CALIFORNIA CASE LAW ALERT

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

(See prior archived alerts by clicking on "Blog" under menu. For alerts older than one year, please request under "Contact" tab.)

Bills Signed by Governor (10/12-13/19)

AB 118 by the Committee on Budget – State employment: State Bargaining Units 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20, and 21.

AB 749 by Assemblymember Mark Stone (D-Scotts Valley) – Settlement agreements: restraints in trade.
AB 1820 by the Committee on Judiciary – Personal rights: civil liability and enforcement.
SB 17 by Senator Thomas Umberg (D-Santa Ana) – Civil discovery: sanctions.
SB 707 by Senator Bob Wieckowski (D-Fremont) – Arbitration agreements: enforcement.

Bills Vetoed by Governor (10/12-13/19)

AB 23 by Assemblymember Autumn Burke (D-Inglewood) – Governor’s Office of Business and Economic Development: Business Workforce Coordination Unit. A veto message can be found here.
AB 171 by Assemblymember Lorena Gonzalez (D-San Diego) – Employment: sexual harassment. A veto message can be found here.
AB 314 by Assemblymember Rob Bonta (D-Alameda) – Public employment: labor relations: release time. A veto message can be found here.
AB 346 by Assemblymember Jim Cooper (D-Elk Grove) – Workers’ compensation: leaves of absence. A veto message can be found here.
AB 403 by Assemblymember Ash Kalra (D-San Jose) – Division of Labor Standards Enforcement: complaint. A veto message can be found here.
AB 520 by Assemblymember Ash Kalra (D-San Jose) – Public works: public subsidy. A veto message can be found here.
AB 589 by Assemblymember Lorena Gonzalez (D-San Diego) – Employment: unfair immigration-related practices. A veto message can be found here.
AB 625 by Assemblymember Ash Kalra (D-San Jose) – Service contracts: public transit: collection and transportation of solid waste: retention of employees. A veto message can be found here.
AB 1214 by Assemblymember Melissa Melendez (R-Lake Elsinore) – School employees: training: cardiopulmonary resuscitation. A veto message can be found here.
AB 1466 by Assemblymember Jacqui Irwin (D-Thousand Oaks) – Employee classification: professional classification: specified educational employees. A veto message can be found here.
AB 1478 by Assemblymember Wendy Carrillo (D-Los Angeles) – Employment discrimination. A veto message can be found here.
AB 1613 by Assemblymember Patrick O’Donnell (D-Long Beach) – Public works: prevailing wages. A veto message can be found here.
AB 1681 by Assemblymember Lorena Gonzalez (D-San Diego) – Public employees: collective bargaining: unit determinations. A veto message can be found here.
SB 35 by Senator Ling Ling Chang (R-Diamond Bar) – Human trafficking: California ACTS Task Force. A veto message can be found here.
SB 184 by Senator John Moorlach (R-Costa Mesa) – Judges’ Retirement System II: deferred retirement. A veto message can be found here.
SB 218 by Senator Steven Bradford (D-Gardena) – Employment: discrimination enforcement: local government. A veto message can be found here.
SB 363 by Senator Richard Pan (D-Sacramento) – Workplace safety. A veto message can be found here.

Koenig v. Warner Unified School District (CA4/1 D072463, filed 9/19/19, pub. ord. 10/11/109) School District/Termination of Employment Contract/Health Benefits

The Government Code requires a contract between an employee and a school district to provide that, if the contract is terminated, the maximum cash settlement the employee may receive is an amount equal to the monthly salary of the employee multiplied by the number of months left on the unexpired term of the contract, up to a maximum of 18 months. (Gov. Code, §§ 53260, subd. (a); 53263.) Health benefits offered in connection with such a settlement are limited to the same time period, or until the employee finds other employment, whichever occurs first. (§ 53261.)

Ron Koenig was the superintendent and principal of the Warner Unified School District (the district). He and the district entered an agreement to terminate his employment one year before his employment agreement was due to expire. Under the termination agreement, Koenig agreed to release any potential claims against the district in exchange for a lump sum payment equivalent to the amount due during the balance of the term of his employment agreement, consistent with section 53260. The district also agreed to continue to pay health benefits for Koenig and his spouse "until Koenig reaches age 65 or until Medicare or similar government provided insurance coverage takes effect, whichever occurs first."

