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Hernandez v. Meridian Management Services, LLC (CA2/8 B312814 1/30/23) Arbitration | Contract Enforcement by Other Employers
Jessica Hernandez signed an arbitration contract with an employer called Intelex Enterprises, LLC. While working for Intelex, Hernandez also worked for other firms (Other Firms). These Other Firms were legally separate from Intelex, but functionally related to it. The Other Firms did not contract for arbitration with Hernandez. After termination, Hernandez sued the Other Firms but not Intelex: Intelex has never been a party to this case. The Other Firms moved to compel arbitration based on Hernandez’s agreement with Intelex. The trial court denied the Other Firms’ motion to enforce a contract they had not signed.
The trial court was right. The Other Firms cannot equitably estop Hernandez because they do not show she is trying to profit from some unfair action. They have no proof of agency. And they are not third party beneficiaries of Intelex’s contract. Consequently, we affirm.
https://www.courts.ca.gov/opinions/documents/B312814.PDF Arbitration
Murrey v. Superior Court (CA4/3 G061329 1/30/23) Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act
In March 2022, President Joseph R. Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the Act) (9 U.S.C. §§ 401, 402), representing the first major amendment of the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.) since its inception nearly 100 years ago. This legislation, having bipartisan support, voids predispute arbitration clauses in cases, such as the one before us now, involving sexual harassment allegations. We regret that this new legislation does not apply retroactively to Casandra Murrey’s complaint filed in March 2021. Nevertheless, we will consider Murrey’s writ petition because the highly secretive and one-sided provisions of her arbitration agreement make it both procedurally and substantively unconscionable. The agreement is factually distinguishable from existing case authority upholding employment adhesion contracts and exemplifies why the legislature drafted House Bill No. 4445. We conclude the trial court erred by enforcing an unconscionably void arbitration agreement.
https://www.courts.ca.gov/opinions/documents/G061329.PDF
Greigo v. City of Barstow (CA2/8 B322638M mod. 1/30/23) Fire Fighter Discipline
IT IS ORDERED that the opinion in the above-entitled matter filed on January 3, 2023, be modified as follows:
On page 2, the second paragraph of part I is deleted and is replaced with the following paragraph:
In 2007, the Fire District issued a memorandum to its captains directing personnel not to attend sporting events while on duty. Later the District reprimanded Griego, in writing, for an “intentional violation of a Verbal Directive, and a written Memorandum . . . .” Griego’s violations were for coaching sports while on duty. After that, the District once again reprimanded Griego for coaching on duty. The reason was “taxpayers don’t pay us to coach softball.” Later he was seen taking a fire engine to a sports event and coaching while on duty. The District reprimanded Griego a third time: “[T]here is no coaching on duty in any capacity. Do not take the engine. Period.” During his third reprimand, Griego was defensive and argumentative and expressed no regret.
The petition for rehearing filed by Respondent Jesse Griego is denied.
There is no change in the judgment.
https://www.courts.ca.gov/opinions/documents/B322638M.PDF
Casson v. Orange County Employees Retirement System (CA4/3 G060950 1/30/23) Public Sector Disability Retirement
This appeal arises from a claim for a service-connected disability retirement (i.e., retirement arising from an on-the-job injury) under a pension governed by the County Employees Retirement Law of 1937, Government Code section 31450 et seq. (CERL). Petitioner Nicholas Casson was a firefighter for the City of Santa Ana for 27 years. In 2012, he retired and began collecting a pension from California Public Employees Retirement System (CalPERS). He immediately started a second career with the Orange County Fire Authority (OCFA), where he was eligible for a pension under respondent Orange County Employees Retirement System (OCERS). Importantly, he did not elect reciprocity between the two pensions, which would have allowed him to import his years of service under CalPERS to the OCERS pension. He started as a first-year firefighter for purposes of the OCERS pension and immediately began collecting pension payments from CalPERS. Five years into the job, he suffered an on-the-job injury that permanently disabled him. He applied for and received a disability pension from OCERS, which, normally, would have paid out 50 percent of his salary for the remainder of his life. However, because he was receiving a CalPERS retirement, OCERS imposed a “disability offset” pursuant to section 31838.5, which is the statute at the center of this appeal. This resulted in a monthly benefit reduction from $4,222.81 to $1,123.87.
After exhausting his administrative remedies, Casson filed a petition for a writ of mandate in the trial court. The court denied the petition, finding that the plain language of section 31838.5 required a disability offset. Casson appealed.
We reverse. Section 31838.5 precludes a “disability allowance” that exceeds the amount a member would receive had he or she stayed in a single pension system. We hold that Casson’s service retirement from CalPERS is not a disability allowance and thus should not have been included in the calculation of Casson’s total disability allowance. Excluding the CalPERS retirement, Casson’s disability allowance—the $4,222.81 OCERS initially agreed to pay him—did not run afoul of section 31838.5. Thus, OCERS should not have imposed an offset, and the trial court should have issued a writ of mandate.
At first blush, this conclusion may seem to contradict our prior holding in Block v. Orange County Employees’ Retirement System (2008) 161 Cal.App.4th 1297 (Block), where we held that a service retirement was a component of a disability allowance. However, the facts in Block involved a crucial difference: the plaintiff in Block elected reciprocity. In Block, we stated, “[S]ection 31838.5, as part of a greater statutory scheme, makes sense only when construed in context as part of that scheme.” (Id. at p. 1307.) Focusing on the reciprocity system, we concluded a “‘disability allowance’” included “all amounts the member receives in reciprocal benefits when retiring due to disability . . . .” (Id. at p. 1314, italics added.) As we explain in greater detail below, because Casson declined the benefits of reciprocity, he is free from its limitations as well, including the disability offset in section 31838.5.
https://www.courts.ca.gov/opinions/documents/G060950.PDF
NLRB V. Aakash, Inc. (9th Cir. 22-70002 1/27/23) Removal of NLRB General Counsel | RNs as Statutory Supervisors
The panel granted a petition for enforcement brought by the National Labor Relations Board (“the Board”), and denied a cross-petition for review of an order of the Board, issued against Aakash, Inc., which held that Aakash violated Sections 8(a)(5) and (1) of the National Labor Relations Act, by refusing to recognize and bargain with Service Employees International Union, Local 215.
