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Tuesday, May 26, 2015

Integrity Staffing Solutions, Inc. v. Busk: SCOTUS Holds that Security Check Time is not Compensable under FLSA

In Integrity Staffing Solutions, Inc. v. Busk, ___U.S. ___ (12/9/14), the plaintiff filed a putative collective action under the federal Fair Labor Standards Act (FLSA), alleging that the defendant failed to compensate its employees for time that they spent waiting for and going through the employer's mandatory end-of shift security checks.

The Ninth Circuit, in Busk v. Integrity Staffing Solutions, Inc., 713 F. 3d 525 (9th Cir. 4/12/13) (discussed here), had held that such time was compensable. The Supreme Court reversed, holding as follows:

The Portal-to-Portal Act, 29 U. S. C. §251(a), provides that an employer need not pay an employee for the following:
(1) walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform, and

(2) activities which are preliminary to or postliminary to said principal activity or activities, which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities.
"At issue here is the exemption for 'activities which are preliminary to or postliminary to said principal activity or activities.'"

The term "principal activities" includes all activities that are "integral and indispensable part of the principal activities." An activity is "integral and indispensable" if it is "an intrinsic element of [the principal] activities and one with which the employee cannot dispense if he is to perform his principal activities."

The time spent waiting for or engaged in security checks was not compensable. Waiting for and engaging in security checks were not the "principal activity or activities which [the] employee is employed to perform." Nor were they integral and indispensable to the employees' duties as warehouse workers. Integrity Staffing could have done away with the security screenings without impacting the employees' ability to perform their work.

Neither the fact that the employer required the employees to undergo the screening, nor that fact that the employer could have reduced the waiting time to a de minimis amount by adding more screeners change the analysis. Neither of these facts would make the screening time integral and indispensable to the employees' principal activities as warehouse workers.

Justice Thomas wrote the opinion for a unanimous Court. Justice Sotomayor wrote a concurring opinion, in which Justice Kagan joined. The opinion is available here

Friday, May 22, 2015

Garcia v. Superior Court: Court Must Rule on Application of FAA Before Ordering Arbitration of Truck Driver Wage Dispute

In Garcia v. Superior Court (Southern Counties Express, Inc.) (5/15/15) --- Cal.App.4th ---, the petitioners were truck drivers who were engaged by the defendant to haul shipping containers from the ports of Los Angeles and Long Beach to facilities throughout Southern California. The drivers repeatedly signed independent contractor agreements and vehicle leases, both of which included arbitration clauses.

The drivers filed wage claims with the Division of Labor Standards Enforcement (DLSE), alleging that the defendant improperly classified them as independent contractors, rather than employees. The defendant petitioned the Superior Court to stay the DLSE proceedings and compel arbitration. The trial court held evidentiary hearings, found that the arbitration agreements were not procedurally unconscionable, and compelled arbitration. The drivers sought writ relief, and the Court of Appeal reversed and remanded, holding as follows:

The Federal Arbitration Act (FAA) does not apply to "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." 9 U.S.C. § 1 et seq.

The drivers argued that they were workers engaged in interstate commerce, and their contracts were exempt from the FAA. They argued that because the FAA did not apply, Labor Code section 229 would allow them to pursue their wage claims "without regard to the existence of any private agreement to arbitrate."

The defendant argued that the independent contractor agreements and vehicle leases were not "contracts of employment," the FAA applied, and the drivers should be compelled into arbitration.

The trial court erred in not deciding whether the independent contractor agreements and vehicle leases were contracts of employment for transportation workers engaged in interstate commerce, within the meaning of the FAA’s section 1 exemption.

The opinion is available here.

Thursday, May 21, 2015

McGill v. Citibank: In Light of Concepcion, Cal. Supremes Will Review Viability of Broughton-Cruz Rule that "Public Injunction" Cases May Not Be Compelled to Arbitration

In Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066 and Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303, the California Supreme Court held that statutory claims for public injunctive relief are not subject to compulsory private arbitration.

In McGill v. Citibank, N.A., the Court will decide whether the Broughton-Cruz rule survives the United States Supreme Court's decision in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 321 (discussed here). In Ferguson v. Corinthian Colleges, Inc., 733 F.3d 928 (9th Cir. 2013) (discussed here), the Ninth Circuit gave its view, holding that Broughton-Cruz does not survive.

The Court's web page for McGill is here.