The district stopped paying Koenig's health benefits 22 months later. Koenig then sued to rescind the termination agreement and sought declaratory relief he was entitled to continued benefits pursuant to his underlying employment agreement, which provided that Koenig and his spouse would continue receiving health benefits, even after the term of the agreement expired.

After a bench trial, the trial court determined the district's promise in the termination agreement to pay health benefits until Koenig turned 65 violated section 53261, was unenforceable, and rendered the termination agreement void for lack of consideration. The trial court determined that Koenig was entitled to receive continued benefits under the underlying employment agreement, but found that agreement was ambiguous with respect to how long he was entitled to continue receiving such benefits. The trial court found the parties intended the district would provide health benefits until Koenig obtained coverage through his new employer. The trial court concluded neither party was entitled to damages or restitution and awarded Koenig costs as the prevailing party.

Both Koenig and the district appealed from the judgment entered after trial. Koenig contends the trial court properly determined the termination agreement was void but should have concluded he is entitled to continued health benefits until the age of 65. The district contends the trial court erred when it concluded the termination agreement was void; rather, the trial court should have severed the termination agreement's unenforceable promise to continue paying benefits, enforced the remainder of the termination agreement, and required Koenig to pay restitution for benefits paid beyond the term of the original agreement. We conclude the termination agreement's unlawful promise to pay health benefits in excess of the statutory maximum should have been severed to comply with sections 53260 and 53261, Koenig did not establish he is entitled to rescind the termination agreement, and the district is entitled to restitution for health benefits paid beyond the statutory maximum. We therefore reverse the judgment and direct that judgment be entered in favor of the district in the amount of $16,607.

https://www.courts.ca.gov/opinions/documents/D072463.PDF

Bills Signed by Governor (10/10/19)

AB 9 by Assemblymember Eloise Gómez Reyes (D-Grand Terrace) – Employment discrimination: limitation of actions.
AB 35 by Assemblymember Ash Kalra (D-San Jose) – Worker safety: blood lead levels: reporting.
AB 51 by Assemblymember Lorena Gonzalez (D-San Diego) – Employment discrimination: enforcement.
AB 203 by Assemblymember Rudy Salas (D-Bakersfield) – Occupational safety and health: Valley Fever.
AB 355 by Assemblymember Tom Daly (D-Anaheim) – Public Employment Relations Board: Orange County Transportation Authority.
AB 538 by Assemblymember Marc Berman (D-Palo Alto) – Sexual assault: medical evidentiary examinations and reporting.
AB 547 by Assemblymember Lorena Gonzalez (D-San Diego) – Janitorial workers: sexual violence and harassment prevention training.
AB 673 by Assemblymember Wendy Carrillo (D-Los Angeles) – Failure to pay wages: penalties.
AB 1400 by Assemblymember Sydney Kamlager-Dove (D-Los Angeles) – Employment safety: firefighting equipment: mechanics.
AB 1748 by Assemblymember Rob Bonta (D-Alameda) – California Family Rights Act: flight crews.
AB 1768 by Assemblymember Wendy Carrillo (D-Los Angeles) – Prevailing wage: public works.
SB 142 by Senator Scott Wiener (D-San Francisco) – Employees: lactation accommodation.
SB 229 by Senator Robert Hertzberg (D-Van Nuys) – Discrimination: complaints: administrative review.
SB 530 by Senator Cathleen Galgiani (D-Stockton) – Construction industry: discrimination and harassment prevention.
SB 688 by Senator Bill Monning (D-Carmel) – Failure to pay wages: penalties

Naranjo v. Spectrum Security Services, Inc. (CA2/4 B256232M mod. 10/10/19) Wage and Hour Class Action

THE COURT:

The opinion filed in the above-entitled matter on September 26, 2019, is ordered MODIFIED as follows:

On page 42, the first three sentences of the second paragraph of Part IV.A are deleted and replaced with the following:

At all times relevant to this action, Spectrum’s written policies did not authorize off-duty rest breaks. Pre-Memorandum 33, Spectrum’s SOP and SOPP advised, “This job does not allow for breaks other than using the hallway bathrooms for a few minutes.” Memorandum 33 stated, “rest periods are provided ‘On-Duty.’”

