Reverse chronological e-mail alerts prepared pro bono for the California Lawyers Association (formerly State Bar of California) Labor & Employment Law Section, unofficially since 2003 and officially since 2007, covering California, 9th Circuit and US Supreme Court decisions, and new laws signed by Governor. To subscribe, contact LaborLaw@CLA.Legal.
See prior archived alerts by clicking on "Blog" under menu. For alerts older than one year, please request under "Contact" tab.
Bishop v. The Bishop's School (CA4/1 D079827 12/21/22) Breach of Employment Contract & Defamation | Anti-SLAPP
The Bishop’s School (the School) terminated Chad Bishop’s (Bishop) employment as a teacher for the School after it became aware of a text exchange between Bishop and a former student. Bishop filed a lawsuit asserting a breach of contract claim against the School and defamation claims against the School and Ron Kim, the Head of the School, based on the termination letter they sent to Bishop and a statement Kim made that was published in the student newspaper. Defendants filed a special motion to strike the first amended complaint as a strategic lawsuit against public participation (SLAPP) as well as a demurrer. The trial court granted defendants’ anti-SLAPP motion as to the defamation claims but denied it as to the contract claim against the School. The court also overruled the School’s demurrer to the contract claim.
Bishop timely appealed the anti-SLAPP ruling. On cross-appeal, the School challenges the court’s order denying anti-SLAPP protection for the contract claim. In its briefing on appeal, the School also seeks a writ of mandate directing the trial court to sustain its demurrer to the contract claim. We conclude that (1) defendants did not meet their burden to show that Bishop’s allegations regarding the termination letter, which supports the defamation claim, or the termination itself, which supports the contract claim, involve protected activity; (2) defendants met their burden to show that Kim’s statement was protected activity, and Bishop failed to show that the defamation claim as based on that activity had minimal merit; and (3) without having filed a writ petition, there is no basis for the School to seek writ relief from the court’s order overruling its demurrer ruling on the contract claim. We therefore affirm in part and reverse in part the trial court’s order and remand the matter with directions.
https://www.courts.ca.gov/opinions/documents/D079827.PDF
Whitlach v. Premier Valley, Inc. (CA5 F082322 11/18/22) Real Estate Salesperson | Employee or Independent Contractor
Plaintiff James Whitlach pursued a claim under the Labor Code Private Attorney General Act of 2004 (Lab. Code, § 2698 et seq.) against Defendants Premier Valley, Inc. (doing business as Century 21 MM) and Century 21 Real Estate LLC, to enforce civil penalties for violations of the Labor Code. The trial court sustained defendants’ demurrer to the operative complaint without leave to amend. Whitlach appealed.
This appeal involves issues of statutory interpretation with regard to the following question: What is the applicable test or governing standard for determining whether a real estate salesperson is an “employee” or an “independent contractor” for purposes of the Labor Code’s wage and hour provisions. Resolution of this question turns on interpreting recently enacted Labor Code section 2778, subdivision (c)(1), and other provisions incorporated therein.
We conclude the applicable test for the purpose at hand is the test set forth in Unemployment Insurance Code sections 650 and 13004.1, as incorporated in Business and Professions Code section 10032, subdivision (b), which is itself incorporated in Labor Code section 2778, subdivision (c)(1).
The trial court reached the same conclusion and applied the correct test in ruling on defendants’ demurrer. We affirm the judgment.
https://www.courts.ca.gov/opinions/documents/F082322.PDF
Allen v. San Diego Convention Center Corp., Inc. (CA4/1 D080045 12/16/22) Wage and Hour | Class Certification
Sharlene Allen is a former employee of the San Diego Convention Center Corporation (SDCCC). After SDCCC terminated Allen, she filed the present class action lawsuit against SDCCC alleging various violations of the Labor Code. The trial court largely sustained SDCCC’s demurrer to the complaint on the grounds that the corporation was exempt from liability as a government entity. The court, however, left intact one claim for untimely payment of final wages under Labor Code sections 201, 202, and 203, and derivative claims under the Unfair Competition Law (UCL, Bus. & Prof. Code, § 17200, et seq.) and the Private Attorneys General Act (PAGA, § 2698, et seq.).
Allen then moved for class certification for her surviving causes of action. The trial court denied the motion based on Allen’s concession that her claim for untimely final payment was not viable because it was derivative of the other claims dismissed at the demurrer stage. Allen now appeals from the denial of the motion for class certification, which she asserts was the death knell of her class claims and thus, the lawsuit. She argues the trial court’s ruling on the demurrer was incorrect because SDCCC did not establish as a matter of law that it was exempt from liability. In response, SDCCC asserts that Allen’s appeal should be dismissed as taken from a nonappealable order. Alternatively, SDCCC contends the trial court’s order sustaining its demurrer was correct, and the subsequent denial of class certification should be affirmed. We reject SDCCC’s assertion that the order is not appealable. However, we agree that class certification was properly denied by the trial court and affirm the order.
https://www.courts.ca.gov/opinions/documents/D080045.PDF
Blaser v. Cal. State Teachers' Retirement System (CA6 H049277 11/21/22) Teachers’ Pension Overpayments
California State Teachers’ Retirement System (CalSTRS) is the state agency responsible for managing contributions made by employees and member school districts to the State Teachers’ Retirement Fund. (See Ed. Code, § 22000 et seq.; Teachers’ Retirement Law.) In February 2016, respondents, who are 31 retired teachers (Teachers) formerly employed by the Salinas Unified High School District (District), filed a petition for writ of mandate and a complaint for declaratory and injunctive relief against CalSTRS and the District. Teachers challenged reductions that CalSTRS had made and continued to make to their monthly retirement benefits after determining that the District had erred in its reporting to CalSTRS; those errors resulted in the overstatement of Teachers’ monthly benefits. The reductions by CalSTRS adjusted ongoing monthly benefits to their proper amounts and recouped prior overpayments. In July 2017, the trial court granted the petition, concluding that CalSTRS’s claims to reduce Teachers’ retirement benefits and collect overpayments were time-barred.
