Nam v. Regents of UC (CA3 C074796 7/29/16) Sexual Harassment & Retaliation/anti-SLAPP
The California anti-SLAPP statute was intended to counter the “disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.” (Code Civ. Proc., § 425.16, subd. (a).) It has been suggested that “[t]he cure has become the disease—SLAPP motions are now just the latest form of abusive litigation.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 96 (dis. opn. of Brown, J.) (Navellier).) And the disease would become fatal for most harassment, discrimination, and retaliation actions against public employers if we were to accept the Regents of the University of California’s (University) misguided reading of the anti-SLAPP law and reverse the trial court’s denial of its motion to strike. We agree with plaintiff Un Hui Nam that defendant did not sustain its burden to demonstrate that the gravamen of her claims for sexual harassment and retaliation arose from defendant’s protected First Amendment activity. The trial court’s order therefore is affirmed.
Sandquist v. Lebo Automotive, Inc. (SC S220812 7/28/16) Class arbitration is determined case by case
Plaintiff Timothy Sandquist and the various defendants here are parties to an arbitration agreement. A salient question is whether that agreement permits or prohibits arbitration on a classwide basis. Here we must answer a question one step removed—who decides whether the agreement permits or prohibits classwide arbitration, a court or the arbitrator? The question has divided the many state and federal courts to consider it.
We conclude no universal rule allocates this decision in all cases to either arbitrators or courts. Rather, who decides is in the first instance a matter of agreement, with the parties’ agreement subject to interpretation under state contract law. Under state law, these parties’ arbitration agreement allocates the decision to the arbitrator. Under federal arbitration law, no contrary presumption requires a different result, so the issue remains one for the arbitrator. Because the Court of Appeal arrived at a similar answer, we affirm.
Osborne v. Yasmeh (CA2/4 B262043 7/28/16) Plaintiff denied rights is not required to pay a discriminatory fee to establish standing to sue under the Unruh Act
Plaintiffs John Flowers, Rebecca Osborne, Seth Messmer, and Kody Messmer (collectively, plaintiffs) allege that they visited a hotel owned and managed by defendants Bruce Yasmeh, Alfred Yasmeh, American Property Management, and INE Capital Holdings. Flowers is paraplegic and employs the use of a service dog. Osborne is Flowers’s wife, and the Messmers are Flowers’s stepsons. Plaintiffs allege that they visited defendants’ hotel, but management refused to rent them a room unless they first paid a non-refundable cleaning fee relating to the dog. They allege that the charge for the room was $80, and the nonrefundable cleaning fee was $300. Plaintiffs left the hotel without paying the fee or checking in as guests.
Plaintiffs sued defendants in two separate lawsuits, one brought by Osborne and one brought by Flowers and the Messmers. In both actions, plaintiffs alleged violations of the Unruh Civil Rights Act (Civil Code, § 51) and intentional infliction of emotional distress. Defendants argued that plaintiffs’ pleadings could not establish standing due to a “bright-line rule” articulated in Surrey v. True Beginnings (2008) 168 Cal.App.4th 414, 416 (Surrey), that under the Unruh Act, “a person must tender the purchase price for a business’s services or products in order to have standing to sue it for alleged discriminatory practices relating thereto.” Because plaintiffs left the hotel without paying the fee, defendants argued, they did not have standing to assert an Unruh Act cause of action. The trial court sustained defendants’ demurrers without leave to amend. Plaintiffs appealed from the judgments entered in their two separate cases. We consolidated the cases for purposes of oral argument and decision.
While we agree with the result in Surrey, we find that its bright-line rule is not applicable to the facts of this case. Section 52, which provides remedies for violations of the Unruh Act, states that any person aggrieved by conduct that violates the Unruh Act may bring a civil action. (§ 52, subd. (c).) When a disabled person such as Flowers alleges that he presented himself to a business establishment and was required to pay a fee relating to his disability before accessing the products or services offered, he has stated facts sufficient to establish that he is a person aggrieved as defined in section 52, subdivision (c), and he has therefore alleged facts sufficient to demonstrate standing to sue under the Unruh Act. A plaintiff is not required to pay a discriminatory fee to establish standing to sue under the Unruh Act, as long as the plaintiff alleges facts showing that he or she has directly experienced a denial of rights as defined in sections 51 and 52. In addition, when a disabled individual has standing to sue under section 52, subdivision (c), any person “associated with” that individual (§ 51.5, subd. (a)) has standing if the associated person has also directly experienced the discriminatory conduct. We therefore reverse the judgments below and remand for further proceedings.
Mitchell v. Dept. of Public Health (CA2/4 B265769 7/27/16) FEHA limitation period may be equitably tolled during period of EEOC investigation
Appellant Reginald Mitchell sued his former employer, respondent California Department of Public Health (the Department), for racial discrimination in violation of the California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.). The trial court dismissed the complaint after sustaining a demurrer on the statute of limitations ground. In this appeal from the judgment of dismissal, we find the allegations of the complaint are sufficient to establish a claim of equitable tolling, and reverse.
JAMS, Inc. v. Super. Ct. (CA4/1 D069862 7/27/16) ADR provider's Web site posting on background and qualifications of neutral falls within commercial speech exemption of anti-SLAPP statute
This action arises from representations made on the JAMS, Inc. (JAMS) Web site regarding the background of the Honorable Sheila Prell Sonenshine (Retired), and JAMS's operations in offering alternative dispute resolution (ADR) services. Kevin J. Kinsella alleges he relied upon certain representations made on the Web site when he agreed to stipulate to hire Sonenshine as a privately compensated judge to resolve issues related to his marital dissolution case and later discovered the representations were either untrue or misleading.