This modification does not change the judgment.

The petition for rehearing is DENIED.

https://www.courts.ca.gov/opinions/documents/B256232M.PDF

Ferra v. Loews Hollywood Hotel (CA2/3 B283218 10/9/19) Regular Rate of Pay v. Compensation/Rounding

Does “regular rate of compensation” for calculating meal or rest break premium payments mean the same thing as “regular rate of pay” for calculating overtime premium payments, and does facially neutral “rounding” of employee work time systematically undercompensate Jessica Ferra and a class of employees of Loews Hollywood Hotel, LLC (Loews)? We agree with the trial court that the phrases have different meanings, and Loews’s facially neutral rounding policy does not systematically undercompensate Loews employees.

https://www.courts.ca.gov/opinions/documents/B283218.PDF

R.G. & G.R. Harris Funeral Homes v. EEOC (US 18-107 oral argument transcript 10/8/19) Title VII/Transgender Discrimination

Issue: Whether Title VII prohibits discrimination against transgender people based on (1) their status as transgender or (2) sex stereotyping under Price Waterhouse v. Hopkins.

Transcript

Gonzales v. San Gabriel Transit (CA2/4 B282377 10/8/19) Wage and Hour Class Certification/Dynamex

Appellant Francisco Gonzales formerly worked as a driver for respondent San Gabriel Transit, Inc. (SGT), a company that coordinates with public and private entities to arrange transportation services for passengers. In February 2014, Gonzales filed this putative class action seeking to represent over 550 drivers engaged by SGT as independent contractors from February 2010 to the present. Among other things, Gonzales alleged that by misclassifying drivers as independent contractors, SGT violated various provisions of the Labor Code and the Industrial Welfare Commission’s (IWC) wage orders, particularly Wage Order No. 9-2001 (codified at Cal. Code Regs., tit. 8, § 11090 [Wage Order No. 9]), which governs the transportation industry, and engaged in unlawful business practices under Business and Professions Code section 17200 (17200). The trial court did not evaluate individual causes of action. Rather, analyzing the action as a whole, premised on terms contained in several lease agreements in effect during the class period, the court found that Gonzales failed to demonstrate the requisite community of interest or typicality among SGT drivers under the then—prevailing legal test, and denied the motion for class certification.

While this appeal was pending, the California Supreme Court decided Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 (Dynamex), in which it adopted the “ABC test” used in other jurisdictions to streamline and provide consistency in analyzing the distinction between employees and independent contractors for purposes of wage order claims. We conclude that: (1) the ABC test adopted in Dynamex is retroactively applicable to pending litigation on wage and hour claims; (2) the ABC test applies with equal force to Labor Code claims that seek to enforce the fundamental protections afforded by wage order provisions; and (3) statutory claims alleging misclassification not directly premised on wage order protections, and which do not fall within the generic category of “wage and hour laws,” are appropriately analyzed under what has commonly been known as the “Borello” test (referring to S.G. Borello and Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 (Borello)).

Because the trial court did not have the benefit of the Dynamex decision, we reverse and remand the matter with directions. On remand, the trial court shall: (1) evaluate which alleged Labor Code claims enforce wage order requirements, and which do not; (2) as to the Labor Code claims that enforce wage order requirements, apply the ABC test as set forth in Dynamex to determine whether the requirements of commonality and typicality for purposes of certification of a class action are satisfied; (3) as to the Labor Code claims that do not enforce wage order requirements, apply the Borello test to determine whether the requirements of commonality and typicality for purposes of certification of a class action are satisfied; (4) as to the derivative claim under section 17200, apply the ABC or Borello test as appropriate for the underlying alleged unlawful business practice; and (5) in the event the court determines class certification is appropriate for any claims, complete the analysis by determining whether proceeding as a class action would be superior to alternative methods of adjudication.

