Thanks for a Great 2012, Looking Forward to 2013!

2012 has been a wonderful year, with my mediation practice taking off and this blog becoming incredibly successful. Over 200 people subscribe to the blog by email, and the web site receives an additional 1,000 hits per week. Plus, over 1,300 people now receive my monthly Update email. 

Please remember that I am available across California to help you resolve all of your employment law cases, from individual FEHA, wrongful termination, or trade secret cases to wage and hour class actions. 

Here's wishing all of you a Merry New Year! 

Ralphs Grocery v. UFCWU: Cal. Supreme Court Holds That Union Has Statutory Right to Picket in Front of Market

In Ralphs Grocery Company v. United Food and Commercial Workers Union Local 8 (12/27/12) --- Cal.4th ---, the California Supreme Court has ruled on a labor union's constitutional and statutory rights to picket in front of a grocery market's sole entrance. The opinion, by Justice Kennard with Cantil-Sakauye, Baxter, Werdegar, Corrigan, and Liu joining, gives a good summary of the proceedings below and the holdings: 

A supermarket owner sought a court injunction to prevent a labor union from picketing on the privately owned walkway in front of the only customer entrance to its store. In response, the union argued that two statutory provisions — Code of Civil Procedure section 527.3 (the Moscone Act) and Labor Code section 1138.1 (section 1138.1) — prohibited issuance of an injunction under these circumstances. The trial court denied relief, ruling that the supermarket owner had failed to satisfy section 1138.1‘s requirements for obtaining an injunction against labor picketing.  

The Court of Appeal reversed. It held that the walkway fronting the supermarket's entrance was not a public forum under the California Constitution's provision protecting liberty of speech (Cal. Const., art. I, § 2, subd. (a)), and therefore the store owner could regulate speech in that area. It further held that both the Moscone Act and section 1138.1, because they give speech regarding a labor dispute greater protection than speech on other subjects, violate the free speech guarantee of the federal Constitution‘s First Amendment and the equal protection guarantee of the federal Constitution's Fourteenth Amendment. This court granted the union's petition for review.

We agree with the Court of Appeal that the supermarket's privately owned entrance area is not a public forum under the California Constitution's liberty of speech provision. For this reason, a union's picketing activities in such a location do not have state constitutional protection. Those picketing activities do have statutory protection, however, under the Moscone Act and section 1138.1. We do not agree with the Court of Appeal that the Moscone Act and section 1138.1, which are components of a state statutory system for regulating labor relations, and which are modeled on federal law, run afoul of the federal constitutional prohibition on content discrimination in speech regulations. On this basis, we reverse the Court of Appeal's judgment and remand the matter for further proceedings.

Slip op. at 1-2. The opinion is available here.  

I am organizing a series of webinars on important recent decisions for the The State Bar of California's Labor and Employment Law Section.  We will present a webinar on Ralphs Grocery within the next two weeks or so.  I am very pleased that Justice Miriam Vogel and Paul More, who argued the case for Ralphs and the Union, respectively, have agreed to speak.  Please stay tuned for more information. 

Olofsson v. Mission Linen Supply: Court of Appeal Holds That Employer Was Not Estopped to Deny That it Approved CFRA and FMLA Leave

This decision is very fact-specific, but it is interesting regardless.  In Olofsson v. Mission Linen Supply (12/13/12) --- Cal.App.4th ---, the Court of Appeal affirmed a trial court judgment, holding that substantial evidence supported the trial court’s findings that the employer (1) did not misrepresent by deed that the employee’s leave had been approved; and (2) was not silent when it had a duty to speak under the applicable regulations.  

The decision does a good job of laying out the respective obligations of employer and employee under the CFRA and FMLA: 

California’s Moore-Brown-Roberti Family Rights Act (CFRA) and the federal Family and Medical Leave Act (FMLA) compel an employer of Mission Linen’s size to grant a leave of absence to an employee, and preserve that employee’s right to continued employment, if the employee worked 1,250 hours in the year preceding the leave and the leave is for a recognized reason, such as to care for a family member who has a serious health condition.  (Gov. Code, § 12945.2, subds. (a), (b), (c)(3); 29 U.S.C. §§ 2611(2), (4), 2612(a), 2614(a).)  The family leave laws also impose on employers a legal duty to inform employees of the conditions that must be met to qualify for family leave.  (Cal. Code Regs., tit. 2, § 7297.9; 29 U.S.C. § 2619.)  It is undisputed that Mission Linen complied with these posting requirements.   

Under the CFRA, where the employee’s need for leave is foreseeable, the employee must provide the employer with reasonable advance notice of this need.  (Gov. Code, § 12945.2, subd. (h).)  Indeed, the employer may require that employees provide at least 30 days’ advance notice before the CFRA leave is to commence if the need for leave is foreseeable based on planned medical treatment for a serious health condition of a family member.  (Cal. Code Regs., tit. 2, § 7297.4, subd. (a)(2).) Further, if the need for leave is foreseeable due to a planned medical treatment or supervision, the employee must make a reasonable effort to schedule the treatment or supervision to avoid disruption to the employer’s operations, subject to approval of the health care provider.  (Ibid.)  It is undisputed that Olofsson knew that July and August were the busiest months for Mission Linen.   