Wednesday, May 20, 2015

Golden v. California Emergency Physicians: Ninth Circuit Addresses "No Employment" Clauses and Business and Professions Code Section 16600

In Golden v. California Emergency Physicians, ___ F.3d ___ (9th Cir. 4/8/15), plaintiff Donald Golden, M.D., was affiliated with defendant California Emergency Physicians Medical Group (CEP), "a large consortium of over 1000 physicians that manages or staffs many emergency rooms, inpatient clinics, and other facilities in California and other, mostly Western states." Golden sued CEP for numerous causes of action, and the parties settled before trial.

On the record before the Court, Golden waived any and all rights to employment with CEP or at any facility that CEP may own or with which it may contract in the future. When the parties reduced the agreement to writing, Golden refused to sign and attempted to have the agreement set aside. The district court rejected this effort, and Golden appealed. The Ninth Circuit reversed, holding as follows:

Section 16600 of the California Business and Professions Code instructs that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Section 16600 does not merely prohibit covenants not to compete. It is broadly drawn, with limited exceptions, to void all contracts that restrain the lawful pursuit of a profession, trade, or business.

On this basis, the Ninth Circuit reversed the district court and remanded for the district court to "determine in the first instance whether the no-employment provision constitutes a restraint of a substantial character to Dr. Golden’s medical practice."

The opinion is available here.

Tuesday, May 19, 2015

Dickson v. Burke Williams, Inc.: No Failure to Prevent Liability Absent Actionable Harassment or Discrimination

Just a very quick note on Dickson v. Burke Williams, Inc. (3/6/15) --- Cal.App.4th ---, in which the Court of Appeal held as follows:
[T]here cannot be a valid claim for failure to take reasonable steps necessary to prevent sexual harassment if, as here, the jury finds that the sexual harassment that occurred was not sufficiently severe or pervasive as to result in liability. A claim for failure to take reasonable steps necessary to prevent sexual harassment cannot prevail when the necessary element of sexual harassment is not established. Similarly, the jury's finding that defendant was not liable on plaintiff's sex discrimination claim because there was no adverse employment action precludes defendant's liability for failure to take reasonable steps necessary to prevent sex discrimination.
The opinion is available here

Monday, May 18, 2015

Young v. UPS: SCOTUS Addresses Title VII Disparate Treatment Pregnancy Discrimination Action

In Young v. United Parcel Service, Inc., ___U.S. ___ (3/25/15), the plaintiff worked as a part-time driver for UPS. When she became pregnant, her doctor restricted her lifting activities, which were required for her position. UPS told Young that she could not work as a driver while under a lifting restriction and did not qualify for a temporary alternative work assignment.

Young sued under Title VII of the Civil Rights Act of 1964, which provides: "women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes . . . as other persons not so affected but similar in their ability or inability to work . . . ." 42 U. S. C. §2000e(k). The District Court granted summary judgment for UPS, finding that Young could not show intentional discrimination, nor could she make out a prima facie case under McDonnell Douglas, and in any case, UPS had a legitimate, nondiscriminatory reason for its actions. The Fourth Circuit Court of Appeals affirmed, and the US Supreme Court granted certiorari.

The Supreme Court reversed, holding that Young had created a triable dispute of material fact under McDonnell Douglas as to "whether UPS provided more favorable treatment to at least some employees whose situation cannot reasonably be distinguished from Young’s." Young created this triable issue by introducing evidence that UPS accommodated (1) drivers who had become disabled on the job, (2) those who had lost their Department of Transportation certifications, and (3) those who suffered from a disability covered by the Americans with Disabilities Act of 1990.

The Fourth Circuit did not consider the combined effects of these policies, nor did it consider the strength of UPS’ justifications for each when combined. That is, why, when the employer accommodated so many, could it not accommodate pregnant women as well?
The Court did not consider whether Young created a triable issue of fact as to whether UPS's reasons for its conduct were pretextual. 

Justice Breyer wrote the opinion, with Chief Justice Roberts and Justices Ginsburg, Sotomayor, and Kagan joining. Alito concurred in the judgment. Scalia, Kennedy, and Thomas dissented. The opinion is available here

Saturday, May 16, 2015

Williams v. Superior Court (Marshalls of CA): Court Properly Limited Discovery of Employees' Contact Information in PAGA Action

In Williams v. Superior Court (Marshalls of CA, LLC) (5/15/15) --- Cal.App.4th ---, the plaintiff filed a PAGA action for meal and rest period violations and sought discovery of contact information for Marshalls's non-exempt employees. The trial court granted plaintiff's motion to compel in part, ordering Marshalls to produce contact information for the employees only at its Costa Mesa store, and denying plaintiff's request for state-wide discovery, but allowing plaintiff to renew his motion to compel the remaining information after he had been deposed “for at least six productive hours,” at which time Marshalls could attempt to show plaintiff’s substantive claims had no factual merit.