Aakash argued that the Board’s General Counsel, Jennifer Abruzzo, lacked authority to prosecute the unfair labor practice charge because the President could not remove the Board’s previous General Counsel, Peter Robb, without cause during the four-year term to which he had been appointed, making his successor’s acts ultra vires and void. The panel rejected Aakash’s contentions. The panel held that the President may remove the Board’s General Counsel at any time and for any reason. The panel held that several canons of construction supported their conclusion. Even if history mattered here, past administrations have maintained that the General Counsel was removable at will. Finally, neither of the established two exceptions to the President’s plenary removal power applied here. First, Congress can impose removal restrictions on a group of principal officers serving as part of a multimember body of experts who do not wield substantial executive power, but that exception does not apply because the General Counsel is a single officer with independent functions. Second, Congress can remove restrictions on inferior officers with limited duties and no policymaking or administrative authority, but the exception does not apply because the General Counsel exercised significant administrative authority, and was not an inferior officer. The panel noted that their decision was in accord with the only other circuit precedent on this issue in Exela Enter. Sols., Inc. v. NLRB, 32 F.4th 436, 443-44 (5th Cir. 2022).
Aakash contended that the certified bargaining unit was inappropriate because the Registered Nurses (RNs) that it included were statutory supervisors. The panel disagreed with Aakash’s claims that the RNs were supervisors because they held authority to assign, discipline, and responsibly direct employees, and they exercised that authority using independent judgment. First, Aakash failed to present sufficient evidence to prove that the RNs assigned work using independent judgment within the meaning of 29 U.S.C. § 152(11). The record suggested that they simply paired nursing students to groups of patients using a schedule created by the Director of Staff Development. Nor did the RNs discipline employees. The power to issue verbal reprimands or report to higher-ups did not suffice. Finally, Aakash did not prove that the RNs responsibly directed other employees using independent judgment.
The panel therefore concluded that General Counsel Robb was lawfully removed, and the RNs were not statutory supervisors under the National Labor Relations Act.
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/01/27/22-70002.pdf
Wit v. United Behavioral Health (9th Cir. 20-17364 1/26/23) ERISA
The panel affirmed in part and reversed in part the district court’s judgment finding United Behavioral Health (“UBH”) liable, and awarding declaratory and injunctive relief, to classes of plaintiffs who were beneficiaries of ERISA-governed health benefit plans for which UBH was the claims administrator.
Plaintiffs submitted health plan coverage requests, which UBH denied. Plaintiffs brought claims under ERISA for breach of fiduciary duty and improper denial of benefits, based on a theory that UBH improperly developed and relied on internal guidelines that were inconsistent with the terms of the class members’ plans and with state-mandated criteria. The parties stipulated to a sample class, from which they submitted a sample of health insurance plans. Plaintiffs alleged that the plans provided coverage for treatment consistent with generally accepted standards of case (“GASC”) or were governed by state laws specifying certain criteria for making coverage or medical necessity determinations. Plaintiffs alleged that UBH’s Level of Care Guidelines and Coverage Determination Guidelines for making these determinations were more restrictive than GASC and were also more restrictive than state-mandated criteria.
The district court certified three classes, conducted a bench trial, and entered judgment in plaintiffs’ favor, concluding that UBH breached its fiduciary duties and wrongfully denied benefits because UBH’s Guidelines impermissibly deviated from GASC and state-mandated criteria. The district court issued declaratory and injunctive relief, directed the implementation of court-determined claims processing guidelines, ordered “reprocessing” of all class members’ claims in accordance with the new guidelines, and appointed a special master to oversee compliance for ten years.
The panel held that plaintiffs had Article III standing to bring their claims. The panel held that plaintiffs sufficiently alleged a concrete injury as to their fiduciary duty claim because UBH’s alleged fiduciary violation presented a material risk of harm to plaintiffs’ interest in their contractual benefits. Plaintiffs also alleged a concrete injury as to the denied of benefits claim because they alleged a harm—the arbitrary and capricious adjudication of benefits claims—that presented a material risk to their interest in fair adjudication of their entitlement to their contractual benefits. Further, plaintiffs alleged a particularized injury as to both claims because the Guidelines materially affected each plaintiff. Finally, plaintiffs’ alleged injuries were “fairly traceable” to UBH’s conduct.
The panel reversed the part of the district court’s class certification order certifying plaintiffs’ denial of benefits claims as class actions. The panel held that plaintiffs’ “reprocessing” theory, seeking reprocessing of their benefits claims under proper guidelines, was a use of the class action procedure to expand or modify substantive rights provided by ERISA, in violation of Fed. R. Civ. P. 23 and the Rules Enabling Act, 28 U.S.C. § 2072(b).
UBH did not appeal the portion of the district court’s judgment finding that the UBH Guidelines were impermissibly inconsistent with state-mandated criteria, and that portion of the district court’s decision therefore remained intact. UBH did argue on appeal that the district court erred in concluding that the Guidelines improperly deviated from GASC and that the district court did not apply an appropriate level of deference to UBH’s interpretation of the ERISA plans. The panel concluded that the district court did not clearly err in finding that UBH had a structural conflict of interest in serving a dual role as plan administrator and insurer, and that UBH also had a financial conflict because it was incentivized to keep benefit expenses down. The panel held, however, that these findings did not excuse the district court from reviewing UBH’s interpretation of the plans for an abuse of discretion. The panel held that, even assuming the conflicts of interest found by the district court warranted heavy skepticism against UBH’s interpretation, UBH’s interpretation did not conflict with the plain language of the plans. Accordingly, the district court erred by substituting its interpretation of the plans for UBH’s interpretation. The panel reversed the district court’s judgment that UBH wrongfully denied benefits to the named plaintiffs based upon the court’s finding that the Guidelines impermissibly deviated from GASC. The panel held that the district court also erred in its judgment on plaintiffs’ breach of duty claim, which also relied heavily on the district court’s conclusion that the Guidelines impermissibly deviated from GASC.