In July 2019, a panel of this court reversed, concluding the trial court had erred in holding that CalSTRS’s efforts to recoup overpayments were time-barred as to all monthly retirement payments, both past and future. (See Blaser v. State Teachers’ Retirement System (2019) 37 Cal.App.5th 349 (Blaser I).) This court found that the continuous accrual theory applied. (Id. at pp. 365-368.) In so concluding, we relied on our prior decision, Baxter v. State Teachers’ Retirement System (2017) 18 Cal.App.5th 340 (Baxter). There, the pension benefits of 11 other retired schoolteachers (collectively, the Baxter petitioners) had likewise been overstated due to reporting errors by the District, and the case thus concerned “the same periodic (monthly) pension payments” at issue in Blaser I. (Blaser I, supra, at p. 368.) This court held in Blaser I that CalSTRS was not barred from adjusting to the correct amounts Teachers’ monthly benefit payments accruing on or after February 1, 2013, and it was not barred from asserting claims for prior overpayments for periodic benefits accruing on or after that date. (Blaser I, supra, at p. 378.)
In their respondents’ brief in Blaser I, Teachers had raised the defenses of equitable estoppel and laches, which they argued precluded CalSTRS from adjusting monthly benefits or from asserting overpayment claims. Because these defenses had not been raised below and therefore the trial court had not considered them, this court remanded the case for further proceedings to determine, first, whether Teachers had forfeited the defenses by failing to assert them, and second (if the trial court determined they had not been forfeited), whether either defense served as a bar to CalSTRS’s adjustment of benefits and its claims for overpayments of prior benefits. (Blaser I, supra, 37 Cal.App.5th at p. 379.)
On remand, after briefing and argument, the trial court decided both questions in favor of Teachers. In an order filed March 16, 2021, the court ruled that Teachers were not barred by forfeiture from asserting equitable estoppel and laches, and it held that the two defenses applied. In the judgment and writ of mandate filed May 21, 2021, the court directed that CalSTRS refrain from reducing Teachers’ monthly pension benefits or from seeking recovery of claimed overpayments.
CalSTRS challenges the judgment, arguing, inter alia, that (1) the undisputed evidence shows that Teachers forfeited the defenses by never asserting them prior to remand; (2) on the merits, estoppel may not be asserted in this instance against the public agency, CalSTRS, because to do so would run contrary to statutory limitations upon its conduct; and (3) laches, an equitable defense, is not available here to claims seeking money judgments.
We conclude that the equitable estoppel and laches defenses could not be asserted in this case as a matter of law. While equitable estoppel may be asserted in a proper case against a governmental entity, it “may not be invoked to directly contravene statutory limitations.” (Medina v. Board of Retirement (2003) 112 Cal.App.4th 864, 869 (Medina).) In this case, the court erred in applying equitable estoppel because doing so required CalSTRS to continue to miscalculate Teachers’ monthly pension benefits in contravention of the Education Code. We hold further that laches, which is an equitable defense, was unavailable to defeat the claims of law at issue here. And, related to this conclusion, because this court previously held in Blaser I that CalSTRS was not barred—based upon the application of the continuous accrual theory—from making benefit adjustments or from asserting overpayment claims for benefits accruing on or after February 1, 2013, laches may not be asserted to negate this prior determination. Because of these conclusions, we need not decide whether Teachers forfeited the defenses of equitable estoppel and laches by failing to raise them below prior to the appeal in Blaser I.
https://www.courts.ca.gov/opinions/documents/H049277.PDF
Beco v. Fast Auto Loans, Inc. (CA4/3 G059382, filed 11/17/22, ord. pub. 12/14/22) Arbitration
Plaintiff Bernell Gregory Beco filed a complaint in Orange County Superior Court alleging 14 causes of action relating to the termination of his employment with defendant Fast Auto Loans, Inc. (Fast Auto), including numerous claims under the Fair Employment and Housing Act (Gov. Code, § 12940 et seq.) (FEHA), numerous wage and hour violations under the Labor Code, wrongful termination, unfair competition (Bus. & Prof. Code, § 17200), and additional tort claims. Fast Auto moved to compel arbitration, arguing that Beco had signed a valid arbitration agreement (the agreement) at the time he was hired.
The trial court found the agreement unconscionable to the extent that severance would not cure the defects, and declined to enforce it. We agree with the court that the agreement was unconscionable, and we further reject Fast Auto’s argument that the arbitrator, not the court, should have decided the issue of unconscionability. Additionally, because the agreement included numerous substantively unconscionable provisions, we find no abuse of discretion in the court’s decision not to sever them. Accordingly, we affirm the order.
https://www.courts.ca.gov/opinions/documents/G059382.PDF
Lewis v. Simplified Labor Staffing Solutions, Inc. (CA2/8 B312871 12/5/22) Arbitration | PAGA
This is an appeal of an order denying the motion of defendant and appellant Simplified Labor Staffing Solutions, Inc. (Simplified) to compel arbitration of plaintiff and respondent Sylvia Lewis’s claims brought under the California Private Attorneys General Act of 2004, Labor Code section 2698 et seq. (PAGA). Simplified’s motion was based on Lewis’s predispute agreement to arbitrate all claims arising from their employment relationship. The trial court understandably denied the motion based on a rule followed by numerous California Courts of Appeal that predispute agreements to arbitrate PAGA claims are unenforceable. We hold that this rule cannot survive the U.S. Supreme Court’s recent decision in Viking River Cruises, Inc. v. Moriana (2022) ___U.S.___ [142 S.Ct. 1906] (Viking River). We further hold that the scope of the arbitration clause is to be determined by the arbitrator, in accordance with the arbitration agreement. Specifically, the parties’ dispute about whether non-individual PAGA claims are governed by the arbitration agreement, in the same way individual PAGA claims are, is an issue for the arbitrator to address. Accordingly, we reverse.
https://www.courts.ca.gov/opinions/documents/B312871.PDF
Hooks v. Nexstar Broadcasting, Inc. (9th Cir. 21-35252 12/5/22) NLRA
The panel vacated the district court’s order granting a petition of the Regional Director of the National Labor Relations Board (“Board”) for preliminary injunctive relief under § 10(j) of the National Labor Relations Act (“NLRA”) in the Board’s action alleging that Nexstar Broadcasting, Inc. committed unfair labor practices in violation of the NLRA.