The Court of Appeal affirmed, holding as follows:

Plaintiff's complaint alleged only that he and perhaps others at the Costa Mesa store suffered Labor Code violations. Plaintiff showed no knowledge of Marshalls' [sic] practices at other stores. "That being the case, it was eminently reasonable for the trial judge to proceed with discovery in an incremental fashion..."
The cost of state-wide discovery also justified incremental discovery.

Nothing in PAGA gives a representative plaintiff the same right to discovery that the Labor Commissioner would have in an enforcement action.

The employees' Constitutional privacy interests outweighed plaintiff’s need to discover their identities at this time.

[Plaintiff's] first task will be to establish he was himself subjected to violations of the Labor Code. As he has not yet sat for deposition, this task remains unfulfilled. The trial court could reasonably conclude that the second task will be to establish Marshalls’ [sic] employment practices are uniform throughout the company, which might be accomplished by reference to a policy manual or perhaps deposition of a corporate officer. The trial court could reasonably conclude that only then will plaintiff be able to set forth facts justifying statewide discovery.
The opinion is available here.

Friday, May 15, 2015

Sandquist v. Lebo Automotive, Inc.: California Supreme Court Will Decide Whether Court or Arbitrator Determines Whether Arbitration Agreement Provides for Class Arbitration

In Sandquist v. Lebo Automotive, Inc. (2014) 228 Cal.App.4th 65, the plaintiff filed a putative class action for race, color, national origin, and ancestry discrimination under the Fair Employment and Housing Act (FEHA). The trial court compelled individual arbitration and dismissed the class allegations. The Court of Appeal reversed, holding that the arbitrator, rather than the trial court, must determine whether an arbitration agreement provides for class arbitration. The Court of Appeal's decision is here.

The California Supreme Court granted review on November 12, 2014. The Court's docket page for Sandquist is here

Thursday, May 14, 2015

Landers v. Quality Communications: US Supreme Court Denies Cert in Case Involving FLSA Pleading Standards

On April 20, 2015, the US Supreme Court denied certiorari in Landers v. Quality Communications, Inc., ___ F.3d ___ (9th Cir. 11/12/14). In Landers, the Ninth Circuit affirmed an order dismissing a collective action under the federal Fair Labor Standards Act (FLSA) for failure to meet the heightened pleading standards set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009).
[T]o survive a motion to dismiss, a plaintiff asserting a claim to overtime payments must allege that she worked more than forty hours in a given workweek without being compensated for the overtime hours worked during that workweek... A plaintiff may establish a plausible claim by estimating the length of her average workweek during the applicable period and the average rate at which she was paid, the amount of overtime wages she believes she is owed, or any other facts that will permit the court to find plausibility. However, like the other circuit courts that have ruled before us, we decline to make the approximation of overtime hours the sine qua non of plausibility for claims brought under the FLSA. After all, most (if not all) of the detailed information concerning a plaintiff-employee's compensation and schedule is in the control of the defendants. 
We further agree with our sister circuits that, at a minimum, a plaintiff asserting a violation of the FLSA overtime provisions must allege that she worked more than forty hours in a given workweek without being compensated for the hours worked in excess of forty during that week. 
The opinion is available here.

Wednesday, May 13, 2015

Department of Homeland Security v. MacLean: SCOTUS Considers Scope of Federal Whistleblower Protection

In Department of Homeland Security v. MacLean, ___ U.S. ___ (2015), the Transportation Safety Authority (TSA) terminated Robert J. MacLean from his position as a federal air marshal because MacLean disclosed to the media the TSA's decision to pull air marshals off of certain flights to save costs.

On certiorari, the United States Supreme Court held that federal whistleblower law protected MacLean from termination.

Federal law prohibits federal agencies from taking personnel actions against employees who disclose information revealing "any violation of any law, rule, or regulation," or "a substantial and specific danger to public health or safety," as long as the disclosure is not "specifically prohibited by law." 5 U. S. C. §2302(b)(8)(A).

The TSA promulgated regulations prohibiting disclosure of "sensitive security information," including the type of information that MacLean disclosed to the media. However, the Court held that these regulations are not "laws" within the meaning of the whistleblower statute. Thus, although prohibited by TSA regulation, MacLean's disclosures were not "prohibited by law," and MacLean was protected from termination.