JAMS and Sonenshine filed an anti-SLAPP (Code Civ. Proc., § 425.16) motion to strike Kinsella's complaint. The court found the action exempt from the anti-SLAPP procedure under the commercial speech exemption of section 425.17, subdivision (c). JAMS and Sonenshine filed a petition for writ of mandate or other relief. We stayed the proceedings and issued an order to show cause why relief should not be granted to allow us the opportunity to consider the issues raised in the petition related to the scope of the commercial speech exemption of section 425.17, subdivision (c). (See Omaha Indemnity Co. v. Superior Court (1989) 209 Cal.App.3d 1266, 1273 [writ review appropriate to decide issues of widespread interest].) Having now considered the matter, we agree the commercial speech exemption applies and precludes the use of the anti-SLAPP procedure in this case. The petition is denied.
In re Swift Transportation (9th Cir. 15-70592 7/26/16) Arbitration/Misclassification
The panel denied a petition for a writ of mandamus in a labor law case in which the defendants sought to compel arbitration.
In a prior appeal, the court of appeals held that the district court, rather than an arbitrator, must decide whether the dispute was exempt from arbitration under 9 U.S.C. § 1, which provides that the Federal Arbitration Act does not apply to contracts of workers engaged in foreign or interstate commerce. On remand, the district court issued a scheduling order for discovery and a trial on the § 1 issue.
In a companion appeal, Van Dusen v. Swift, No. 15-15257, the panel held that it lacked jurisdiction to review the district court’s interlocutory scheduling order. Defendants also sought a writ of mandamus ordering the district court to vacate its order and decide defendants’ petition to compel arbitration without discovery or trial.
The panel denied the mandamus petition because defendants had a remedy in urging their position before the district court in dispositive motions and in the form of direct appeal following the issuance of a final order. Normal litigation expense did not constitute sufficient prejudice to warrant relief, and the discovery cost had already been incurred. And, most crucially, the district court’s order was not clearly erroneous.
Concurring, Judge Hurwitz wrote that the extraordinary remedy of a writ of mandamus was not warranted.
Dissenting, Judge Ikuta wrote that a writ of mandamus should be granted because the district court clearly erred in ordering discovery, pretrial proceedings, and trial rather than addressing the only legal issue before it—whether the workers’ contract was a “contract of employment” for purposes of § 1 of the Federal Arbitration Act. She wrote that other factors also weighed in favor of granting the writ.
Van Dusen v. Swift Transportation (9th Cir. 15-15257 7/26/16)Arbitration/Misclassification
Dismissing an interlocutory appeal from a district court’s case management order in a labor law case, the panel held that the Federal Arbitration Act did not grant it jurisdiction to hear the appeal.
In a prior appeal, the court of appeals held that the district court, rather than an arbitrator, must decide whether the dispute was exempt from arbitration under 9 U.S.C. § 1, which provides that the Federal Arbitration Act does not apply to contracts of workers engaged in foreign or interstate commerce. On remand, the district court issued a scheduling order for discovery and a trial on the § 1 issue.
The panel held that the district court’s order was not final and was not subject to review under the collateral order doctrine. In addition, the order was not reviewable under 9 U.S.C. § 16(a)(1)(B) on the basis that it had the practical effect of denying a motion to compel arbitration.
Concurring, Judge Ikuta agreed with the majority’s holding that the court lacked jurisdiction to hear an interlocutory appeal from the district court’s case
Rollins v. Dignity Health (9th Cir. 15-15351 7/26/16) ERISA
Affirming the district court’s partial summary judgment in favor of the plaintiff, the panel held that Dignity Health’s pension plan was subject to the requirements of the Employee Retirement Income Security Act and did not qualify for ERISA’s church-plan exemption.
Agreeing with other circuits, the panel held that a church plan must be established by a church or by a convention or association of churches and must be maintained either by a church or by a church-controlled or church-affiliated organization whose principal purpose or function is to provide benefits to church employees. The panel remanded the case to the district court for further proceedings.
Lee v. ING GROEP (9th Cir. 14-15848 7/25/16) ERISA
The panel affirmed in part and reversed in part the district court’s summary judgment in favor of the defendants in an action under the Employee Retirement Income Security Act, vacated an award of statutory penalties in favor of the plaintiff, and remanded.
Affirming in part, the panel held that the district court properly imposed a penalty under 29 US.C. § 1132(c)(1) on the ERISA plan administrator for failing to produce the Plan Document within 30 days of the plaintiff’s request.
The panel reversed the district court’s decision to impose a penalty based on the plan administrator’s failure to timely produce emails. Following other circuits, the panel held that 29 C.F.R. § 2560.503-1(h)(2)(iii) imposes requirements on benefits plans, not plan administrators. Accordingly, a failure to comply with this regulation cannot give rise to a penalty under § 1132(c)(1), which applies only to documents that plan administrators are required to produce. The panel concluded that it was not bound by dicta in Sgro v. Danone Waters of N. Am., Inc., 532 F.3d 940 (9th Cir. 2008). The panel remanded for the district court to assess a penalty based solely on the failure to timely produce the Plan Document.