Based on a finding that the Regional Director was likely to succeed on the merits of the complaint and applying an inference of likely irreparable harm based on Frankl ex rel. NLRB v. HTH Corp., 650 F.3d 1334 (9th Cir. 2011), the district court granted a preliminary injunction. After the district court issued the preliminary injunction, an administrative law judge ruled in favor of the Regional Director, finding that Nexstar had violated § 8(a)(1) and (5) of the NLRA. The Board affirmed the ALJ decision and ordered relief for the union.
The panel first considered whether it had jurisdiction over the case. Because the Board has resolved the merits of the unfair labor practice complaint, the appeal of the district court’s grant of a preliminary injunction under § 10(j) is moot, unless an exception to mootness applies. One exception is where disputes are capable of repetition, yet evading review. This court has applied this exception in the context of § 10(j) injunction proceedings using a two-prong analysis. Under the first prong (evading review), the panel considered whether the action at issue was inherently limited in duration. The panel held that a § 10(j) injunction proceeding is the type of case that is inherently limited in duration because the controversy over the injunction exists only until the Board issues its final merits decision, which typically occurs before there is time for full judicial review of the request for an injunction. The panel concluded that the § 10(j) injunction met the first prong. The panel held that the § 10(j) injunction also met the exception’s second prong, because there was a reasonable expectation that the complaining party, Nexstar, will be subject to a petition for a § 10(j) injunction in the future. The panel rejected the Regional Director’s argument that any new §10(j) injunction would raise a different constellation of facts and legal proceedings, and therefore it was not reasonable to expect that the dispute over the specific legal issue in this appeal would recur. The panel concluded that the Board’s issuance of its final order did not render this appeal moot.
The panel next considered whether the district court abused its discretion in granting the preliminary injunction. Under Winter v. NRDC, 555 U.S. 7 (2008), one factor is whether the Regional Director was likely to suffer irreparable harm in the absence of preliminary relief. The panel noted that this court has rejected a presumption of irreparable harm in the § 10(j) context, and Frankl considered how irreparable harm could be established in the § 10(j) context. Frankl established permissible inferences from the nature of the particular unfair labor practice at issue, and such permissible inferences are neither mandatory nor binding on a court.
The panel held that the district court improperly determined that Frankl required it to presume irreparable harm based on its finding that the Regional Director had a likelihood of success on the merits on his claims in violation of § 8(a)(1) of the NLRA. The record showed that the district court inferred there was a likelihood of success of irreparable harm solely due to its finding of a likelihood of success on the merits. The panel held that the district court misread Frankl as creating a mandatory presumption that required it to infer a presumed fact-–irreparable harm—until contrary evidence was introduced. The panel further held that the evidence of likely success on the merits did not show irreparable harm. Based on the record, the panel concluded that the district court improperly applied a presumption in making its irreparable harm determination. Because the district court applied an erroneous legal standard, the district court abused its discretion in making its irreparable harm determination, and in granting the preliminary injunction.
Judge Fletcher dissented. He agreed with the Board that this appeal was moot, and there was no jurisdiction. The exception to mootness invoked by the majority did not apply to the appeal because it was far too fact-intensive to be capable of repetition in the manner required by the exception. If he were to reach the merits, Judge Fletcher would affirm the district court. The district court faithfully followed Frankl when it inferred, absent contrary evidence, that Nexstar’s violation of §8(a)(5) of the NLRA was likely to result in irreparable harm to the union if preliminary injunctive relief were not granted.
https://cdn.ca9.uscourts.gov/datastore/opinions/2022/12/05/21-35252.pdf
De Leon v. Juanita's Foods (CA2/3 B315394 11/23/22) Late Payment of Arbitration Fees
Code of Civil Procedure sections 1281.97 and 1281.98 provide that if a company or business that drafts an arbitration agreement does not pay its share of required arbitration fees or costs within 30 days after they are due, the company or business is in “material breach” of the arbitration agreement. (Code Civ. Proc., §§ 1281.97, subd. (a)(1); 1281.98, subd. (a)(1). ) In the case of such a material breach, an employee or consumer can, among other things, withdraw his or her claim from arbitration and proceed in court. (§§ 1281.97, subd. (b)(1); 1281.98, subd. (b)(1).)
Following commencement of arbitration proceedings between appellant Juanita’s Foods and respondent Kail De Leon [on an employment complaint], Juanita’s Foods failed to pay its share of arbitration fees within 30 days after such fees were due. Based on that late payment, the trial court concluded that Juanita’s Foods was in material breach of the parties’ arbitration agreement and allowed De Leon to proceed with his claims against Juanita’s Foods in court.
Juanita’s Foods argues that the trial court should have considered factors in addition to its late payment—for example, whether the late payment delayed arbitration proceedings or prejudiced De Leon—to determine the existence of a material breach of the arbitration agreement.
We conclude that the trial court correctly declined to consider these additional factors, and we affirm.
https://www.courts.ca.gov/opinions/documents/B315394.PDF
Valiente v. Swift Transp. Co. of Ariz. (9th Cir. 21-55456 11/23/22) Meal & Rest Breaks | Motor Carrier Safety Act Preemption
The panel affirmed the district court’s summary judgment in favor of Swift Transportation Co. of Arizona, LLC in a class action brought by former hourly truck drivers for Swift Transportation (“Plaintiffs”) alleging violations of California’s meal and rest break (“MRB”) rules and derivative state-law claims.
In 2018, the Federal Motor Carrier Safety Administration (FMCSA) decided to preempt California’s MRB rules with respect to truck drivers subject to federal regulations. In International Brotherhood of Teamsters, Local 2785 v. Federal Motor Carrier Safety Administration, 986 F.3d 841, 846 (9th Cir. 2021), this Court held that the agency’s decision was a lawful exercise of its power under the Motor Carrier Safety Act of 1984. Here, the panel addressed the question left open by International Brotherhood and held that the preemption decision also barred plaintiffs from proceeding with lawsuits that commenced before the decision was made.