https://www.courts.ca.gov/opinions/documents/B282377.PDF

Henderson v. Equilon Enterprises (CA1/1 A151626 10/8/19) Wage and Hour/Joint Employer

Plaintiff and appellant Billy R. Henderson brought a civil action for wage and hour violations against defendant and respondent Equilon Enterprises, LLC, doing business as Shell Oil Products US (Shell), under a “joint employer” theory of liability. Henderson’s causes of action consisted of failure to pay overtime compensation, failure to pay for missed break periods, and unfair business practices (Bus. & Prof. Code, § 17200). The trial court found Shell was not Henderson’s joint employer and granted Shell’s motion for summary judgment. We affirm the judgment.

https://www.courts.ca.gov/opinions/documents/A151626.PDF

Ray v. County of Los Angeles (9th Cir. 17-56581, 18-55276 amend 10/8/19) FLSA/Eleventh Amendment Immunity

The opinion filed on August 22, 2019 is amended as follows:

On page six of the opinion, in the paragraph beginning “As employers of the homecare providers,” replace <As employers of the homecare providers, the State and County> with <Assuming, without deciding, the State and County areemployers of the homecare providers, they>.

With this amendment, the panel votes to deny theappellant’s petition for panel rehearing. [Dkt. 51] Judges Wardlaw and Bennett vote to deny the appellant’s petition for rehearing en banc [DKT No. 51], and Judge Cardone so recommends. The full court has been advised of the petition for rehearing en banc, and no active judge has requested a vote on whether to rehear the matter en banc. Fed. R. App. P. 35. The petition for panel rehearing and rehearing en banc is therefore DENIED. No further petitions for panel or en banc rehearing shall be permitted. IT IS SO ORDERED.

http://cdn.ca9.uscourts.gov/datastore/opinions/2019/10/08/17-56581.pdf

Bills Signed by Governor (10/7/19)

AB 1353 by Assemblymember Buffy Wicks (D-Oakland) – Classified employees: probationary period..
SB 616 by Senator Bob Wieckowski (D-Fremont) – Enforcement of money judgments: exemptions.

Supershuttle Internat., Inc v. Lab. & Workforce Development Agency (CA2/8 B292054 10/7/19) Labor Commissioner/Collateral Estoppel

The general question presented is whether an employer can sue for declaratory relief to enforce a superior court judgment unfavorable to the Labor Commissioner without violating the anti-SLAPP statute. The answer is yes, where, as here, the lawsuit does not arise out of activity protected by the statute.

Supershuttle International, Inc., Supershuttle Los Angeles, Inc., and Supershuttle of San Francisco, Inc., (collectively Supershuttle) filed an action for declaratory and injunctive relief against the Labor and Workforce Development Agency; its Secretary; the Division of Labor Standards Enforcement; and the Chief of the Division and Labor Commissioner (the Labor defendants). The civil action seeks a declaration that the doctrine of collateral estoppel precludes the Labor Commissioner from considering wage claims filed by drivers of Supershuttle vans because the Sacramento Superior Court previously found the drivers were independent contractors, not employees. The trial court denied the Labor defendants’ motion to strike pursuant to Code of Civil Procedure section 425.16 et. seq. (the anti-SLAPP laws).

The Labor defendants appeal, contending Supershuttle’s claims arise from statements and writings by the Department of Labor Standards and Enforcement (DLSE) made in connection with an official proceeding (§ 425.16, subd. (e)(2)) or were made in connection with a public issue or issue of public interest. (§ 425.16, subd. (e)(4).) They further contend the Labor Commissioner’s act of setting hearings on the wage claims is not an illegal act within the meaning of the anti-SLAPP law.

