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Reverse chronological e-mail alerts prepared pro bono for the California Lawyers Association (formerly State Bar of California) Labor & Employment Law Section, unofficially since 2003 and officially since 2007, covering California, 9th Circuit and US Supreme Court decisions, and new laws signed by Governor. To subscribe, contact LaborLaw@CLA.Legal.

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Rossi v. Sequoia Union Elementary School (CA5 F085416 8/25/23) COVID-19 | Confidentiality of Medical Information Act


Plaintiff Gloria Elizabeth Rossi appeals the trial court’s order sustaining the defendants’ demurrer to her complaint, without leave to amend.  Plaintiff was placed on unpaid administrative leave and then terminated from her employment with defendant Sequoia Union Elementary School District (the School District) after refusing to either provide verification of her COVID-19 vaccination status or undergo weekly testing as required by a then-operative order of the State Public Health Officer.


Plaintiff brought suit under the Confidentiality of Medical Information Act (CMIA) (Civ. Code, § 56 et seq.) against defendants the School District; Sequoia Union Elementary School (the School) where she worked; and Ken Horn, the School principal and superintendent.  The complaint asserts two causes of action under the CMIA, alleging (1) discrimination due to her refusal to authorize release of her medical information and (2) unauthorized use of her medical information.  The trial court sustained defendants’ demurrer without leave to amend, finding each claim failed as a matter of law due to certain statutory exceptions.


This appeal is related to two other contemporaneous appeals (Dennis v. Tulare City School District (Aug. 25, 2023, F085428) [nonpub. opn.]; Moran v. Tulare County Office of Education (Aug. 25, 2023, F085385) [nonpub. opn.]) from nearly identical orders by judges of the Tulare County Superior Court dismissing identical CMIA causes of action by similarly situated school-worker plaintiffs.  The plaintiff-appellants in all three cases were represented by the same counsel; the cases were argued on the same day before the same panel of this court; and we now issue opinions affirming the trial court’s orders on substantially identical grounds in all three cases.

Wit v. United Behavioral Health (9th Cir. 20-17363 8/22/23) ERISA


The panel filed (1) an order vacating a prior opinion, replacing it with a new opinion, granting a petition for panel rehearing, and denying as moot a petition for rehearing en banc; and (2) an opinion affirming in part and reversing in part the district court’s judgment, after a bench trial, finding United Behavioral Health (“UBH”) liable under ERISA for breach of fiduciary duties and wrongful denial of benefits, and awarding declaratory and injunctive relief, to three classes of plaintiffs who were beneficiaries of ERISA-governed health benefit plans for which UBH was the claims administrator.


The panel held that plaintiffs had Article III standing to bring their claims. Plaintiffs sufficiently alleged a concrete injury as to their fiduciary duty claim because UBH’s alleged violation presented a material risk of harm to plaintiffs’ interest in their contractual benefits. Plaintiffs also alleged a concrete injury as to the denial of benefits claim. Further, plaintiffs alleged a particularized injury as to both claims because UBH’s Level of Care Guidelines and Coverage Determination Guidelines for making medical necessity or coverage determinations materially affected each plaintiff. And plaintiffs’ alleged injuries were “fairly traceable” to UBH’s conduct.


The panel held that the district court did not err in certifying the three classes to pursue the fiduciary duty claim, but the panel reversed the district court’s certification of the denial of benefits classes. The panel held that, by certifying the denial of benefits classes without limiting the classes to those with claims that UBH denied under a specific Guidelines provision or provisions challenged in this litigation that applied to the claimant’s own request for benefits, the certification order improperly enlarged or modified plaintiffs’ substantive rights in violation of the Rules Enabling Act.


The panel held that, on the merits, the district court erred to the extent it determined that the ERISA plans required the Guidelines to be coextensive with generally accepted standards of care. The panel therefore 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 ERISA plans, it was also reversed.


The panel remanded for the district court to answer the threshold question of whether the fiduciary duty claim was subject to the plans’ administrative exhaustion requirement and, if so, whether the requirement was satisfied by unnamed class members or should otherwise be excused.

Raines v. U.S. Healthworks Medical Group (SC S273630 8/21/23) FEHA Employer | Agent


This case requires us to clarify the meaning of the term “employer” as used in the California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.).  Subject to specified exceptions, section 12940 of the FEHA makes it an “unlawful employment practice” for “any employer” “to make any medical or psychological inquiry of an applicant” (§ 12940, subd. (e)(1)), and section 12926, subdivision (d) states that, for purposes of the FEHA, the term “ ‘[e]mployer’ includes any person regularly employing five or more persons, or any person acting as an agent of an employer, directly or indirectly . . . .”  (Italics added.)  The italicized language might be interpreted as merely incorporating the common law principle of respondeat superior, or some variant thereof, into the FEHA’s statutory liability.  Were we to adopt this interpretation of the statutory language, liability for a violation of the statute would reside with the employer, not with the employer’s agent.  Conversely, the italicized language could also be reasonably interpreted to mean that an employer’s agents are subject to all the obligations and liabilities that the FEHA imposes on the employer itself.  Recognizing this ambiguity, the United States Court of Appeals for the Ninth Circuit asked this court to answer the following question:  “Does California’s Fair Employment and Housing Act, which defines ‘employer’ to include ‘any person acting as an agent of an employer,’ Cal. Gov’t Code § 12926(d), permit a business entity acting as an agent of an employer to be held directly liable for employment discrimination?”  (Raines v. U.S. Healthworks Medical Group (9th Cir. 2022) 28 F.4th 968, 969.)  We conclude that an employer’s business entity agents can be held directly liable under the FEHA for employment discrimination in appropriate circumstances when the business-entity agent has at least five employees and carries out FEHA-regulated activities on behalf of an employer.


Assn. for L.A. Deputy Sheriffs v. County of L.A. (CA2/1 B316067 filed 7/27/23, pub. ord. 8/21/23) Civil Services Commission | Settlement Agreements


Three former deputies of the Los Angeles County Sheriff’s Department (department) were discharged from their employment for alleged misconduct.  The former deputies filed administrative appeals with the Los Angeles County Civil Service Commission (commission).  While their appeals were pending, the former deputies executed settlement agreements with department personnel that purported to reinstate the former deputies to employment.  The County of Los Angeles (county) thereafter refused to comply with these settlement agreements.