Plaintiffs argued that the presumption against retroactive application of laws operates here to allow their lawsuit to proceed despite the FMSCA’s preemption of California’s MRB rules. The panel applied the retroactivity test set forth in Landgraf v. USI Film Products, 511 U.S. 244, 263-64, 280 (1994). Under step one of the twostep test, the panel held that because Congress clearly intended for the FMSCA to have the power to halt enforcement of state laws, and because the FMSCA intended for this particular preemption determination to apply to pending lawsuits, the FMSCA’s decision prohibits present enforcement of California’s MRB rules regardless of when the underlying conduct occurred. The panel held that it need not reach the second step of the Landgraf analysis.
Dissenting, District Judge Humetewa agreed with the majority that resolution of the issue required an analysis under the Landgraf retroactivity test, but she disagreed as to the conclusions reached in applying the framework to the question raised here. Unlike the majority, she did not find any language in the Motor Carrier Safety Act of 1984 showing Congress’s express intent to grant the FMCSA authority to promulgate rules that apply retroactively. Judge Humetewa also disagreed with the majority’s holding that it was unnecessary to reach Landgraf’s second step. She would reverse the district court’s order granting summary judgment for Swift Transportation and allow Plaintiffs’ MRB claims arising prior to the date of the preemption decision to proceed.
https://cdn.ca9.uscourts.gov/datastore/opinions/2022/11/23/21-55456.pdf
De Leon v. Juanita's Foods (CA2/3 B315394 11/23/22) Late Payment of Arbitration Fees
Code of Civil Procedure sections 1281.97 and 1281.98 provide that if a company or business that drafts an arbitration agreement does not pay its share of required arbitration fees or costs within 30 days after they are due, the company or business is in “material breach” of the arbitration agreement. (Code Civ. Proc., §§ 1281.97, subd. (a)(1); 1281.98, subd. (a)(1). ) In the case of such a material breach, an employee or consumer can, among other things, withdraw his or her claim from arbitration and proceed in court. (§§ 1281.97, subd. (b)(1); 1281.98, subd. (b)(1).)
Following commencement of arbitration proceedings between appellant Juanita’s Foods and respondent Kail De Leon [on an employment complaint], Juanita’s Foods failed to pay its share of arbitration fees within 30 days after such fees were due. Based on that late payment, the trial court concluded that Juanita’s Foods was in material breach of the parties’ arbitration agreement and allowed De Leon to proceed with his claims against Juanita’s Foods in court.
Juanita’s Foods argues that the trial court should have considered factors in addition to its late payment—for example, whether the late payment delayed arbitration proceedings or prejudiced De Leon—to determine the existence of a material breach of the arbitration agreement.
We conclude that the trial court correctly declined to consider these additional factors, and we affirm.
https://www.courts.ca.gov/opinions/documents/B315394.PDF
Patel v. Chavez (CA2/1 B312985 11/22/22) Labor Commissioner Orders
Appellants Balubhai Patel, DTWO & E, Inc. (DTWO), and Stuart Union, LLC (Stuart Union) (collectively, appellants) have been before this court numerous times in connection with a labor dispute with a former employee, respondent Manuel Chavez, that resulted in two California Labor Commissioner orders (ODAs) in Chavez’s favor. The instant appeal challenges a superior court order forfeiting a bond appellants had posted in an unsuccessful attempt to challenge the ODAs, as well as a judgment against them as bond principals. We affirm the order and judgment.
https://www.courts.ca.gov/opinions/documents/B312985.PDF
Navas v. Fresh Venture Foods, LLC (CA2/6 B312888A 11/21/22) Arbitration
In Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, our Supreme Court held, among other things, that employment agreements that compel the waiver of representative claims under the Private Attorney Generals Act (PAGA) (Lab. Code, §§ 2698, 2699) are contrary to public policy and unenforceable as a matter of state law. This is no longer the case. (See Viking River Cruises, Inc. v. Moriana (June 15, 2022, No. 20-1573) _ U.S. _ [213 L.Ed.2d 179, 200].) Nevertheless, Iskanian still survives.
Defendant Fresh Venture Foods, LLC (FVF) appeals an order denying its motion to compel arbitration of a lawsuit filed against it for wages and damages by plaintiffs Juan Navas, Martha Herrera Lopez (Lopez), and Benjamin Hernandez Ramos (Ramos). We conclude, among other things, that 1) FVF’s arbitration agreement with Lopez and Ramos is not valid; and 2) the arbitration agreement with Navas is procedurally and substantively unconscionable. (Code Civ. Proc., § 1281.2, subd. (c).) We affirm.
https://www.courts.ca.gov/opinions/documents/B312888A.PDF
Collier v. Lincoln Life Assurance Co. of Boston (9th Cir. 21-55465 11/21/22) ERISA
The panel reversed the district court’s judgment in favor of Lincoln Life Assurance Company of Boston and remanded in an ERISA action brought by Vicki Collier.
Collier challenged Lincoln’s denial of her claim for long-term disability benefits. On de novo review, the district court affirmed Lincoln’s denial of Collier’s claim, but it adopted new rationales that the ERISA plan administrator did not rely on during the administrative process. Specifically, the district court found for the first time that Collier was not credible and that she had failed to supply objective evidence to support her claim.
The panel held that when a district court reviews de novo a plan administrator’s denial of benefits, it examines the administrative record without deference to the administrator’s conclusions to determine whether the administrator erred in denying benefits. The district court’s task is to determine whether the plan administrator’s decision is supported by the record, not to engage in a new determination of whether the claimant is disabled. Accordingly, the district court must examine only the rationales the plan administrator relied on in denying benefits and cannot adopt new rationales that the claimant had no opportunity to respond to during the administrative process.