Bills Signed by Governor (7/25/16)
AB 1709 by Assemblymember James M. Gallagher (R-Plumas Lake) – Deaf or hard-of-hearing individuals.
Existing law uses the term “hearing impaired,” or a close variation of that term, in numerous provisions.
This bill would replace the term “hearing impaired” with the term “hard of hearing,” or a close variation of “hard of hearing,” and would make additional technical, nonsubstantive changes in those provisions.
AB 1953 by Assemblymember Shirley N. Weber (D-San Diego) – Peace officers: civilian complaints.
Existing law requires each department or agency in this state that employs peace officers to establish a procedure to investigate complaints by members of the public against the personnel of these departments or agencies, and to make a written description of the procedure available to the public. Existing law also refers to these complaints as citizens’ complaints. Existing law sets forth specified policies and procedures relating to citizens’ complaints. Among other things, existing law makes it a misdemeanor to file an allegation of misconduct against a peace officer knowing the allegation to be false. Existing law requires a law enforcement agency accepting an allegation of misconduct against a peace officer to require the complainant to read and sign a specified advisory that describes, generally, the law and procedure governing citizens’ complaints. Existing law also requires the Department of Justice to prepare and present to the Governor, on or before July 1, an annual report containing the criminal statistics of the preceding calendar year, including, among other statistics, the total number of citizen complaints alleging racial or identity profiling, as specified.
This bill would delete references to citizens’ complaints and instead refer to civilians’ complaints.
AB 2061 by Assemblymember Marie Waldron (R-Escondido) – Supervised Population Workforce Training Grant Program.
Existing law, until January 1, 2021, establishes the Supervised Population Workforce Training Grant Program to be administered, as provided, by the California Workforce Investment Board. Existing law establishes grant program eligibility criteria for counties and provides that eligible uses for grant funds include, but are not limited to, vocational training, stipends for trainees, and apprenticeship opportunities for the supervised population, which include individuals on probation, mandatory supervision, and postrelease community supervision. Existing law requires the board to develop criteria for the selection of grant recipients, but requires the board to give preference to certain grant applications, including an application that proposes participation by one or more nonprofit community-based organizations that serve the supervised population. Existing law requires the board, by January 1, 2018, to submit a report to the Legislature containing specified information, including an evaluation of the effectiveness of the grant program.
This bill would also require the board to give preference to a grant application that proposes participation by one or more employers who have demonstrated interest in employing individuals in the supervised population. The bill would require the board to include in its report to the Legislature whether the program provided training opportunities in areas related to work skills learned while incarcerated. The bill would update references to the California Workforce Investment Board to reflect its new name, the California Workforce Development Board.
AB 2248 by Assemblymember Chris Holden (D-Pasadena) – Teacher credentialing: out-of-state trained teachers: English learner authorizations.
Existing law requires the Commission on Teacher Credentialing to issue authorizations for a teacher to provide specific services to limited-English-proficient pupils, if certain minimum requirements are met.
This bill would provide that a teacher who possesses any of several specified California credentials or permits, and who is able to present a valid out-of-state credential or certificate that authorizes content instruction delivered in a pupil’s primary language, may qualify for that authorization by submitting an application and a fee to the commission.
SB 1342 by Senator Tony Mendoza (D-Artesia) – Wages: investigations: subpoenas.
Existing law authorizes the Industrial Welfare Commission to subpoena witnesses. Existing law provides that if a person fails to comply with an order or subpoena of the commission or a witness refuses to testify to any matter regarding which he or she may lawfully be interrogated before any wage board or the commission, it shall be the duty of the superior court to compel obedience in a manner by which such obedience could be compelled in a proceeding pending before the court.
This bill would specify that a legislative body of a city or county is authorized to delegate that body’s authority to issue subpoenas and to report noncompliance thereof to the judge of the superior court of the county, to a county or city official or department head in order to enforce any local law or ordinance, including local wage laws. The bill would provide legislative findings in support of this provision.
Bills Signed by Governor (7/22/16)
AB 1311 by Assemblymember Jim Cooper (D-Elk Grove) – Temporary services employees: wages.
Existing law generally requires that an employee of a temporary services employer, as defined, be paid weekly. Existing law provides that a violation of these provisions is punishable as a misdemeanor.
This bill would, with certain exceptions, make the weekly pay requirement applicable to a security guard employed by a private patrol operator who is a temporary services employer, as provided.
By expanding the scope of a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
This bill would declare that it is to take effect immediately as an urgency statute.
AB 1684 by Assemblymember Mark Stone (D-Scotts Valley) – Civil actions: human trafficking.
Existing law authorizes a victim of human trafficking, as defined, to bring a civil action for actual damages, compensatory damages, punitive damages, injunctive relief, any combination of those, or any other appropriate relief, as specified. Existing law authorizes the Department of Fair Employment and Housing to receive, investigate, conciliate, mediate, and prosecute complaints alleging certain unlawful practices, as specified.
This bill would further authorize the department to receive, investigate, conciliate, mediate, and prosecute complaints alleging, and bring civil actions for, a victim of human trafficking, as described above. The bill would require any damages awarded in a civil action brought by the department to be awarded to the victim of human trafficking.
AB 2063 by Assemblymember James M. Gallagher (R-Plumas Lake) – Work-based learning opportunities: work experience education and job shadowing.
