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Tuesday, July 30, 2013

Pasadena Bar Association Wage and Hour Update

I have been invited to present a program on recent developments in wage and hour law for the Pasadena Bar Association Labor and Employment Law Section. The program will be September 10, 2013, from 11:30 to 1:30 at Noor Restaurant in Pasadena. More information will be available shortly from the Pasadena Bar Association.  

Wednesday, July 24, 2013

Wisdom v. AccentCare: Supreme Court Dismisses Case on Unconscionability of Arbitration Agreement

In Wisdom v. AccentCare, Inc. (2012) 202 Cal.App.4th 591 (discussed here) the Court of Appeal affirmed a trial court order denying a motion to compel arbitration where the plaintiffs (six individuals) sought monetary, injunctive, and declaratory relief based on allegations that their employer required them to work off the clock. The Court of Appeal held that the arbitration agreement was both procedurally and substantively unconscionable.

The California Supreme Court granted review (discussed here) stating the issue on review as follows:
Is an arbitration clause in an employment application that provides "I agree to submit to binding arbitration all disputes and claims arising out of the submission of this application" unenforceable as substantively unconscionable for lack of mutuality, or does the language create a mutual agreement to arbitrate all such disputes? (See Roman v. Superior Court (2009) 172 Cal.App.4th 1462.)
I received notice today that the parties have settled, and the Supreme Court has dismissed the case.  

Thursday, July 18, 2013

Reminder: State Bar Advanced Wage and Hour Conference: July 31, San Francisco

It's not too late to sign up for the State Bar Labor and Employment Law Section's Third Annual Advanced Wage and Hour Conference on July 31, 2014, in San Francisco. This year's Conference will include:
Recent Developments Update 
Litigating and Resolving Cases Involving Insolvency Issues 
The Supreme Court of the United States and Its Impact on Wage and Hour Practice 
The View From 30,000 Feet: Where We’ve Been and Where We’re Headed  
A View From the Bench: Judges' Perspective on Wage and Hour Practice
It's going to be a great program, and cheap at just $150 for section members and $225 for non-members.  

And even if you can't make it to San Francisco for the Conference, you can attend individual sessions or the whole day via webcast.  

The brochure and registration are available on the Labor and Employment Law Section's web site.  I hope to see you there!  

Monday, July 15, 2013

Please Nominate Our Blog for the ABA Journal Blawg 100!

Every year the ABA Journal announces its "Blawg 100" of notable law blogs, and I would love to be included on that list. That will happen only if you go to the Blawg 100 web page and nominate me.  Do it today.  It will make you feel good.  

Thanks so much for your support.  I appreciate it.  

Friday, July 12, 2013

Ayala v. Antelope Valley Newspapers: Supreme Court Orders Supplemental Briefing on Martinez v. Combs

In Ayala v. Antelope Valley Newspapers, Inc. (9/19/12, pub. 10/17/12) 210 Cal.App.4th 77 (discussed here), the plaintiffs sought to certify a class of newspaper home delivery carriers, alleging that AVP improperly classified them as independent contractors rather than employees. The trial court held that individual issues predominated because of numerous variations in how the carriers performed their jobs. The Court of Appeal reversed in part, holding that such variations did not preclude class certification under S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341.

On January 30, the Supreme Court granted the defendant's petition for review. Case No. S206874. And on June 26, the Court ordered the parties to submit letter briefs: 

discussing the relevance of Martinez v. Combs (2010) 49 Cal.4th 35, 52-57, 73, and IWC wage order No. 1-2001, subdivision 2(D)-(F) (Cal. Code Regs., tit. 8, § 11010, subd. 2(D)-(F)), to the issues in this case. (See also Sotelo v. Medianews Group, Inc. (2012) 207 Cal.App.4th 639, 660-662; Bradley v. Networkers Internat., LLC (2012) 211 Cal.App.4th 1129, 1146-1147.)  
Interesting.  Martinez (discussed here) held that the IWC Wage Order defines an employer as one who, directly or indirectly, or through an agent or any other person, (1) engages, (2) suffers or permits any person to work, or (3) exercises control over the wages, hours, or working conditions of any person. Martinez held further that Labor Code 1194 (minimum wage and overtime) adopts this broad, disjunctive definition of "employer."  

Sotelo (discussed here) affirmed a trial court order denying certification of a class of newspaper carriers, stating that the trial court should have analyzed employment vs. independent contractor status under Martinez, but that the failure to do so was harmless error.  