The former deputies and a labor union for department personnel (collectively, appellants) filed suit against the county, the Los Angeles County Board of Supervisors (board of supervisors or board), the department, the Los Angeles County Sheriff (sheriff), the Los Angeles County Counsel (county counsel), and the Director of Personnel for the County of Los Angeles (director of personnel) (collectively, respondents).  Appellants sought enforcement of the settlements through mandamus, breach of contract, and promissory estoppel claims.  They also requested a declaration that the county’s rejection of the settlements is unlawful, and that the county’s supposed blanket refusal to settle disciplinary cases against department employees violates the due process rights of labor union members. 


The trial court sustained respondents’ demurrers to appellants’ pleading without leave to amend.  Among other things, the court ruled the settlement agreements are void because county counsel did not approve them, and section 21 of the county charter (section 21) confers upon county counsel “exclusive charge and control of all civil actions and proceedings in which the County or any officer thereof, is concerned or is a party.”  (Fn. omitted.)  Appellants seek review of the ensuing judgment of dismissal.


On appeal, we hold that section 21 of the charter does not grant county counsel exclusive authority to settle appeals of discipline that are pending before the commission.  Under the original version of the charter, which included section 21, the commission did not hear appeals from discipline of county employees.  Further, the grammatical structure of the phrase “civil actions and proceedings” in section 21 indicates county counsel’s exclusive authority extends only to civil actions and civil proceedings.  This conclusion is supported by provisions of the Code of Civil Procedure that existed when the original charter was drafted and ratified, and by subsequent Attorney General opinions.  Respondents fail to show that the drafters and ratifiers of the original charter intended to grant county counsel exclusive charge and control of later-invented administrative appeals of discipline, or that subsequent amendments to the charter were intended to provide this exclusive authority to county counsel.

Notwithstanding our construction of section 21, we conclude the trial court did not err in sustaining the demurrers to the contract and mandamus claims because appellants have not demonstrated that the sheriff and his subordinates are authorized to bind the county to settlements of appeals before the commission.  Furthermore, appellants fail to show that despite this defect, they can recover on their promissory estoppel and declaratory relief causes of action. 


We also conclude that with the exception of the portion of appellants’ declaratory relief cause of action that is premised on an alleged procedural due process violation, the trial court erred in denying appellants leave to amend.  Given that the trial court was reviewing appellants’ first pleading and that appellants could potentially discover the legal basis (if any) for the department’s alleged long-standing apparent belief that its personnel have authority to settle commission appeals on their own (i.e., without the consent of other county officials), we conclude that allowing appellants to file an amended pleading would not be an exercise in futility.


We thus reverse the trial court’s judgment of dismissal and remand the matter for further proceedings.

Hecox v. Little (9th Cir. 20-35813 8/17/23) Transgender Student Athletes | Equal Protection


The panel affirmed the district court’s order preliminarily enjoining Idaho’s Fairness in Women’s Sports Act, a categorical ban on the participation of transgender women and girls in women’s student athletics.


The Act bars all transgender women and girls from participating in, or trying out for, public school female sports teams at every age, from primary school through college, and at every level of competition, from intramural to elite teams. It also provides a sex dispute verification process whereby any individual can “dispute” the sex of any female student athlete in the state of Idaho and require her to undergo intrusive medical procedures to verify her sex, including gynecological exams. Male student athletes in Idaho are not subject to a similar dispute process.


The panel held that the district court did not abuse its discretion when it found, on the record before it, that plaintiffs were likely to succeed on the merits of their claim that the Act violates the Equal Protection Clause of the Fourteenth Amendment.


Citing United States v. Virginia, 518 U.S. 515, 555 (1996), and Karnoski v. Trump, 926 F.3d 1180, 1200–01 (9th Cir. 2019), the panel stated that a heightened level of scrutiny applies to laws that discriminate on the basis of transgender status and sex. The district court did not err in concluding that heightened scrutiny applied because the Act discriminates on the basis of transgender status by categorically excluding transgender women from female sports and on the basis of sex by subjecting all female athletes, but not male athletes, to invasive sex verification procedures to implement that policy.


Because the Act subjects only women and girls who wish to participate in public school athletic competitions to an intrusive sex verification process and categorically bans transgender women and girls at all levels, regardless of whether they have gone through puberty or hormone therapy, from competing on female, women, or girls teams, and because the State of Idaho failed to adduce any evidence demonstrating that the Act is substantially related to its asserted interests in sex equality and opportunity for women athletes, the panel held that plaintiffs were likely to succeed on the merits of their equal protection claim.


Concurring in part and dissenting in part, Judge Christen wrote that given the categorical sweep of the ban on transgender students, the medical consensus that circulating testosterone rather than transgender status is an accurate proxy for athletic performance, and the unusual and extreme nature of the Act’s sex verification requirements, the district court did not abuse its discretion by granting injunctive relief.


Disagreeing with the majority in part, Judge Christen wrote that she read the sex dispute verification provision to apply to any student, male or female, who participates on women’s or girls’ athletic teams. Accordingly, it is the team an athlete chooses to join that dictates whether they are subject to the statute’s verification process, not the athlete’s sex. Judge Christen also wrote that the district court’s injunction lacked specificity as required by Federal Rule of Civil Procedure 65(d)(1) because it failed, among other things, to specify whether it was enjoining all provisions of the Act, or only some of them, or whether it was enjoining any specific provision of the Act in its entirety or only as applied to certain classes of individuals. Finally, Judge Christen stated that the injunction was overbroad to the extent that it applies to transgender women who are not receiving gender-affirming hormone therapy.

Fuentes v. Empire Nissan, 90 Cal.App.5th 919 (2023), review granted, 2023 WL 5114942 (Aug. 9, 2023); S280256/B314490 Arbitration


Petition for review after reversal of order denying a petition to compel arbitration. Is the form arbitration agreement that the employer here required prospective employees to sign as a condition of employment unenforceable against an employee due to unconscionability? Review granted/brief due.