The panel held that the district court erred because it relied on new rationales to affirm the denial of benefits. As Lincoln did not present these rationales during the administrative process, Collier was afforded no opportunity to respond to them, and was denied her statutory right to “full and fair review” of the denial of her claim. The panel reversed and remanded for the district court to reconsider Collier’s claim de novo, with no deference to the administrator’s decision, and to determine whether the record evidence supports the reasons on which Lincoln relied to deny benefits.
https://cdn.ca9.uscourts.gov/datastore/opinions/2022/11/21/21-55465.pdf
Ramirez v. PK I Plaza 580 SC LP (CA1/1 A162593 11/10/22) Pivette Doctrine
Francisco Ramirez, a self-employed contractor, was hired by a shopping center’s tenant to remove an exterior sign after the tenant vacated its space. While searching for the sign’s electrical box, he entered a cupola on the shopping center’s roof and fell through an opening built into the cupola’s floor, sustaining serious injuries.
Ramirez and his wife (collectively, plaintiffs) filed a tort action against defendants Kimco Realty Corporation and its subsidiary, PK 1 Plaza 580 SC, LP (collectively, Kimco), who own and operate the shopping center. The trial court granted summary judgment in Kimco’s favor based on the Privette doctrine, which creates “a strong presumption under California law that a hirer of an independent contractor delegates to the contractor all responsibility for workplace safety[,] . . . mean[ing] that a hirer is typically not liable for injuries sustained by an independent contractor or its workers while on the job.” (Gonzalez v. Mathis (2021) 12 Cal.5th 29, 37–38 (Gonzalez), citing Privette v. Superior Court (1993) 5 Cal.4th 689 (Privette).)
On appeal, plaintiffs contend that summary judgment was improperly granted because the Privette doctrine does not apply. We agree. Kimco did not hire its tenant or Ramirez to perform the work. Thus, Kimco did not delegate its own responsibility for the roof’s condition to Ramirez through an employment relationship, as contemplated by Privette. Nor did Kimco delegate such responsibility by virtue of its landlord-tenant relationship. Since Kimco neither sought summary judgment nor argues for affirmance on any basis other than the Privette doctrine, we must reverse and remand for further proceedings. In doing so, however, we recognize the strong possibility that Kimco will prevail under general principles of premises liability.
https://www.courts.ca.gov/opinions/documents/A162593.PDF
Price v. Victor Valley Union High School Dist. (CA4/2 E076784 11/9/22) Disability Discrimination and Retaliation
La Vonya Price worked intermittently as a part-time substitute special education aide at the Victor Valley Unified School District (the District) before applying for a full-time position. She received an offer for a full-time position that was contingent on passing a physical exam. When she failed the physical exam for not being “medically suitable for the position,” the District rescinded the offer, terminated her as a substitute, and disqualified her from any future employment with the District.
Price sued the District for retaliation and various disability-related claims, but the trial court granted summary judgment to the District. Price appeals, and we affirm in part and reverse in part.
https://www.courts.ca.gov/opinions/documents/E076784.PDF
Zhang v. Super. Ct. (CA2/8 B31438611/9/22) Arbitration
Petitioner Jinshu “John” Zhang was an equity partner in Dentons U.S. LLP (real party in interest or Dentons), a major law firm with offices throughout the United States. A dispute arose between them over a multimillion dollar contingency fee from a client whom petitioner brought to the firm. The partnership agreement contains a clause providing for arbitration of all disputes in Chicago or New York. The partnership agreement also contains a clause delegating all questions of arbitrability to the arbitrator (delegation clause).
Dentons terminated petitioner for cause, asserting a breach of fiduciary duty, and initiated an arbitration in New York. Petitioner then sued Dentons for wrongful termination and other causes of action in Los Angeles Superior Court. Petitioner obtained a temporary restraining order (TRO) and then a preliminary injunction, enjoining the New York arbitration until the court could decide whether there was a clear and unmistakable delegation clause.
After the TRO was issued, Dentons filed a motion under Code of Civil Procedure section 1281.4, seeking a mandatory stay of the case based on its motion to compel arbitration that was then pending in a New York court, which the New York court later granted. In opposition, petitioner argued he was Dentons’s employee, and Labor Code section 925 “render[ed] the courts of New York incompetent to rule on Dentons’ motion to compel arbitration.” Section 925 prohibits an employer from requiring an employee who resides and works in California to agree to a provision requiring the employee to adjudicate outside California a claim arising in California.
Judge Sotelo granted Dentons’s motion to stay petitioner’s action in superior court pending completion of arbitration in New York. The court ruled the arbitration agreement clearly and unmistakably delegated arbitrability issues to the arbitrator, including the applicability of Labor Code section 925 to the dispute.
Petitioner sought a writ of mandate, which we denied. The Supreme Court granted review and transferred the case back to us, directing us to issue an order to show cause. We did so, and now again deny the petition. We agree with the trial court that the parties delegated questions of arbitrability to the arbitrator. The arbitrability issues in this case include whether petitioner is an employee who may invoke Labor Code section 925 and require the merits of the dispute to be resolved in California instead of New York. We reject petitioner’s contention that, because he invoked section 925, the New York court is not “a court of competent jurisdiction” (Code Civ. Proc., § 1281.4) that can order arbitration of this dispute.
https://www.courts.ca.gov/opinions/documents/B314386.PDF
Unzueta v. Akopyan (CA2/7 B313215 11/7/22) Peremptory Challenges | Code Civ. Proc. § 231.5 | Gov. Code §11135
Zulma Unzueta appeals from a judgment entered in favor of defendant Asmik Akopyan, M.D., on Unzueta’s action for medical malpractice after the trial court denied her motion under Batson v. Kentucky (1986) 476 U.S. 79 (Batson) and People v. Wheeler (1978) 22 Cal.3d 258 (Wheeler) following our remand in Unzueta v. Akopyan (2019) 42 Cal.App.5th 199 (Unzueta I). In this appeal, we consider whether under California law an attorney may properly strike a prospective juror based on the disability of the juror’s family member. Historically Batson/Wheeler motions have been analyzed, as the trial court did here, in terms of whether the justification for excusing a prospective juror is race-neutral. However, in 2015 the Legislature expanded the scope of cognizable groups protected under Batson/Wheeler by its enactment of Assembly Bill No. 87 (2015-2016 Reg. Sess.) § 1 (Assembly Bill 87), effective January 1, 2017. Assembly Bill 87 amended Code of Civil Procedure section 231.5 to specify by reference to Government Code section 11135 that peremptory challenges cannot be used to excuse prospective jurors on the basis of their sex, race, color, religion, ancestry, national origin, ethnic group identification, age, mental and physical disability, medical condition, genetic information, marital status, or sexual orientation. Nor can a peremptory challenge be based on the perception the juror possesses one of these characteristics or because of the juror’s association with someone perceived to have one of these characteristics.