Bradley (discussed here) reversed a trial court order denying certification, holding that common evidence would be used to determine whether the class members were independent contractors or employees, whether the trial court ultimately used the standard enunciated in Borello or the one in Martinez

As always, stay tuned here for further developments.  This is going to be interesting.    

Thursday, July 11, 2013

Mendiola v. CPS Security Solutions: Court Of Appeal Issues Mixed Ruling Re. On Call Time and Sleep Time In Security Guard Action

Mendiola v. CPS Security Solutions, Inc. (7/3/13) --- Cal.App.4th --- presents a couple of interesting issues on compensable work time, on call time, and sleep time.

The plaintiffs worked as security guards for CPS, which provides security guard services at construction sites. CPS designates some of its guards as "trailer guards," who remain on the work site in residential trailers 16 hours per day during the week (eight hours "on duty" and eight hours "on call") and 24 hours per day on the weekends (16 hours "on duty" and eight hours "on call"). During the nighttime on call periods, CPS generally compensates the guards only for time spent actively conducting investigations.

The plaintiffs filed a putative class action, and the trial court granted certification.  The court then granted the guards' motion for summary adjudication and motion for a preliminary injunction requiring CPS to compensate them for all on call time spent on the premises. CPS appealed, and the Court affirmed in part and reversed in part.  

First, the Court affirmed the trial court's finding that the trailer guards' on call time was "hours worked," as defined by the applicable Wage Order (Order No. 4-2001). Slip op. at 16-27. 
By their presence on site during the on-call hours, the guards perform an important function for their employer and its clients: they deter theft and vandalism. CPS promises its clients security services throughout the night and for 24 hours on Saturday and Sunday, and would be in breach if no security guards were present between 9:00 p.m. and 5:00 a.m. The parties' On-Call Agreements designate that period as “free time,” but it is clear from the Agreements and the stipulated facts that trailer guards are not free to leave at will. A guard may leave only when and if a reliever is available. From this, it can reasonably be said that the restrictions on the on-call time are “primarily directed toward the fulfillment of the employer's requirements,” and the guards are “substantially restricted” in their ability to engage in private pursuits.
Slip op. at 21.  

The Court emphasized that the trailer guards did not "enjoy the normal freedoms of a typical off-duty worker" during their on call hours. Slip op. at 22-23. 

The Court declined to adopt the federal rule embodied in 29 CFR 785.23 that employees who reside on their employers' premises are not deemed to be working at all times that they are on premises. First, the trailer guards here did not have "complete freedom from all duties" and could not leave the premises during their on call time. Slip op. at 24-25. Second, the Court found no evidence of the IWC's intent to adopt the federal standard, and its adoption would eliminate the greater protections available to employees under California law.  Slip op. at 26-27. 

Second, the Court reversed the trial court's holding that CPS could not deduct up to eight hours of regularly scheduled "sleep time" when the trailer guards worked 24 hour shifts.  Slip op. at 27. Relying on Monzon v. Schaefer Ambulance Service (1990) 224 Cal.App.3d 16 and Seymore v. Metson Marine, Inc. (2011) 194, Cal.App.4th 361, the Court held that the ability to deduct for sleep time is not limited to the transportation industry, which is covered by Wage Order 9-2001. 
While that wage order contained a specific provision permitting an employer and employee to agree in writing to exclude sleep time from compensation, neither court relied on the provision to exclude the eight hours of sleep time. Instead, both courts looked to the wage order's definition of “hours worked” and found it comparable to the federal definition.
Slip op. at 30. The Court then held that the employer and trailer guard employees had entered into an agreement to exclude eight hours of sleep time from the guards' compensable time.  Slip op. at 32. 

The opinion is available here.  

Wednesday, July 10, 2013

Watkins v. Vital Pharmaceuticals, Inc.: Undisputed Declaration On Sales Of Product Establishes CAFA Jurisdiction In False Advertising Class Action

In Watkins v. Vital Pharmaceuticals, Inc., ___ F.3d ___ (7/2/13), the plaintiff filed a putative nationwide class action in Superior Court, alleging that the defendant, Vital, erroneously marketed and labeled its "ZERO IMPACT" protein bars as having little to no impact on blood sugar. He alleged that "the aggregate damages sustained by the Class are likely in the millions of dollars." 

Vital removed the case to district court, filing two declarations with the notice of removal: (1) a declaration of counsel stating that the amount in controversy exceeded $5 million; and (2) a declaration stating that nationwide sales of the bars for the last four years exceeded $5 million. The district court remanded the case sua sponte, holding that Vital did not meet its burden of proving by a preponderance of the evidence that the amount in controversy requirement of the Class Action Fairness Act (CAFA) was met.  