Court of Appeal Decision


Basith v. LAD Carson-Nm LLC, 90 Cal.App.5th 951 (2023), review granted, 2023 WL 5114947 (Aug. 9, 2023); S280258/B316098 Arbitration


The petition for review is granted. Further action in this matter is deferred pending consideration and disposition of a related issue in Fuentes v. Empire Nissan, Inc., S280256 (see Cal. Rules of Court, rule 8.512(d)(2)), or pending further order of the court. Submission of additional briefing, pursuant to California Rules of Court, rule 8.520, is deferred pending further order of the court. Review granted/holding for lead case.



Court of Appeal Decision

Cal. Dept. Corrections & Rehabilitation v. Workers' Comp. App. Bd. (CA4/2 E079076 8/14/23) Industrial Disability Leave and Workers’ Compensation


In workers’ compensation law, if a worker is injured because of the employer’s serious and willful misconduct, the “compensation” the worker is entitled to increases by one half.  The statute defining “compensation” limits the term to benefits or payments provided by Division 4 of the Labor Code.  In this writ proceeding, we find that “compensation” does not include industrial disability leave, which is provided by the Government Code, and therefore cannot be increased by one half in cases of serious and willful employer misconduct.

Hittle v. City of Stockton (9th Cir. 22-15485 8/4/23) Religious Discrimination


The panel affirmed the district court’s summary judgment in favor of defendants in Ronald Hittle’s employment discrimination action under Title VII and California’s Fair Employment and Housing Act.


Hittle alleged that he was terminated from his position as Fire Chief for the City of Stockton based upon his religion and, specifically, his attendance a religious leadership event.


The panel held that, in analyzing employment discrimination claims under Title VII and the California FEHA, the court may use the McDonnell Douglas burden-shifting framework, under which the plaintiff must establish a prima facie case of discrimination. The burden then shifts to the defendant to articulate a legitimate, nondiscriminatory reason for the challenged actions. Finally, the burden returns to the plaintiff to show that the proffered nondiscriminatory reason is pretextual. Alternatively, the plaintiff may prevail on summary judgment by showing direct or circumstantial evidence of discrimination. Hittle was required to show that his religion was “a motivating factor” in defendants’ decision to fire him with respect to his federal claims, and that his religion was “a substantial motivating factor” with respect to his FEHA claims.


The panel concluded that Hittle failed to present sufficient direct evidence of discriminatory animus in defendants’ statements and the City’s notice of intent to remove him from City service. And Hittle also failed to present sufficient specific and substantial circumstantial evidence of religious animus by defendants. The district court’s grant of summary judgment in defendants’ favor was appropriate where defendants’ legitimate, nondiscriminatory reasons for firing Hittle were sufficient to rebut his evidence of discrimination, and he failed to persuasively argue that these non-discriminatory reasons were pretextual.


Bugielski v. AT&T Services, Inc. (9th Cir. 21-56196 8/4/23) ERISA


The panel affirmed in part and reversed in part the district court’s summary judgment in favor of the defendants in an ERISA class action brought by former AT&T employees who contributed to AT&T’s retirement plan, a defined contribution plan.


Plaintiffs brought this class action against the Plan’s administrator, AT&T Services, Inc., and the committee responsible for some of the Plan’s investment-related duties, the AT&T Benefit Plan Investment Committee (collectively, “AT&T”). Plaintiffs alleged that AT&T failed to investigate and evaluate all the compensation that the Plan’s recordkeeper, Fidelity Workplace Services, received from mutual funds through BrokerageLink, Fidelity’s brokerage account platform, and from Financial Engines Advisors, L.L.C. Plaintiffs alleged that (1) AT&T’s failure to consider this compensation rendered its contract with Fidelity a “prohibited transaction” under ERISA § 406, (2) AT&T breached its fiduciary duty of prudence by failing to consider this compensation, and (3) AT&T breached its duty of candor by failing to disclose this compensation to the Department of Labor.


The panel reversed the district court’s grant of summary judgment on the prohibited-transaction claim. Relying on the statutory text, regulatory text, and the Department of Labor’s Employee Benefits Security Administration’s explanation for a regulatory amendment, the panel held that the broad scope of § 406 encompasses arm’s-length transactions. Disagreeing with other circuits, the panel concluded that AT&T, by amending its contract with Fidelity to incorporate the services of BrokerageLink and Financial Engines, caused the Plan to engage in a prohibited transaction. The panel remanded for the district court to consider whether AT&T met the requirements for an exemption from the prohibited-transaction bar because the contract was “reasonable,” the services were “necessary,” and no more than “reasonable compensation” was paid for the services. Specifically, the panel remanded for the district court to consider whether Fidelity received no more than “reasonable compensation” from all sources, both direct and indirect, for the services it provided the Plan.


For similar reasons, the panel also reversed the district court’s summary judgment on the duty-of-prudence claim. The panel concluded that, as a fiduciary, AT&T was required to monitor the compensation that Fidelity received through BrokerageLink and Financial Engines. The panel remanded for the district court to consider the duty-of prudence claim under the proper framework in the first instance.


On the reporting claim, the panel affirmed as to the compensation from BrokerageLink and reversed as to the compensation from Financial Engines. The panel concluded that AT&T adequately reported the compensation from Financial Engines on its Form 5500s with the Department of Labor, but it did not adequately report the compensation from Financial Engines because an alternative reporting method for “eligible indirect compensation” was not available.

Persian Broad. Serv. Global, Inc. v. Walsh (9th Cir. 22-55254 8/1/23) Wages | Labor Condition Applications


The panel affirmed the district court’s summary judgment upholding an Administrative Review Board (“ARB”) order awarding backpay plus pre-and post-judgment interest to Majid Varess, an Australian citizen and E-3 visa-holder who was employed as a sports reporter and producer by Persian Broadcast Service Global (“Persian Broadcast”).


