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Wednesday, November 26, 2014

In re Walgreen Co. Overtime Cases: Court of Appeal Affirms Denial of Certification in Meal Period Class Action

In In re Walgreen Co. Overtime Cases (10/23/14, pub. 11/13/14) --- Cal.App.4th ---, the plaintiffs sought to certify a class of hourly employees on the theory that Walgreens propounded a lawful meal period policy, but in practice Walgreens failed to provide its employees with compliant meal periods. The trial court denied their motion for class certification, and the Court of Appeal affirmed, holding as follows: 

The trial court held that employers must make meal periods available, but need not ensure that their employees actually take those meal periods. Slip op. at 3-6. The trial court thus predicted the eventual holding in Brinker Restaurant Corp. v. Superior Court (2013) 53 Cal.4th 1004, and used the proper criteria to analyze the motion. 

The evidence on certification demonstrated that Walgreens made meal periods available, but that its employees sometimes decided to skip or delay them. Slip op. at 4. The plaintiffs' evidence to the contrary failed to convince the trial court otherwise. 

The plaintiffs introduced expert witness testimony regarding the rate at which Walgreens' time records showed a missed or late meal period. Slip op. at 6. The trial court properly rejected this evidence because it relied on the faulty assumption that every such instance represented a violation of the meal period requirement. 

The plaintiffs introduced emails among Walgreens management regarding missed meal periods, but the emails showed the "significant importance Walgreens attached to the meal break issue and the efforts of Walgreens to provide meal breaks to all employees." Slip op. at 7-8. Rather than showing Walgreens pressuring employees to skip meal periods, the emails showed Walgreens pressuring its management to ensure that meal periods were taken. 

Finally, the plaintiffs introduced employee declarations stating that meal periods were not made available. Slip op. at 8-10. The declarations were unreliable, and numerous employees recanted them in deposition, raising questions about how counsel created them in the first place. 

The opinion is available here.  

Monday, November 24, 2014

Martinez v. Joe’s Crab Shack Holdings: Court Reverses Order Denying Class Certification in Misclassification Action

In Martinez v. Joe's Crab Shack (2013) 221 Cal.App.4th 1148 (discussed here) the plaintiffs alleged that the defendants misclassified its salaried managers and assistant managers as exempt from California’s overtime requirements. The trial court denied certification, finding that the plaintiffs failed to establish typicality, adequacy of representation, predominance of common questions, and superiority of the class action mechanism. After the Court of Appeal reversed, the California Supreme Court granted review and remanded in light of its opinion in Duran v. US Bank N.A. (2014) 59 Cal.4th 1 (2014). On remand, the Court of Appeal once again reversed the trial court's decision, holding as follows: 

The trial court erred in finding that the plaintiffs’ claims were not typical of the class and that the plaintiffs would not be adequate class representatives because the plaintiffs' claims would be "vulnerable to the defense that each of them performed exempt tasks more than 50% of their work time." Slip op. at 12-13. Nor did the antagonism "voiced by general managers, who overwhelmingly opposed the litigation," necessarily indicate inadequacy of representation. On remand, the trial court could exercise its discretion to  create a general managers subclass or to exclude general managers entirely from the class. Slip op. at 13-14. 

"The theory of liability in this litigation—that, by classifying all managerial employees as exempt, [defendant] violated mandatory overtime wage laws—is, to paraphrase Brinker, 'by nature a common question eminently suited for class treatment.'" Slip op. at 18. Although such a theory of liability "has the potential to generate individual issues," considerations such as the employer's realistic expectations and the actual overall requirements of the job are "likely to prove susceptible of common proof." Slip op. at 20. Courts in such actions must analyze these common questions, rather than focusing on whether a particular employee was engaged in an exempt or non-exempt task at a given time. Slip op. at 21. Statistical sampling may prove helpful in analyzing these common questions, provided that the use of such sampling "accords the employer an opportunity to prove its affirmative defenses." Slip op. at 22. 

The Court concluded by recognizing that a number of appellate decisions have affirmed trial court decisions denying certification in misclassification actions. 
However, we understand from Brinker, Duran and Ayala that classwide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof. By refocusing its analysis on the policies and practices of the employer and the effect those policies and practices have on the putative class, as well as narrowing the class if appropriate, the trial court may in fact find class analysis a more efficient and effective means of resolving plaintiffs’ overtime claim.
Slip op. at 23. 

