Cal. Supreme Court Issues Important Decision in Consumer Protection Case

On January 29, 2009, The California Supreme Court issued an important ruling in a case under the California Consumer Legal Remedies Act ("CLRA"). Cal. Civil Code Section 1750, et seq. The Court in Meyer v. Sprint Spectrum L.P. held that a plaintiff has no standing to sue under the CLRA without some allegation that allegedly unlawful practice resulted in some kind of tangible increased cost or burden to plaintiff, even if the plaintiff seeks only injunctive relief to prevent an unlawful practice. In this case, the Court held that the plaintiff lacked standing to sue for injunctive relief to prohibit the defendant from placing an unconscionable arbitration provision in its service contract, where the defendant had no yet invoked the arbitration provision. Obviously, this is a bad ruling for consumers and consumer advocates battling mandatory pre-dispute arbitration agreements.

Ninth Circuit: Federal Law Does Not Preempt State Wage Claims

On January 27, 2009, the Ninth Circuit Court of Appeal held that the Federal Railway Labor Act does not preempt a putative class action law suit against an airline company for willfully failing to pay former employees all wages due upon termination pursuant to Oregon law. Moore-Thomas v. Alaska Airlines, Inc.

Ninth Circuit Court of Appeal Hears Oral Argument in Wal-Mart National Gender Discrimination Class Action

On March 24, 2009, an en banc panel of eleven judges heard oral argument in Dukes v. Wal-Mart Stores, Inc., a national gender discrimination class action. When Federal District Court Judge Martin Jenkins certified Dukes as a class action in 2004, it became the largest case discrimination class action in the nation's history.

A three judge panel of the Ninth Circuit Court of Appeal affirmed the class certification order in February, 2007, then modified its decision in December, 2007, again affirming certification, but the Ninth Circuit subsequently granted Wal-Mart's petition for en banc review. So Tuesday, the Court once again heard arguments on whether to affirm the District Court order.

Kim Kralowec of the very fine UCL Practitioner blog has given an excellent live report and follow-up report on the oral argument. Kim writes, in part:

Judge Pamela Rymer asked lead plaintiffs' counsel Brad Seligman, "in 25 words or less, what is the claim in this case?" Seligman said "uniform delegation of discretion regarding pay decisions in a business with a culture of discrimination."

15 words. This -- boiling such a complicated case down to such a concise statement -- is very high-level lawyering, folks. You can listen to the oral argument on the web site run by class counsel.

US Supreme Court Extends Anti-Retaliation Protections

On January 26, 2009, the United States Supreme Court in Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee held that the Civil Rights Act’s Title VII antiretaliation provision’s protection extends to an employee who speaks out about discrimination in answering questions during an employer’s internal investigation. Because the Civil Rights Act does not define the term "oppose" in its anti-retaliation provisions, it carries its ordinary dictionary meaning of resisting or contending against, and a person can "oppose" discrimination by responding to someone else’s questions as well as by provoking discussion. The Court therefor held that an employee’s disapproving account of coworker’s sexually obnoxious behavior toward her in response to questioning during an internal investigation constituted "opposition" to an unlawful employment practice and was covered by the Act’s antiretaliation provision.

Although Crawford is not a wage and hour case, it will not be difficult to make the jump from Title VII's anti-retaliation provisions to the the anti-retaliation provisions of the federal wage and hour law, the Fair Labor Standards Act ("FLSA"). In other words, advocates for employees will be able to use Crawford use it to help protect employees from retaliation when they complain about illegal wage practices, whether the employee or the employer initiates the conversation.

Court of Appeal Issues Class Action "Virtual Representation" Decision

On January 22, 2009, the Second District Court of Appeal published its previous decision in Deleon v. Verizon Wireless, one of a growing list of cases that considers when the filing of an earlier class action will prohibit the filing of a later class action. In Deleon, the Court held that where the plaintiff in a class action pleads the same set of operative facts violating same primary rights as raised in a prior class action against the same defendant -- that employer made unlawful chargebacks against employees’ commissions -- even though parties sought different forms of relief, the primary right invaded was identical, and the latter class action was barred by res judicata to the extent that the plaintiff sought relief on behalf of class members who had settled the prior class action. The Court also held that the trial court abused its discretion in denying the plaintiff leave to amend his complaint to state claims that accrued after the settlement date of the prior action.