To employ Varess, Persian Broadcast filed and received approval for a Labor Condition Application (LCA) through the U.S. Department of Labor (“Department”), first in 2011 and again in 2013. An LCA binds an employer to pay the required wages for the period of authorized employment, and only two exemptions can eliminate an employer’s legal obligations: when an employee is nonproductive for personal reasons or there has been a bona fide termination of the employment relationship. 20 C.F.R. § 655.731(c)(7)(ii). In February 2015, Varess filed an administrative complaint with the Department, arguing that Persian Broadcast failed to pay him the full amount of his wages as specified in the two LCAs.


First, the panel held that Varess’s February 2015 complaint was not time barred. The ARB reasonably relied on the LCAs rather than Varess’s visa to determine the period of authorized employment and Persian Broadcast’s wage obligations. By failing to pay Varess the reported wage under the second LCA period, Persian Broadcast continued to violate the wage requirement until the LCA period ended on September 12, 2015.


Second, the panel held that Varess’s circumstances did not meet either of the statutory exemptions to the LCA wage requirement because, by continuing his reporting work, Varess remained in productive status and there was never a bona fide termination.


Finally, given Persian Broadcast’s failure to pay Varess the LCA wages for the period of authorized employment, the ARB did not abuse its discretion by awarding backpay plus pre- and post-judgment interest. 

Boermeester v. Carry (SC S263180 per curiam 7/31/23) Private Universities’ Title IX Hearings


In recent years, courts in California and throughout the nation, as well as the California Legislature and the United States Department of Education’s Office for Civil Rights (OCR), have attempted to determine the precise procedures universities must utilize when investigating and disciplining students accused of sexual misconduct or intimate partner violence.  This judicial and legislative activity likely began in response to a “Dear Colleague” letter relating to title IX of the Education Amendments of 1972 (20 U.S.C. § 1681 et seq.) (Title IX) that the OCR issued in 2011, which gave guidance on the specific procedures federally funded universities should implement when investigating sexual harassment allegations.  The letter sought to stymie the rising tide of sexual assault on campuses by making it easier for victims to prove their claims in university disciplinary actions.  Though the letter was rescinded in 2017, students accused of sexual misconduct or intimate partner violence continue to challenge many of the disciplinary procedures universities have since implemented, asserting that these procedures create an unfair process which may result in universities mistakenly imposing severe sanctions upon accused students, including expulsion.


In this case, respondents University of Southern California and its Vice President of Student Affairs, Ainsley Carry (collectively, USC) expelled appellant Matthew Boermeester from the private university after conducting a two-month investigation and determining that he violated USC’s policy against engaging in intimate partner violence.  Boermeester filed a petition for a writ of administrative mandate under Code of Civil Procedure section 1094.5 (section 1094.5), alleging that he was deprived of the “fair trial” required by that section.  A divided Court of Appeal agreed, with the majority concluding that “USC’s disciplinary procedures . . . were unfair because they denied Boermeester a meaningful opportunity to cross-examine critical witnesses at an in-person hearing.”  (Boermeester v. Carry (June 4, 2020, B290675) review granted and opn. ordered nonpub. Sept. 16, 2020, S263180.)  More specifically, the Court of Appeal majority determined that USC’s disciplinary procedures were unfair because USC should have afforded Boermeester the opportunity to attend a live hearing at which he or his advisor-attorney would directly cross-examine the alleged victim, Jane Roe, as well as the third party witnesses, or indirectly cross-examine them by submitting questions for USC’s adjudicators to ask them at the live hearing.  (Boermeester v. Carry, supra, B290675.)  The Court of Appeal majority made clear that the witnesses need not be “physically present to allow the accused student to confront them” and could instead appear “by videoconference, or by another method that would facilitate the assessment of credibility.”  (Ibid.)  Nevertheless, the Court of Appeal majority believed that accused students must be able to contemporaneously hear and observe the real-time testimony of the accuser and other witnesses at a live hearing to have a “meaningful opportunity to respond to the evidence against [them]” and ask follow-up questions.  (Ibid.)


We hold that, though private universities are required to comply with the common law doctrine of fair procedure by providing accused students with notice of the charges and a meaningful opportunity to be heard, they are not required to provide accused students the opportunity to directly or indirectly cross-examine the accuser and other witnesses at a live hearing with the accused student in attendance, either in person or virtually.  Requiring private universities to conduct the sort of hearing the Court of Appeal majority envisioned would be contrary to our long-standing fair procedure admonition that courts should not attempt to fix any rigid procedures that private organizations must “invariably” adopt.  (Pinsker v. Pacific Coast Society of Orthodontists (1974) 12 Cal.3d 541, 555 (Pinsker II).)  Instead, private organizations should “retain the initial and primary responsibility for devising a method” to ensure adequate notice and a meaningful opportunity to be heard.  (Ibid.)  We accordingly reverse the Court of Appeal’s judgment.

Bill Signed by Governor (7/27/23)


  • AB 1766 by the Committee on Labor and Employment – Division of Occupational Safety and Health: regulations

Jones v. L.A. Central Plaza, LLC (9th Cir. 22-55489 7/26/23) ADA Standing


The panel vacated the district court’s sua sponte dismissal of George Jones’s action under the Americans with Disabilities Act against L.A. Central Plaza LLC and Central Liquor & Market, Inc., and remanded for further proceedings.


After Jones moved for summary judgment on the merits, the district court instead sua sponte dismissed the case on the ground that Jones’s amended complaint failed adequately to plead the elements of Article III standing. Defendants’ opposition to Jones’s motion had argued, in the alternative, that the case should be dismissed for lack of jurisdiction because Jones failed adequately to show Article III standing. In his reply, Jones had argued that he had sufficiently established standing.


The panel held that, because Jones had a full and fair opportunity to prove his case as to standing, the district court had discretion, in resolving Jones’s summary judgment motion, to also consider sua sponte whether to grant summary judgment against Jones on the issue of standing. The panel held, however, that when presented with the issue of standing in the context of Jones’s fully briefed summary judgment motion, the district court could not ignore the factual evidence of standing presented at summary judgment and instead sua sponte examine the adequacy of the complaint’s allegations of standing.