The Ninth Circuit reversed, holding: 

It had jurisdiction to review the district court's order.  Slip op. at 5-6. 

The declaration stating that nationwide sales of the bars exceeded $5 million was sufficient to establish that the amount in controversy exceeded $5 million.  Slip op. at 6-7.  

The opinion is available here

Tuesday, July 9, 2013

Roth v. CHA Hollywood Medical Center: Ninth Circuit Clarifies Time Period For CAFA Removal

In Roth v. CHA Hollywood Medical Center (9th Cir. 6/27/13) ___ F.3d ___, the Ninth Circuit reversed a district court order remanding a putative wage and hour class action to state court.  The holding is pretty straight-forward: 
[28 U.S.C.] Section 1446(b)(1) and (b)(3) specify that a defendant must remove a case within thirty days of receiving from the plaintiff either an initial pleading or some other document, if that pleading or document shows the case is removable.  However, these two periods do not otherwise affect the time during which a defendant may remove. That is, the two periods specified in § 1446(b)(1) and (b)(3) operate as limitations on the right to removal rather than as authorizations to remove.  
We hold that a defendant who has not lost the right to remove because of a failure to timely file a notice of removal under § 1446(b)(1) or (b)(3) may remove to federal court when it discovers, based on its own investigation, that a case is removable. 
Slip op. at 3-4.  

In other words, the two thirty-day time periods listed above are not the only times that a defendant may remove a case under CAFA, and a defendant may not remove "if and only if" the initial pleading or other document shows grounds for removal. Rather, a defendant may remove based on independent information gathered outside these thirty-day periods, provided that it has not previously waived the right to remove by failing to do so where the plaintiff's initial pleading or other document shows that the case is removable. 

Roth v. CHA Hollywood Medical Center is available here

Monday, July 8, 2013

The Passing of My Friend and Mentor John D. Weiss

My friend and mentor John D. Weiss passed away on Saturday. 

Many of you who read this blog knew John, or J.D., as most called him. He practiced employment law for more than 30 years, representing individuals and advising businesses on compliance issues. He also frequently helped non-profit entities gain and keep their 501(c)(3) status. For the last several years he focused on helping people resolve disputes as a mediator. 

John was an avid bicycler, baker of challah, teacher of baking challah, and musician. He was one of the most gentle, loving, genuine people I have ever met. He was a true mensch (a word sometimes used too loosely): one to admire and emulate, one of high character, integrity, dignity. He also was just fun to hang out with. 

John offered many lessons in the things he said and the way he lived his life, but not at all in a pedantic or heavy-handed way. At the funeral yesterday, a couple of people remembered John saying, "The most important person in the world is the person you're talking to -- right now." And that was how he treated people. He listened, he asked questions, he paid attention to what you had to say. 

John fought brain cancer for about the last three years. He told me that he was going to kick its ass back to whatever rock it had come out from under, and I believed him.  His conviction and optimism gave me strength and hope.  

When John was taking chemotherapy at Cedars, he would bring his guitar to play for everyone -- the other patients and the nurses. After he finished chemo, he continued to go to Cedars with his guitar.  He was grateful for the opportunity to help lift their burden. 

The Rabbi at John's funeral yesterday, Tsafi Lev, said something very profound. "Many of you are thinking, 'Why do bad things happen to good people?' The answer is, they don't." 

Rabbi Lev then spoke about John's response to the news that the experimental treatment he was trying had not worked, and that the cancer was terminal. John said that he was honored that the treatment, even though it had not helped him, would help others who would follow him.  In the face of his own passing, John chose to see the good. He felt honored by the fact that his treatment would help others.  Honored to be in a position to help other people.  

Even though John has passed, he did kick cancer's ass -- just like he said he would -- by continuing to live his life the way he always had: with love and compassion, hope, integrity, devotion to his family. 

John is survived by his lovely wife Janis and their three beautiful children: Sarah, Jacob, and Charlotte. John's physical presence in the world will be missed so dearly by so many. May the memory of this righteous man be a blessing. 