The opinion is available here

Thursday, November 6, 2014

LACBA Presents "Employment Law Nuts & Bolts" Program 11/15

The Los Angeles County Bar Association is presenting "Employment Law Nuts & Bolts: Discrimination, Harassment, Retaliation and Wage and Hour Law" on Saturday, November 15, 2014, at Loyola Law School in Los Angeles. The program runs from 9:00 am until 12:15 pm.

The program will focus on teaching the law to new attorneys, those in practice less than five years, or those with more experience outside of the employment law field who wish to gain a better understanding of employment law.

The first panel will cover federal and state wage and hour law. I am moderating, with Lauren Teukolsky presenting the employee's perspective and Leslie Abbott presenting the employer's perspective. 

For the second panel, Heather Appleton, Eric Schwettmann, and Art Silbergeld will cover discrimination, harassment, and retaliation. 

More information and registration are available here

Wednesday, November 5, 2014

Dynamex Operations West v. Superior Court: Who Is An Employer? (Revisited)

In Martinez v. Combs (2010) 49 Cal.4th 35 (discussed here), the California Supreme Court held that the broad, three pronged definition of "employer" found in the IWC Wage Orders applies in minimum wages actions brought under Labor Code section 1194. The question after Martinez was whether the Wage Order definition of "employer" would apply in all wage and hour actions or whether courts would continue to look at the multi-factor test found in cases such as S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341.

Dynamex Operations West, Inc. v. Superior Court (Lee) (10/15/14) --- Cal.App.4th --- addresses these issues.

The plaintiffs in Dynamex filed a class action, alleging that the defendant violated a range of wage and hour laws by classifying them as independent contractors, rather than employees. The defendant petitioned for a writ of mandate after the trial court denied its motion to decertify the class. It argued that the Borello "right to control" test applied, and that individual issues under that test would predominate over common issues. 

The Court of Appeal granted the petition in part, holding that the Wage Order definition of "employer" applies to those claims that fall within the scope of the Wage Order. Slip op. at 12-16. As to claims that fall outside the scope of the Wage Order, the multi-factor test discussed in Borello applies.

The real question becomes this: How do you know whether a claim falls within the scope of the Wage Order? For minimum wage and overtime claims, the answer seems clear. For other types of claims, such as the Labor Code section 2802 reimbursement claim in Dynamex, not so much. One can only assume that this particular issue will require greater clarification.

The Court also held that use of the Wage Order definition is not limited to determining whether an entity is a joint employer. Slip op. at 16, n. 14. 
Rather, it applies in any Wage Order claim in which one's employment status is at issue. 

The opinion is available here.

Tuesday, November 4, 2014

Godfrey v. Oakland Port Services Corp.: FAAAA Does Not Preempt Meal and Rest Period Requirements

In People ex rel. Harris v. Pac Anchor Transportation, Inc. (7/28/14) --- Cal.4th --- (discussed here), the California Supreme Court held that an Unfair Competition Law (UCL) action based on a trucking company’s alleged violation of state labor and insurance laws was not “related to a price, route or service” of the company and, therefore, was not preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA).

In Dilts v. Penske Logistics, LLC, ___ F.3d ___ (9th Cir. 7/9/14, amended 9/8/14) (discussed here), the Ninth Circuit held that the FAAAA does not preempt California's meal and rest period requirements. 

In Godfrey v. Oakland Port Services Corp. (10/28/14) --- Cal.App.4th ---, the Court of Appeal followed suit, also holding that the FAAAA does not preempt California's meal and rest period requirements. Slip op. at 9-17. 

The opinion is available here.

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, and 
the precedents established in FLSA collective actions do not apply in Rule 23 class actions. Slip op. at 8-9. 

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 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.

Wednesday, September 10, 2014

Slayman v. FedEx Ground: FedEx Drivers Are Employees Under "Economic Realities" Test

In Alexander v. FedEx Ground Package System, Inc., ___ F. 3d. ___ (9th Cir. 8/27/14) (discussed here) the Ninth Circuit held that FedEx drivers were employees under California law, which focuses primarily on "whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired." 

