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Friday, September 27, 2013

Rodriguez v. RWA Trucking: Federal Law Preempts Certain Claims in Action by Truck Drivers, Does Not Preempt Others

In Rodriguez v. RWA Trucking Company, Inc. (9/12/13) --- Cal.App.4th ---, the Court of Appeal considered a judgment rendered in favor of a class of truck drivers who were treated as independent contractors. The Court held that federal law preempts claims that the trucking company profited by charging the drivers for liability, physical damage, and cargo insurance, but it does not preempt the claim that the company unlawfully charged the drivers for workers compensation insurance.

Claim for Unlawfully Transacting Insurance

RWA required each of its drivers to maintain automobile liability insurance, physical damage insurance, and cargo insurance for his or her vehicle. RWA gave each driver the option of accepting coverage under RWA’s fleet policies; if the driver elected such coverage, RWA deducted the cost of the insurance from the driver’s earnings. During some years, RWA also deducted an additional administrative fee from the drivers’ earnings.

The plaintiff alleged that this practice constituted transacting insurance without a license in violation of the California Insurance Code. The trial court agreed, but the Court of Appeal reversed.

First, the Court assumed without deciding that the plaintiff was right, and RWA's practices constituted transacting insurance under California law. Second, the Court summarized a number of federal decisions and found that federal law permits motor carriers to charge back the cost of liability insurance to their drivers and to profit from such chargebacks. Third, the Court concluded that if California's Insurance Code prohibits RWA from charging back its liability insurance costs to its drivers, that law is preempted by federal law. Slip op. at 19.

Claim for Workers Compensation Chargebacks

RWA charged the drivers for its workers' compensation insurance. The plaintiff alleged that this practice violated California Labor Code section 3751 and the Unfair Competition Law (UCL). RWA argued that the the Federal Aviation Administration Authorization Act of 1994 (FAAAA), title 49 United States Code section 14501 et seq., preempted the workers compensation law in this respect. The trial court agreed with the plaintiff, and the Court of Appeal affirmed.

The Court summarized the law on FAAAA preemption as follows: 
FAAAA preempts state laws that “relate[]” to a “price, route, or service of any motor carrier.” Taken together, the cases discussed above hold that a state law “relates” to federal law if it has “a connection with” or “reference to” the subject of the federal law. Preemption may occur even if the state law’s effect “is only indirect,” but there is no preemption if that effect is only “tenuous, remote, or peripheral.” Generally applicable state labor laws are not preempted if they do not “acutely interfere[] with the forces of competition” or prevent carriers from making “their own decisions about [routes] and how many resources to devote to each route and service.” However, if the state labor laws are such that they “bind” the motor carrier’s prices, routes, or services, they interfere with competitive market forces and are preempted by the FAAAA. 
Slip op. at 36-37. The parties agreed that the workers compensation law did not "reference" RWA's prices, routes, or services, and the Court found that the law also did not "have a connection with prices, routes, or services. Slip op. at 37-39. 

Prejudgment Interest

Finally, the Court held that Civil Code section 3287 does not authorize prejudgment interest on an award of restitution under the UCL, but the trial court could award prejudgment interest on the UCL claim under its equitable powers. The Court remanded to the trial court to reconsider this issue. 

The opinion is available here

Thursday, September 26, 2013

Carter v. Entercom: Court Clarifies Employer's Labor Code Section 2802 Duty to Indemnify for "Necessary Expenditures"

Carter v. Entercom Sacramento, LLC (9/3/13) --- Cal.App.4th --- is an unusual case in a number of ways. Here's the introduction to the Court of Appeal's opinion: 
As the result of drinking too much water in an ill-conceived radio contest, a woman died. Plaintiff Matt Carter had helped conduct the contest as part of his duties as an employee of defendant Entercom Sacramento, LLC, the company that owned the radio station. Although Entercom told Carter it would provide legal counsel for him, Carter chose to hire his own attorney. When the woman’s family sued Carter (as well as Entercom and others), Carter tendered defense of the action to Entercom’s insurer. The insurer accepted the tender without any reservation of rights and appointed a different attorney to represent Carter. Carter refused that attorney and insisted on being represented by the attorney he had chosen. When the insurer refused to pay for that attorney, Carter filed a cross-complaint against Entercom seeking indemnity under Labor Code section 2802 for the fees and costs he incurred. Subdivision (a) of section 2802 requires an employer to indemnify its employee “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.”  
Slip op. at 1-2. 

