip op. at 13. "Generally applicable background regulations that are several steps removed from prices, routes, or services, such as prevailing wage laws or safety regulations, are not preempted, even if employers must factor those provisions into their decisions about the prices that they set, the routes that they use, or the services that they provide." Slip op. at 16.

California's meal and rest period requirements are not preempted because they apply broadly to hundreds of industries and "do not set prices, mandate or prohibit certain routes, or tell motor carriers what services they may or may not provide, either directly or indirectly." Slip op. at 18-14.

The opinion is available here.

Wednesday, July 16, 2014

Haro v. City of Los Angeles: Ninth Circuit Affirms Overtime Award to Fire Department Employees

In Haro v. City of Los Angeles, ___ F.3d ___ (9th Cir. 3/18/14), the plaintiffs worked as dispatchers or aeromedical technicians for the City of Los Angeles Fire Department. They alleged that the City improperly classified them as employees "engaged in fire protection" and improperly failed to pay them weekly overtime compensation under the federal Fair Labor Standards Act (FLSA). 

The district court granted summary judgment to the plaintiffs, finding that they were not engaged in fire protection work. The City appealed, and the Ninth Circuit affirmed, finding as follows: 

Dispatchers do not have the "responsibility to engage in fire suppression" and do not qualify for the FLSA overtime exemption for employees "engaged in fire protection." Slip op. at 17-18. Aeromedical technicians also do not "engage in fire suppression" and also do not qualify for the FLSA overtime exemption. Slip op. at 19. 

The FLSA's three year statute of limitations applied because the City's violation of the FLSA was "willful," meaning that the City "either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute." Slip op. at 19-21. 

The plaintiffs were entitled to liquidated damages in the amount of the unpaid overtime compensation (i.e. double damages). Slip op. at 21-22. 

The City was entitled to credit overtime payments already made to employees against overtime payments owed to them under the FLSA. However, such offsets must be calculated and could be applied only on a workweek-by-workweek basis. Slip op. at 22-25. 

Haro v. City of Los Angeles is available here

Tuesday, July 15, 2014

Peabody v. Time Warner Cable: Employer May Not Average Commission Wages Across a Monthly Pay Period and Must Apply Such Wages to the Pay Period in Which They Are Actually Paid

Susan Peabody filed suit against Time Warner Cable (TWC), alleging, in part: As an account executive for TWC, she worked an average of 45 hours per week and earned salary plus commissions based on her monthly sales; TWC paid her salary biweekly and paid commissions monthly; in those pay periods that included a commission payment, TWC paid Ms. Peabody more than one and one-half times the minimum wage; in those pay periods that did not include a commission payment, TWC paid Ms. Peabody less than one and one-half times the minimum wage, such that she did not qualify for the commissioned sales exemption.

The district court granted summary judgment for TWC, and Ms. Peabody appealed. The Ninth Circuit affirmed in part (as to a question not at issue here) and asked the California Supreme Court to decide the following question: whether an employer can average an employee’s commission payments over certain pay periods to satisfy the compensation requirements of California commission sales exemption. 

In its decision yesterday, the Supreme Court answered the question in the negative, holding as follows: 

Labor Code section 204 requires employers to pay wages no less than semimonthly, and Time Warner could not apply commission wages to a monthly, rather than semimonthly, pay period. Slip op. at 5-7. 

The commission sales exemption depends on the amount of wages actually paid in a given pay period, and Time Warner could not attribute the commission wages paid in one pay period to an earlier pay period. Slip op. at 7-9. 

The federal Fair Labor Standards Act's exemption for commissioned employees is not analogous to California law because the FLSA does not require employers to pay employees no less than semimonthly. Slip op. at 9. 

Peabody v. Time Warner Cable (7/14/14) --- Cal.4th ---, is available here

Monday, July 14, 2014

Paratransit, Inc. v. UIAB: Employee's Refusal to Sign Disciplinary Notice Constitutes Insubordination, but not Grounds to Deny Unemployment Benefits

In Paratransit, Inc. v. Unemployment Insurance Appeals Board (Medeiros) (2012) 206 Cal.App.4th 1319, the Court of Appeal held that an employee's refusal to sign a disciplinary memorandum in connection with a prior incident of misconduct constituted work-related misconduct, not a good-faith error in judgment, rendering the employee ineligible for unemployment compensation.

On July 3, 2014, the California Supreme Court disagreed. Paratransit, Inc. v. Unemployment Insurance Appeals Board (Medeiros) (7/3/14) --- Cal.4th ---. The Court held as follows:
In this case, an employee refused his employer's repeated orders to sign a written disciplinary notice, because he disputed the notice's factual allegations and thought he was entitled to consult with his union representative first. There is no dispute over whether the employer was within its rights to fire the employee for his insubordination. The only question is whether that single act of disobedience constituted misconduct within the meaning of California's Unemployment Insurance Code. If so, then the employee is disqualified from receiving unemployment compensation benefits. 
Based on the undisputed facts in the administrative record, we conclude the employee's refusal to sign the disciplinary notice was not misconduct but was, at most, a good faith error in judgment that does not disqualify him from unemployment benefits.
The opinion is available here.