Finally, the panel held that the district court erred when it excused unnamed class members from demonstrating compliance with the plans’ administrative exhaustion requirement. The panel held that when an ERISA plan does not merely provide for administrative review but, as here, explicitly mandates exhaustion of such procedures before bringing suit in federal court and, importantly, provides no exceptions, application of judicially created exhaustion exceptions would conflict with the written terms of the plan. Accordingly, to the extent that any absent class members’ plans required exhaustion, the district court erred in excusing the failure to satisfy such a contractual requirement.
In sum, the panel held that plaintiffs had Article III standing to bring their breach of fiduciary duty and improper denial of benefits claims pursuant to 29 U.S.C. §§ 112(a)(1)(B) and (a)(3). And the district court did not err in certifying three classes to pursue the fiduciary duty claim. However, because plaintiffs expressly declined to make any showing, or seek a determination of, their entitlement to benefits, permitting plaintiffs to proceed with their denial of benefits claim under the guise of a “reprocessing” remedy on a class-wide basis violated the Rules Enabling Act. Accordingly, the panel affirmed in part and reversed in part the district court’s class certification order. On the merits, the panel held that the district court erred in excusing absent class members’ failure to exhaust administrative remedies as required under the plans. The district court also erred in determining that the Guidelines improperly deviated from GASC based on its interpretation that the plans mandated coverage that was coextensive with GASC. Therefore, the panel reversed the judgment on plaintiffs’ denial of benefits claim. To the extent the judgment on plaintiffs’ breach of fiduciary duty claim was based on the district court’s erroneous interpretation of the plans, it was also reversed. The panel affirmed in part, reversed in part, and remanded for further proceedings.
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/01/26/20-17363.pdf
Bitner v. Dept. of Corrections & Rehabilitation (CA4/2 E078038 1/24/23) FEHA Sexual Harassment by Inmates | Public Entity Statutory Immunity
Plaintiffs and appellants Jennifer Bitner and Evelina Herrera were employed as licensed vocational nurses by defendant and respondent California Department of Corrections and Rehabilitation (CDCR). They filed a class action suit against CDCR alleging that (1) while assigned to duties that included one-on-one suicide monitoring, they were subjected to acts of sexual harassment by prison inmates and, (2) CDCR failed to prevent or remedy the situation in violation of the California Fair Employment and Housing Act (FEHA), Government Code section 12940 et seq. The trial court granted summary judgment in favor of CDCR on the ground that it was entitled to statutory immunity under section 844.6, which generally provides that “a public entity is not liable for . . . [a]n injury proximately caused by any prisoner.” (§ 844.6, subd. (a).)
Plaintiffs appeal, arguing that, as a matter of first impression, we should interpret section 844.6 to include an exception for claims brought pursuant to FEHA. Plaintiffs also argue that, even if claims under FEHA are not exempt from the immunity granted in section 844.6, the evidence presented on summary judgment did not establish that their injuries were “ ‘proximately caused’ ” by prisoners. We disagree on both of these points and affirm the judgment.
https://www.courts.ca.gov/opinions/documents/E078038.PDF
Imperial County Sheriff's Assn. v. County of Imperial (CA4/1 D079274 1/20/23) Public Employee Retirement | Class Certification
Plaintiffs, six individuals employed by the County of Imperial, and the three unions representing them (the Imperial County Sheriff’s Association (ICSA), the Imperial County Firefighter’s Association (ICFA), and the Imperial County Probation and Corrections Peace Officers’ Association (PCPOA)), brought a class action lawsuit against the County of Imperial, the Imperial County Employees’ Retirement System, and the System’s Board alleging that the defendants were systematically miscalculating employee pension contributions.
After two years of failed mediation, the plaintiffs filed a motion for class certification under Code of Civil Procedure section 382. The trial court denied the motion, finding that the conflicting interests of two primary groups of employees, those hired before the effective date of the Public Employee Pension Reform Act (Gov. Code, § 7522, et seq. , PEPRA) and those hired after, precluded the court from certifying a class. The court found that because the employees hired before PEPRA took effect were entitled to an enhanced pension benefit unavailable to those hired after, the two groups’ interests were antagonistic and the community of interest among the proposed class members required for certification could not be met. The trial court also concluded the proposed class representatives had failed to show they could adequately represent the class.
On appeal from that order, the plaintiffs contend that insufficient evidence supports the trial court’s finding that there was an inherent conflict among the class members that precluded class certification and that the court’s legal reasoning on this factor was flawed. The plaintiffs also argue they should have been afforded an opportunity to show they can adequately represent the interests of the class.
As we shall explain, we disagree with the trial court’s reasoning concerning the community of interest among the proposed class and agree with the plaintiffs they should be provided an opportunity to demonstrate their adequacy. Accordingly, we reverse the order denying class certification and remand the matter to the trial court with directions to allow the proposed class representatives to file supplemental declarations addressing their adequacy to serve in this role. Thereafter, if the trial court approves of the class representatives, the court is directed to grant the plaintiffs’ motion for class certification, including the creation of the subclasses identified in this opinion.
https://www.courts.ca.gov/opinions/documents/D079274.PDF
Vascos Excavation Group LLC v. Gold (CA2/5 B315205, filed 12/21/22, pub. ord. 1/20/23) Arbitration | Contractor License
Plaintiff and appellant Vascos Excavation Group LLC (Vascos), a contractor, prevailed in an arbitration against its client, defendant and respondent Robert Gold. After finding that Vascos was not duly licensed because its responsible managing employee (RME) did not meet the criteria required by law, the trial court granted Gold’s petition to vacate the arbitration award on the ground the arbitrator exceeded her powers.