The trial court held that Carter was not entitled to indemnity under Labor Code 2802 for any attorney fees incurred after the carrier offered to defend him, and the Court of Appeal affirmed. It held: 

Entercom did not have to pay for the attorney of Carter's choosing. Slip op. at 8-11. 

Substantial evidence supported the trial court's finding that the fees and costs that Carter incurred after he rejected counsel were not "necessary expenditures" under section 2802, and Entercom did not have to indemnify him for them. Slip op. at 11-17. The fact that Carter faced both potential criminal charges and punitive damages did not change this conclusion. The mere allegation of punitive damages does not require independent counsel, and Carter failed to show that he needed independent counsel to deal with the criminal investigation. 

The opinion is available here

Wednesday, September 25, 2013

Governor Brown Signs Minimum Wage Increase

Governor Brown signed AB 10 into law today. AB 10 amends Labor Code section 1182.12 to increase California's minimum wage from $8 per hour to $9 per hour, effective July 1, 2014, and to $10 per hour, effective January 1, 2016. 

More information is available here

Tuesday, September 24, 2013

Advanced Strategies for Mediating the Employment Case

I am presenting "Advanced Strategies for Mediating the Employment Case" with Andrew Friedman of Helmer Friedman and John Barber of Lewis Brisbois on October 11, 2013, at the State Bar's Annual Meeting in San Jose. The program will run from 2:30 to 4:00 pm.

Andrew and John are top notch litigators, and they have very interesting insights on the settlement process. Their views sometimes clash, which makes it all the more fun.

It should be an entertaining and valuable program. 
I hope you will come see us if you are at the Annual Meeting.  

Governor Signs Bill Providing Overtime Compensation to Domestic Workers

Governor Brown has signed AB 241, known as the "Domestic Worker Bill of Rights." Enacting Labor Code section 1450 et seq., the legislation provides overtime compensation to certain domestic workers, as defined, who work more than nine (9) hours per day or 45 hours per week. The legislation requires the Governor to convene a committee to study and report to the Governor on the effects of the legislation. The legislation sunsets on December 31, 2016. 

More information and the text of the bill are available here

Monday, September 23, 2013

Governor Signs Legislation Restricting Defense Attorney Fees in Actions for Nonpayment of Wages

Governor Brown has signed SB 462, which restricts attorney fee awards to prevailing defendants in actions for the recovery of wages.

Labor Code section 218.5 allows the prevailing party in an action for nonpayment of wages to recover its reasonable attorney fees and costs. SB 462 amends section 218.5 as follows (amendment in italics): 

(a) In any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorney’s fees and costs to the prevailing party if any party to the action requests attorney’s fees and costs upon the initiation of the action. However, if the prevailing party in the court action is not an employee, attorney’s fees and costs shall be awarded pursuant to this section only if the court finds that the employee brought the court action in bad faith....
SB 462 does not address the Supreme Court's holding in Kirby v. Immoos Fire Protection, Inc. (4/30/12) 53 Cal.4th 1244 (discussed here), in which the California Supreme Court considered whether a defendant can recover its attorney fees when it prevails in an action for meal and rest period compensation under California Labor Code section 226.7. The Court concluded that an action under Labor Code 226.7 for meal and rest period violations is not an “action brought for the nonpayment of wages” under section 218.5, so neither employee nor employer can recover its fees in such an action.

More information and the text of SB 462 can be found here.

Thursday, September 19, 2013

Richards v. Ernst & Young: Ninth Circuit Holds That Defendant Did Not Waive Right to Move to Compel Arbitration

Richards v. Ernst & Young, LLP, ___ F.3d ___ (9th Cir. 8/21/13) is another case addressing whether a defendant can bring or renew a motion to compel arbitration in the wake of the Supreme Court's decision in AT&T Mobility LLC v. Concepcion. See, e.g., Phillips v. Sprint PCS (9/26/12) 209 Cal.App.4th 758, review denied 12/19/12 (discussed here).

The Ninth Circuit here reversed a district court order denying the defendant's motion to compel arbitration: 

The district court determined that Ernst & Young had waived its right to arbitration by failing to assert that right as a defense in an action brought by two other former employees, David Ho and Sarah Fernandez, whose action had been consolidated with that of Ms. Richards. Because Ms. Richards has not established any prejudice as a result of Ernst & Young’s alleged delay in asserting its arbitral rights, we reverse the judgment of the district court.
Slip op. at 3. 