The employee must “provide at least verbal notice sufficient to make the employer aware that the employee needs CFRA-qualifying leave, and the anticipated timing and duration of the leave.”  (Cal. Code Regs., tit. 2, § 7297.4, subd. (a)(1).)  The employer in turn is charged with responding to the leave request “as soon as practicable and in any event no later than ten calendar days after receiving the request.”  (Id., subd. (a)(6).)  

Additionally, under the CFRA and implementing regulations, an employer may require that an employee’s leave request for a family member’s serious health condition be supported by a certification from the health care provider for that member.  (Gov. Code, § 12945.2, subd. (j)(1); Cal. Code Regs., tit. 2, § 7297.4, subd. (b)(1).)  As well, the employer may require that the employee provide such certification within 15 calendar days of the employer’s request.  (Cal. Code Regs., tit. 2, § 7297.4, subd. (b)(3).)

Slip op. at 1-2.

On June 14, 2004, Lars Olofsson asked his employer for seven weeks off, starting July 12, to care for his mother after surgery. On July 9, after much back-and-forth, Mission Linen rejected the request because Olofsson did not meet the 1,250-hour requirement.  Olofsson sued for wrongful termination in violation of public policy. In a bifurcated trial, the trial court held that Mission Linen was not estopped to deny that it had approved Olofsson's leave.   

The Court of Appeal affirmed, holding that substantial evidence supported the trial court's findings. In particular, the fact that Mission Linen had Olofsson train a replacement driver to assume his duties while he was out did not estop if from denying that it approved the leave.  Slip op. at 7-8. Nor did Mission Linen's failure to approve or deny the leave within ten days of Olofsson's request support an estoppel claim.  Slip op. at 8-12. 

Here Mission Linen first responded by telling Olofsson what he had to do—fill out a form and get medical certification.  Next, Mission Linen responded when Clark told Olofsson that approval had to come from HR, he could not assume the leave had been approved, and could not check the eligibility box himself.  To underscore the point, she whited out his hand-noted approval.  This communication occurred on June 21, when Olofsson turned in the form, prior to the scheduled surgery and within the 10-day window.  In other words, Mission Linen responded that it was processing the application, and until HR said “Yes,” he was not approved for leave.  

Slip op. at 11. 

The opinion is available here.  

Richey v. AutoNation: Court of Appeal Vacates Arbitration Award Based on "Honest Belief Defense" in CFRA Action

Richey v. AutoNation, Inc. (11/13/12, mod. 12/12/12) is interesting for its discussion of CFRA and FMLA rights, as well as its discussion of standards for reviewing arbitration awards.

Avery Richey, a sales manager for defendant, was terminated four weeks before the expiration of his approved CFRA medical leave because his employer believed he was misusing his leave by working part time in a restaurant he owned. Richey sued for violation of the CFRA, and his case went to arbitration under an agreement that provided, in part, “[r]esolution of the dispute shall be based solely upon the law governing the claims and defenses set forth in the pleadings.” 

The arbitrator denied Richey’s CFRA claim based on the "honest belief" or "honest suspicion" defense. The trial court denied Richey’s motion to vacate the arbitrator’s award and granted AutoNation’s petition to confirm the award. The Court of Appeal reversed: 

The honest belief defense accepted by the arbitrator is incompatible with California statutes, regulations and case law and deprived Richey of his unwaivable statutory right to reinstatement under section 12945.2, subdivision (a). This clear legal error abridged Richey’s statutory rights under CFRA—rights based on, and intended to further, an important public policy. Accordingly, under the principles set forth in Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83 and Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665, the award must be vacated.

Slip op. at 2. 

After discussing a review court's limited authority to vacate an arbitrator's award (Slip op. at 7-10), the Court held that the arbitrator committed clear legal error by relying solely on the employer's belief that Richey had abused his medical leave. Focusing on the employee's reinstatement rights under the CFRA and FMLA (slip op. at 10-13), the Court then held that the arbitrator improperly shifted the burden of proof to Richey by holding for the employer based solely on his finding that Richey’s supervisor held an “honest belief” that Richey had violated company policy barring outside employment. Slip op. at 14-24. 

[Lonicki v. Sutter Health Central (2008) 43 Cal.4th 201] necessarily stands for the proposition that an employer may not, in terminating or failing to reinstate an employee who has been granted CFRA leave, defend a lawsuit from that employee based on its honest belief the employee was abusing his or her leave. Instead, the employer must demonstrate evidentiary facts sufficient to carry the burden of proof imposed by CFRA and FMLA.

Slip op. at 23. 

The Court then held that these errors of law required that the award be vacated. Slip op. at 24-28. 

Here, where the parties have agreed the arbitrator will resolve any claim “solely upon the law” and the purported legal error goes to both express, unwaivable statutory rights (the guarantee of reinstatement) and the proper allocation of the burden of proof, judicial review is essential to ensure the arbitrator has complied with the requirements of CFRA. In this instance, and on these facts, “‘granting finality to [the] arbitrator’s decision would be inconsistent with the protection of [Richey’s] statutory rights.’” 