In Slayman v. FedEx Ground Package System, Inc., ___ F.3d ___ (9th Cir. 8/27/14), the Court held that the same result applies under the "economic realities" test. The Court reasoned as follows:

As in Alexander, the drivers were employees under the "right to control" test. 
Slip op. at 15-23.  

The drivers also were employees under the economic realities test, which encompasses situations "situations where the worker is not directed or controlled by the employer but, nevertheless, as a matter of economic reality, depends on the employer." Slip op. at 24.

All but one named plaintiff stopped working for FedEx before suit was filed and lacked Article III standing to seek prospective relief. Remaining named plaintiff stopped working for FedEx before class certification decision, and his claim for prospective relief became moot at that time. Under these circumstances, district court should not have certified prospective relief claims. Slip op. at 25-27.

The opinion is available here

Tuesday, September 9, 2014

Alexander v. FedEx Ground: Delivery Drivers Are Employees Under California Law "Right to Control" Test

In Alexander v. FedEx Ground Package System, Inc., ___ F. 3d. ___ (9th Cir. 8/27/14), individuals who drove delivery routes for FedEx Ground and FedEx Home (FedEx) in California sued for unpaid wages, reimbursement of business expenses, and violation of the Family and Medical Leave Act (FMLA), alleging that they were employees, rather than independent contractors. The case was consolidated with cases from a number of other states for multidistrict litigation (MDL) proceedings.

The MDL Court certified the expense reimbursement and unpaid wage claims, but not the FMLA claims. The parties then made cross-motions for summary judgment, asking the MDL Court to determine whether the drivers were employees or independent contractors as a matter of law. The MDL Court determined that the drivers were independent contractors as a matter of law in each state in which common-law agency principles govern employment status, including California.

The Ninth Circuit reversed, holding that the plaintiffs were employees as a matter of California law.

Under the test set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989) (which the Court referred to as the "right to control test"), “The principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” Because FedEx exercised all "necessary control" over the drivers, including their appearance, the appearance of their vehicles, the timing of work and deliveries, the packages to be delivered and the service areas in which to deliver them, the right to control factor strongly favored deeming the plaintiffs to be employees. Slip op. at 14-26. The Court characterized this as "powerful evidence" of employee status.

The "secondary indicia" set forth in Borello did not strongly favor either employee or independent contractor status. Slip op. at 26-31.

The opinion is available here.

Thursday, August 28, 2014

Patterson v. Domino's Pizza: Franchisor Not Responsible for Acts of Franchisee's Employee

In Patterson v. Domino's Pizza, --- Cal.4th --- (8/28/14), an employee, Patterson, alleged that her supervisor subjected her to sexual harassment. She sued her direct employer, a franchisee of Domino's Pizza, as well as Domino's itself, the franchisor. Patterson alleged that Domino's was liable because it was her joint employer and because the franchisee was its agent. The trial court granted summary judgment for Domino's, the Court of Appeal reversed, and the California Supreme Court reversed the judgment of the Court of Appeal, holding as follows:

Potential liability of a franchisor depends upon whether it has "retained or assumed a general right of control over factors such as hiring, direction, supervision, discipline, discharge, and relevant day-to-day aspects of the workplace behavior of the franchisee‘s employees." Slip op. at 30-31.

Although Domino's "vigorously enforced" standards for general operations, it "lacked the general control of an 'employer' or 'principal' over relevant day-to-day aspects of the employment and workplace behavior" of the franchisee's employees. Slip op. at 33.
According to the testimonial evidence, [the franchisee] exercised sole control over selecting the individuals who worked in his store. He did not include Domino's in the application, interview, or hiring process. Nor did anyone attempt to intervene on Domino's behalf. It was [the franchisee's] decision to hire Patterson as a new employee and to otherwise retain the existing staff when he bought the franchise.
Slip op. at 35-36. The franchisee also controlled its own sexual harassment policies and training. Slip op. at 36. Evidence that Domino's told the franchisee to "get rid of" the alleged harasser did not raise an inference that Domino's was in charge of employment decisions. Slip op. at 38.

The opinion is available here.