Vascos makes two main arguments on appeal. It first contends the trial court misapplied the burden of proof regarding whether Vascos was a duly licensed contractor. We reject this argument. The trial court correctly determined that Vascos had the burden of proof on this issue.
Vascos also argues the trial court erroneously denied it an evidentiary hearing. In the trial court, however, Vascos did not seek an evidentiary hearing. It instead argued that such a hearing was not authorized by law. Vascos therefore forfeited the issue on appeal.
https://www.courts.ca.gov/opinions/documents/B315205.PDF
Wu v. Public Employment Relations Bd. (CA3 C092640, filed 12/28/22, ord. pub. 1/19/23) PERB | Unfair Practice by Union
This case involves our review of the Public Employment Relations Board’s (Board) refusal to file an unfair labor practice complaint on behalf of plaintiff Rebecca Wu, a substitute teacher representing herself in propria persona, against real party in interest Twin Rivers United Educators (Union), a teachers’ union. In her unfair practice charge filed with the Board, Wu alleged the Union breached its duty to represent her in her claim against Twin Rivers Unified School District (School District), wherein she claimed to be misclassified as a substitute teacher. The Board declined to file a complaint against the Union based on Wu’s charge because Wu, as a substitute teacher, was not entitled to union representation given that substitute teachers were excluded from representation by virtue of the collective bargaining agreement between the Union and the School District.
In cases involving the Board’s refusal to file an unfair practice complaint, our review is limited to whether the Board violated the Constitution, misinterpreted a statute, or exceeded its authority. (International Assn. of Fire Fighters, Local 188, AFL-CIO v. Public Employment Relations Bd. (2011) 51 Cal.4th 259, 271 (Fire Fighters).) Wu argues she has a constitutional right to union representation as a misclassified teacher and as a substitute teacher. She further argues she has a statutory right to representation by the Union that could not be circumvented by a collective bargaining agreement.
We disagree with Wu that she has a constitutional or statutory right to representation by the Union as an alleged misclassified employee or as a substitute teacher. Accordingly, we affirm the trial court’s order.
https://www.courts.ca.gov/opinions/documents/C092640.PDF
Iyere v. Wise Auto Group (CA1/4 A163967 1/19/23) Arbitration | Signature Authenticity & Unconscionability
Wise Auto Group, doing business as Infiniti of Marin (hereafter Wise), appeals an order denying its motion to compel Leroy Iyere, Phillip Derbigny, and Michael Worlow (collectively plaintiffs) to arbitrate their employment-related claims. Plaintiffs asserted that they did not recall signing the arbitration agreement bearing their purported handwritten signatures and that the asserted agreement is unconscionable. The court concluded that Wise had not borne its burden of proving the authenticity of the signatures and, alternatively, that the agreement is unconscionable. We shall reverse.
https://www.courts.ca.gov/opinions/documents/A163967.PDF
Adanna Car Wash Corp. v. Gomez (CA2/5 B313649 1/18/23) Labor Commissioner Appeal Bond
This appeal addresses the relationship between two statutory surety bonds required under different sections of the Labor Code. Adanna Car Wash Corporation (Adanna) appeals from the superior court’s dismissal of its trial de novo appeal from the Labor Commissioner’s award of back wages and other damages in favor of Adanna’s former employee, Jesus Gomez. The trial court dismissed the appeal for lack of jurisdiction because Adanna failed to post with the trial court an appeal bond required by section 98.2.
Adanna contends that it, in fact, had complied with section 98.2, pointing to a surety bond that it had posted earlier under a different Labor Code provision, section 2055. The section 2055 undertaking is required of all car wash owners as a condition of operating a car wash business. We agree with the trial court that the section 2055 bond was not the appeal bond required under section 98.2. Accordingly, we affirm.
https://www.courts.ca.gov/opinions/documents/B313649.PDF
Opara v. Yellen (9th Cir. 21-55953 1/17/2023) ADEA Age and Title VII National Origin Discrimination | IRS
The panel affirmed the district court’s summary judgment in favor of the Treasury Secretary of the United States in plaintiff’s action alleging she was wrongfully terminated from her employment as a Revenue Officer at the Internal Revenue Service for assessed Unauthorized Access of Taxpayer Data (“UNAX”) offenses.
After unsuccessfully pursuing an internal Equal Employment Opportunity complaint, plaintiff brought her action in federal court alleging that her termination was based on impermissible criteria of age and national origin in violation of the Age Discrimination in Employment Act (“ADEA”) and Title VII of the Civil Rights Act of 1964.
The panel held that the district court did not err in granting the Treasury Secretary’s motion for summary judgment on plaintiff’s age discrimination claim. At step one of the legal framework for a discrimination action, the district court found that none of plaintiff’s evidence established a prima facie case of age discrimination. The panel agreed with the district court that most of plaintiff’s evidence comprised “circumstantial evidence”—her superior’s alleged exaggeration of her offenses, assignment of menial tasks, selection of draconian penalties. The panel held, however, that the record was not devoid of direct evidence of age discrimination. Because very little evidence is necessary to establish a prima facie case through direct evidence, the panel was satisfied that the record taken as a whole supported plaintiff’s prima facie case of age discrimination. At step two, the burden shifted to the employer to articulate a legitimate, nondiscriminatory reason for terminating plaintiff's employment. Here, the IRS Manager’s Guide instructed that the decision to terminate plaintiff was an appropriate penalty for the assessed UNAX(c) and UNAX(e) violations. The panel held that the Secretary’s proffered reasons for its action was sufficient. At step three, since the Secretary articulated a sufficient reason for the challenged action, the burden shifted back to plaintiff to show that the articulated reason was pretextual. Because plaintiff’s direct record evidence of age-related discriminatory animus consisted of her own allegations, the panel held that the proffered direct record was insufficient to raise a genuine issue as to pretext. Plaintiff’s indirect evidence likewise did not raise a genuine issue of material fact regarding her employer’s motive. It was undisputed that plaintiff committed at least some UNAX offenses. Regarding plaintiff’s claims of humiliation, all parties acknowledged that it was standard procedure to deny certain access to any employee under investigation for UNAX violations until a disciplinary decision was reached. Because plaintiff had not raised a genuine issue as to whether her termination was due in whole or in part to age discrimination, the panel affirmed the district court’s summary judgment to the Secretary on plaintiff’s first claim.