Monday, July 7, 2014

Von Nothdurft v. Steck: Apartment Owner Entitled to Credit Rental Value of Apartment Against Minimum Wages Owed to Apartment Manager

Just a quick word on this case. In Von Nothdurft v. Steck (6/26/14), --- Cal.App.4th ---, the defendant hired the plaintiff to work as a resident apartment manager. The parties signed a management agreement that provided that the plaintiff would receive free rent on her apartment. 

The plaintiff sued for unpaid minimum wages, and the case made its way to the Court of Appeal, which held that the management agreement satisfied the requirements of the applicable IWC Wage Order No. 5-2001, such that the defendant was entitled to credit a portion of the apartment's rental value against the minimum wages owed. 

The opinion is available here.

Friday, July 4, 2014

The Declaration of Independence

IN CONGRESS, July 4, 1776.

The unanimous Declaration of the thirteen united States of America,


When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.--Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world. 

He has refused his Assent to Laws, the most wholesome and necessary for the public good.  
He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.  
He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.  
He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.  
He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.  
He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.  
He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.  
He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.  
He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.  
He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.  
He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures. 
He has affected to render the Military independent of and superior to the Civil power.  
He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation: 
For Quartering large bodies of armed troops among us: 
For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:  
For cutting off our Trade with all parts of the world:  
For imposing Taxes on us without our Consent:  
For depriving us in many cases, of the benefits of Trial by Jury: 
For transporting us beyond Seas to be tried for pretended offences 
For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies: 
For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments: 
For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever. 
He has abdicated Government here, by declaring us out of his Protection and waging War against us.  
He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.  
He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.  
He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.  
He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.
In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our Brittish brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

Thursday, July 3, 2014

Harris v. Quinn: US Supreme Court Rules on First Amendment Rights of Hybrid Public Sector and Private Sector Union Members

In Harris v. Quinn, ___ U.S. ___ (6/30/2014), the United States Supreme Court considered "whether the First Amendment permits a State to compel personal care providers to subsidize speech on matters of public concern by a union that they do not wish to join or support." The Court held that it does not, although the opinion's scope and future applicability seem to be limited by the fact that the union members at issue occupy a position somewhere between full-fledged public sector and private sector employees. 

The opinion is written by Justice Alito, with Chief Justice Roberts and Justices Scalia, Kennedy, and Thomas joining. Justice Kagan wrote a dissent, in which Justices Ginsburg, Breyer, and Sotomayor joined. 