Existing law authorizes a school district to offer work experience education and requires a pupil to be at least 16 years of age to receive credit for completing a work experience education program, except under specified circumstances. Existing law specifies that a pupil may participate in a job shadowing experience for a maximum of 25 hours in a specified period.
This bill would authorize work experience education credit to be granted to a pupil who is at least 14 years of age if the principal of the school in which the pupil is enrolled certifies that it is necessary for the pupil’s participation in a career technical education program and would also authorize a pupil to participate in a job shadowing experience for up to 40 hours in a specified period if the principal of the school in which the pupil is enrolled certifies that it is necessary for the pupil’s participation in a career technical education program.
AB 2535 by Assemblymember Sebastian Ridley-Thomas (D-Los Angeles) – Employment: wages: itemized statements.
Existing law requires an employer to provide his or her employee an accurate itemized statement in writing containing specified information, either semimonthly or at the time the employer pays the employee his or her wages. That specified information includes showing total hours worked by the employee, unless the employee’s compensation is solely based on a salary and the employee is exempt from payment of overtime under a specified statute or any applicable order of the Industrial Welfare Commission.
This bill would additionally exempt from that requirement for information on total work hours an employee exempt from payment of minimum wage and overtime under specified statutes or any applicable order of the Industrial Welfare Commission.
SB 914 by Senator Tony Mendoza (D-Artesia) – Workers' compensation: medical provider networks: independent medical reviews.
Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of his or her employment. Existing law authorizes an insurer, employer, or entity that provides physician network services to establish or modify a medical provider network for the provision of medical treatment to injured employees, and requires the administrative director to contract with individual physicians or an independent medical review organization to perform medical provider network independent medical reviews. Existing law provides that if a treatment or diagnostic service remains disputed after a 3rd physician’s opinion, the injured employee may request a medical provider network independent medical review. Existing law requires the review to use standards established in statute or use the American College of Occupational and Environmental Medicine’s Occupational Medicine Practice Guidelines.
This bill would delete the authorization to use the American College of Occupational and Environmental Medicine’s Occupational Medicine Practice Guidelines as standards for those independent medical reviews. The bill would make additional technical, nonsubstantive changes.
City of Eureka v. Superior Court (CA1/5 A145701 7/19/16) Pitchess/Arrest Video Not Personnel Record
The issue in this case is whether a video of an arrest captured by a patrol car’s dashboard camera is a confidential “personnel record” under Penal Code sections 832.7 or 832.8. On the record before us, the answer is no. We conclude the juvenile court properly determined the arrest video is not a personnel record protected by the Pitchess statutes. (See Pitchessv. Superior Court (1974) 11 Cal.3d 531 (Pitchess).) We therefore affirm the court’s order requiring the City of Eureka (City) to release a portion of the video to local reporter and real party in interest, Thadeus Greenson.
Morales v. 22nd Dist. Agricultural Assn. (CA4/1 D067247 7/13/16) FLSA/Amusement or Recreation Exemption
This appeal addresses a collective action alleging nonpayment of overtime, as required by state law under Labor Code section 510 and federal law under the Fair Labor Standards Act of 1938 (FLSA, 29 U.S.C. § 201, et seq.). We conclude that the trial court properly entered judgment for the defendant on the FLSA claim. Defendant proved the amusement or recreational exemption (29 U.S.C. § 213(a)(3), the amusement exemption) as an affirmative defense and plaintiffs failed to show error in the denial of their nonsuit motion, in the jury instructions, in the verdict form or in the court's exclusion of witnesses from the courtroom. We also conclude that the trial court properly sustained defendant's demurrer to the section 510 claim, but further conclude that the court erred in denying leave to amend.
Pacific Maritime Ass’n v. NLRB (9th Cir. 13-35818 7/7/16) NLRB/Jurisdiction for Judicial Review
Reversing the district court’s summary judgment in favor of the Pacific Maritime Association, the panel held that the district court lacked subject matter jurisdiction to vacate an interlocutory decision of the National Labor Relations Board issued under § 10(k) of the National Labor Relations Act, which directs the Board to hear and determine disputes concerning unfair labor practice charges.
An employer filed an unfair labor practice charge against a union, and the Board issued a Notice of Hearing under § 10(k). The Board denied a motion to intervene and a motion to quash the Notice of Hearing by the Pacific Maritime Association, a multi-employer association that bargained with the union, and concluded that it had jurisdiction to resolve the unfair labor practice charge.
The Pacific Maritime Association filed an action in district court seeking immediate judicial review of the Board’s § 10(k) decision.
The panel held that the Leedom v. Kyne, 358 U.S. 184 (1958), exception to the finality requirement for district court jurisdiction did not apply. This exception requires a plaintiff to show both that the Board’s action was ultra vires and that absent district court jurisdiction, the party seeking review will be wholly deprived of a meaningful and adequate means of vindicating its statutory rights. The panel stated that it was skeptical that the Board’s exercise of jurisdiction was proper.
Nonetheless, whether or not the Board’s decision was ultra vires, the district court lacked jurisdiction because the Pacific Maritime Association had alternative means of challenging the Board’s § 10(k) decision. The panel concluded that the Association could seek to intervene in an ongoing unfair labor practice case that arose out of the Board’s decision, or it could simply await the Board’s final order in that case and then seek judicial review under NLRA § 10(f) as an “aggrieved person.”
The panel rejected Pacific Maritime Association’s argument that it should affirm on the basis of NLRB v. Noel Canning, 134 S. Ct. 2550 (2014), which invalidated Board appointments and meant that the Board was acting without a quorum.