The panel held that the district court did not err in granting the Treasury Secretary’s motion for summary judgment on plaintiff’s national origin discrimination claim. At step one of the framework, the panel held that plaintiff seemed to rely exclusively on circumstantial evidence to establish her prima facie case of national origin discrimination. The panel held further that it need not decide whether plaintiff could establish a prima facie case because even assuming arguendo that she could, her claim failed at the pretext stage. At the second step, the panel held that the Secretary satisfied her burden of articulating a legitimate, non-discriminatory reason for the challenged action for the same reasons as those discussed in plaintiff’s age discrimination claim. At step three, the panel held that plaintiff failed to prove that the Secretary’s proffered reasons for termination were a pretext for discrimination based on national origin. The conclusory allegations that plaintiff presented were insufficient. The panel concluded that plaintiff did not succeed in creating a genuine issue as to whether the agency’s proffered reasons were false or whether her termination was due in whole or in part to her national origin; and the district court appropriately granted summary judgment to the Secretary on the national origin discrimination claim.
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/01/17/21-55953.pdf
Brubaker v. Strum (CA2/7 B317694 1/13/23) Child & Spousal Support | Employer Earnings Assignment Orders
Sometimes a former spouse who owes child and spousal support (i.e., the obligor) to a former spouse (i.e., the obligee) doesn’t pay what he or she owes, either because the obligor spouse has fallen behind in the payments or is not making support payments at all. To ensure the obligor’s children and the obligee receive court-ordered support if that occurs, a family court order for child and spousal support must include an “earnings assignment order” that directs the obligor’s employer to pay the obligee any portion of the obligor’s earnings the obligor owes in child or spousal support.
The obligor’s employer ignores an earnings assignment order at its peril. Family Code section 5241, subdivision (a), provides that an employer who willfully fails to withhold and forward support pursuant to a valid earnings assignment order (called an “income withholding order” under federal law) must pay the obligee the amount of support that should have been withheld and sent to the obligee, plus interest. And if the employer complies with the assignment order, the obligor employee has some protection. Section 5241, subdivision (b), provides that, if the employer properly withholds support from the obligor’s earnings, the obligor cannot be held in contempt or subject to criminal prosecution for nonpayment of the support, even if the obligee did not receive the support the obligor’s employer withheld.
The issue in this appeal is whether section 5241 precludes the obligee from seeking a determination of arrearages allegedly owed by the obligor, where the obligor’s employer is subject to a valid earnings assignment order. The family court ruled section 5241 precludes such a request, but reached that conclusion by answering a different question: whether section 5241 precludes an obligee from seeking to enforce arrearages against an obligor whose employer is subject to an earnings assignment order. The court concluded section 5241 precludes such a request, and then applied that reasoning to deny an obligee’s request for an order to determine (as opposed to enforce) arrearages. As a result, the family court denied a request by Betsey Brubaker for an order to determine child and spousal support arrearages against her former husband, Andy Strum. The court also granted Strum’s request for monetary sanctions under Code of Civil Procedure section 128.5 against Brubaker’s attorney, Mark Karney, because the court found its interpretation of section 5241 “absolutely clear.”
We agree with the family court that the language of section 5241 is clear, but not in the way the family court thought it was. Based on the language and legislative history of section 5241, we conclude that, where an employer is subject to an earnings assignment order, section 5241 protects obligors only from being held in contempt or subject to criminal prosecution for nonpayment of the support. Contrary to the family court’s ruling, the statute does not preclude an obligee like Brubaker from seeking arrearages or a determination of arrearages from an obligor like Strum. Which in turn means Brubaker’s request for an order determining arrearages was not frivolous for the reasons stated by the family court and did not support an award of sanctions against Karney. Therefore, we reverse the family court’s order and direct the court to determine the amount of arrearages, if any, Strum owes Brubaker.
https://www.courts.ca.gov/opinions/documents/B317694.PDF
Ohio Adjutant General’s Dept. v. Federal Labor Relations (US 21-1454 Oral Argument 1/9/23)
1. Does the Civil Service Reform Act of 1978, which empowers the Federal Labor Relations Authority to regulate the labor practices of federal agencies only, see 5 U.S.C. §7105(g), empower it to regulate the labor practices of state militias?
2. The second Militia Clause empowers Congress to "provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States." U.S. Const. art. I, §8, cl. 16. Assuming the Civil Service Reform Act of 1978 permits the Federal Labor Relations Authority to regulate the labor practices of state militias, is the Act unconstitutional in its application to labor practices pertaining to militia members who are not employed in the service of the United States?
Decision Below: 21 F.4th 401 (6th Cir. 2021)
Glacier Northwest, Inc. v. Int’l Brotherhood of Teamsters Local Union No. 174 (US 21-1449 Oral Argument 1/10/23)
Does the National Labor Relations Act impliedly preempt a state tort claim against a union for intentionally destroying an employer's property in the course of a labor dispute?
Decision Below: 500 P.3d 119 (Wash. 2021)
Lathus v. City of Huntington Beach (9th Cir. 21-56197 1/5/23) First Amendment | Volunteer’s Dismissal
Affirming the district court’s dismissal of a complaint for failure to state a claim, the panel held that the First Amendment does not protect a volunteer member of a municipal advisory board from dismissal by the city councilperson who appointed her and who is authorized under a city ordinance to remove her.