The Court also held that the federal statute that authorized the TSA to issue the regulations - 49 U. S. C. §114(r)(1) - did not itself prohibit MacLean's disclosures. The Court held that section 114(r)(1) only authorizes the TSA to issue regulations and does not itself prohibit anything.

Chief Justice Roberts wrote the opinion, joined by Justices Scalia, Thomas, Ginsburg, Breyer, Alito, and Kagan. Justices Sotomayor and Kennedy dissented.

The opinion is available here.

Hirst v. City of Oceanside: Court Examines Scope of FEHA Harassment Protection for Persons Providing Contract Services

In Hirst v. City of Oceanside (5/8/15) --- Cal.App.4th ---, the plaintiff, Kimberli Hirst, worked as a phlebotomist for American Forensic Nurses, Inc. (AFN). AFN contracted with San Diego County to provide phlebotomy services for local law enforcement agencies, including the Oceanside Police Department (OPD).

Hirst sued the City of Oceanside under FEHA, alleging that an OPD officer sexually harassed her while she was providing phlebotomy services to OPD under AFN's contract with the County. Hirst prevailed at trial, and the City moved for judgment notwithstanding the verdict, arguing that Hirst lacked standing to bring a FEHA claim against the City. The trial court denied the motion, and the City appealed. The Court of Appeal affirmed, holding that Hirst had standing to sue as a "person providing services pursuant to a contract." The Court reasoned as follows:

At the relevant time, Government Code section 12940(j) provided that an employer may be held liable for its employee's harassment of an "employee, an applicant, or a person providing services pursuant to a contract." [In 2014, the Legislature broadened this provision to encompass interns and volunteers as well.] Section 12940(j)(5) defines "a person providing services pursuant to a contract" as one who (1) "has the right to control the performance of the contract for services and discretion as to the manner of performance"; (2) "is customarily engaged in an independently established business"; and (3) "has control over the time and place the work is performed, supplies the tools and instruments used in the work, and performs work that requires a particular skill not ordinarily used in the course of the employer's work."

Hirst met all three of these requirements. First, she exercised professional judgment in implementing the blood drawing services. Although law enforcement officers secured the environment in which she worked, they did not exercise authority over her in any other manner. Second, she was engaged in the profession of a phlebotomist, which was not a usual part of the City's public duties. Third, she brought her own equipment to provide these services and did not use the City's property or rely on its expertise.

Interestingly, Hirst apparently did not argue at trial that she was a "person providing services pursuant to a contract." Instead, she argued that AFN was such a person, and that she was protected as AFN's employee. The City did not deny that AFN was such a person, but argued that FEHA protection did not extend to AFN's employees. The Court rejected this argument, holding that the Legislature could not have intended to cover a business entity such as AFN, but not the people through whom such an entity provides contractual services.

The opinion is available here

Tuesday, May 5, 2015

Williams v. Chino Valley Independent Fire District: Supreme Court Rules on Cost Awards to Prevailing Defendants in FEHA Actions

Williams v. Chino Valley Independent Fire District (5/4/15) --- Cal.4th --- concerns whether a prevailing defendant in a FEHA action may recover its ordinary costs absent a finding that the plaintiff brought or continued the litigation without an objective basis for believing that it had merit.

Plaintiff Loring Winn Williams sued defendant Chino Valley Independent Fire District for disability discrimination. The trial court granted summary judgment for the defendant and awarded it $5,368.88 in costs. The Court of Appeal affirmed, but the Supreme Court reversed, holding as follows:

CCP section 1032(b) mandates that prevailing parties recover their costs as a matter of right, "except as otherwise expressly provided by statute." Government Code section 12965(b) allows courts, in their discretion, to award attorney fees and costs to prevailing parties in FEHA actions. Section 12965(b) thus constitutes an express exception to section 1032(b) and as a result, trial courts have discretion to award ordinary costs to prevailing defendants, but need not do so.

In exercising this discretion, courts must follow the rule set forth in Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412. In Christiansburg, the U.S. Supreme Court held that a prevailing plaintiff in a Title VII action ordinarily should be awarded his or her fees but should not be assessed his or her opponent's fees unless a court finds that the claim was "frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so."

Christiansburg applies equally to awards of attorney fees and costs in FEHA actions: a prevailing plaintiff ordinarily should recover his or her fees and costs unless special circumstances would render such an award unjust, but a prevailing defendant should not recover its fees or costs unless the court finds the action was "objectively without foundation when brought, or the plaintiff continued to litigate after it clearly became so."

The opinion is available here.