We find the gravamen of Supershuttle’s complaint is the harm it will suffer from the intended decision of the Labor defendants to deny collateral estoppel effect to a final decision of the Sacramento Superior Court, not from the Labor defendants’ writing or statements preceding or communicating that decision. We also find the Labor defendants have not identified speech or writings made in connection with a public issue or issue of public importance from which the causes of action arise. Finally we find the trial court here did not conclude that the Labor defendants acted illegally as a matter of law within the meaning of the anti-SLAPP law. Most importantly, the trial court did not rely on any illegality to deny the Labor defendants’ motion to strike. Nor do we rely on any illegality to affirm the trial court’s order, which we now do.

https://www.courts.ca.gov/opinions/documents/B292054.PDF

Bill Signed by Governor (10/3/19)

SB 698 by Senator Connie Leyva (D-Chino) – Employee wages: payment.

County of L.A. v. Civil Service Com. of the County of L.A. (CA2/1 B282133 10/3/19) Officer Misconduct/Civil Service Commission

Los Angeles County Sheriff’s Deputy Mark Montez failed to report and lied about the unreasonable use of force by another deputy against an inmate at the Men’s Central Jail in Los Angeles (the jail). The Sheriff’s Department discharged Montez, but after an administrative hearing the Los Angeles County Civil Service Commission (the Commission) reduced his discharge to a 30-day suspension without back pay. The county petitioned the superior court for a writ vacating the Commission’s decision and upholding Montez’s discharge. The court, Judge James C. Chalfant presiding, found that the Commission’s decision was unsupported by its own findings. The court accordingly issued a writ ordering the Commission to set aside its decision and reconsider the matter.

We conclude that Montez’s misconduct was an inexcusable neglect of duty that harmed the Sheriff’s Department by compromising the public’s ability to trust it, and the Commission abused its discretion by reducing Montez’s punishment. Therefore, we affirm the trial court’s order.

https://www.courts.ca.gov/opinions/documents/B282133.PDF

Bills Signed by Governor (10/2/19)

AB 170 by Assemblymember Lorena Gonzalez (D-San Diego) – Worker status: employees and independent contractors.
AB 241 by Assemblymember Sydney Kamlager-Dove (D-Los Angeles) – Implicit bias: medical profession continuing education: requirements.
AB 242 by Assemblymember Sydney Kamlager-Dove (D-Los Angeles) – Courts: attorneys: implicit bias: training.
AB 333 by Assemblymember Susan Talamantes Eggman (D-Stockton) – Whistleblower protection: county patients’ rights advocates.
AB 525 by Assemblymember Luz Rivas (D-Arleta) – Teacher credentialing.
AB 543 by Assemblymember Christy Smith (D-Santa Clarita) – Education: sexual harassment: written policy: posters.
AB 560 by Assemblymember Miguel Santiago (D-Los Angeles) – Public utilities: unionization.
AB 800 by Assemblymember Kansen Chu (D-San Jose) – Civil actions: confidentiality.
AB 1033 by Assemblymember Jim Cooper (D-Elk Grove) – State employment: new employees: information.
AB 1320 by Assemblymember Adrin Nazarian (D-North Hollywood) – Public employee retirement systems: prohibited investments: Turkey.
AB 1510 by Assemblymember Eloise Gómez Reyes (D-Grand Terrace) – Sexual assault and other sexual misconduct: statutes of limitations on civil actions.

Salazar v. McDonald’s Corp. (9th Cir. 17-15673 10/1/19) Franchises/Joint Employer

The panel affirmed the district court’s summary judgment in favor of McDonald’s Corp. in a class action brought by McDonald’s employees alleging that they were denied overtime premiums, meal and rest breaks, and other benefits in violation of the California Labor Code.

The plaintiff class members worked at McDonald’s franchises in the Bay Area operated by the Haynes Family Limited Partnership.

The panel held that the district court properly ruled that McDonald’s was not an employer under the “control” definition, which requires “control over the wages, hours, or working conditions.” Martinez v. Combs, 231 P.3d 259, 277 (Cal. 2010). The panel also held that the district court correctly concluded that McDonald’s did not meet the “suffer or permit” definition of employer. The panel held that under California common law, McDonald’s cannot be classified as an employer of its franchisees’ workers. The panel concluded that although there was arguably evidence suggesting that McDonald’s was aware that Haynes was violating California’s wage-and-hour laws with respect to Haynes’ employees, there was no evidence that McDonald’s had the requisite level of control over plaintiffs’ employment to render it a joint employer under applicable California precedents.