The case appears to be a class action, and the arbitration agreement at issue appears to include a class action waiver, but the Court did not address the merits of those issues at any length. 

The opinion is available here

Wednesday, September 18, 2013

Estrada v. City of Los Angeles: Court Issues FEHA Decision on Volunteer v. Employee Status

In Estrada v. City of Los Angeles (7/24/13) --- Cal.App.4th ---, the plaintiff was a volunteer police reserve officer who sued the City for disability discrimination under the Fair Employment and Housing Act (FEHA). The Court of Appeal affirmed a judgment for the City, holding that the fact that the City its volunteer officers with workers compensation benefits did not make them employees for FEHA purposes.  

The Court looked to the definition of "employee" contained in the regulations enacted by the Department of Fair Employment and Housing (DFEH) to implement the FEHA. The regulations define an employee as "any individual under the direction and control of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written." Cal. Code Regs., tit. 2, § 7286.5, subd. (b). Slip op. at 5. 

The Court concluded that although the plaintiff was "appointed" to a volunteer position, he was not "appointed" to an employee position under the City's civil service rules. Slip op. at 11-13. The fact that the plaintiff received workers' compensation benefits as a volunteer officer did not change this conclusion. Slip op. at 13-15.  

The opinion is available here

Friday, September 13, 2013

Alamo v. Practice Management Information: Court of Appeal Construes Harris v. City of Santa Monica

In Harris v. City of Santa Monica (2013) 56 Cal.4th 203 (discussed here), the California Supreme Court held:
A plaintiff in an action under the Fair Employment and Housing Act (FEHA) must prove that unlawful discrimination was a “substantial factor motivating” the alleged adverse employment action;  
A defendant in such an action may use a “mixed-motive” defense by proving, by a preponderance of the evidence, that it would have made the same decision absent such discrimination;   
A defendant making such a showing need not concede that unlawful discrimination played any role in its decision-making process; and  
If the defendant makes such a showing, the plaintiff may not obtain reinstatement, backpay, front pay, or noneconomic damages, but may obtain declaratory relief, injunctive relief, and reasonable attorney’s fees and costs. 
In Alamo v. Practice Management Information Corporation (8/21/13) --- Cal.App.4th ---, pub. 9/5/13, the plaintiff, Alamo, sued her former employer, PMIC, for pregnancy discrimination and other non-statutory causes of action. The trial court entered judgment in her favor after jury trial on the FEHA and wrongful termination claims, and the Court of Appeal affirmed, but the California Supreme Court granted review and held pending its decision in Harris.  On remand after Harris, the Court of Appeal reversed in part and affirmed in part, holding: 
The trial court erred in using former CACI Nos. 2430, 2500, 2505, and 2507 to instruct the jury that Alamo had to prove that her pregnancy or pregnancy-related leave was “a motivating reason” for her discharge, rather than “a substantial motivating reason” for her discharge. Slip op. at 13-14.  
The trial court did not err in using former CACI No. 2527 to instruct the jury that Alamo had to establish that PMIC discriminated or retaliated against her “because” she took a pregnancy-related leave. Slip op. at 15-16.  
The trial court did not err in refusing to give the jury a "mixed-motive" or "same decision" instruction because PMIC failed to plead such a defense in its answer, waiving the defense. Slip op. at 16-18. 
The opinion is available here

Blantz v. California Department of Corrections and Rehabilitation: Independent Contractor Does Not Have Constitutionally Protected Property Interest in Her Position with the State

A quick note on this case, in which the Ninth Circuit affirmed dismissal of a case based on allegations that the plaintiff was terminated without explanation from her independent contractor position as a nurse for the California prison system and effectively barred from further employment within the system. 

In Blantz v. California Department of Corrections and Rehabilitation, ___ F.3d ___ (9th Cir. 8/15/13), plaintiff Christine Blantz worked as an independent contractor nurse for the California Department of Corrections and Rehabilitation (CDCR). She alleged that CDCR terminated her position unexpectedly and without cause and when she applied for another position elsewhere within CDCR, she was informed that she had received poor reviews and therefore did not meet the job requirements. Blantz sued the CDCR and various CDCR employees. 

After one of the individual defendants removed, the district court dismissed Blantz's two federal claims, which alleged that the defendants deprived her of property and liberty without due process in violation of the Fourteenth Amendment. The district court dismissed all of her claims against defendant Terry Hill (the former Chief Medical Officer for the Receiver of the California prison medical care system) and remanded the remainder of her state law claims to the superior court.  