As usual, the decision's syllabus does an excellent job of tracing the ins and outs of the majority opinion: 
Illinois' Home Services Program (Rehabilitation Program) allows Medicaid recipients who would normally need institutional care to hire a "personal assistant" (PA) to provide homecare services. Under State law, the homecare recipients (designated "customers") and the State both play some role in the employment relationship with the PAs. Customers control most aspects of the employment relationship, including the hiring, firing, training, supervising, and disciplining of PAs; they also define the PA's duties by proposing a "Service Plan." Other than compensating PAs, the State's involvement in employment matters is minimal. Its employer status was created by executive order, and later codified by the legislature, solely to permit PAs to join a labor union and engage in collective bargaining under Illinois' Public Labor Relations Act (PLRA).  
Pursuant to this scheme, respondent SEIU Healthcare Illinois & Indiana (SEIU-HII) was designated the exclusive union representative for Rehabilitation Program employees. The union entered into collective-bargaining agreements with the State that contained an agency-fee provision, which requires all bargaining unit members who do not wish to join the union to pay the union a fee for the cost of certain activities, including those tied to the collective-bargaining process. A group of Rehabilitation Program PAs brought a class action against SEIU-HII and other respondents in Federal District Court, claiming that the PLRA violated the First Amendment insofar as it authorized the agency-fee provision. The District Court dismissed their claims, and the Seventh Circuit affirmed in relevant part, concluding that the PAs were state employees within the meaning of Abood v. Detroit Bd. of Ed., 431 U.S. 209 .  
Held: The First Amendment prohibits the collection of an agency fee from Rehabilitation Program PAs who do not want to join or support the union. Pp. 8-40.  
(a) In upholding the Illinois law's constitutionality, the Seventh Circuit relied on Abood, which, in turn, relied on Railway Employes v. Hanson, 351 U.S. 225 , and Machinists v. Street, 367 U.S. 740 . Unlike Abood, those cases involved private-sector collective-bargaining agreements. The Abood Court treated the First Amendment issue as largely settled by Hanson and Street and understood those cases to have upheld agency fees based on the desirability of "labor peace" and the problem of " 'free riders[hip].' " 431 U.S., 220-222 , 224 . However, "preventing nonmembers from free-riding on the union's efforts" is a rationale "generally insufficient to overcome First Amendment objections," Knox v. Service Employees, 567 U.S. ___ , ___ , and in this respect, Abood is "something of an anomaly," 567 U.S., at ___ .   
The Abood Court's analysis is questionable on several grounds. The First Amendment analysis in Hanson was thin, and Street was not a constitutional decision. And the Court fundamentally misunderstood Hanson's narrow holding, which upheld the authorization, not imposition, of an agency fee. The Abood Court also failed to appreciate the distinction between core union speech in the public sector and core union speech in the private sector, as well as the conceptual difficulty in public-sector cases of distinguishing union expenditures for collective bargaining from those designed for political purposes. Nor does the Abood Court seem to have anticipated the administrative problems that would result in attempting to classify union expenditures as either chargeable or nonchargeable, see, e.g., Lehnert v. Ferris Faculty Assn., 500 U.S. 507 , or the practical problems that would arise from the heavy burden facing objecting nonmembers wishing to challenge the union's actions. Finally, the Abood Court's critical "labor peace" analysis rests on the unsupported empirical assumption that exclusive representation in the public sector depends on the right to collect an agency fee from nonmembers. Pp. 8-20.  
(b) Because of Abood's questionable foundations, and because Illinois' PAs are quite different from full-fledged public employees, this Court refuses to extend Abood to the situation here. Pp. 20-29.  
(1) PAs are much different from public employees. Unlike full-fledged public employees, PAs are almost entirely answerable to the customers and not to the State, do not enjoy most of the rights and benefits that inure to state employees, and are not indemnified by the State for claims against them arising from actions taken during the course of their employment. Even the scope of collective bargaining on their behalf is sharply limited. Pp. 20-25.  
(2) Abood's rationale is based on the assumption that the union possesses the full scope of powers and duties generally available under American labor law. Even the best argument for Abood's anomalous approach is a poor fit here. What justifies the agency fee in the Abood context is the fact that the State compels the union to promote and protect the interests of nonmembers in "negotiating and administering a collective-bargaining agreement and representing the interests of employees in settling disputes and processing grievances." Lehnert,supra, at 556. That rationale has little application here, where Illinois law requires that all PAs receive the same rate of pay and the union has no authority with respect to a PA's grievances against a customer. Pp. 25-27.  
(3) Extending Abood's boundaries to encompass partial public employees would invite problems. State regulations and benefits affecting such employees exist along a continuum, and it is unclear at what point, short of full-fledged public employment, Abood should apply. Under respondents' view, a host of workers who currently receive payments from a government entity for some sort of service would become candidates for inclusion within Abood's reach, and it would be hard to see where to draw the line. Pp. 27-29.  
(c) Because Abood does not control here, generally applicable First Amendment standards apply. Thus, the agency-fee provision here must serve a " 'compelling state interes[t] . . . that cannot be achieved through means significantly less restrictive of associational freedoms.' " Knox, supra, at ___ . None of the interests that respondents contend are furthered by the agency-fee provision is sufficient. Pp. 29-34.  
(1) Their claim that the agency-fee provision promotes "labor peace" misses the point. Petitioners do not contend that they have a First Amendment right to form a rival union or that SEIU-HII has no authority to serve as the exclusive bargaining representative. This, along with examples from some federal agencies and many state laws, demonstrates that a union's status as exclusive bargaining agent and the right to collect an agency fee from nonmembers are not inextricably linked. Features of the Illinois scheme-e.g., PAs do not work together in a common state facility and the union's role is very restricted-further undermine the "labor peace" argument. Pp. 31-32.  
(2) Respondents also argue that the agency-fee provision promotes the welfare of PAs, thereby contributing to the Rehabilitation Program's success. Even assuming that SEIU-HII has been an effective advocate, the agency-fee provision cannot be sustained unless the union could not adequately advocate without the receipt of nonmember agency fees. No such showing has been made. Pp. 32-34.   
(d) Respondents' additional arguments for sustaining the Illinois scheme are unconvincing. First, they urge the application of a balancing test derived from Pickering v. Board of Ed. of Township High School Dist. 205, Will Cty., 391 U.S. 563 . This Court has never viewed Abood and its progeny as based on Pickering balancing. And even assuming that Pickering applies, that case's balancing test clearly tips in favor of the objecting employees' First Amendment interests. Second, respondents err in contending that a refusal to extend Abood here will call into question this Court's decisions in Keller v. State Bar of Cal., 496 U.S. 1 , and Board of Regents of Univ. of Wis. System v. Southworth, 529 U.S. 217 , for those decisions fit comfortably within the framework applied here. Pp. 34-40.
The full opinion is available here. SCOTUSblog has a number of interesting articles on the decision here