In Unzueta I, we concluded the trial court erred in denying Unzueta’s Batson/Wheeler motion (initially made sua sponte by the court) after Dr. Akopyan’s attorney exercised peremptory challenges to six Hispanic prospective jurors out of his seven total challenges. (Unzueta I, at p. 202.) We agreed with Unzueta that the court erred in not requiring defense counsel to offer nondiscriminatory reasons for his first four challenges that formed the basis of the trial court’s prima facie finding of racial bias. (Id. at p. 202.) We conditionally reversed for the limited purpose of the court conducting the second and third steps of the Batson/Wheeler inquiry as to all six challenged Hispanic jurors and directed the court on remand to “require defense counsel to state his reasons for challenging the first four prospective jurors, and . . . [to] decide in light of the record as to all six jurors whether Unzueta has proved purposeful racial discrimination.” (Unzueta I, at pp. 202-203.) We directed the court further that if it found Dr. Akopyan’s challenges were permissible, it should reinstate the judgment. (Id. at p. 203.)
On remand, the trial court elicited justifications for the six prospective jurors at issue, which Dr. Akopyan’s attorney provided. As to two of the jurors, Dr. Akopyan’s attorney asserted they were excused because they had a family member who was disabled, and the attorney feared the family member’s disability would cause the juror to be biased in favor of Unzueta, who alleged she became disabled as a result of Dr. Akopyan’s professional negligence. The court found the justifications were “race-neutral,” and after analyzing all the challenges, it denied the Batson/Wheeler motion and reinstated the judgment.
Unzueta argues in this appeal that Dr. Akopyan’s striking of the two prospective jurors based on the disabilities of their family members was itself based on protected characteristics. Unzueta is correct. Dr. Akopyan’s justification for excusal of the two jurors was race-neutral, but it was still impermissible under California law. We again reverse and order a new trial.
https://www.courts.ca.gov/opinions/documents/B313215.PDF
Trina Ray, et al. v. Los Angeles County Dept. Social Services, et al. (9th Cir. 20-56245 11/4/22) FLSA Overtime | In-Home Support Services
The panel affirmed in part and reversed in part the district court’s orders granting summary judgment in favor of Los Angeles County Department of Social Services and denying partial summary judgment to the plaintiffs in an action brought under the Fair Labor Standards Act by In-Home Supportive Services providers and other homecare workers.
Plaintiffs sought unpaid overtime wages for the period between January 1, 2015, and February 1, 2016, during which a Department of Labor rule entitling homecare workers to overtime pay under the FLSA was temporarily vacated. The district court conditionally certified a putative collective consisting of IHSS providers who worked overtime during this period.
Reversing in part and remanding, the panel held that the County was a joint employer, along with care recipients, of IHSS providers, and thus could be liable under the FLSA for failing to pay overtime compensation. The panel held that under Bonnette v. Cal. Health & Welfare Agency, 704 F.2d 1465 (9th Cir. 1983), it must consider the “economic reality” and apply four factors: “whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.” The court in Bonnette held that the State of California and three counties were joint employers of IHSS providers. The panel held that, notwithstanding differences between the IHSS program operating in Los Angeles County today and the programs analyzed in Bonnette, the County was a joint employer of plaintiffs, in light of the economic and structural control it exercised over the employment relationship. The panel directed the district court, on remand, to grant partial summary judgment to plaintiffs on the issue of whether the County was a joint employer of IHSS providers.
Affirming in part, the panel held that the district court did not err in granting partial summary judgment to the County on the issue of willfulness and denying partial summary judgment to plaintiffs on the issue of liquidated damages. The panel held that a determination of willfulness and the assessment of liquidated damages are reserved for the most recalcitrant violators. Here, it was undisputed that the County had no ability to pay overtime wages in the absence of the State making funds available to satisfy the overtime obligations. It was also undisputed that resolution of the overtime wages for IHSS providers in California played out in public, including numerous training sessions on implementing the new FLSA requirements. The panel held that, under this circumstance, it agreed with the district court that the County acted in good faith.
Concurring in part and dissenting in part, Judge Berzon joined the majority’s holding that the County was a joint employer. She disagreed with the majority’s holding that because, as a practical matter, the State controlled the payroll system (1) the County acted in good faith for purposes of determining whether it had established a defense to liquidated damages; and (2) the County’s failure to pay overtime wages could not have been willful for purposes of determining the applicable statute of limitations. Judge Berzon wrote that, although the result the majority reached on liquidated damages and willfulness may seem equitable, it was not consistent with the standards the panel was obligated to apply under the FLSA. She would hold that the County was, on the record here, liable for liquidated damages. For purposes of determining whether the County’s conduct was willful, she would hold that plaintiffs raised a triable issue of fact as to whether the County knew or showed reckless disregard that its conduct violated the FLSA.
https://cdn.ca9.uscourts.gov/datastore/opinions/2022/11/04/20-56245.pdf
Taska v. The RealReal, Inc. (CA1/5 A164130 11/4/22) Wrongful Termination & Retaliation | Attorneys’ Fees & Costs
This is an appeal from judgment in a wrongful termination and retaliation lawsuit. An arbitrator initially resolved the dispute in favor of defendant The RealReal, Inc. (TRR), and against its former employee, plaintiff Elizabeth Taska, but denied the parties’ respective requests for attorney fees and costs (April 3, 2020 Award). However, the arbitrator then issued a revised award that added an award of approximately $73,000 in attorney fees and costs to TRR (June 29, 2020 Corrected Final Award). Taska petitioned the trial court only to vacate the newly rendered attorney fees and costs award. TRR, in turn, petitioned the court to confirm the June 29, 2020 Corrected Final Award in full.
The trial court sided with Taska and struck the award of attorney fees and costs, reasoning the arbitrator exceeded her authority by making substantive changes to the April 3, 2020 Award. The court otherwise confirmed the arbitrator’s award and entered judgment in favor of TRR.