City of Carlsbad v. Scholtz (CA4/1 D070253 7/8/16) Police Officer Discipline/Interlocutory Judgment
This case presents the question of whether a judgment denying a petition for writ of mandate challenging an evidentiary ruling of a hearing officer is an appealable final judgment or a nonappealable interlocutory judgment. We publish this order to clarify a judgment denying a petition for writ of mandate challenging an evidentiary ruling of a hearing officer is a nonappealable interlocutory judgment where, as here, the superior court did not deny the petition on the merits, the administrative proceedings before the hearing officer have not concluded, the hearing officer is not the final administrative decision maker, and the hearing officer's decision did not a create a substantial risk confidential information would be publicly disclosed. We, therefore, dismiss the appeal and deny a related motion for stay as moot.
Garity v. APWU National Labor Organization (9th Cir. 13-15195 7/5/16) ADA Disability Discrimination/Duty of Fair Representation
The panel reversed the district court’s dismissal of disability discrimination and retaliation claims brought against a union under the Americans with Disabilities Act.
The district court held that the ADA claims were barred by issue preclusion because of a ruling in a prior case that the union had not breached its duty of fair representation. Agreeing with the Seventh Circuit, the panel held that a prima facie claim of disability discrimination against a union does not require a showing of a breach of the duty of fair representation. Accordingly, the plaintiff’s claims were not barred by issue preclusion. The panel also held that the ADA complaint was not barred by claim preclusion. It remanded the case to the district court for further proceedings.
Chang v. Co. of LA (CA2/5 B261194 7/1/16) Public Employer Reservation of Rights Not to Indemnify Employee
A public entity employer provided a defense for three employees under a reservation of rights, then refused to pay the resulting judgment for battery and civil rights violations on the ground that the employees acted with actual malice. The employees sought indemnification from their employer under Government Code section 825. The trial court granted summary judgment in favor of the employees. On appeal, the public entity contends that because the defense was conducted under a reservation of rights, the employees had to satisfy the requirements of section 825.2 for indemnification. We hold that section 825.2 applies when a public entity employer provides a defense under a reservation of rights that includes reservation of the right not to indemnify for acts committed with actual fraud, corruption or actual malice. An employer’s reservation of the right to indemnity from the employee for acts committed with actual fraud, corruption or actual malice is necessarily a reservation of the right not to indemnify the employee for such acts. We reverse the judgment with directions.
Bill Signed by Governor (7/1/16)
SB 1038 by Senator Ben Allen (D-Santa Monica) - Community colleges: employees
City of Petaluma v. Super. Ct. (CA1/3 A145437, filed 6/8/16, pub. ord. 6/30/16)Prelitigation Investigation/Privilege and Avoidable Consequences
This writ proceeding requires us to resolve two questions related to whether an employer’s prelitigation investigation of an employee’s harassment and discrimination claims is protected from disclosure in discovery. As an initial matter, we consider whether the employer’s prelitigation factual investigation is protected by the attorney-client privilege or work product doctrine when the investigation is undertaken by outside counsel who is specifically directed not to provide legal advice as to which course of action to take. If we conclude the investigation is privileged, we must next consider whether the employer’s assertion of an “avoidable consequences” defense waives any applicable claim of privilege when the investigation was initiated after the employee had already left his or her job with the employer.
The trial court ruled in favor of the former employee on the privilege issue, concluding that outside counsel was acting as a fact finder and not an attorney who was providing legal advice. The court also concluded the employer waived any privilege that might be claimed by asserting an avoidable consequences defense and thereby placing the investigation at issue.
We conclude the trial court erred. The dominant purpose of outside counsel’s factual investigation was to provide legal services to the employer in anticipation of litigation. Outside counsel was not required to give legal advice as to what course of action to pursue in order for the attorney-client privilege to apply. Further, the privilege was not waived by the employer’s assertion of an avoidable consequences defense under the circumstances presented here.
Walmart v. United Food etc. Union (CA2/8 B259926 6/30/16) NLRA Preemption/Trespass
In September 2014, the trial court issued a permanent injunction barring defendants United Food and Commercial Workers International Union (UFCW) and Organization United for Respect at Walmart (OUR Walmart; collectively the union) from conducting demonstrations inside stores owned by Wal-Mart Stores, Inc., and affiliated companies (collectively Walmart). On appeal, the union contends the trial court had no jurisdiction to enter the injunction because the matter was preempted by the National Labor Relations Act (29 U.S.C. § 151, et seq.; NLRA). We conclude the NLRA does not preempt Walmart’s trespass action.
Seibert v. City of San Jose (CA6 H040268N, filed 5/31/16, mod. 6/30/16) Civil Service Misconduct
It is ordered that the opinion filed on May 31, 2016, be modified as follows:
On page 50, first full paragraph, second sentence beginning “Whatever the court’s” is deleted and the following sentence is inserted in its place:
Whatever the court’s conclusions, we caution it not to adopt language that could be reasonably understood to constrain the administrative decision maker’s discretion upon reconsideration of penalty.
There is no change in the judgment.
Appellant’s petition for rehearing is denied.