The Ninth Circuit affirmed, holding that Blantz did not have a constitutionally protected property interest in her independent contractor position with the CDCR and that she failed to allege sufficient facts to state a claim for denial of liberty without due process. It also held that dismissal of the claims against Dr. Hill was appropriate because the allegations concerning him were conclusory and implausible on their face. 

The opinion is available here.  

Thursday, September 12, 2013

Rodriguez v. AT&T Mobility: Preponderance of Evidence Standard Applies to Defendant Removing Class Action under CAFA

In Standard Fire Ins. Co. v. Knowles, ___ U.S. ___ (2013) (discussed here), a unanimous United States Supreme Court held: (1) a plaintiff in a putative class action may not defeat federal jurisdiction under the Class Action Fairness Act (CAFA) by stipulating that he or she will not seek to recover more than $5 million; and (2) a district court should look beyond the four corners of the complaint to determine the amount in controversy.

In Rodriguez v. AT&T Mobility Services LLC, ___ F.3d ___ (9th Cir. 8/27/13), the Ninth Circuit Court of Appeals held that, in light of Standard Fire, a "defendant seeking removal of a putative class action must demonstrate, by a preponderance of evidence, that the aggregate amount in controversy exceeds the jurisdictional minimum." Slip op. at 14. 

The Court thus overturned its prior decision in Lowdermilk v. U.S. Bank National Association, 479 F.3d 994, 999 (9th Cir. 2007), which held that a removing defendant must establish the amount in controversy to a legal certainty. 

The opinion is available here

Beaumont-Jacques v. Farmers Group: Insurance Company District Manager Was Independent Contractor

Just a quick note on this somewhat unusual case. In Beaumont-Jacques v. Farmers Group, Inc. (6/12/13, pub. 7/11/13) --- Cal.App.4th ---, the plaintiff worked for the defendant insurance companies ("Signatory Defendants") as a district manager. She "recruited and recommended persons to become agents solely for the Signatory Defendants; if the latter accepted such a person, [plaintiff] trained and motivated that agent to market only the Signatory Defendants' insurance products. While she herself did not sell those products, Appellant could represent Respondents, but no other insurers." 

The plaintiff filed an action for Labor Code and other violations, alleging that the defendants improperly treated her as an independent contractor, rather than as an employee.  The trial court granted the defendants' motion for summary judgment, and the Court of Appeal affirmed: 
The record below demonstrates that Appellant exercised meaningful discretion with reference to her efforts. While Respondents had input over the quality and direction of those efforts, they did not have sufficient “control of the details” with respect to those efforts. Appellant was thus an independent contractor and all of her claims must fail. 
Slip op. at 1. 

The opinion is available here

Wednesday, September 11, 2013

Governor Signs Bill to Provide That Sexual Harassment Need Not Be Motivated by Sexual Desire, Overturning Kelley v. Conco

On August 12, 2013, Governor Brown signed SB 292, a bill designed to overturn the decision in Kelley v. Conco Companies (2011) 196 Cal.App.4th 191 (discussed here). In Kelly, a male employee complained that he was subjected to demeaning, sexually explicit comments and gestures by his male supervisor. Kelley sued for sexual harassment, and the trial court granted the defendants' motion for summary judgment. The Court of Appeal affirmed, holding that there was no “credible evidence that the harasser was homosexual” or that the harassment was “motivated by sexual desire.”

SB 292 amends the Fair Employment and Housing Act (FEHA) to provide: "Sexually harassing conduct need not be motivated by sexual desire." 
Government Code Section 12940(j)(4)(C). 

Tuesday, September 10, 2013

Wang v. Chinese Daily News: Ninth Circuit Vacates Prior Order, Again Remands to District Court for Reconsideration of Certification Order in Light of Wal-Mart

In 2004, the plaintiffs in Wang v. Chinese Daily News filed a putative class and collective action against defendant Chinese Daily News (CDN), alleging violations of the federal Fair Labor Standards Act (FLSA), the California Labor Code, and the Unfair Competition Law (UCL). The district court certified the FLSA claim as a collective action and certified the state-law claims as a class action under Federal Rule 23. After a sixteen-day jury trial and a three-day bench trial, the district court entered judgment for the plaintiffs for damages, but denied their request for injunctive relief.

