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Wednesday, October 8, 2014

Gomez v. Campbell-Ewald Co.: Rejected Settlement Offer Does Not Moot Individual or Putative Class Claims

Gomez v. Campbell-Ewald Company, ___ F.3d ___ (9th Cir. 9/19/2014) concerns an issue that has arisen more frequently in employment class actions: whether a rejected settlement offer moots individual and/or class claims. See Genesis Healthcare Corp. v. Symczyk, ___ U.S. ___, 133 S.Ct. 1523 (2013) (discussed here).

In Gomez, the plaintiff filed an individual and putative class action under the Telephone Consumer Protection Act (TCPA). The defendant made a Rule 68 offer of judgment for the full amount of the plaintiff’s individual claim, and the plaintiff rejected the offer. After the district court dismissed the action on grounds not relevant here, the plaintiff appealed. The defendant then moved to dismiss the appeal for lack of jurisdiction, arguing that the personal and putative class claims were mooted by Gomez’s refusal to accept the settlement offer. The Ninth Circuit rejected this argument, holding as follows:

Under Ninth Circuit precedent, "an unaccepted Rule 68 offer that would fully satisfy a plaintiff’s claim is insufficient to render the [individual] claim moot," and such an offer, even if made before the plaintiff moves for class certification, does not render the class claims moot. Slip op. at 6-8.

Genesis Healthcare did not change this result. Genesis Healthcare was a putative collective action under the Fair Labor Standards Act (FLSA), rather than a Rule 23 class action. Slip op. at 8-9. As the Supreme Court stated in Genesis Healthcare, and as a number of courts have held since, the precedents established in FLSA collective actions do not apply in Rule 23 class actions.

The opinion is available here.

Monday, September 29, 2014

Kao v. University of San Francisco: Employer Not Required to Enter into Interactive Process before Requiring Fitness-for-Duty Exam

In Kao v. University of San Francisco (8/2/14, pub. 9/2/14) --- Cal.App.4th ---, plaintiff John S. Kao alleged that the University of San Francisco (USF) violated the Fair Employment and Housing Act (FEHA) and other California laws by directing him to have a fitness-for-duty exam (FFD) after faculty members and school administrators reported that his behavior was frightening them, and then terminating his employment when he refused to participate in the examination. He appealed from a judgment against him after jury trial, and the Court of Appeal affirmed, holding as follows:

The law did not require USF to engage in the interactive process because Kao never acknowledged having a disability or sought any accommodation for one.

Unless a disability is obvious, it is the employee’s burden to initiate the interactive process. (Gelfo v. Lockheed Martin Corp (2006) 140 Cal.App.4th 34, 62, fn. 22; 2 Wilcox, Cal. Employment Law (2013) § 41.51[3][b], p. 41-278.) Kao cannot plausibly claim it should have been obvious to USF that he was disabled because he never admitted any disability in the workplace. When a disability is not obvious, the employee must submit “reasonable medical documentation confirm[ing] [its] existence.” (Cal. Code Regs., tit. 2, § 11069, subd. (d)(2).) Kao did nothing of the sort. He provided no information to USF after learning of the university’s concerns other than documents at the October 2008 meeting with [a USF administrator], which were aimed at showing that those concerns were illusory.
Slip op. at 14-15.

USF presented substantial evidence that the FFD was "job related and consistent with business necessity" as required by FEHA, particularly evidence that the FFD was necessary to determine whether Kao posed a danger to others in the workplace. Slip op. at 15-16.

USF did not violate the Unruh Act's prohibition against disability discrimination because "[t]he evidence did not as a matter of law establish that USF had a discriminatory motive in keeping Kao away from campus." Slip op. at 16-17. 

The opinion is available here.

Friday, September 26, 2014

Jimenez v. Allstate: District Court Did Not Err in Certifying Off-the-Clock Class Action

In Jimenez v. Allstate Insurance Company ___ F.3d ___ (9th Cir. 9/3/14), the defendant, Allstate, appealed from an order granting Rule 23 class certification district court’s grant of class certification in an action alleging that it had a practice or unofficial policy of requiring its claims adjusters to work unpaid off-the-clock overtime in violation of California law. The Ninth Circuit affirmed, holding as follows:

The plaintiff satisfied the commonality requirement of Federal Rule 23(a)(2) by identifying common questions, the truth or falsity of which would "resolve an issue that is central to the validity of each claim in one stroke":
(i) whether class members generally worked overtime without receiving compensation as a result of Defendant’s unofficial policy of discouraging reporting of such overtime, Defendant’s failure to reduce class members’ workload after the reclassification, and Defendant’s policy of treating their pay as salaries for which overtime was an “exception”; (ii) whether Defendant knew or should have known that class members did so; and (iii) whether Defendant stood idly by without compensating class members for such overtime.
These common questions constituted the "glue" necessary to say that "examination of all the class members’ claims for relief will produce a common answer to the crucial question[s]" raised by the plaintiffs’ complaint. Slip op. at 7-11. 

The plaintiff could use statistical sampling and representative testimony to prove liability, "so long as the use of these techniques is not expanded into the realm of damages." The district court "was careful to preserve Allstate’s opportunity to raise any individualized defense it might have at the damages phase of the proceedings" and "preserved the rights of Allstate to present its damages defenses on an individual basis." As a result, the district court did not err by certifying the class. Slip op. at 11-15.

The opinion is available here.

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.