Monday, August 25, 2014

Weaving v. City of Hillsboro: Police Officer's ADHD Did Not Constitute Disability Under ADA

In Weaving v. City of Hillsboro, ___ F.3d ___ (8/15/14), a police officer, Weaving, sued his police department and the City of Hillsboro (City), alleging that it terminated him in violation of the Americans with Disabilities Act (ADA) because of problems associated with his attention deficit hyperactivity disorder (ADHD). A jury returned a verdict in his favor, and the City appealed from the ensuing judgment. The Ninth Circuit reversed. 

The Court first reviewed the applicable law under the ADA: 
The ADA forbids discrimination against a “qualified individual on the basis of disability.” 42 U.S.C. § 12112(a). A disability is “a physical or mental impairment that substantially limits one or more major life activities of [the] individual [who claims the disability],” or “a record of such an impairment,” or “being regarded as having such an impairment.” Id. § 12102(1). The ADA provides a nonexhaustive list of “major life activities.” Such activities include “caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working.” Id. § 12102(2)(A).
Slip op. at 12-13. 

The Court then held that substantial evidence did not support the judgment. 

Weaving alleged that his ADA substantially limited both his working and his interacting with others. Although both working and interacting with others constitute "major life activities," Weaving did not present substantial evidence to show that his ADHD substantially limited either (1) his ability to work compared to “most people in the general population" or (2) his ability to interact with others. Slip op. at 14-18. Weaving's ADHD may have limited his ability to get along with others, but that did not mean that it limited ability to interact with others. Slip op. at 17.

The opinion is available here.

Hager v. County of Los Angeles: Court of Appeal Affirms Whistleblower Retaliation Judgment for Deputy Sheriff, Reverses on Damage Award

Hager v. County of Los Angeles (8/5/2014) concerns the standard for proving retaliation under Labor Code section 1102.5.

Plaintiff Darren Hager worked for the County of Los Angeles as a sheriff's deputy. He sued the County and Sheriff's Department (County) alleging that the County retaliated against him for reporting alleged unlawful conduct by another sheriff's deputy. After a jury reached a verdict for Hager, the County appealed from the judgment, and Hager appealed from a post-trial order denying his motion for attorney fees. The Court of Appeal affirmed in part and reversed in part, holding as follows:

In the context of public employment, neither Mize-Kurzman v. Marin Community College Dist. (2012) 202 Cal.App.4th 832, nor section 1102.5 supports a rule that only the first employee reporting alleged unlawful conduct is entitled to whistleblower protection. Slip op. at 10-15.

Whistleblower protection applies when the disclosure of information addresses the alleged wrongdoing of a fellow employee. Slip op. at 15-16.

The trial court did not abuse its discretion in excluding evidence of incidents in Hager's employment history unrelated to the County's stated reasons for terminating him or evidence as to previously undisclosed reasons for terminating him. Slip op. at 16-23. The trial court did not err in finding that such evidence had no probative value. Slip op. at 19-21. The trial court also did not err in finding that such evidence would be more prejudicial than probative under Evidence Code section 352. Slip op. at 21-23.

Even if evidence in the record would have supported a verdict in favor of the County, substantial evidence supported the jury's finding that the County terminated Hager in retaliation for reporting alleged misconduct. Slip op. at 24-26. Hager introduced evidence of inconsistencies and implausabilities in the County's stated reasons for terminating him, such that the jury could rationally find those reasons "unworthy of credence." Slip op. at 26.

Substantial evidence did not support the jury's award of lost earnings to Hager. In April 2003 -- prior to his termination -- Hager applied for and received medical disability retirement as a result of injuries suffered on the job. In light of this, Hager failed to introduce evidence at trial that he lost past wages as a result of the termination, and the evidence did not support the award of backpay. Slip op. at 27-30.

For the same reason, the jury's award of front pay was speculative. Hager failed to introduce evidence that he would have continued to earn his salary but for his termination. Slip op. at 30-31.

Finally, the trial court did not err in denying Hager's request for attorney fees under Code of Civil Procedure section 1021. 5. Slip op. at 39-42. Some actions benefit all public safety officers and the public at large, but Hager's action only benefited him and did not confer a significant benefit on the general public.

The opinion is available here.