Leos v. Darden Restaurants: Court Reverses Order Denying Motion To Compel Arbitration, Finds Agreement Not Unconscionable

In Leos v. Darden Restaurants, Inc. (6/4/13, pub. 6/24/13) --- Cal.App.4th ---, the Court of Appeal reversed a trial court order denying a defendant's motion to compel arbitration in a sexual harassment, retaliation, and wrongful termination action. The Court held:
  • The employer did not present evidence that the plaintiffs' employment or any relevant transaction "involved interstate commerce," and the Federal Arbitration Act (FAA) did not apply, but application of the FAA would not have changed the outcome. Slip op. at 4-6. 
  • The arbitration agreement was substantively unconscionable because the employer presented it as a condition of employment, and the plaintiffs could not negotiate it. Slip op. at 8-9. 
  • The agreement was not substantively unconscionable: 
    • The provision that it "may be updated from time to time as required by law" did not render the agreement illusory. Slip op. at 9-12. 
    • Clauses setting limits on discovery, the length of time before the arbitration hearing, and the length of the hearing itself were "subject to change upon the arbitrator's determination of good cause" and did not render the arbitration provision unconscionable. Slip op. at 12-16. 
    • The fact that the employees would have to pay for a court reporter, if they wanted one, was not substantively unconscionable. Slip op. at 16-17. 
    • Language allowing either party to request "available temporary or preliminary injunctive remedies from an appropriate court" mirrored similar provisions in the California Arbitration Act (CAA) and did not render the agreement "unfairly one-sided." Slip op. at 17-22. 
    • The provision prohibiting class and collective actions did not apply to this action by two individuals and in any case did not render the agreement unenforceable. Slip op. at 22-23. Citing Truly Nolen of America v. Superior Court (2012) 208 Cal.App.4th 487, 514–515; Nelsen v. Legacy Partners Residential, Inc. (2012) 207 Cal.App.4th 1115, 1132–1134. 
It will be interesting to see whether the California Supreme Court grants review or allows the opinion to stand.  The parties did not petition for review in Truly Nolen (discussed here) and the Court denied review in Nelsen v. Legacy Partners (discussed here), but it granted review in Iskanian v. CLS Transportation (discussed here), which held that the NLRB incorrectly decided D.R. Horton.

While we're all waiting, 
Leos v. Darden is available here.  

Wednesday, July 3, 2013

Vasquez v. Greene Motors: Supreme Court Issues Another Arbitration Grant-And-Hold

In Vasquez v. Greene Motors, Inc. (3/27/13) 214 Cal.App.4th 1172, the Court of Appeal found that a standard arbitration agreement contained in many automobile sales contracts was not unconscionable and reversed a trial court order denying a motion to compel arbitration. The decision follows two other decisions regarding the same arbitration agreement already before the California Supreme Court:
Sanchez v. Valencia Holding Co. LLC (2011) 201 Cal.App.4th 74 (discussed here) rev. granted 3/21/12 (Case No. S199119) (discussed here); and  
Goodridge v. KDF Automotive Group, Inc. (2012) 209 Cal.App.4th 325 (discussed here), rev. granted 12/19/12 and briefing deferred pending Sanchez v. Valencia Holding Co. (Case No. S206153) (discussed here). 
As anticipated, the California Supreme Court on June 27, 2013, granted review (Case No. S210439and held briefing pending its decision in Sanchez v. Valencia Holding Co.  

Tuesday, July 2, 2013

University of Texas Southwestern Medical Center v. Nassar: Supreme Court Requires "But-For" Causation In Title VII Retaliation Actions

In University of Texas Southwestern Medical Center v. Nassar, ___ U.S. ___ (6/24/13), the Supreme Court considered the plaintiff's burden of proof in a Title VII retaliation action. In an opinion written by Justice Kennedy, with Chief Justice Roberts and Justices Scalia, Thomas, and Alito joining, the Court began with the premise that "causation in fact—i.e., proof that the defendant's conduct did in fact cause the plaintiff's injury—is a standard requirement of any tort claim." 

The Court then reviewed the history of Title VII's enactment in 1964, its amendment in 1991, the cases on the proof required in Title VII discrimination and retaliation claims, and its decision in Gross v. FBL Financial Services, Inc., 557 U. S. 167 (2009), which required the plaintiff to demonstrate but-for causation in an action under the Age Discrimination in Employment Act (ADEA). 

The Court then held that Title VII's anti-retaliation provision, like the ADEA, requires proof of but-for causation: 
[Title VII] like the [ADEA], makes it unlawful for an employer to take adverse employment action against an employee "because" of certain criteria. Cf. 29 U. S. C. §623(a)(1). Given the lack of any meaningful textual difference between the text in this statute and the one in Gross, the proper conclusion here, as in Gross, is that Title VII retaliation claims require proof that the desire to retaliate was the but-for cause of the challenged employment action.  
The Court rejected the argument that the "motivating factor" standard, which applies in Title VII discrimination cases, should apply equally in Title VII retaliation cases:
It must be acknowledged that because Title VII defines "unlawful employment practice" to include retaliation, the question presented by this case would be different if §2000e-2(m) extended its coverage to all unlawful employment practices. As actually written, however, the text of the motivating-factor provision, while it begins by referring to "unlawful employment practices," then proceeds to address only five of the seven prohibited discriminatory actions—actions based on the employee's status, i.e., race, color, religion, sex, and national origin. This indicates Congress' intent to confine that provision's coverage to only those types of employment practices. The text of §2000e-2(m) says nothing about retaliation claims. Given this clear language, it would be improper to conclude that what Congress omitted from the statute is nevertheless within its scope.
The Court then made a number of public policy arguments for adopting the more narrow but-for causation standard, including noting that retaliation claims "are being made with ever-increasing frequency" and that the lower standard "could also contribute to the filing of frivolous claims."