The Ninth Circuit affirmed. Wang v. Chinese Daily News, 623 F.3d 743 (9th Cir. 2010) (discussed here). In 2011, the United States Supreme Court vacated that decision and ordered the Ninth Circuit to reconsider it in light of Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___ (2011) (discussed here). On remand, the Ninth Circuit reversed the judgment for the class members on remanded to the district court to reconsider its certification order. Wang v. Chinese Daily News, 709 F.3d 829 (9th Cir. 3/4/13) (discussed here).

On September 3, 2013, the Ninth Circuit vacated its opinion of March 4, 2013, denied rehearing and rehearing en banc, and issued a new opinion, which largely tracks its earlier opinion.  The Court held as follows:

CDN could challenge the district court's finding that the commonality requirement of Federal Rule 23(a)(2) was satisfied, even though it originally did not brief the issue. "We conclude that the [Supreme] Court’s decision in Wal-Mart presents a sufficiently significant legal development to excuse any failure of CDN to discuss the commonality requirement of Rule 23(a)(2) in its opening brief." Slip op. at 9.

Although Wal-Mart differed substantially from Wang, the district court should reconsider its commonality finding in light of Wal-Mart:

On remand, the district court must determine whether the claims of the proposed class “depend upon a common contention . . . of such a nature that it is capable of classwide resolution — which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Plaintiffs need not show that every question in the case, or even a preponderance of questions, is capable of classwide resolution. So long as there is “even a single common question,” a would-be class can satisfy the commonality requirement of Rule 23(a)(2). Wal-Mart, 131 S. Ct. at 2556 (alteration and internal quotation marks omitted).
Slip op. at 11. The Court here deleted language from its earlier opinion that the plaintiffs must show "significant proof that [CDN] operated under a general policy of [violating California labor laws]."

The plaintiffs conceded that class certification for their monetary claims under Rule 23(b)(2) could stand in light of Wal-Mart, but the possibility of a Rule 23(b)(2) class seeking injunctive relief remained. As former employees, none of the named plaintiffs had standing to pursue injunctive relief, but "because the Rule 23(b)(2) class was certified by the district court while they were current employees, the class certification with respect to injunctive relief may survive if there are identifiable class members who are still employed by CDN." Slip op. at 12. In another change from its earlier opinion, the Court remanded this issue to the district court for reconsideration.

The Court remanded to the district court for reconsideration of the propriety of class certification under Rule 23(b)(3) for three reasons:

  1. The district court must reconsider commonality under Rule 23(a)(2), as discussed above. 
  2. The district court improperly "create[d] a presumption that class certification [was] proper when an employer’s internal exemption policies are applied uniformly to the employees," and the Ninth Circuit recently has held that an employer's uniform policy of classifying all reporters and account executives as exempt employees is not sufficient to support Rule 23(b)(3) certification in and of itself. See In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953, 958–59 (9th Cir. 2009) (discussed here); Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 944–48 n.14 (9th Cir. 2009). 
  3. The district court should consider the impact of the California Supreme Court's decision in Brinker v. Superior Court (2012) 53 Cal.4th 1004 (discussed here). 
Slip op. at 13-16. 

Departing from its prior decision, the Ninth Circuit this time declined to address the calculation of damages, if the district court should find certification appropriate on remand. Slip op. at 16. 

The latest opinion is available here

Monday, September 9, 2013

Wade v. Ports America: Labor Arbitration That Encompasses an Employee's FEHA-Related Common Law Claims Will Preclude the Employee from Later Litigating Those Claims in Court

Wade v. Ports America Management Corporation (8/2/13) --- Cal.App.4th ---, is an interesting case on the preclusive effect of a labor arbitration on common law claims that often arise in an action under the Fair Employment and Housing Act, such as a claim for wrongful termination in violation of public policy. The decision's summary does a good job of describing the holding: 
Camargo v. California Portland Cement Co. (2001) 86 Cal.App.4th 995 (Camargo), held that a labor arbitration pursuant to a collective bargaining agreement (CBA) has no preclusive effect on a claim pursuant to the Fair Employment and Housing Act (FEHA), Government Code section 12940 et seq., unless the parties expressly agreed to arbitrate FEHA claims. (Camargo, at p. 1008.) On appeal, Calvin Wade contends this holding should be extended to common law claims related to the FEHA, such as a claim for wrongful termination in violation of public policy. We disagree, as there is no comprehensive statutory scheme applicable to FEHA-related common law claims comparable to the FEHA. In the alternative, appellant contends the arbitration had no preclusive effect, as it did not address his racial discrimination claim. We conclude the arbitration encompassed that claim. Accordingly, we affirm the grant of a summary judgment in favor of respondents Marine Terminals Corporation and Ports America Management Corporation (collectively MTC) on appellant's cause of action for wrongful termination in violation of public policy. 
Slip  op. at 2. In other words, a labor arbitration that encompasses an employee's FEHA-related common law claims will preclude the employee from later litigating those claims in court.  