Friday, August 22, 2014

Rhea v. General Atomics: Employer May Deduct Vacation Pay from Exempt Employee for Partial Day Absences

In Rhea v. General Atomics (7/21/14) --- Cal.App.4th ---, the plaintiff filed a putative class action challenging the employer's policy of requiring exempt employees to use annual leave hours to cover partial day absences from work. The plaintiff alleged that under this policy, exempt employees were not being paid on a salary basis for purposes of California law and could not be exempt.

The trial court granted summary judgment for the defendant, and the plaintiff appealed. The Court of Appeal affirmed, holding as follows:

California law on the issue is patterned after federal law, which allows employers to deduct from pay "for absences of one or more full days occasioned by sickness or disability." Slip op. at 8. Under both California and federal law, when an exempt employee is absent from work for a partial day, an employer is prohibited from deducting monetary pay from the employee. Slip op. at 9. In Conley v. Pacific Gas & Electric Co. (2005) 131 Cal.App.4th 260, the Court of Appeal held that under California law, an employer may deduct vacation pay for partial day absences without destroying the exemption. Slip op. at 10-11.

California's law prohibiting the forfeiture of earned wages does not prohibit an employer from deducting leave pay for partial day absences. Slip op. at 11-18. Although vacation pay constitutes wages under California law, and although California law prohibits the forfeiture of vacation pay, requiring employees to use vacation pay to cover partial day absences does not constitute the forfeiture of wages. Slip op. at 13-15. Instead, requiring such use of vacation pay simply "affords an employer the right to control the terms under which vacation time may be exercised by employees." Slip op. at 15.

The deduction policy also does not constitute an "impermissible shifting of wages that an employee has already earned (i.e., Annual Leave benefits) to cover [the employer's] duty to pay wages for the period of the employee's partial-day absence." Slip op. at 19-20. Requiring an employee to use vacation pay does not mean that an employer has failed to pay all of the wages that it is obligated to pay during an employee's partial-day absence. Slip op. at 20.

Finally, California law does not prohibit use of vacation pay wages when a partial day absence is for less than four hours. Slip op. at 21-22.

The opinion is available here.

Thursday, August 21, 2014

Cochran v. Schwan’s Home Service: Employer Must Reimburse Employees for Work-Related Use of Cell Phones; Individual Questions as to Damages Do Not Justify Denial of Class Certification

In Cochran v. Schwan’s Home Service, Inc. (8/12/14) --- Cal.App.4th ---, the plaintiff filed a putative class action alleging that the defendant failed to reimburse its employees for expenses arising out of the work-related use of their cell phones. 

On the plaintiff's motion for class certification, the defendant argued that common issues did not predominate because some employees had unlimited data plans and thus did not incur additional expense from the use of their personal cell phones. The trial court agreed, holding that common issues did not predominate and a class action was not a superior method of resolving the dispute: 
The showing of an actionable expenditure or loss by . . . class member[s] pertains to [defendant's] liability, not to class members’ damages as it is set forth in . . . section 2802. If the class member[s] did not incur . . . loss[es], there can be no liability.” 
Slip op. at 4-5. In addition, the trial court reasoned that there was a question as to “whether the cell phone charges [the plaintiff] allegedly incurred were incurred and paid for by him or by his live-in girlfriend.”  

The plaintiff appealed, and the Court of Appeal reversed, holding as follows:

When employees have to use their personal cell phones for work-related purposes, the employer must reimburse them for such use, whether the employees incurred an additional expense as a result of such use or not. "[T]o be in compliance with section 2802, the employer must pay some reasonable percentage of the employee’s cell phone bill. Because of the differences in cell phone plans and worked-related scenarios, the calculation of reimbursement must be left to the trial court and parties in each particular case." Slip op. at 6-7.

The trial court made erroneous legal assumptions when it denied certification based on its holding that section 2802 does not require reimbursement if the employee's cell phone charges were paid by a third person, or if the employee had an unlimited data plan. 
Slip op. at 7-8. 