The panel held that McDonald’s cannot be held liable for wage-and-hour violations under an ostensible-agency theory.

The panel rejected plaintiffs’ claim that McDonald’s owed them a duty of care, which it breached by supervising Haynes’ managers inadequately and failing to prevent the alleged hour-and-wage violations. The panel held that plaintiffs met neither the damages nor the duty elements required to prove negligence.

The panel did not consider plaintiffs’ arguments on the merits of the district court’s rulings striking plaintiffs’ representative Private Attorney General Act claims, and denying class certification. Chief Judge Thomas concurred in part and dissented in part.

Chief Judge Thomas agreed with the majority that there was no genuine issue of material fact regarding whether McDonald’s was an employer under the “control” or common law definitions. Dissenting, Chief Judge Thomas would hold that there were genuine issues of material fact regarding whether McDonald’s was a joint employer of franchise location workers under the “suffer or permit” definition.

http://cdn.ca9.uscourts.gov/datastore/opinions/2019/10/01/17-15673.pdf

Nejadian v. County of Los Angeles (CA2/4 B285016 10/1/19) Retaliation/Insufficient Evidence

A jury found in favor of plaintiff Patrick Nejadian and against his employer, defendant County of Los Angeles (County), on Nejadian’s causes of action for retaliation in violation of Labor Code section 1102.5, subdivision (c) (hereafter, section 1102.5(c)), and for retaliation in violation of the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12940 et seq.), and awarded Nejadian almost $300,000 in damages. County appeals, raising numerous issues as to both causes of action, including that Nejadian failed to present sufficient evidence to support the jury’s verdict on both claims. We conclude that County’s sufficiency of the evidence arguments have merit.

Section 1102.5(c) prohibits “[a]n employer, or any person acting on behalf of the employer, . . . [from] retaliate[ing] against an employee for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation.” We hold that to prevail on a claim under this provision, the plaintiff must identify both the specific activity and the specific statute, rule, or regulation at issue; the court must then determine the legal question whether the identified activity would result in a violation or noncompliance with the identified statute, rule, or regulation, and, if so, the jury must determine the factual issue whether the plaintiff was retaliated against for refusing to participate in the identified activity. In the present case, the trial court declined to make the initial legal determination. Although this ordinarily would require a reversal and remand for retrial, we find no remand is necessary because Nejadian failed to present sufficient evidence at trial to establish that any acts he was asked to perform would result in a violation of or noncompliance with any identified state, federal, or local statute, rule, or regulation. Therefore, County is entitled to judgment on the section 1102.5(c) retaliation claim.

With regard to Nejadian’s FEHA retaliation claim, the jury was instructed that Nejadian could establish that claim by proving that County subjected him to an adverse employment action in retaliation for “refusing to participate in activities that would violate state, federal, or local statutes, rules, or regulations and/or for complaining about age discrimination and retaliation in violation of FEHA.” Because this instruction erroneously allowed the jury to find in favor of Nejadian even if no violation of FEHA was committed, the judgment on this claim must be reversed. As with the section 1102.5(c) claim, however, no remand is required here. Instead, we find that County is entitled to judgment in its favor because Nejadian failed to present evidence from which a reasonable jury could conclude that any adverse employment action he suffered was motivated by retaliation for complaints he made regarding discrimination or other activity protected by FEHA. Accordingly, we reverse the judgment and direct that judgment be entered in favor of County on Nejadian’s complaint.

https://www.courts.ca.gov/opinions/documents/B285016.PDF

Bills Signed by Governor (10/1/19)

AB 1116 by Assemblymember Tim Grayson (D-Concord) -- California Firefighter Peer Support and Crisis Referral; firefighters: peer support.
SB 438 by Senator Robert Hertzberg (D-Van Nuys) – Emergency medical services: dispatch.
SB 542 by Senator Henry Stern (D-Canoga Park) – Trauma Treatment Act; workers’ compensation

Modaraei v. Action Property Management, Inc. (CA2/1 B290247 9/30/19) Misclassification/Class Certification