Kuciemba v. Victory Woodworks, Inc. (9th Cir. 21-15963 7/25/23) Covid-19 | Employee Household Members


The panel affirmed the district court’s dismissal of a diversity action brought by Robert Kuciemba and his wife Corby Kuciemba against Mr. Kuciemba’s employer Victory Woodworks, alleging that Mrs. Kuciemba contracted a severe case of COVID-19 from Mr. Kuciemba as a result of Victory’s negligent failure to protect its employees from the virus.


The panel certified two questions to the Supreme Court of California, which accepted certification and held that (1) California’s derivative injury doctrine—under which workers’ compensation benefits generally provide the exclusive remedy for third party claims if the asserted claims are collateral to or derivative of the employee’s workplace injury—did not bar Mrs. Kuciemba’s tort claims against Victory; but (2) an employer does not owe a duty of care under California law to prevent the spread of COVID-19 to employees’ household members. Because Victory owed no duty of care to Mrs. Kuciemba, the panel affirmed the district court’s order dismissing the complaint.

Crowe v. Wormuth (9th Cir. 21-15802 7/25/23) Exhaustion of Administrative Remedies | Merit Systems Protection Board


The panel affirmed in part and vacated in part the district court’s decision and remanded in an action brought by Steven Crowe, a police officer at the Tripler Army Medical Center in Honolulu, Hawaii, alleging that he had been subjected to discrimination based on his sexual orientation (bisexual) and race (Caucasian), retaliated against for protected conduct, and ultimately terminated from his employment.


Prior to his termination, Crowe filed a complaint with the Equal Employment Opportunity (EEO) office alleging sexual and race discrimination, retaliation, and a proposed and later a formal termination. After he was terminated, Crowe attempted to file a mixed case appeal with the Merit Systems Protection Board (MSPB), seeking to appeal the Army’s termination decision based on the affirmative defense of sexual orientation discrimination. The MSPB upheld Crowe’s termination and Crowe filed suit in district court.


The panel first vacated the district court’s decision that Crowe failed to exhaust administrative remedies before the MSPB with respect to his claims of pre-termination adverse employment actions. The panel held that the MSPB lacked jurisdiction to consider the pre-termination claims. Neither the text nor the structure of the Civil Service Reform Act (CSRA) supports the theory that the MSPB has pendent jurisdiction to decide factually related claims of discrimination associated with personnel actions outside the list of “particularly serious” actions set forth in 5 U.S.C. 7512. Such discrimination claims must instead be exhausted through the EEO process. The panel remanded for further proceedings.


The panel affirmed the district court’s (1) determination that Crowe failed to exhaust before the MSPB any other theories of discrimination for his termination besides sexual orientation, the only claim Crowe asserted; (2) grant of summary judgment to the Army on Crowe’s Title VII claim, finding there was no genuine dispute of material fact that Crowe was terminated because of his misconduct at the workplace, as opposed to his sexual orientation; and (3) grant of summary judgment to the Army on Crowe’s CSRA claim, finding that substantial evidence supported the MSPB’s finding that Crowe regularly had sex at TAMC during work hours.


Concurring, Judge Schroeder agreed with the majority’s outcomes, including its conclusion to remand the pretermination claims to the district court, but noted the unfortunate situation that two government entities are taking opposing positions with respect to the district court’s jurisdiction to hear the pre-termination claims.

Woodworth v. Loma Linda Univ. Med. Center (CA4/2 E072704 7/24/23) Class Certification & PAGA Action


Nicole Woodworth was a registered nurse at Loma Linda University Medical Center (the medical center) from December 2011 to June 2014.  In June 2014, she filed this putative class action against the medical center, alleging a host of wage and hour claims on behalf of herself and other employees.  She later amended her complaint to add a cause of action under the Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.).  (Unlabeled statutory citations refer to the Labor Code.) 


After several years of litigation, only her individual claim for failure to provide rest periods remained.  The court had granted four motions for summary adjudication in favor of the medical center, denied Woodworth’s motion for class certification, and denied her motion to strike putative class members’ declarations.  Woodworth appeals from those orders, which disposed of the putative class members’ claims, the PAGA claims, and all of her individual claims (apart from her claim about rest periods).  The medical center moves to dismiss most of Woodworth’s appeal, but we deny the motion.


We affirm the orders in large part but reverse in a number of respects.  In particular, we reverse in part the order denying class certification.  The court erred with respect to Woodworth’s proposed wage statement class, which consisted of employees who received allegedly inaccurate wage statements.  We remand for the trial court to reconsider certification of that class. 


We also conclude that the court erred by granting summary adjudication for the medical center on the PAGA rest period, regular rate, wage statement, and waiting time claims, as well as Woodworth’s individual wage statement claim.  We thus reverse the order granting the relevant motions and direct the court to enter a new order granting the motions in part and denying them in part. 


Additionally, the court erred by granting summary adjudication for the medical center on Woodworth’s claim that she and other nonexempt employees were underpaid as a result of time rounding.  The medical center had a policy of rounding employees’ time punches down to the nearest tenth of an hour.  See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889 (See’s Candy) approved of time rounding, so long as the rounding policy is “fair and neutral on its face” and “‘used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.’”  (Id. at p. 907.)  Recently, another appellate court rejected the See’s Candy rounding standard.  (Camp v. Home Depot U.S.A., Inc. (2022) 84 Cal.App.5th 638, 643 (Camp), review granted Feb. 1, 2023, S277518.)  We publish our discussion of the rounding motion to express our agreement with Camp.


We also publish another portion of our discussion regarding the alternative workweek schedule (AWS) instituted by the medical center.  California law permits employers to institute an AWS that operates as an exception to overtime requirements.  (§§ 510, subd. (a)(1), 511; Maldonado v. Epsilon Plastics, Inc. (2018) 22 Cal.App.5th 1308, 1314 (Maldonado).)  Employees must vote to adopt an AWS, and the law requires employers to disclose the effects of an AWS before the vote.  (Cal. Code Regs., tit. 8, § 11050, subd. 3(C)(3).)  The medical center moved for summary adjudication on its AWS defense to Woodworth’s claim for unpaid overtime.  The trial court granted that motion, and we affirm that order.  In doing so, we hold that an employer’s failure to comply with the pre-election disclosure requirement renders an AWS election null and void only if the employer omits material information about the proposed AWS’s effects. 