While serving as a Huntington Beach City Councilperson, Kim Carr appointed plaintiff Shayna Lathus to the city’s Citizen Participation Advisory Board (“CPAB”). Each councilperson appoints one member to the seven-person CPAB and may remove that member without cause. See Huntington Beach, Cal., Mun. Code §§ 2.97.020, 2.100.100. After being appointed to the CPAB, Lathus was photographed at an immigrants’ rights rally standing near individuals whom Carr believed to be “Antifa.” After determining that Lathus’s public denouncement of Antifa was insufficient, Carr removed Lathus from the CPAB, citing lack of shared values.
The panel held that given the statutory structure and duties of the CPAB, the public could readily infer that a CPAB member’s actions and statements while serving in the role reflected the current views and goals of the appointing councilperson. Like each of her fellow board members, Lathus was the “public face” of her appointor. She could therefore be dismissed for lack of political compatibility. The panel further rejected Lathus’ compelled speech claim and held that an elected official can compel the public speech of her representative because that speech will be perceived as the elected official’s own. Finally, given the structural features of the CPAB, which taken together make its members public surrogates of the appointing councilperson, the district court did not abuse its discretion by denying Lathus leave to amend her complaint.
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/01/05/21-56197.pdf
Vaughn v. Tesla, Inc. (CA1/5 A164053 1/4/23) FEHA Public Injunctions
Defendant and appellant Tesla, Inc. (Defendant) appeals from the denial of its motion to compel arbitration of workplace race discrimination claims asserted by plaintiffs Monica Chatman and Evie Hall (Plaintiffs). Plaintiffs initially worked for Defendant through staffing agencies before signing employment letters prepared by Defendant in July 2017. Plaintiffs’ complaint alleged the discrimination occurred before and after the letters were signed. We determine the trial court properly relied on the language in an arbitration provision contained in the letters to exclude from arbitration those claims based on conduct occurring during periods Plaintiffs were employed by staffing agencies rather than directly by Defendant. We also conclude the trial court properly declined to mandate arbitration of Plaintiffs’ request for a public injunction. On that issue, we reject Defendant’s two principal contentions. First, we hold that injunctions sought under the Fair Employment and Housing Act (FEHA) (Gov. Code, §§ 12900 et seq.) may be considered “public injunctions.” Second, we rule the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.), as interpreted in Viking River Cruises, Inc. v. Moriana (2022) ___ U.S. ___ [142 S.Ct. 1906, 213 L.Ed.2d 179] (Viking River), does not preempt the California rule prohibiting waiver of the right to seek such injunctions.
https://www.courts.ca.gov/opinions/documents/A164053.PDF
Lemm v. Ecolab (CA2/5 B312232 1/3/23) Overtime | PAGA
Stephen Lemm appeals from a judgment in favor of his employer, Ecolab, Inc. Lemm sued Ecolab under the Private Attorneys General Act (PAGA; Lab. Code, § 2698 et seq.) alleging Ecolab improperly calculated the overtime due on a nondiscretionary bonus paid to Lemm and other similarly situated employees. Ecolab successfully moved for summary judgment on the ground its formulation of the overtime payment comported with the Fair Labor Standards Act of 1938 (FLSA). On appeal, Lemm argues California authorities require a different method of calculation and supersede federal authority in this instance because California provides greater protection to employees like him. We affirm.
https://www.courts.ca.gov/opinions/documents/B312232.PDF
Griego v. City of Barstow (CA2/8 B322638 1/3/23) Public Employee Termination | Independent Judgment
Jesse Griego was a captain in the Barstow Fire Protection District. The City of Barstow fired him for criminal and perjurious acts, for willful refusal to comply with official orders, and for setting a poor professional example for his subordinates, as well as for other charges no longer at issue. The trial court erred by remanding this case for the City to reconsider Griego’s discipline. There is no real doubt the City would terminate Griego, so there is no reason to remand the case. (See Byrd v. Savage (1963) 219 Cal.App.2d 396, 402–403 (Byrd).) We reverse the trial court and affirm the City’s decision.
https://www.courts.ca.gov/opinions/documents/B322638.PDF
Socal Recovery , LLC v. City of Costa Mesa (9th Cir. 20-55820 1/3/23) Sober-Living Homes | Actual and Regarded as Disabled
The panel reversed the district court’s summary judgment in favor of the City of Costa Mesa in cases in which plaintiffs-appellants (“Appellants”), operators of sober living homes for persons recovering from drug and alcohol addiction, alleged that two new City ordinances and the City’s enforcement practices discriminated against them on the basis of disability under the Fair Housing Act (FHA), the Americans with Disabilities Act (ADA), and the California Fair Employment and Housing Act (FEHA).
The ordinances, which made it unlawful to operate sober living homes without a permit, define sober living homes as group homes serving those who are “recovering from a drug and/or alcohol addiction and who are considered handicapped under state or federal law,” and define group homes as “facilit[ies] that [are] being used as a supportive living environment for persons who are considered handicapped under state or federal law.” Until the ordinances were adopted, the City did not regulate sober living homes differently from other residences. The ordinances required all sober living homes, including established homes, to be located more than 650 feet away from any other sober living home or any state-licensed drug and alcohol treatment center. No existing homes were grandfathered—i.e., if two operating sober living homes were within 650 feet of each other, one would have to cease operating as a sober living home. The ordinances did not address the criteria used to determine which home could remain, but provided that applicants could request reasonable accommodations from permit conditions and requirements, like the 650-foot requirement.
Appellants submitted both permit applications and reasonable accommodation requests to the City so they could continue to operate their sober living homes, even those that were operating within 650 feet of other sober living homes or state-licensed drug and alcohol treatment centers. The City found that Appellants were operating sober living homes but denied some permits and reasonable accommodation requests because the homes were operating in violation of the new separation requirement. The City issued citations to Appellants for operating the sober living homes without approval, and filed state court abatement actions against Appellants.
Granting the City’s motions for summary judgment, the district court found that Appellants did not establish that residents in their sober living homes were actually disabled, or that the City regarded their residents as disabled.