TRR contends the court’s order to strike the award of attorney fees and costs was legally and factually wrong. We disagree and affirm.
https://www.courts.ca.gov/opinions/documents/A164130.PDF
Shouse v. County of Riverside (CA4/2 E076975 11/3/22) POBRA
Petitioner, Andrew Shouse, was terminated from his employment as a captain of the Riverside County Sheriff’s Office (RCSO, the Department, or respondent), following an administrative hearing at which findings were made that petitioner engaged in improper sexual relationships with subordinates under his command, misappropriated county equipment and electronic mail for his personal use, was insubordinate in violating a direct order prohibiting him from contacting any person with whom he had had a personal relationship during the pendency of the investigation, and unbecoming conduct discrediting the Sheriff’s Department. Following an administrative appeal, the findings were sustained. Petitioner filed a petition for writ of mandate seeking review of his dismissal, and, upon denial of that petition, he appeals.
On appeal, the sole legal issue presented is whether petitioner’s rights pursuant to the Public Safety Officer’s Bill of Rights (POBRA) were violated where the investigation into his alleged improper conduct was not completed within one year of discovery. We affirm.
https://www.courts.ca.gov/opinions/documents/E076975.PDF
Villareal v. LAD-T, LLC (CA2/7 B313681M, filed 10/20/22, mod. 11/2/22) Arbitration
THE COURT:
The above-entitled opinion filed on October 20, 2022 is modified as follows:
On page 22, in the second to last sentence of the last paragraph, replace “FSG files” with ”defendants file,” so the sentence reads:
In addition, if defendants file a second motion to compel arbitration, this would further delay the trial court proceeding (now two years after Villareal filed this action) given the need for the filing, scheduling, and briefing on a new motion.
There is no change in the appellate judgment.
LAD-T, LLC, dba Toyota of Downtown Los Angeles (LAD T), and its parent company Lithia Motors Inc. (Lithia; collectively, defendants) appeal from an order denying their motion to compel arbitration of Albert Villareal’s claims brought under the California Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.). Defendants contend the trial court erred in finding Business and Professions Code section 17918 barred them from enforcing an arbitration agreement made in the name of an unregistered fictitious business, DT Los Angeles Toyota. The trial court did not err. Section 17918 bars a party that regularly transacts business in California for profit under a fictitious business name from maintaining an action on a contract until a fictitious business name statement is filed. Substantial evidence supports the trial court’s finding LAD-T was transacting business as DT Los Angeles Toyota. Although section 17918 is most commonly applied to prevent a plaintiff from maintaining an action on a contract in the name of the fictitious business, we conclude it also applies to bar a party from maintaining a motion to compel arbitration because the motion is in essence a suit in equity to compel performance of a contract—the arbitration agreement.
Further, contrary to defendants’ contention, Villareal timely asserted his defense to the motion to compel arbitration by raising it in his opposition to the motion. In addition, the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.) does not preempt section 17918 because the requirement that a party file a fictitious business name statement applies to all actions on a contract, not just arbitration agreements.
During the pendency of this appeal and nearly one year after the trial court denied the motion to compel arbitration, defendants registered the name DT Los Angeles Toyota. They now contend we should reverse the trial court’s order as moot because there is no longer a bar to their maintaining their motion to compel arbitration. Villareal responds that we should dismiss the appeal as moot, leaving the trial court order in place. Neither position is quite correct. The appeal is not moot because if we were to decide the appeal in defendants’ favor, we could provide them immediate relief by directing the trial court to grant the motion to compel arbitration. We therefore reach the merits of the appeal. However, because the failure to file a fictitious business name statement does not invalidate the agreement in the name of the business, instead only abating the proceeding until there is compliance, we vacate the trial court’s order and remand for the court to consider whether defendants’ motion to compel arbitration should now be granted. Villareal cannot on remand relitigate issues already decided (for example, unconscionability), but he should be afforded an opportunity in the trial court to raise waiver as a defense to enforcement of the arbitration agreement based on defendants’ delayed filing of the fictitious business name statement.
https://www.courts.ca.gov/opinions/documents/B313681M.PDF
Mills v. Facility Solutions Group (CA2/7 B313943 11/1/22) Arbitration Unconscionability | Wage & Hour | PAGA
In November 2020 Chris Mills filed a complaint against his former employer, Facility Solutions Group, Inc. (FSG), for disability discrimination and related causes of action under the Fair Employment & Housing Act (FEHA; Gov. Code, § 12900 et seq.) (Mills v. Facility Solutions Group, Inc. (Super. Ct. L.A. County, 2020, No. 20STCV44744) (Mills I). The same month Mills filed this class action against FSG for Labor Code violations, which also included a claim under the Private Attorneys General Act of 2004 (PAGA; Labor Code, § 2698 et seq.). In February 2021 the trial court in Mills I (Judge Daniel S. Murphy) granted FSG’s motion to compel arbitration, finding the substantively unconscionable terms in the arbitration agreement could be severed from the agreement. FSG then moved to compel arbitration in this action under the same arbitration agreement. The trial court in this action (Judge Amy D. Hogue) denied FSG’s motion, finding unconscionability permeated the arbitration agreement because it had a low to moderate level of procedural unconscionability and at least six substantively unconscionable terms, making severance infeasible.
On appeal, FSG contends claim and issue preclusion required the trial court in this action to enforce the arbitration agreement. However, Judge Murphy’s order granting FSG’s motion to compel arbitration is not final, so claim and issue preclusion do not apply.