The opinion is available here

Wednesday, August 20, 2014

Avila v. LAPD: Ninth Circuit Affirms FLSA Retaliation Award for LAPD Officer

In Avila v. Los Angeles Police Department, ___ F.3d ___ (9th Cir. 7/10/14), plaintiff Leonard Avila, a police officer, sued the Los Angeles Police Department and the City of Los Angeles (collectively, City) for retaliation under the Fair Labor Standards Act (FLSA), alleging the following facts: Avila periodically worked through his meal period but did not request overtime; Avila testified for another police officer, Maciel, in support of Maciel's claim that LAPD failed to compensate him for overtime hours worked; and LAPD terminated Avila after he testified, alleging that Avila was insubordinate for not claiming his own overtime. 

A jury found in favor of Avila on his FLSA anti-retaliation claim, and the City appealed. The Ninth Circuit affirmed, finding as follows:

The determination by the LAPD 
Board of Rights (BOR) that Avila was guilty of insubordination and should be fired was not entitled to preclusive effect. Slip op. at 7-8. The BOR did not decide whether Avila was terminated in in retaliation for testifying in the Maciel action, and Avila was entitled to have the issue determined in court. 

The district court properly instructed the jury on Avila's retaliation claim. Slip op. at 8-17. 

The district court properly refused to instruct the jury on the same decision defense because the uncontested evidence was that the City would not have fired Avila had he not testified. Slip op. at 10-11. Given this uncotested evidence, the court had no evidentiary foundation for giving a same decision instruction.

The district court did not err in refusing to instruct the jury that an employee who engages in protected activity is not immune from adverse employment action for violating workplace rules and is not immune from termination if the employee's conduct warrants termination. Slip op. at 11-17. These instructions would have supported the City's argument that it did not fire Avila because he testified, but rather because he failed to request overtime. As stated earlier, the City was not entitled to a same decision instruction, nor was it entitled to an instruction that it could fire Avila for not claiming overtime. 
[T]he only issue for the jury in this case was whether the City was telling the truth in claiming that it fired a model employee (who was hired by another police force even as the termination action was pending), for not seeking all the pay that he might have. The district court did not abuse its discretion in declining to give the requested supplemental instructions. 
Slip op. at 17. 

Finally, the district court did not abuse its discretion in awarding Avila his attorney fees and liquidated damages under the FLSA. Slip op. at 18-19. 

The opinion is available here

Tuesday, August 19, 2014

Anderson v. City and County of San Francisco: Ninth Circuit Rules on "Bona Fide Occupational Qualification" Exemption to Title VII Prohibition on Sex Discrimination

In Anderson v. City and County of San Francisco, ___ F.3d ___, (9th Cir. 7/2/14), the Ninth Circuit considered the "bona fide occupational qualification" (BFOQ) exception to Title VII's prohibition of sex discrimination. 
Plaintiffs, current and former deputies of the San Francisco Sheriff’s Department (“SFSD”), appeal the district court’s order granting summary judgment to the City and County of San Francisco (the “County”) on their challenge to SFSD’s policy prohibiting male deputies from supervising female inmates in the housing units of SFSD’s jails. The district court concluded that SFSD’s policy did not violate Title VII’s prohibition on sex discrimination because it fell within the statute’s “bona fide occupational qualification” exception, 42 U.S.C. § 2000e-2(e)(1). We reverse the district court’s grant of summary judgment to the County on the sex discrimination claims and vacate the denial of summary judgment to plaintiffs on those claims.
Slip op. at 5. 

Title VII permits employers to discriminate on the basis of sex where sex is a BFOQ. 
To justify discrimination under the BFOQ exception, an employer must “prove by a preponderance of the evidence: 1) that the job qualification justifying the discrimination is reasonably necessary to the essence of its business; and 2) that [sex] is a legitimate proxy for the qualification because (a) it has a substantial basis for believing that all or nearly all [men] lack the qualification, or . . . (b) it is impossible or highly impractical . . . to insure by individual testing that its  employees will have the necessary qualifications for the job.”
Slip op. at 13. 

While judgments by prison administrators are entitled to some deference in court, such decisions must be based on a “reasoned decision-making process, based on available information and experience.” A material issue of genuine fact arose as to whether the Sheriff's decision here met that standard. Slip op. at 14-18. 

The County set forth four rationales to justify its sex-based policy: (1) protecting female inmates from sexual misconduct by male deputies; (2) maintaining jail security; (3) protecting inmate privacy; and (4) preserving the ability of female inmates to rehabilitate. 