Finally, the Court considered the EEOC's "long-standing agency views" that the motivating-factor standard should apply. The Court held that the EEOC's views "lack the persuasive force that is a necessary precondition to deference" under Skidmore v. Swift & Co., 323 U. S. 134 (1944).  

The dissent, written by Justice Ginsburg and joined by Justices Breyer, Sotomayor, and Kagan, argues for a number of textual and public policy reasons that the Court should apply a motivating factor standard to retaliation cases. The dissent concludes: 
The Court holds, at odds with a solid line of decisions recognizing that retaliation is inextricably bound up with status-based discrimination, that §2000e-2(m) excludes retaliation claims. It then reaches outside of Title VII to arrive at an interpretation of "because" that lacks sensitivity to the realities of life at work. In this endeavor, the Court is guided neither by precedent, nor by the aims of legislators who formulated and amended Title VII. Indeed, the Court appears driven by a zeal to reduce the number of retaliation claims filed against employers. See ante, at 18-19. Congress had no such goal in mind when it added §2000e-2(m) to Title VII. See House Report Part II, at 2. Today's misguided judgment, along with the judgment in Vance v. Ball State Univ., post,p. 1, should prompt yet another Civil Rights Restoration Act.
I think it goes without saying that Congress is not likely to pass any such legislation any time in the near future.  

University of Texas Southwestern Medical Center v. Nassar is here. The SCOTUSblog page for it is here.  

Monday, July 1, 2013

Vance v. Ball State University: Supreme Court Limits Employer Liability In Title VII Actions

In Vance v. Ball State University ___ U. S. ___ (6/24/13) the Supreme Court considered who qualifies as a “supervisor” for purposes of establishing vicarious liability in a Title VII discrimination and harassment action. Here is the case in a nutshell, taken from the majority opinion written by Justice Alito (joined by Chief Justice Roberts and Justices Scalia, Kennedy, and Thomas): 
In this case, we decide a question left open in Burlington Industries, Inc. v. Ellerth, 524 U. S. 742 (1998), and Faragher v. Boca Raton, 524 U. S. 775 (1998), namely, who qualifies as a "supervisor" in a case in which an employee asserts a Title VII claim for workplace harassment? 
Under Title VII, an employer's liability for such harassment may depend on the status of the harasser. If the harassing employee is the victim's co-worker, the employer is liable only if it was negligent in controlling working conditions. In cases in which the harasser is a "supervisor," however, different rules apply. If the supervisor's harassment culminates in a tangible employment action, the employer is strictly liable. But if no tangible employment action is taken, the employer may escape liability by establishing, as an affirmative defense, that (1) the employer exercised reasonable care to prevent and correct any harassing behavior and (2) that the plaintiff unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided. Id., at 807; Ellerth, supra, at 765. Under this framework, therefore, it matters whether a harasser is a "supervisor" or simply a co-worker. 
We hold that an employee is a "supervisor" for purposes of vicarious liability under Title VII if he or she is empowered by the employer to take tangible employment actions against the victim.... 
Slip op. at 1-2.  

What does it mean to be "empowered by the employer to take tangible employment actions against the victim"?  Funny you should ask.  

Citing Ellerth, the Court held that one is so empowered when one may effect a "significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits." Slip op. at 9. The Court rejected the position adopted by the EEOC and several lower courts that a supervisor is one with the ability to "exercise significant direction over another's daily work." Ibid.  

Writing in dissent, Justice Ginsburg (joined by Justices Breyer, Sotomayor, and Kagan) argued that the Court should follow the approach adopted by the EEOC after Ellerth and Faragher that a supervisor is either: (1) an individual authorized "to undertake or recommend tangible employment decisions affecting the employee," including "hiring, firing, promoting, demoting, and reassigning the employee"; or (2) an individual authorized "to direct the employee's daily work activities."  

The opinion is available here.