The medical center has filed a cross-appeal from the order denying its motion to strike all of the PAGA allegations from the operative complaint on the ground that the PAGA claims were unmanageable.  Woodworth moves to dismiss the cross-appeal.  We grant that motion, but we consider the arguments raised in the cross-appeal to the extent that they provide alternative grounds to affirm the erroneous orders terminating the PAGA claims. 


We conclude that the medical center’s manageability arguments do not provide alternative grounds for affirmance.  There is a split in the appellate courts over whether trial courts may strike or dismiss PAGA claims for lack of manageability, and we also publish the relevant portion of our discussion to express our agreement with one side of that split.  (Wesson v. Staples the Office Superstore, LLC (2021) 68 Cal.App.5th 746, 756 (Wesson) [holding that courts have inherent authority to strike unmanageable PAGA claims]; Estrada v. Royalty Carpet Mills, Inc. (2022) 76 Cal.App.5th 685, 697 (Estrada), review granted June 22, 2022, S274340 [holding that courts cannot strike PAGA claims on the basis of manageability concerns].)  We agree with the court in Estrada and hold that trial courts may not strike or dismiss a PAGA claim for lack of manageability.  When faced with unwieldy PAGA claims, trial courts may limit the scope of the claims or the evidence to be presented at trial but may not prohibit PAGA plaintiffs from presenting their claims entirely.


L & S Framing Inc. v. Cal. Occupational Saf. & Health Appeals Bd. CA3 C096386, filed 6/29/23, pub. 7/24/23) Cal-OSHA Appeals Board | Amendment of Citation


On August 20, 2016, Martin Mariano, an employee of plaintiff L & S Framing Inc., was working on a residential house under construction when he fell from the second floor onto the concrete ground floor below, sustaining serious injuries.  Following an investigation, real party in interest California Department of Industrial Relations’ Division of Occupational Safety and Health (the Division) issued a notice of intent to cite plaintiff and subsequently issued a citation, which eventually included a serious accident-related citation for violation of California Code of Regulations, title 8, section 1626, subdivision (b)(5). Plaintiff appealed the citation.  An administrative law judge (ALJ) denied the Division’s mid-hearing request to amend the citation to allege a violation of section 1632, subdivision (b)(1), denied the Division’s post-hearing motion to amend to allege violation of section 1626, subdivision (a)(2), and concluded the Division failed to prove the alleged violation of section 1626, subdivision (b)(5).  The Division filed a petition for reconsideration with the defendant California Occupational Safety and Health Appeals Board (the Appeals Board).  The Appeals Board concluded the ALJ improperly denied the two requests to amend and upheld the citation based on violation of both section 1632, subdivision (b)(1) and 1626, subdivision (a)(2).  Plaintiff filed a petition for a writ of mandate in the trial court, the trial court denied the petition, and plaintiff appeals.


Plaintiff asserts the trial court (1) erred in permitting the Appeals Board to amend the citation, (2) incorrectly concluded sections 1632, subdivision (b)(1) and 1626, subdivision (a)(2) applied, and (3) incorrectly concluded section 1716.2 did not apply and did not supersede the other regulations on the facts of this case.  The second and third of these contentions depend on the seemingly simple question whether the specific location from which Mariano fell qualified as a floor opening (§ 1632, subd. (b)(1)) and/or a stairwell (§ 1626, subd. (a)(2)), or instead an “unprotected side[] or edge[]” (§ 1716.2, subd. (f)).


We affirm.  We conclude the Appeals Board properly allowed the Division to amend the citation, the Appeals Board reasonably deemed the location at issue to fall within the scope of sections 1632 subdivision (b)(1) and 1626, subdivision (a)(2) and that determination was supported by substantial evidence, and the Appeals Board properly determined section 1716.2 did not apply.


Bills Signed by Governor (7/21/23)


  • AB 956 by Assemblymember David Alvarez (D-San Diego) – California State Auditor: background checks for prospective employees

  • AB 1740 by Assemblymember Kate Sanchez (R-Rancho Santa Margarita) – Human trafficking: notice: farm labor contractors, job recruitment centers, business establishments

  • SB 376 by Senator Susan Rubio (D-Baldwin Park) – Human trafficking: victim rights, human trafficking advocate

Perez v. Discover Bank (9th Cir. . 22-15322 7/24/23) Arbitration | Unruh Act Citizenship Discrimination


The panel affirmed the district court’s order declining to compel plaintiff Iliana Perez to arbitrate her claims that Discover Bank unlawfully discriminated against her based on her citizenship and immigration status when it denied her application for a consolidation loan for her student loan.


Discover Bank asserted that two arbitration agreements—one Perez made in 2010 in connection with her student loan from Citibank and one she made in 2018 in connection with the application for the consolidation loan with Discover Bank—required arbitration. Discover Bank acquired ownership of the Citibank loan around October 1, 2011, and currently holds the note.


Before the district court, Discover Bank initially argued that its agreement with Perez was not unconscionable because if Perez sent an opt out, she would not be bound by the agreement’s arbitration provision. Shortly thereafter Perez notified Discover Bank that she wished to reject the arbitration agreement. The district court found that Perez’s opt out of the Discover Bank agreement applied to her discrimination claims and that the discrimination claims were outside the scope of the Citibank agreement.


The panel held that Discover Bank was judicially estopped from arguing that Perez did not opt out of the Discover Bank agreement. The panel determined that Discover Bank’s past position clearly contradicted its current position that the opt out would only apply to Perez’s future discrimination claims, Discover Bank persuaded the court to accept its previous position, and Discover Bank would derive an unfair advantage absent estoppel.


Citing Revitch v. DIRECTV, LLC, 977 F.3d 713 (9th Cir. 2020), the panel further held that Perez and Discover Bank never formed an agreement to arbitrate her discrimination claims involving her application for a consolidation loan via the Citibank agreement.

Holley-Gallegly v. TA Operating, LLC (9th Cir. 22-55950 7/21/23) Employment Arbitration | Delegation Clause


The panel vacated the district court’s order denying defendant TA Operating LLC’s motion to compel arbitration of employment-related claims brought by Kenneth Holley Gallegly and remanded for the district court to order the arbitrator to decide the issue of arbitrability.