Each such rationale related to a job qualification "reasonably necessary to the essence of" operating SFSD's jails: (1) not posing a threat to the safety of female inmates due to a likelihood of perpetrating sexual misconduct against them; (2) not posing a threat to jail security; (3) not posing a threat to female inmates’ privacy; and (4) not posing a threat to female inmates’ ability to rehabilitate. Each such rationale thus satisfied the first prong of the BFOQ exemption test. Slip op. at 18-19. 

To satisfy the second prong of the exemption, the County would have to show that excluding all male deputies is a “legitimate proxy” for excluding deputies who lack one of these four qualifications. The County could do so by showing that there is: (a) “a substantial basis for believing that all or nearly all [men] lack the qualification”; or (b) “it is impossible or highly impractical . . . to insure by individual testing” whether or not a male deputy has the qualification. The County did not do so on the record before the Court. Slip op. at 20-25. 

The opinion is available here

People ex rel. Harris v. Pac Anchor Transportation: FAAAA Does Not Preempt UCL Action Based on State Insurance and Wage Law

The California Supreme Court has announced its decision in People ex rel. Harris v. Pac Anchor Transportation, Inc. (7/28/14) --- Cal.4th ---. In Harris, the State of California alleged that the defendants misclassified truck drivers as independent contractors, thus denying them protections that state insurance and wage laws provide to employees, including the right to itemized wage statements. The issue, as described by the Court, is as follows:
Whether an action under the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) (UCL) that is based on a trucking company’s alleged violation of state labor and insurance laws is “related to a price, route or service” (49 U.S.C. § 14501 (c)(1)) of the company and, therefore, preempted by the Federal Aviation Administration Authorization Act of 1994 (Pub.L. No. 103-305 (Aug. 23, 1994) 108 Stat. 1569) (FAAAA).
The defendants made two preemption arguments. First, they argued that the FAAAA facially preempts all UCL claims against motor carriers. Second, they argued that the particular UCL claims at issue were preempted as applied to this case.

The Court rejected both arguments on essentially the same grounds. The Court held that the FAAAA does not preempt an action based on a trucking company’s alleged general violations of state labor and insurance laws. Such state laws do not focus on motor carriers, but regulate employer practices generally. They are "laws of general application whose effects on carriers' prices, routes, and services is remote." Even IWC Wage Order No. 9, which regulates the transportation industry, is not preempted because any effect on prices, routes, or services is indirect.

The opinion is available here.

Monday, August 18, 2014

Johnmohammadi v. Bloomingdales’s: Where Employee Has Opportunity to Opt Out of Arbitration Agreement, Employer Does Not Violate Norris-LaGuardia Act or National Labor Relations Act

A quick word on Johnmohammadi v. Bloomingdales’s, Inc., ___ F.3d ___ (9th Cir. 6/23/14), in which a putative class representative plaintiff appealed from the district court's order granting the defendant's motion to compel individual arbitration of her California wage and hour claims. The Ninth Circuit affirmed, holding as follows:

Where an employer gives an employee thirty days to opt out of an arbitration policy that forbids class-wide arbitration, the employer does not violate either the Norris-LaGuardia Act, 29 U.S.C. § 101 et seq., or the National Labor Relations Act, 29 U.S.C. § 151 et seq. Such a policy does not interfere with, restrain, or coerce the employee in the exercise of her right to file a class action. As the Court stated:
If [the employee] wanted to retain [the right to file a class action], nothing stopped her from opting out of the arbitration agreement. [The employer] merely offered her a choice: resolve future employment-related disputes in court, in which case she would be free to pursue her claims on a collective basis; or resolve such disputes through arbitration, in which case she would be limited to pursuing her claims on an individual basis. In the absence of any coercion influencing the decision, we fail to see how asking employees to choose between those two options can be viewed as interfering with or restraining their right to do anything.
Slip op. at 9. 

The opinion is available here.

Thursday, August 14, 2014

Rebolledo v. Tilly’s: Court Properly Denied Arbitration Where Agreement Excluded Statutory Labor Code Claims from its Scope

In Rebolledo v. Tilly’s Inc. (8/6/14) --- Cal.App.4th ---, the plaintiff filed a putative class action and representative PAGA action alleging a number of wage and hour violations. The defendants moved to compel arbitration and dismiss class claims. The trial court denied the motion, and the defendants appealed.