Ramos v. Garcia (CA4/1 D068500 6/28/16) Wage & Hour Prevailing Party/Attorney Fees
Rogelio Ramos (Appellant) sued his former employers, Jose Robledo and Dora Garcia ("the two employers"; nonparties in this appeal), seeking to recover unpaid overtime, minimum wages and other compensation, and to impose job-related penalties. (Lab. Code,§§ 1194, 226.7, 201, 203 [waiting time for payment], 226, subd. (f) [failure to turn over wage records].) Appellant obtained some of the monetary recovery he requested against the two employers. However, Appellant had also sued Manuel Garcia ("Respondent"), claiming he was an employer, but Appellant lost on all those claims as to Respondent, when the court found that Respondent was a manager and co-employee of the business, not an owner/employer.
Following trial, the court awarded Respondent attorney fees, as the "prevailing party" under section 218.5, which is commonly referred to as a two-way fee shifting provision. (Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1258 (Kirby).) Appellant argues on appeal that the award of attorney fees to Respondent must be reversed because the statutory requirements of sections 218.5 and 1194 do not allow an award of attorney fees under these circumstances, in which Respondent was a prevailing employee defendant. We agree that the attorney fees award is not supported by the record and reverse with directions.
Tanner v. CalPERS (CA3 C078458 6/28/16) Pension Spiking
In this “pension spiking” case, Plaintiff Joseph Tanner sought to overturn a decision of defendant California Public Employees’ Retirement System (CalPERS) significantly reducing his expected retirement benefit.
Specifically, Tanner argues his retirement benefit should be set based on a base salary of $305,844, which was provided for in his final written contract with the City of Vallejo. The Board of Administration of CalPERS (also a defendant in this action) decided Tanner was not entitled to have his retirement benefit based on that figure. On Tanner’s petition for a writ of administrative mandate, the trial court agreed with the board, holding (among other things) that the $305,844 figure could not be used as Tanner’s final compensation for purposes of setting his retirement benefit because it did not qualify as his payrate due to the fact that the figure did not appear on a publicly available pay schedule.
On Tanner’s appeal, we agree with the trial court that neither Tanner’s final contract with the city nor a chart prepared by city staff to show how Tanner’s final base salary was determined qualified as a publicly available pay schedule for purposes of determining the amount of Tanner’s final compensation and, in turn, the amount of his retirement benefit. Accordingly, we affirm.
Bills Signed by Governor (6/27/16)
2016-17 State Budget: Among other things, this year's budget begins implementing the state's new $15 per hour minimum wage by raising the statewide minimum wage to $10.50 per hour beginning on January 1, 2017.
SB 848 by the Committee on Budget and Fiscal Review - State Employment
Fisher v. University of Tex. at Austin (US 14–981 6/23/16) Affirmative Action
The University of Texas at Austin (University) uses an undergraduate admissions system containing two components. First, as required by the State’s Top Ten Percent Law, it offers admission to any students who graduate from a Texas high school in the top 10% of their class. It then fills the remainder of its incoming freshman class, some 25%,by combining an applicant’s “Academic Index”—the student’s SAT score and high school academic performance—with the applicant’s “Personal Achievement Index,” a holistic review containing numerous factors, including race. The University adopted its current admissions process in 2004, after a year-long-study of its admissions process—undertaken in the wake of Grutter v.Bollinger, 539 U. S. 306, and Gratz v. Bollinger, 539 U. S. 244—led it to conclude that its prior race-neutral system did not reach its goal of providing the educational benefits of diversity to its undergraduate students. Petitioner Abigail Fisher, who was not in the top 10% of her high school class, was denied admission to the University’s 2008 freshman class. She filed suit, alleging that the University’s consideration of race as part of its holistic-review process disadvantaged her and other Caucasian applicants, in violation of the Equal Protection Clause. The District Court entered summary judgment in the University’s favor, and the Fifth Circuit affirmed. This Court vacated the judgment, Fisher v. University of Tex. at Austin, 570 U. S. ___ (Fisher I),and remanded the case to the Court of Appeals, so the University’s program could be evaluated under the proper strict scrutiny standard. On remand, the Fifth Circuit again affirmed the entry of summary judgment for the University.
Held: The race-conscious admissions program in use at the time of petitioner’s application is lawful under the Equal Protection Clause Pp. 6–20.
(a) Fisher I sets out three controlling principles relevant to assessing the constitutionality of a public university’s affirmative action program. First, a university may not consider race “unless the admissions process can withstand strict scrutiny,” i.e., it must show that its “purpose or interest is both constitutionally permissible and substantial, and that its use of the classification is necessary” to accomplish that purpose. 570 U. S., at ___. Second, “the decision to pursue the educational benefits that flow from student body diversity is, in substantial measure, an academic judgment to which some, bu tnot complete, judicial deference is proper.” Id., at ___. Third, when determining whether the use of race is narrowly tailored to achieve the university’s permissible goals, the school bears the burden of demonstrating that “available” and “workable” “race-neutral alternatives” do not suffice. Id., at ___. Pp. 6–8.
(b) The University’s approach to admissions gives rise to an unusual consequence here. The component with the largest impact on petitioner’s chances of admission was not the school’s consideration of race under its holistic-review process but the Top Ten Percent Plan. Because petitioner did not challenge the percentage part of the plan, the record is devoid of evidence of its impact on diversity. Remand for further fact finding would serve little purpose, however, because at the time of petitioner’s application, the current plan had been in effect only three years and, in any event, the University lacked authority to alter the percentage plan, which was mandated by the Texas Legislature. These circumstances refute any criticism that the University did not make good faith efforts to comply with the law. The University, however, does have a continuing obligation to satisfy the strict scrutiny burden: by periodically reassessing the admission program’s constitutionality, and efficacy, in light of the school’s experience and the data it has gathered since adopting its admissions plan, and by tailoring its approach to ensure that race plays no greater role than is necessary to meet its compelling interests. Pp. 8–11.