TA moved to compel arbitration pursuant to an arbitration agreement (the Agreement) that Holley-Gallegly signed when TA hired him as a truck mechanic. The Agreement included a delegation clause delegating to the arbitrator questions regarding the interpretation and enforceability of the Agreement. The district court ruled that the parties had delegated issues of arbitrability to the arbitrator and the delegation was clear and unmistakable, but that the delegation clause was unconscionable and therefore unenforceable. The district court then itself addressed arbitrability and concluded that the Agreement as a whole was unconscionable and unenforceable.


The panel held that the district court erred in finding that the arbitration agreement’s delegation clause was unenforceable because it was substantively unconscionable. The district court properly considered whether an “unrelated” jury waiver provision made the delegation clause unconscionable. Here, though, the jury waiver provision applied only if the Agreement were determined to be unenforceable. As such, it could not support the conclusion that an agreement to arbitrate enforceability (i.e., the delegation clause) was unenforceable.


Carmona v. Domino’s Pizza (9th Cir. 21-55009 7/21/23) Employment Arbitration | Interstate Commerce


On remand from the United States Supreme Court, the panel affirmed the district court’s order denying Domino Pizza’s motion to compel arbitration in a putative class action brought by three Domino truck drivers, alleging violations of California labor law.


The panel previously affirmed the district court’s denial of Domino’s motion to compel arbitration, holding that because the drivers were a “class of workers engaged in foreign or interstate commerce,” their claims were exempt from the Federal Arbitration Act by 9 U.S.C. § 1. The Supreme Court granted certiorari, vacated, and remanded for reconsideration in light of Southwest Airlines Co. v. Saxon, 142 S. Ct. 1783 (2022).


On remand, the panel stated that its prior decision squarely rested upon its reading of Rittmann v., Inc., 971 F.3d 904 (9th Cir. 2020), which concerned Amazon delivery drivers. The panel found no clear conflict between Rittmann and Saxon and nothing in Saxon that undermined the panel’s prior reasoning that because the plaintiff drivers in this case, like the Amazon package delivery drivers in Rittmann, transport interstate goods for the last leg to their final destinations, they are engaged in interstate commerce under § 1.


Rejecting Domino’s attempts to distinguish Rittmann, the panel stressed that the issue was not how the purchasing order was placed, but rather whether the plaintiff drivers operate in a single, unbroken stream of interstate commerce that renders interstate commerce a central part of their job description. A pause in the journey of the goods at a warehouse did not remove the goods from the stream of interstate commerce because the goods were inevitably destined from the outset of the interstate journey for Domino’s franchisees.

Castellanos v. State of California, 89 Cal.App.5th 131 (2023) (CA1/4 A163655, filed 3/13/23, review granted 6/28/23) Prop. 22


[Although review has been granted, this Court of Appeal decision remains citable for persuasive value and for a limited purpose—see summary below.]


In November 2020, the voters approved Proposition 22, the Protect App-Based Drivers and Services Act (Proposition 22).  (Bus. & Prof. Code, §§ 7448–7467, as added by Prop. 22, approved by the voters at Gen. Elec. (Nov. 3, 2020).)  Shortly afterwards, Hector Castellanos, Joseph Delgado, Saori Okawa, Michael Robinson, Service Employees International Union California State Council, and Service Employees International Union (SEIU; collectively, plaintiffs) filed a petition for writ of mandate seeking a declaration that Proposition 22 is invalid because it violates the California Constitution.  The trial court granted the petition, ruling that the proposition (1) is invalid in its entirety because it intrudes on the Legislature’s exclusive authority to create workers’ compensation laws; (2) is invalid to the extent that it limits the Legislature’s authority to enact legislation that would not constitute an amendment to Proposition 22, and (3) is invalid in its entirety because it violates the single-subject rule for initiative statutes.  


Proposition 22’s proponents and the state appeal, arguing the trial court was mistaken on all three points.  We agree that Proposition 22 does not intrude on the Legislature’s workers’ compensation authority or violate the single-subject rule, but we conclude that the initiative’s definition of what constitutes an amendment violates separation of powers principles.  Because the unconstitutional provisions can be severed from the rest of the initiative, we affirm the judgment insofar as it declares those provisions invalid and to the extent the trial court retained jurisdiction to consider an award of attorney’s fees, and otherwise reverse.


Castellanos v. State of California,  89 Cal.App.5th 131 (2023), review granted, 309 Cal.Rptr.3d 725 (Mem) (June 28, 2023); S279622/A163655


Pending review, the opinion of the Court of Appeal, which is currently published at 89 Cal.App.5th 131, 305 Cal.Rptr.3d 717, may be cited, not only for its persuasive value, but also for the limited purpose of establishing the existence of a conflict in authority that would in turn allow trial courts to exercise discretion under Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 456, 20 Cal.Rptr. 321, 369 P.2d 937, to choose between sides of any such conflict. (See Standing Order Exercising Authority Under California Rules of Court, Rule 8.1115(e)(3), Upon Grant of Review or Transfer of a Matter with an Underlying Published Court of Appeal Opinion, Administrative Order 2021-04-21; Cal. Rules of Court, rule 8.1115(e)(3) and corresponding Comment, par. 2.) Opening brief due.


Supreme Court Docket

Progressive Democrats v. Bonta (9th Cir. 22-15323 7/19/23) State and Local Government Employees | First Amendment


The panel reversed the district court’s summary judgment for the State of California in an action alleging that California Government Code § 3205 violates the First Amendment and Equal Protection Clause by prohibiting local government employees from soliciting political contributions from their coworkers while state employees are not similarly barred.


The panel analyzed the State’s decision to restrict the expression of certain government employees—but not other government employees—under the First Amendment. The panel held that Section 3205 does not survive constitutional scrutiny under either the “closely drawn” standard from McCutcheon v. FEC, 572 U.S. 185 (2014), or the balancing test articulated in Pickering v. Board of Education, 391 U.S. 563 (1968), and United States v. National Treasury Employees Union, 513 U.S. 454 (1995).