The Court of Appeal affirmed, holding as follows:

The defendants' 2001 arbitration agreement expressly excluded from its scope "any matter within the jurisdiction of the California Labor Commissioner." Plaintiff's statutory wage claims fell within the jurisdiction of the Labor Commissioner, who "may enforce the provisions of [the Labor Code] and all labor laws of the state the enforcement of which is not specifically vested in any other officer, board or commission." Slip op. at 12-16.

The Court rejected the defendant's argument that the arbitration agreement intended to exclude only the claims actually filed before the Labor Commissioner, rather than any claims that could have been filed before the Labor Commissioner. If the defendants had intended to exclude only those claims actually filed before the Labor Commissioner, it could have said so in the operative arbitration agreement. Slip op. at 16-22.

To the extent that the defendants' 2005 arbitration agreement modified the terms of the 2001 arbitration agreement, such modification was not effective because the 2001 document stated that it could be modified only with the signatures of the President, Senior Vice President and Director of Human Resources. The defendants did not provide evidence that all three such executives executed the 2005 document and they could not enforce it. Slip op. at 22-26.

The opinion is available here.  

Monday, August 11, 2014

Davis v. Nordstrom: Employee Is Bound By New Handbook When Employer Gives Notice

Davis v. Nordstrom, Inc., ___ F.3d ___ (9th Cir. 6/23/14). 

After AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), defendant Nordstrom, revised its employee handbook to preclude class actions. Weeks later, the plaintiff filed a wage and hour class action, and Nordstom moved to compel individual arbitration. The district court denied the motion, holding that the revision was not valid.

The Ninth Circuit reversed, holding that Nordstrom provided sufficient notice of the change by mailing the revised handbook to its employees and giving them thirty days to decide whether to remain employed by Nordstrom. Under California contract law, the revised handbook constituted a binding agreement between the parties. The law did not require Nordstrom to list the policy revisions in the cover letter that it sent with the revised handbook. Nor did the law require Nordstrom to advise its employees that their continued employment constituted acceptance of the revised policy.

Davis v. Nordstrom is available here

Thursday, August 7, 2014

Malone v. Superior Court: Court of Appeal Upholds Arbitration "Delegation Clause"

In Malone v. Superior Court (California Bank & Trust) (6/17/14) --- Cal.App.4th ---, the Court considered whether a delegation clause -- one that delegates to the arbitrator issues regarding the enforceability of the arbitration clause -- is unconscionable. Malone a predates the California Supreme Court's decision in Iskanian, but it still is worth noting. 

The defendant in a wage and hour class action, CB&T, moved to compel arbitration, and the plaintiff opposed on unconscionability grounds. The defendant argued that the arbitration agreement's delegation clause required the arbitrator to decide the issue, and the plaintiff argued that the delegation clause itself was unconscionable. The trial court found that the delegation clause was not unconscionable and compelled arbitration. The plaintiff took a writ, which the Court of Appeal denied, holding as follows:

If a party challenges the enforceability of a delegation clause alone, the court determines the issue. If a party challenges the enforceability of the arbitration agreement in its entirety, the arbitrator determines the issue. Slip op. at 8-9.

To be enforceable, a delegation clause must be clear and unmistakable. Slip op. at 9-10.

Earlier cases held that delegation clauses were substantively unconscionable on three grounds: (1) such clauses are outside the reasonable expectation of the parties; (2) such clauses are not bilateral; and (3) the arbitrator has a self-interest in finding arbitration agreements enforceable. Slip op. at 10-15.

The delegation clause here was bilateral in that either party may challenge the enforceability of the agreement, and any such challenge would be referred to an arbitrator. Slip op. at 15-16.

The Federal Arbitration Act (FAA) preempts any finding that a delegation clause is substantively unconscionable because the clause raises an inference of bias on the part of arbitrators purportedly acting in their own financial interests. Slip op. at 16-24. Any such finding would be "nothing more than an expression of a judicial hostility to arbitration, based on the assumption that a paid decisionmaker cannot be unbiased...." Slip op. at 23.

The arbitration clause at issue was not "outside the reasonable expectations of the parties." Slip op. at 24-25.

The opinion is available here.

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