The panel held that Appellants and other sober living home operators can satisfy the “actual disability” prong of the ADA, FHA, or FEHA on a collective basis by demonstrating that they serve or intend to serve individuals with actual disabilities; they need not provide individualized evidence of the actual disability of their residents. Rather, they can meet their burden by proffering admissible evidence that they have policies and procedures to ensure that they serve or will serve those with actual disabilities and that they adhere or will adhere to such policies and procedures. The panel held that in each action, the district court therefore erred by finding that an individualized assessment of resident disability was necessary under the “actually disabled” prong of the disability definition.
The panel held that in determining whether Appellants can establish disability under the “regarded as disabled” prong of the disability definition, the district court erred by finding that Appellants must prove the City’s “subjective belief” that their residents were disabled. The panel explained that under this prong, the analysis turns on how an individual is perceived by others.
The panel noted that Appellants provided the district court with evidence of (1) admissions criteria and house rules, (2) employee and former resident testimony, (3) public fears and stereotypes of their residents that may have influenced the City’s perception, and (4) the actual content of City ordinances, denial letters, resolutions, citations, and abatement actions that acknowledged the residents in Appellants’ homes were disabled. The panel wrote that this type of evidence, if it satisfied the requirements of Federal Rule of Civil Procedure 56(c), should have been considered by the district court in evaluating whether Appellants established triable issues of fact under either or both of the “actually disabled” or “regarded as disabled” prongs. The panel therefore reversed each of the district court’s grants of summary judgment and remanded for the court to consider whether the record contains evidence sufficient to establish a genuine dispute of material fact on the “actually disabled” or “regarded as disabled” prongs of the disability definition.
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/01/03/20-55820.pdf
Freedom Foundation v. Super. Ct. (CA3 C096273, filed 12/5/22, ord. pub. 12/30/22) Public Records Act | Dills Act Collective Bargaining Exemption
Freedom Foundation filed a petition for writ of mandate and complaint for declaratory and injunctive relief under the California Public Records Act (PRA; Gov. Code, § 6250 et seq. ) to compel the Department of Human Resources (CalHR) to disclose records regarding collective bargaining units and state employees. The trial court denied the petition and complaint.
Freedom Foundation sought extraordinary writ relief in this court. Freedom Foundation argues: (1) the collective bargaining exemption under section 6254, subdivision (p)(1) is limited to information that reveals an agency’s deliberative processes; and (2) CalHR is obligated to search the database maintained by the State Controller’s Office for responsive documents. We issued an order to show cause. After reviewing the parties’ additional briefing, we deny the petition.
https://www.courts.ca.gov/opinions/documents/C096273.PDF
Dodge v. Evergreen School District #114 (9th Cir. 21-35400 12/29/22) First Amendment
The panel affirmed in part and reversed in part the district court’s summary judgment in favor of defendants in an action brought pursuant to 42 U.S.C. § 1983 by a teacher who alleged retaliation in violation of the First Amendment when a school principal told him that he could not bring his Make America Great Again (MAGA) hat with him to teacher-only trainings on threat of disciplinary action and when the school board affirmed the denial of plaintiff’s harassment complaint filed against the principal.
The panel first concluded that plaintiff was engaged in speech protected by the First Amendment because the undisputed facts demonstrated that his MAGA hat conveyed a message of public concern, and he was acting as a private citizen in expressing that message.
Addressing the claims against Principal Caroline Garret, the panel next held that viewing the facts in the light most favorable to plaintiff, at a minimum, there were triable issues of fact regarding whether Principal Garrett, who had authority over plaintiff’s employment, took adverse employment action against him when she stated that the next time plaintiff had his MAGA hat, they would have a meeting in which he would need his union representative. Because it was undisputed that plaintiff’s MAGA hat motivated Principal Garret’s action, plaintiff submitted sufficient evidence of a prima facie First Amendment retaliation claim against her for purposes of summary judgment. The record failed to establish, however, that defendant Jenae Gomes, the school district’s Chief Human Resource Officer, took any adverse employment action against plaintiff, and for this reason, plaintiff’s First Amendment retaliation claim against Gomes failed as a matter of law.
Analyzing whether Principal Garrett had a legitimate administrative interest in preventing plaintiff’s speech that outweighed his First Amendment rights, the panel determined that while some of the training attendees may have been outraged or offended by plaintiff’s political expression, no evidence of actual or tangible disruption to school operations had been presented. That some may not like the political message being conveyed is par for the course and cannot itself be a basis for finding disruption of a kind that outweighs the speaker’s First Amendment rights. Therefore, Principal Garrett’s asserted administrative interest in preventing disruption among staff did not outweigh plaintiff’s right to free speech. Moreover, any violation of plaintiff’s First Amendment rights by Principal Garrett was clearly established where longstanding precedent held that concern over the reaction to controversial or disfavored speech itself does not justify restricting such speech. For these reasons, the panel reversed the district court’s grant of summary judgment in favor of Principal Garrett.
Addressing plaintiff’s claim against the Evergreen School District, the panel held that the school board’s dismissal of plaintiff’s administrative complaint on the grounds that Principal Garrett did not violate any District “policy or procedure,” was not an approval of her conduct or the basis for it. Plaintiff failed to establish that a material dispute of fact existed regarding whether the District ratified any unconstitutional conduct by Principal Garrett. The panel therefore affirmed the district court’s grant of summary judgment in favor of the District.