Court of Appeal Issues Decision on Tip Pools

In Lu v. Hawaiian Gardens Casino, the Second District Court of Appeal on January 22, 2009, held: (1) Labor Code section 351 does not prohibit tip pooling in casinos; and (2) Although sections 351 and 450 contain no private right of action, they do serve as predicates for actions under the Unfair Competition Law. Not surprisingly, the Court confirmed that casinos and their "agents" -- that is, “every person other than the employer having the authority to hire or discharge any employee or supervise, direct, or control the acts of employees" -- may not take any part of a gratuity given to an employee by a patron.

Court of Appeal Holds that Waiting Time Penalties are Not Available Under UCL

On January 21, 2009, the First District Court of Appeal issued a decision that has a number of bad points for employees. A little background: the plaintiff was employed by Bank of America, and resigned effective May 11, 2006. B of A did not pay him his final wages until May 16, 2006. Plaintiff filed a class action lawsuit on October 22, 2007, more than a year later. The trial court granted B of A's motion for judgment on the pleadings, and the plaintiff appealed.

The Court of Appeal held: (1) As held in McCoy v. Superior Court (Kimco) (2007) a 1-year statute of limitations applies to Section 203 claims where the employer pays the employee all earned wages before the employee sues; (2) The trial court did not abuse its discretion in denying the plaintiff leave to amend to name a new class representative plaintiff whose claims were not barred by the 1-year statute of limitations; and (3) Labor Code Section 203 waiting time penalties cannot be recovered as restitution under the Unfair Competition Law, California Business and Professions Code Section 17200.

I hate to say it, but this is one of those cases that I wouldn't have pursued. As the saying goes, bad facts make bad law.

Steven G. Pearl to Speak at Advanced Wage and Hour Conference

I will speak at the California Employment Lawyers Association's ("CELA") Fifth Annual Advanced Wage and Hour Conference. I will moderate a panel addressing the use of obtain injunctions and pre-judgment writs of attachment in wage and hour cases. The panel, "Starting off on the Right Foot: Intake, Investigation, and Provisional Remedies," will include Hon. Victor Greenberg of the Los Angeles Superior Court.

I am the primary organizer of this year's conference. CELA is a statewide organization of approximately 750 attorneys representing employees in employment cases. I serve as co-chair of CELA's Wage and Hour Committee.

Cal. Supreme Court Sets Hearings in Wage and Hour Cases

The California Supreme Court has set hearings in two cases that we're watching. On March 8, the Court will hear arguments in Arias v. Superior Court (Angelo Dairy) and Amalgamated Transit Union v. Superior Court (First Transit, Inc.).

In Arias, the Court will consider the following issues:

(1) Must an employee who is suing an employer for labor law violations on behalf of himself and others under the Unfair Competition Law (Bus. & Prof. Code, section 17203) bring his representative claims as a class action? (2) Must an employee who is pursuing such claims under the Private Attorneys General Act (Lab. Code, section 2699) bring them as a class action?

It seems to me that the Court is likely to answer: (1) Yes; (2) No. But I'm not on the Court.

In Amalgamated, the Court will consider the following:

(1) Does a worker's assignment to the worker's union of a cause of action for meal and rest period violations carry with it the worker's right to sue in a representative capacity under the Labor Code Private Attorneys General Act of 2004 (Lab. Code, sec. 2698 et seq.) or the Unfair Competition Law (Bus. & Prof. Code, sec. 17200 et seq.)? (2) Does Business and Professions Code section 17203, as amended by Proposition 64, which provides that representative claims may be brought only if the injured claimant "complies with Section 382 of the Code of Civil Procedure," require that private representative claims meet the procedural requirements applicable to class action lawsuits?

I think the Court is likely to answer: (1) Yes; (2) Yes. Let's see how my predictions do.