(c) Drawing all reasonable inferences in her favor, petitioner has not shown by a preponderance of the evidence that she was denied equal treatment at the time her application was rejected. Pp. 11–19.
(1) Petitioner claims that the University has not articulated its compelling interest with sufficient clarity because it has failed to state more precisely what level of minority enrollment would constitute a “critical mass.” However, the compelling interest that justifies consideration of race in college admissions is not an interest in enrolling a certain number of minority students, but an interest in obtaining “the educational benefits that flow from student body diversity.” Fisher I, 570 U. S., at ___. Since the University is prohibited from seeking a particular number or quota of minority students, it cannot be faulted for failing to specify the particular level of minority enrollment at which it believes the educational benefits of diversity will be obtained.
On the other hand, asserting an interest in the educational benefits of diversity writ large is insufficient. A university’s goals cannot be elusory or amorphous—they must be sufficiently measurable to permit judicial scrutiny of the policies adopted to reach them. The record here reveals that the University articulated concrete and precise goals—e.g., ending stereotypes, promoting “cross-racial understanding,” preparing students for “an increasingly diverse workforce and society,” and cultivating leaders with “legitimacy in the eyes of the citizenry”—that mirror the compelling interest this Court has approved in prior cases. It also gave a “reasoned, principled explanation” for its decision, id., at ___, in a 39-page proposal written after a year-long study revealed that its race-neutral policies and programs did not meet its goals. Pp. 11–13.
(2) Petitioner also claims that the University need not consider race because it had already “achieved critical mass” by 2003 under the Top Ten Percent Plan and race-neutral holistic review. The record, however, reveals that the University studied and deliberated for months, concluding that race-neutral programs had not achieved the University’s diversity goals, a conclusion supported by significant statistical and anecdotal evidence. Pp. 13–15.
(3) Petitioner argues further that it was unnecessary to consider race because such consideration had only a minor impact on the number of minority students the school admitted. But the record shows that the consideration of race has had a meaningful, if still limited, effect on freshman class diversity. That race consciousness played a role in only a small portion of admissions decisions should be a hallmark of narrow tailoring, not evidence of unconstitutionality. P. 15.
(4) Finally, petitioner argues that there were numerous other race-neutral means to achieve the University’s goals. However, as the record reveals, none of those alternatives was a workable means of attaining the University’s educational goals, as of the time of her application. Pp. 15–19.
758 F. 3d 633, affirmed.
KENNEDY, J., delivered the opinion of the Court, in which GINSBURG, BREYER, and SOTOMAYOR, JJ., joined. THOMAS, J., filed a dissenting opinion. ALITO, J., filed a dissenting opinion, in which ROBERTS, C. J., and THOMAS, J., joined. KAGAN, J., took no part in the consideration or decision of the case.
Harris v. TAP Worldwide (CA2/5 B262504 6/22/16) Arbitration
Defendants, TAP Worldwide, LLC, Eddie Rivera and Alex Dominguez, appeal from an order denying their motion to compel arbitration. Plaintiff, Dwayne Harris, filed a complaint against defendants alleging wrongful termination and violations of the Fair Employment and Housing Act and the Labor Code. Defendants moved to compel arbitration relying upon an arbitration agreement which plaintiff acknowledged receiving. Plaintiff asserted there was no arbitration agreement and alternatively argued any agreement was unconscionable. Defendants’ motion to compel arbitration was denied.
Defendants assert the trial court erred because the arbitration agreement attached as Appendix A to the Employer Handbook is enforceable. The undisputed facts demonstrate: there is a valid arbitration agreement; the agreement to arbitrate is not illusory; and, as discussed in the unpublished part of our opinion, the arbitration agreement is not unconscionable to the degree that it is unenforceable. Accordingly, we reverse the order under review.
Weisner v. Santa Cruz Co. Civil Service Com. (CA6 H041850 6/22/16) Civil Service Commission/Mootness and Jurisdiction
This appeal arises from the 2008 termination of appellant James Weisner’s employment with the County of Santa Cruz (the County). Several years of litigation followed the termination, with Weisner eventually reinstated to his County employment without back pay.
In this appeal, Weisner seeks reversal of a 2014 order denying his petition for administrative writ of mandamus. The writ petition asked the superior court to order the Santa Cruz County Civil Service Commission (the Commission) to award back pay and other benefits as part of the reinstatement of Weisner’s County employment. The superior court denied Weisner’s writ petition as moot, finding that the Commission lost jurisdiction to grant relief because Weisner resigned from his reinstated employment with the County. As set forth below, we conclude that the matter is not moot, and we reverse.
Moore v. Regents of the University of Calif. (CA4/1 D067120, filed 6/2/16, pub. ord. 6/20/16) FEHA Perceived Disability and Pretext/CFRA Retaliation Amendment’s Prospective Application
Plaintiff Deborah Moore appeals from a judgment entered in favor of defendant The Regents of the University of California (Defendant). Moore sued Defendant for claims under the Fair Employment and Housing Act (FEHA) (Gov. Code, §§ 12900-12966) and the California Family Rights Act (CFRA) (§§ 12945.1, 12945.2).