https://cdn.ca9.uscourts.gov/datastore/opinions/2022/12/29/21-35400.pdf
Parsons v. Estenson Logistics, LLC (CA3 C093489 12/28/22) Wage and Hour Timely Payment
Labor Code section 204, subdivision (d), provides that wages for employees who are paid weekly are deemed timely if paid “not more than seven calendar days following the close of the payroll period.” What happens if the seventh calendar day falls on a Saturday? Plaintiff and appellant Robert Parsons argues the wages must be paid on that Saturday. Defendant and respondent Estenson Logistics, LLC (Estenson) argues the wages may be paid the following Monday, because Code of Civil Procedure section 12a provides that weekends are holidays, and further provides, “If the last day for the performance of any act provided or required by law to be performed within a specified period of time is a holiday, then that period is hereby extended to and including the next day that is not a holiday.” The trial court agreed with Estenson, and granted summary judgment in its favor on a wage and hour claim brought by Parsons. We also agree, and thus affirm.
https://www.courts.ca.gov/opinions/documents/C093489.PDF
Espinoza v. Warehouse Demo Services, Inc. (CA1/5 A165820 12/23/22) Employee Working Away from Employer’s Place of Business
This appeal presents the question of whether an employee working at a fixed site not owned or leased by the employer is subject to the outside salesperson exemption where the employer controls the employee’s hours and working conditions. Plaintiff and appellant Georgina Espinoza appeals a judgment in favor of defendant and respondent Warehouse Demo Services, Inc. following the trial court’s order granting its motion for summary judgment. The subject dispute involved a class action suit in which various Labor Code violations were alleged against respondent as the employer. The trial court granted respondent’s motion and found that the outside salesperson exemption applied because appellant did not work at a site owned or controlled by respondent and therefore worked away from respondent’s place of business. The trial court did not reach respondent’s arguments in support of summary adjudication.
On appeal, we hold that the pertinent inquiry as to whether an employee works away from the employer’s place of business is not whether the employer owns or controls the work site, but the extent to which the employer maintains control or supervision over the employee’s hours and working conditions. Here, respondent assigned appellant to work not only at a fixed site, but within a small, designated area within this site during each shift. Appellant was required to clock in and out at every shift, was responsible for maintaining her designated area, and could not leave this designated area during her shift unless another employee came to relieve her for a break. The outside salesperson exemption was created because it has historically been difficult for an employer to control or monitor outside salespersons who control their own hours and schedule. The purpose of the exemption would not be served here where appellant’s hours and schedule were carefully monitored and controlled by respondent. Accordingly, we reverse.
As we hold that appellant did not work away from respondent’s place of business for purposes of the outside salesperson exemption, we need not reach the issue of whether appellant was engaged in “selling” under the exemption.
https://www.courts.ca.gov/opinions/documents/A165820.PDF
Williams v. West Coast Hospitals, Inc. (CA6 H049177 12/22/22) Untimely Payment of Arbitration Fees [not an employment case, but may be applicable]
Code of Civil Procedure sections 1281.97 and 1281.98 provide that a company or business pursuing arbitration of a dispute under a predispute arbitration agreement is in material breach and default of that agreement—thereby waiving its right to arbitrate—if it fails to timely pay its share of arbitration fees. Among the consumer’s potential remedies for this material breach is to eschew arbitration and litigate. This appeal by defendant West Coast Hospitals, Inc. (West Coast), calls for us to decide (1) whether sections 1281.97 or 1281.98 required plaintiffs Ann Williams, John Williams, and Paul Williams to first obtain an arbitrator’s determination of West Coast’s default before returning to the trial court; and (2) whether these statutory provisions apply only to mandatory predispute arbitration agreements. Because nothing in the statute authorizes the restrictive interpretation that West Coast posits, we affirm the trial court’s order permitting the resumption of litigation.
https://www.courts.ca.gov/opinions/documents/H049177.PDF
Kemp v. Super. Ct. (CA4/3 G061122 12/22/22) Job Background Check | FCRA | CCRAA
Under the federal Fair Credit Reporting Act (FCRA), a regulated agency may report a person’s prior conviction to a prospective employer no matter how long ago it occurred. (15 U.S.C. § 1681c(a)(5).) Conversely, under the California Investigative Consumer Reporting Agencies Act (ICRAA) and the California Consumer Credit Reporting Agencies Act (CCRAA), an agency is prohibited from reporting a “conviction of a crime that, from the date of disposition, release, or parole, antedate the report by more than seven years.” (Civ. Code, §§ 1785.13, subd. (a)(6), 1786.18, subd. (a)(7).)
Generally, a state legislature can “offer greater protection to the consumer” than Congress. (See Cisneros v. U.D. Registry, Inc. (1995) 39 Cal.App.4th 548, 577.)
In 2011, plaintiff R. Kemp was convicted, released from prison, and placed on parole. In 2020, Amazon.com, Inc. (Amazon) offered Kemp a job in Sacramento. Defendant Accurate Background LLC (Accurate) provided a background report to Amazon revealing Kemp’s criminal conviction. Amazon then withdrew its job offer.
Because Kemp’s 2011 conviction predated the 2020 report by more than seven years, he filed a complaint alleging Accurate: 1) violated the ICRAA, 2) violated the CCRAA, and 3) derivatively violated the state’s Unfair Competition Law (UCL).
Accurate filed a demurrer. Kemp’s parole endedin 2014, which predated the 2020 report by less than seven years. Accurate argued under the ICRAA and the CCRAA, “the term ‘parole’ refers to the end of the parole period,” thus barring liability. Alternatively, Accurate argued the federal FCRA preempts the state ICRAA, and therefore Kemp’s ICRAA claim is barred as a matter of law.
The trial court overruled Accurate’s demurrer, in part, finding “the plain meaning of ‘from the date of . . . parole’ refers to the start date of conditional release.” The court sustained Accurate’s demurrer, in part, finding “the FCRA preempts the ICRAA claim.” Accurate and Kemp both filed petitions for extraordinary writ relief in this court. We issued orders to show cause.
We hold the phrase from the date of parole refers to the start date of parole, and the FCRA does not preempt Kemp’s ICRAA claim. Thus, we direct the trial court to vacate its prior order, which partially sustained Accurate’s demurrer, and to issue a new order overruling the demurrer in its entirety.
https://www.courts.ca.gov/opinions/documents/G061122.PDF