The opinion is available here

Saturday, September 7, 2013

Murphy v. DirecTV: Ninth Circuit Affirms In Part, Reverses In Part, Order Compelling Arbitration In Putative Class Action

A quick note on Murphy v. DirecTV, Inc., ___ F.3d ___ (9th Cir. 7/30/13).

The plaintiffs filed a putative class action, alleging that DirecTV and Best Buy misrepresented certain DirecTV equipment as being for sale at Best Buy, when the equipment actually was for lease. The plaintiffs alleged violations of the Unfair Competition Law (UCL) and the Consumer Legal Remedies Act (CLRA).
The district court granted the defendants' motion to compel arbitration pursuant to DirecTV's customer agreement, which included a class action waiver. 

The Ninth Circuit affirmed as to DirecTV. Applying Concepcion retroactively to the arbitration provision, the Court held that “the class action waiver is not unconscionable, and therefore, the arbitration provision is enforceable.” Slip op. at 9. The arbitration provision included a clause that if any part of it would not be found valid under controlling state law, the arbitration provision would not be enforced. The Court rejected the argument that the agreement was not enforceable under California law prior to Concepcion, triggering this "jettison clause." 
Section 2 of the FAA, which under Concepcion requires the enforcement of arbitration agreements that ban class procedures, is the law of California and of every other state.   
It follows that, under the doctrine of preemption, the Discover Bank rule is not, and indeed never was, California law. 
Slip op. at 10-11. 

The Ninth Circuit reversed as to Best Buy, finding that it was not a signatory to any arbitration agreement with the plaintiffs and that it could not avail itself of equitable estoppel, agency, or third party beneficiary arguments.  

Under California contract law, Best Buy could not compel arbitration under the theory of equitable estoppelSlip op. at 17-23. Neither of two required conditions was met: (1) the plaintiffs did not "rely on the terms of the written agreement" containing the arbitration provision, and their claims were not "intimately founded in and intertwined with the underlying contract;" and (2) the plaintiffs did not allege "substantially interdependent and concerted misconduct... founded in or intimately connected with the obligations of the underlying agreement."  

The theory of agency also did not require arbitration. Slip op. at 23-26. Agency requires that the principal maintain control over the agent’s actions, and retailers typically are not considered the agents of the manufacturers whose products they sell. The district court did not find that Best Buy was DirecTV's agent, and the only evidence on this point in the record suggested that the parties had disavowed an agency relationship.

Finally, Best Buy could not rely on a third party beneficiary theory to compel arbitration. Slip op. at 26-28. Best Buy could not show that either DirecTV or the plaintiffs intended it to benefit from DirecTV's customer agreement. 

The opinion is available here.  

Friday, September 6, 2013

Purton v. Marriott International: Court Holds Employer Liable For Death Caused By Employee Who Got Drunk At Employer Party

A quick note on an interesting case dealing with respondeat superior liability: Purton v. Marriott International, Inc. (7/31/13) --- Cal.App.4th ---.
In this case, an employee consumed alcoholic beverages at an employer hosted party and became intoxicated. The employee arrived home safely, but then left to drive a coworker home. During that drive, the employee struck another car, killing its driver.  The trial court granted summary judgment for the employer on the ground the employer's potential liability under the doctrine of respondeat superior ended when the employee arrived home.  
We hold that an employer may be found liable for its employee's torts as long as the proximate cause of the injury (here, alcohol consumption) occurred within the scope of employment. It is irrelevant that foreseeable effects of the employee's negligent conduct (here, the car accident) occurred at a time the employee was no longer acting within the scope of his or her employment. We also hold that no legal justification exists for terminating the employer's liability as a matter of law simply because the employee arrived home safely from the employer hosted party. Accordingly, we reverse the judgment in favor of the employer. 
Slip op. at 1-2. 

The Court held that a reasonable trier of fact could find that the employee was acting within the scope of his employment when he became intoxicated at the party because: the employer served alcohol at and allowed the employee to bring his own alcohol to the party; the party and the drinking of alcohol at the party benefitted the employer by improving employee morale and furthering employer-employee relations; and the drinking of alcohol by employees was "a customary incident to the employment relationship." Slip op. at 12-18.