Slip op. at 25, citing Pearson Dental, supra, 48 Cal.4th at 680. 

The Court of Appeal modified its opinion without changing the result on December 12, 2012. The order modifying and the modified opinion are here.  I assume that the employer will seek review in the California Supreme Court and I will let you know what happens there.  

Garvey v. KMart: Judge Alsup Rules For The Defense in "Suitable Seating" Case After Trial

The first of the "suitable seating" class actions has gone to trial, and it has resulted in a judgment -- though limited -- for the defense. 

In Garvey v. KMart Corporation (N.D. Cal. Case No. C 11-02575), the plaintiff alleged that KMart violates Labor Code section 1198 and Industrial Welfare Commission Wage Order No. 7 by failing to provide suitable seating to cashiers.  The case went to trial in November on a class limited to cashiers employed at a single KMart store. The court summarized its holding as follows: 

“All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats,” according to the law in California. In this civil action, class counsel have failed to prove that the nature of the work reasonably permits the seating modification urged by counsel at trial. Possibly a different modification involving a lean-stool would be provable but this record does not support it.

Slip op. at 1.  

A few notes regarding the trial: Plaintiff called six live witnesses, and defendant called four. The court gave each side 12 hours for witnesses at trial; both sides finished with time to spare. The court found "no genuine commonality issues" at trial and denied defendant's decertification motion. 

After describing the cash register work stations and procedures in detail, the Court found that most work done by cashiers could be done while seated, but cashiers need to stand "many times over the course of an hour." Slip op. at 12. The Court then found that class counsel's proposal -- re-arranging the work space to allow a stool to be stored under the counter in the register area -- would be "too unsafe, too inefficient, and too inconvenient to customers and cashiers."  Slip op. at 13-17.  

Next, the Court discussed -- and criticized -- a "secret" KMart policy that any cashier would be given a seat if he or she asked for one. The Court spoke critically of KMart's defense at several points. Perhaps because the Court felt annoyed by KMart's alternate efforts to use the policy as a defense and then to keep it out of evidence at trial, the Court held: 

After all of Kmart’s machinations, it would be poetic justice to hold Kmart to the full implications of its so-called policy, namely to hold that providing a seat in the existing configuration would be safe and practical. This would, however, not be actual justice, nor actual safety.

Slip op. at 18. 

The Court then took the highly unusual step of setting forth what it called "the best case for a plaintiff class." Slip op. at 18.  In the Court's view, this would involve the use of "lean-stools" that "allow an individual to place most of their weight on a supported seat, while remaining in a more upright, leaning position." Slip op. at 18-20. 

The Court then held that KMart "has a genuine customer-service rationale for requiring its cashiers to stand": 

[I]t is reasonable for Kmart to require its cashiers to stand while processing customers out the door so as to maximize the efficiency of the process and to project to its customers an attitude of efficiency and readiness to assist customers. 

Slip op. at 20-22.  However, the Court held that this rationale "might (or might not) be compatible with the judicious use of lean-stools."  Slip op. at 22.  

Finally, the Court noted that the litigation regarding the single store at issue at trial is "over and ready for appeal."  Slip op. at 22.  

As for all other Kmart stores in California, counsel could not agree as to whether the result in this trial should not control (Kmart counsel particularly refused to agree), so we must proceed to consider certification of classes covering one or more other stores in California and then to try those cases. 

Subsequent trials presumably will focus on what the Court called "the best case for a plaintiff class." 

Please email me here if you would a copy of the decision. 

24 Hour Fitness: Following D.R. Horton, ALJ Finds Class Action Waiver Violates NLRA, Despite Opt Out Provision

In D.R. Horton, 357 NLRB No. 184 (2012) (discussed here), the National Labor Relations Board held that an employer violated Section 8(a)(1) of the National Labor Relations Act by requiring employees, as a condition of employment, to sign an agreement that precluded them from filing joint, class, or collective claims addressing their wages, hours, or other working conditions.  

24 Hour Fitness, Inc. and Alton J. Sanders, Case No. 20-CA-035419, presents a twist.  The employer there allowed employees to opt out of its arbitration policy -- which included a class action waiver -- within thirty days of hire.  Despite this, an administrative law judge has found that the policy violates the NLRA.  

I will not discuss the opinion in detail.  It is available on the NLRB's web page here. 

Phillips v. Sprint PCS: Cal. Supreme Court Denies Review of Arbitration Decision

In Phillips v. Sprint PCS (9/26/12) --- Cal.App.4th --- (discussed here), the Court of Appeal issued two holdings that should be noted:

1. A defendant whose motion to compel arbitration was denied in 2006 could renew the motion after Concepcion (the defendant filed its renewed motion two months after Concepcion came down); and 
2. The arbitrator should decide whether the contract as a whole, rather than just its class action waiver clause, was unconscionable and unenforceable (the enforceability of the arbitration clause being a question for the court). 

On December 19, the California Supreme Court denied review of Phillips, so it stands as citable authority.