The trial court granted summary judgment in favor of Defendant. Our review of the record demonstrates that summary judgment was improperly granted with respect to Moore's first, second, third, fifth and sixth causes of action. Summary adjudication in favor of Defendant was appropriate, however, with respect to Moore's fourth cause of action.
We reverse the judgment and remand the matter for further proceedings in the trial court.
Encino Motorcars, LLC v. Navarro (US 15-415 6/20/16) Regulatory Deference/FLSA Overtime for Car Dealerships Service Advisors
The Fair Labor Standards Act (FLSA) requires employers to pay overtime compensation to covered employees who work more than 40 hours in a given week. In 1966, Congress enacted an exemption from the overtime compensation requirement for “any salesman, parts-man, or mechanic primarily engaged in selling or servicing automobiles” at a covered dealership. Fair Labor Standards Amendments of 1966, §209, 80 Stat. 836, codified as amended at 29 U. S. C. §213(b)(10)(A). Congress authorized the Department of Labor to promulgate necessary rules, regulations, or orders with respect to this new provision. The Department exercised that authority in 1970 and issued a regulation that defined “salesman” to mean “an employee who is employed for the purpose of and is primarily engaged in making sales or obtaining orders or contracts for sale of the vehicles . . . which the establishment is primarily engaged in selling.” 29 CFR §779.372(c)(1) (1971). The regulation excluded service advisors, who sell repair and maintenance services but not vehicles, from the exemption. Several courts, however, rejected the Department’s conclusion that service advisors are not covered by the statutory exemption. In 1978, the Department issued an opinion letter departing from its previous position and stating that service advisors could be exempt under 29 U. S. C. §213(b)(10)(A). In 1987, the Department confirmed its new interpretation by amending its Field Operations Handbook to clarify that service advisors should be treated as exempt under the statute. In 2011, however, the Department issued a final rule that followed the original 1970 regulation and interpreted the statutory term “salesman” to mean only an employee who sells vehicles. 76 Fed. Reg. 18859. The Department gave little explanation for its decision to abandon its decades-old practice of treating service advisors as exempt under §213(b)(10)(A).
Petitioner is an automobile dealership. Respondents are or were employed by petitioner as service advisors. Respondents filed suit alleging that petitioner violated the FLSA by failing to pay them overtime compensation when they worked more than 40 hours in a week. Petitioner moved to dismiss, arguing that the FLSA overtime provisions do not apply to respondents because service advisors are covered by the §213(b)(10)(A) exemption. The District Court granted the motion, but the Ninth Circuit reversed in relevant part. Deferring under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, to the interpretation set forth in the 2011 regulation, the court held that service advisors are not covered by the §213(b)(10)(A) exemption.
Held: Section 213(b)(10)(A) must be construed without placing controlling weight on the Department’s 2011 regulation. Pp. 7–12.
(a) When an agency is authorized by Congress to issue regulations and promulgates a regulation interpreting a statute it enforces, the interpretation receives deference if the statute is ambiguous and the agency’s interpretation is reasonable. See Chevron, supra, at 842–844. When Congress authorizes an agency to proceed through notice-and-comment rulemaking, that procedure is a “very good indicator” that Congress intended the regulation to carry the force of law, so Chevron should apply. United States v. Mead Corp., 533 U. S. 218, 229–230. But Chevron deference is not warranted where the regulation is “procedurally defective”—that is, where the agency errs by failing to follow the correct procedures in issuing the regulation. 533 U. S., at 227.
One basic procedural requirement of administrative rulemaking is that an agency must give adequate reasons for its decisions. Where the agency has failed to provide even a minimal level of analysis, its action is arbitrary and capricious and so cannot carry the force of law. Agencies are free to change their existing policies, but in explaining its changed position, an agency must be cognizant that longstanding policies may have “engendered serious reliance interests that must be taken into account.” FCC v. Fox Television Stations, Inc., 556 U. S. 502, 515. An “[u]nexplained inconsistency” in agency policy is “a reason for holding an interpretation to be an arbitrary and capricious change from agency practice,” National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U. S. 967, 981, and an arbitrary and capricious regulation of this sort receives no Chevron deference. Pp. 7–10.
(b) Applying those principles, the 2011 regulation was issued without the reasoned explanation that was required in light of the Department’s change in position and the significant reliance interests position that service advisors are exempt from the FLSA’s overtime pay requirements, and had negotiated and structured compensation plans against this background understanding. In light of this background, the Department needed a more reasoned explanation for its decision to depart from its existing enforcement policy. The Department instead said almost nothing. It did not analyze or explain why the statute should be interpreted to exempt dealership employees who sell vehicles but not dealership employees who sell services. This lack of reasoned explication for a regulation that is inconsistent with the Department’s longstanding earlier position results in a rule that cannot carry the force of law, and so the regulation does not receive Chevron deference. It is appropriate to remand for the Ninth Circuit to interpret §213(b)(10)(A) in the first instance. Pp. 10–12.
780 F. 3d 1267, vacated and remanded.
KENNEDY, J., delivered the opinion of the Court, in which ROBERTS, C. J., and GINSBURG, BREYER, SOTOMAYOR, and KAGAN, JJ., joined. GINSBURG, J., filed a concurring opinion, in which SOTOMAYOR, J., joined. THOMAS, J., filed a dissenting opinion, in which ALITO, J., joined.