The opinion is available here

Thursday, September 5, 2013

Steven G. Pearl to Address Recent Developments at Pasadena Bar Association Meeting September 10

Steven G. Pearl will join a distinguished panel of labor and employment lawyers at the September 10 meeting of the Pasadena Bar Association's Labor and Employment Section. The panel will discuss recent developments in California law, including:
  • Wage and hour class action litigation after Brinker 
  • Employer meal and rest period obligations 
  • PAGA claims 
  • Interns, independent contractors, and employees 
In addition to Mr. Pearl, the panel will include attorneys Anthony Lewis and Jeffrey Ranen and moderator Jack Schaedel.

The meeting runs from 11:30 to 1:30 and includes lunch. It takes place at Noor Restaurant, 260 East Colorado Boulevard, Paseo Colorado, in Pasadena. More information and registration are available here.

Farmers Insurance Exchange v. Superior Court: Where Trial Court Relied on Just One Case in Granting Class Certification, Subsequent Depublication of That Case Required Court to Reconsider Certification Order

In Farmers Insurance Exchange v. Superior Court (Wilson) (7/23/13) --- Cal.App.4th ---, the Court of Appeal held that when a trial court relies on just one case in making an order granting class certification, the California Supreme Court's subsequent depublication of that case constitutes a change of law, and the trial court must review its earlier order on a motion for reconsideration. 

The plaintiffs filed a putative wage and hour class action on behalf of individuals employed by the defendant as claims adjusters. While the plaintiffs' motion for class certification was pending, the Court of Appeal issued its decision in Harris v. Superior Court (July 23, 2012) (discussed here), holding that a trial court should have denied a defendant's motion to decertify a class of claims adjusters and should have granted the plaintiffs' motion for summary judgment on the defendant's administrative exemption defense. 

Relying entirely on Harris and stating that it had no choice but to do so, the trial court granted the plaintiffs' motion for class certification. Less than a month later, the California Supreme Court depublished Harris (discussed here). The trial court denied the defendant's motion for reconsideration, and the defendant appealed. 

First, the Court held that the trial court's decision was subject to review on a petition for writ of mandate. Slip op. at 17-18.

Second, the Court held that depublication may constitute a change of law sufficient to warrant reconsideration under Code of Civil Procedure section 1008. Slip op. at 18-21.

Finally, the Court held that under the circumstances of this case, the trial court abused its discretion by denying the defendant's motion for reconsideration. Slip op. at 21-23.

The Court remanded to the trial court to reconsider its order granting class certification.

The opinion is available here.

Wednesday, September 4, 2013

A Good Year -- L'shanah Tovah!

Sunset tonight marks the start of a new year, so now is a good time to wish all of our friends a good year, one filled with sweetness and success, peace, joy, love, and good health.  

And don't forget to eat apples dipped in honey. Delicious! 

Bain v. Tax Reducers: Court Rules on Statute of Limitations, Equitable Tolling, Individual Liability, and Other Issues in Individual Wage Case

Bain v. Tax Reducers, Inc. (8/28/13) --- Cal.App.4th --- addresses a number of interesting issues.
In 2005, Harold Bain filed a Labor Commissioner (LC) action against Tax Reducers, Inc. (TRI). The LC awarded Bain $15,000 in wages, interest, and penalties. 

Bain appealed to the Superior Court, and in December, 2006, the parties agreed to settle.  In May, 2008, Bain sued TRI to enforce the settlement agreement, for contract damages based on the settlement agreement, and for Labor Code violations. In September, 2010, Bain amended his complaint to name TRI's principal shareholder, Griffin, as a defendant. 

The trial court granted summary judgment for Griffin, finding that he was not Bain's employer and was not liable on Bain's claims. After trial, the court awarded Bain $25,000 in unpaid wages, waiting time penalties, liquidated damages, and interest, plus attorney fees and costs. Both sides appealed, and the Court of Appeal affirmed in part and reversed in part, holding: 

A three-year statute of limitations applied to Bain's claims for unpaid wages and waiting time penalties. Slip op. at 18-19. However, Bain's claim for liquidated damages under Labor Code 1194.2 was a claim for penalties, and a one-year statute applied. Slip op. at 19-20. 