The panel held that the speculative benefits that Section 3205 may provide the Government were not sufficient to justify the burden on plaintiffs’ expression. The State therefore did not meet its burden of justifying the differential ban under the First Amendment. None of the materials before the State at the time of Section 3205’s enactment supported the statute’s distinction between local and state workers; the State offered no affirmative evidence that intragovernmental solicitations have coerced government employees into financially supporting political candidates or caused government employees to perform their duties in a partisan manner; Section 3205 did not account for agency size which undercut the State’s argument that the statute was properly tailored to address the government’s interest; and Section 3205 was underinclusive as a means of limiting the actuality and appearance of partisan behavior by public employees. Because the panel concluded that Section 3205 did not survive First Amendment scrutiny, it did not reach plaintiffs’ Equal Protection challenge.


Concurring in the result, Judge Ikuta stated that Section 3205 violates the First Amendment as a restriction on political speech that is not justified by California’s asserted governmental interests. But because California did not enact the law in its capacity as an employer, but rather in its capacity as a sovereign, the panel should have analyzed the statute under ordinary First Amendment principles and applied strict scrutiny to determine that California had not demonstrated either a compelling interest or narrowly tailored means.

Adolph v. Uber Technologies, Inc. (SC S274671 per curium 7/17/23) Arbitration | PAGA and Standing 


This case concerns a question of standing under the Private Attorneys General Act of 2004 (PAGA).  (Lab. Code, § 2698 et seq.; all undesignated statutory references are to this code.)  Informed by findings of pervasive under enforcement of many Labor Code provisions and “a shortage of government resources to pursue enforcement,” the Legislature enacted PAGA to create new civil penalties for Labor Code violations and “ ‘to allow aggrieved employees, acting as private attorneys general, to recover [those] penalties.’ ”  (Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 379 (Iskanian).)  Specifically, PAGA authorizes “an aggrieved employee,” acting as a proxy or agent of the state Labor and Workforce Development Agency (LWDA), to bring a civil action against an employer “on behalf of himself or herself and other current or former employees” to recover civil penalties for Labor Code violations they have sustained.  (§ 2699, subd. (a); see Iskanian, at p. 380.) 


In Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. __ [142 S.Ct. 1906] (Viking River), the United States Supreme Court considered a predispute employment contract with an arbitration provision specifying that “in any arbitral proceeding, the parties could not bring any dispute as a class, collective, or representative PAGA action.  It also contained a severability clause specifying that if the waiver was found invalid, any class, collective, representative, or PAGA action would presumptively be litigated in court.  But under that severability clause, if any ‘portion’ of the waiver remained valid, it would be ‘enforced in arbitration.’ ”  (Id. at p. __ [142 S.Ct. at p. 1916].)  In light of our state law rule prohibiting wholesale waiver of PAGA claims (Iskanian, supra, 59 Cal.4th at p. 383), the high court construed the severability clause to reflect the parties’ agreement to arbitrate any alleged Labor Code violations personally sustained by a PAGA plaintiff — so-called “individual” claims — and held that the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.) compels enforcement of this agreement.  (Viking River, at pp. __–__ [142 S.Ct. at pp. 1922–1925].)  In so holding, the high court declared that the FAA “preempted” a separate state law rule that “PAGA actions cannot be divided into individual and non-individual claims” where the parties have agreed to arbitrate individual claims.  (Viking River, at p. __ [142 S.Ct. at p. 1913].)  For consistency, we use the terms “individual” and “non-individual” claims in accordance with the high court’s usage in Viking River


The question here is whether an aggrieved employee who has been compelled to arbitrate claims under PAGA that are “premised on Labor Code violations actually sustained by” the plaintiff (Viking River, supra, 596 U.S. at p. __ [142 S.Ct. at p. 1916]; see §§ 2698, 2699, subd. (a)) maintains statutory standing to pursue “PAGA claims arising out of events involving other employees” (Viking River, at p. __ [142 S.Ct. at p. 1916]) in court.  We hold that the answer is yes.  To have PAGA standing, a plaintiff must be an “aggrieved employee” — that is, (1) “someone ‘who was employed by the alleged violator’ ” and (2) “ ‘against whom one or more of the alleged violations was committed.’ ”  (Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 83, 84 (Kim), quoting § 2699, subd. (c).)  Where a plaintiff has brought a PAGA action comprising individual and non-individual claims, an order compelling arbitration of the individual claims does not strip the plaintiff of standing as an aggrieved employee to litigate claims on behalf of other employees under PAGA. 

Zirpel v. Alki David Productions, Inc. (CA2/4 B317334, filed 6/20/23, pub. ord. 7/14/23) Lab. Code § 1102.5 Retaliation


Defendant and appellant Alki David Productions, Inc. (ADP) appeals from the judgment entered in favor of plaintiff and respondent Karl Zirpel (Zirpel) after a jury found ADP liable for whistleblower retaliation under Labor Code  section 232.5, which prohibits an employer from discharging an employee who discloses information about the employer’s working conditions, and section 1102.5, subdivisions (b) and (c), which prohibits an employer from retaliating against an employee who refuses to participate in an activity that would violate the law or who discloses information the employee reasonably believes would disclose a violation of law.  The jury awarded Zirpel $7,068,717 in damages (consisting of $368,717 in economic damages, $700,000 in non-economic damages, and $6 million in punitive damages).  The jury further found that ADP wrongfully terminated Zirpel’s employment after he refused to work on an equipment installation at a theater because the work would violate the law and because Zirpel reasonably believed that the work would violate the law.  The jury further found that ADP terminated Zirpel’s employment with malice, oppression, or fraud.  The trial court denied ADP’s motions for judgment notwithstanding the verdict (JNOV) and for a new trial.


We affirm the judgment.


Bills Signed by Governor (7/13/23)


  • SB 467 by Senator Anthony Portantino (D-Burbank) – Community colleges: apprenticeship or internship training programs

  • SB 510 by Senator John Laird (D-Santa Cruz) – State civil service: probationary periods.

  • SB 652 by Senator Thomas Umberg (D-Santa Ana) – Evidence: expert testimony

  • SB 748 by Senator Richard D. Roth (D-Riverside) – Disability access and information: local government: notice

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