FSG also argues the arbitration agreement is not unconscionable, or in the alternative, the trial court abused its discretion in not severing any unconscionable terms. Neither contention has merit. We agree with the trial court the arbitration agreement is permeated with unconscionability, and the court cannot simply sever the offending provisions. Rather, the court would need to rewrite the agreement, creating a new agreement to which the parties never agreed. Moreover, upholding this type of agreement with multiple unconscionable terms would create an incentive for an employer to draft a one-sided arbitration agreement in the hope employees would not challenge the unlawful provisions, but if they do, the court would simply modify the agreement to include the bilateral terms the employer should have included in the first place. We affirm.
https://www.courts.ca.gov/opinions/documents/B313943.PDF
Armida Ruelas, et al. v. County of Alameda, et al. (9th Cir. 1-16528 11/1/22) Minimum Wage & Overtime | Non-Convicted Incarcerated Workers
Pursuant to Rule 8.548(b)(2) of the California Rules of Court, the panel requested that the Supreme Court of California decide the certified question presented below:
Do non-convicted incarcerated individuals performing services in county jails for a for-profit company to supply meals within the county jails and related custody facilities have a claim for minimum wages and overtime under Section 1194 of the California Labor Code in the absence of any local ordinance prescribing or prohibiting the payment of wages for these individuals?
https://cdn.ca9.uscourts.gov/datastore/opinions/2022/11/01/21-16528.pdf
Davis v. Shiekh Shoes, LLC (CA1/2 A161961 10/31/22) Arbitration
Nineteen months after plaintiff Britani Davis filed suit against her former employer Shiekh Shoes, LLC (Shiekh), Shiekh moved to compel arbitration of Davis’s claims. The trial court denied the motion, finding Shiekh waived its right to invoke arbitration by unreasonably delaying its arbitration demand and acting inconsistently with an intent to arbitrate. We affirm.
https://www.courts.ca.gov/opinions/documents/A161961.PDF
Students for Fair Admissions, Inc. v. University of North Carolina, et al. (US 21-707 Oral Argument Transcript & Audio 10/31/22) Affirmative Action [may have implications for employment]
1. Should this Court overrule Grutter v. Bollinger, 539 U.S. 306 (2003), and hold that institutions of higher education cannot use race as a factor in admissions?
2. Can a university reject a race-neutral alternative because it would change the composition of the student body, without proving that the alternative would cause a dramatic sacrifice in academic quality or the educational benefits of overall student-body diversity?
Students for Fair Admissions v. President and Fellows of Harvard (US 20-1199 Oral Argument Transcript & Audio 10/31/22) Affirmative Action [may have implications for employment]
1. Should this Court overrule Grutter v. Bollinger, 539 U.S. 306 (2003), and hold that institutions of higher education cannot use race as a factor in admissions?
2. Title VI of the Civil Rights Act bans race-based admissions that, if done by a public university, would violate the Equal Protection Clause. Gratz v. Bollinger, 539 U.S. 244, 276 n.23 (2003). Is Harvard violating Title VI by penalizing Asian-American applicants, engaging in racial balancing, overemphasizing race, and rejecting workable race-neutral alternatives?
GCIU-Employer Retirement Fund, et al. v. MNG Enterprises, Inc. (9th Cir. 21-55864 10/28/22) Multiemployer Pension Plan Amendments Act
The panel affirmed in part and vacated in part the district court’s order affirming, except for a typographical error, an arbitrator’s award regarding the withdrawal liability, under the Multiemployer Pension Plan Amendments Act of 1980, of MNG Enterprises, following MNG’s complete withdrawal from GCIU-Employer Retirement Fund, a multiemployer pension plan.
GCIU’s actuary calculated MNG’s withdrawal liability using an interest rate published by the Pension Benefit Guaranty Corporation (PBGC). The actuary also accounted for the contribution histories of two newspapers that MNG had acquired several years before its complete withdrawal. On MNG’s challenge, the arbitrator found (1) that MNG could not be assessed partial withdrawal liability following a complete withdrawal, (2) that it had shown the interest rate used was not the best estimate of the plan’s experience, and (3) that GCIU properly considered the newspapers’ contribution histories because MNG was a successor to them.
Under the MPPAA, withdrawal liability covers the employer’s proportionate share of the plan’s unfunded vested benefits, calculated as the difference between the present value of the vested benefits and the current value of the plan’s assets. When an employer sells its assets and withdraws from the pension plan, it ordinarily incurs liability for a complete withdrawal. The obligation to pay that liability usually remains with the selling employer, but courts have equitable discretion to hold the purchaser responsible. If a dispute arises as to the amount of withdrawal liability, arbitration is required.
MNG included two smaller controlled groups, MediaNews Group and California Newspaper Partnership Controlled Group. In 2013, California Newspaper completely withdrew from GCIU. In 2014, MediaNews did the same, ending MNG’s contributions to GCIU. In 2018, GCIU assessed against MediaNews a 2014 complete withdrawal and two subsequent partial withdrawals for 2014 and 2015. In 2006 and 2007, MediaNews and California Newspaper had acquired the assets of two newspapers, the Torrance Daily Breeze and the Santa Cruz Sentinel, which had participated in GCIU but stopped contributing before MNG acquired them. Nothing in the record suggested that GCIU assessed withdrawal liability against the newspapers when they withdrew.
Affirming in part, the panel held that, under the unambiguous text of the MPPAA, a partial withdrawal cannot occur after a complete withdrawal when the employer has not otherwise resumed operations or contributions. Thus, GCIU could not assess MNG for two partial withdrawals following its complete withdrawal. The panel held that the MPPAA directs the plan actuary to determine withdrawal liability based on “actuarial assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.”
The panel held that the GCIU actuary’s use of the PBGC rate, without considering the “experience of the plan and reasonable expectations,” did not satisfy the “best estimate” standard.
Vacating in part as to the inclusion of the newspapers’ contribution histories, the panel held that if a purchaser is a successor and has notice of the withdrawal liability, then a court may use its equitable discretion to hold the purchaser liable. The district court concluded that MediaNews and California Newspaper were successors to the Daily Breeze and the Sentinel and that both had notice of the potential liability. The panel held that the district court abused its discretion by not considering MNG’s possible successor liability as of the asset sale dates in 2006 and 2007. The panel vacated and remanded for the district court to determine in the first instance whether MNG had successor liability and if GCIU correctly applied the newspapers’ contribution histories at the time of the asset sales.
https://cdn.ca9.uscourts.gov/datastore/opinions/2022/10/28/21-55864.pdf
MEDIATE.WORK © 2016-2024 by Phyllis W. Cheng.
Acanthus wallpaper by William Morris (1875) in public domain.