Bain's claims were not time-barred because the doctrine of equitable tolling applied. Slip op. at 20-28. Equitable tolling applies “[w]hen an injured person has several legal remedies and, reasonably and in good faith, pursues one.” Because the Labor Code gave Bain the option to pursue his claims in front of the LC or in court, equitable tolling applied when he filed his LC claim. Filing the LC claim gave TRI notice of the claim, the delay did not prejudice TRI's defense of the court action, and Bain acted in good faith. 

The trial court properly relied on the presumption that every person who performs services for another is an employee. Slip op. at 28-33. Even if the trial court erred in applying such a presumption, it "properly analyzed the evidence according to the multi-factor test from" S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341.  Substantial evidence supported the trial court's finding under this analysis that Bain was TRI's employee.  

The trial court properly imposed waiting time penalties under Labor Code section 203. Slip op. at 34-39. Analysis of Bain's employment status was not novel and did not involve an unsettled area of law. 

The trial court did not err in denying Bain's motion for leave to amend his complaint to name TRI's principal, Griffin, as a defendant. Slip op. at 41-46. After reviewing Reynolds v. Bement (2005) 36 Cal.4th 1075, and Martinez v. Combs (2010) 49 Cal.4th 35, the Court held that Griffin could not be liable as a joint employer: 
Bain argues that Griffin meets all three alternative definitions of employer from Martinez because he controlled Bain's hours, working conditions, and whether Bain was paid. However, Bain's contention ignores the court's holdings in Reynolds, which was reaffirmed in Martinez, that the wage orders' definition of “employer” does not impose liability on individual corporate agents acting within the scope of their agency. (Martinez, at p. 75.) In this case, there was no evidence that Griffin acted outside the scope of his agency as an officer and a shareholder of TRI. There is no allegation or evidence that Griffin misappropriated Bain's unpaid wages to himself for his individual advantage. (Reynolds, supra, 36 Cal.4th at p. 1090.) This case is also factually distinguishable from Martinez, because there was no evidence that supported the conclusion that Griffin was a joint employer with TRI.  
Slip op. at 45. 

The opinion is available here.

Tuesday, September 3, 2013

Quin v. County of Kauai: Ninth Circuit Addresses Whether Discrimination Action May Proceed When Plaintiff/Debtor Fails to List it as an Asset in Bankruptcy Proceeding, Then Reopens Proceeding to Do So

A quick note on Quin v. County of Kauai Department of Transportation (9th Cir. 7/24/13) ___ F.3d ___, in which the Ninth Circuit considered whether an individual can prosecute an employment discrimination action when she fails to list it as an asset in her bankruptcy petition schedules, then reopens her bankruptcy case to do so. 

When the failure to list the asset is a result of inadvertence or mistake, judicial estoppel does not prevent the plaintiff/debtor from pursuing the discrimination action. The question is how to define "inadvertence or mistake." The majority of Circuits have adopted a narrow interpretation of these terms that focuses on whether the plaintiff knew of the claims and had a motive to conceal them. Disagreeing with this narrow test, the Court held: 
In these circumstances, rather than applying a presumption of deceit, judicial estoppel requires an inquiry into whether the plaintiff’s bankruptcy filing was, in fact, inadvertent or mistaken, as those terms are commonly understood. Courts must determine whether the omission occurred by accident or was made without intent to conceal. The relevant inquiry is not limited to the plaintiff’s knowledge of the pending claim and the universal motive to conceal a potential asset—though those are certainly factors. The relevant inquiry is, more broadly, the plaintiff’s subjective intent when filling out and signing the bankruptcy schedules.
Slip op. at 19. The Court remanded to the district court to determine the plaintiff/debtor's intent in completing her bankruptcy schedules. 

The opinion is available here.  

Monday, September 2, 2013

Williams v. Chino Valley Independent Fire District: Prevailing Defendant May Recover Ordinary Costs In FEHA Action Without Showing That Action Was Frivolous, Unreasonable, or Groundless

In Williams v. Chino Valley Independent Fire District (7/23/13) --- Cal.App.4th ---, plaintiff Loring Williams sued defendant Chino Valley Independent Fire District for employment discrimination in violation of FEHA and lost. The trial court awarded certain costs of suit to the defendant, and Williams appealed. The Court of Appeal affirmed, holding that a defendant need not show that the claim was frivolous, unreasonable, or groundless in order to recover its "ordinary costs" under CCP 1032. Slip op. at 11-18. 

The Court rejected the plaintiff's argument that the standard for an award of defense attorney fees in a FEHA action also should apply to an award of ordinary costs. The Court also rejected the argument that federal precedent in Title VII and ADA cases should control.

The opinion is available here