Ron Modaraei appeals from an order denying a motion for class certification in an employee misclassification case he brought against his former employer, Action Property Management (APM). He also appeals from an order terminating depositions of class members who signed declarations that were filed as part of APM’s evidence opposing class certification. Finding no abuse of discretion, we affirm the trial court’s orders.

https://www.courts.ca.gov/opinions/documents/B290247.PDF

Teamsters Local 2010 v. Regents of the Univ. of Cal. (CA1/5 A155188 9/30/19) Unfair Labor Practices/Anti-SLAPP

Defendant Regents of the University of California (Regents) appeals from an order denying its special motion to strike under Code of Civil Procedure section 425.16 (the anti-SLAPP statute). The parties agreed that plaintiff Teamsters Local 2010 (Teamsters) filed an action that arose out of protected activity. Regents argues the trial court erred in denying its anti-SLAPP motion after concluding Teamsters had demonstrated a probability of prevailing on its claim. We affirm.

https://www.courts.ca.gov/opinions/documents/A155188.PDF

Bills Signed by Governor (9/30/19)

AB 378 by Monique Limόn (D-Santa Barbara) – Childcare: family childcare providers: bargaining representative
AB 406 by Monique Limόn (D-Santa Barbara) – Disability compensation: paid family leave: application in non-English languages
SB 206 by Senator Nancy Skinner (D-Berkeley) – Fair Pay to Play Act, Collegiate athletics: student athlete compensation and representation

Gupta v. Trustees of the Cal. State University (CA1/3 A151763 9/26/19) FEHA Retaliation/Comparative Evidence

The Trustees of the California State University for San Francisco State University (SFSU) appeals from a judgment entered after a jury found SFSU retaliated against its professor, Dr. Rashmi Gupta, in denying her tenure and terminating her employment. SFSU contends the trial court erred in: (1) allowing Gupta to present evidence of a “comparator professor” without requiring her to show her qualifications were “clearly superior” to that professor’s qualifications; (2) refusing to give a special jury instruction regarding comparator evidence; and (3) “interven[ing] in the questioning of witnesses before the jury in a manner that favored [Gupta].” We reject SFSU’s contentions and affirm the judgment.

https://www.courts.ca.gov/opinions/documents/A151763.PDF

Naranjo v. Spectrum Security Services, Inc. (CA2/4 B256232 9/26/19) Wage and Hour Class Action

Named plaintiff and class representative Gustavo Naranjo and a certified class of former and current employees took their lawsuit against defendant Spectrum Security Services, Inc. (Spectrum) to trial. They alleged Labor Code section 226.7 meal break violations and sought premium wages, derivative remedies pursuant to sections 203 (waiting time penalties) and 226 (itemized wage statement penalties), and attorney fees. The results were mixed, and both sides appeal.

We hold: (1) at-will, on-call, hourly, nonexempt employees who are paid for on-duty meal periods are also entitled to premium wages if the employer does not have a written agreement that includes an on-duty meal period revocation clause (§ 226.7); (2) unpaid premium wages for meal break violations accrue prejudgment interest at seven percent; (3) unpaid premium wages for meal break violations do not entitle employees to additional remedies pursuant to sections 203 and 226 if their pay or pay statements during the course of the violations include the wages earned for on-duty meal breaks, but not the unpaid premium wages; (4) without section 226 penalties, attorney fees pursuant to section 226, subdivision (e) may not be awarded; and (5) the trial court prejudicially erred in denying certification of a rest break class.

https://www.courts.ca.gov/opinions/documents/B256232.PDF

Hawkins v. City of Los Angeles (CA2/3 B279719, filed 9/9/19, pub. ord. 9/25/19) Whistleblower Retaliation/PAGA

The City of Los Angeles (the City) fired Todd Hawkins and Hyung Kim from their jobs as hearing examiners at the Department of Transportation (DOT). Claiming they were fired for whistleblowing on the City’s practice of pressuring hearing examiners to change decisions, Hawkins and Kim sued the City for violations of the Bane Act and for whistleblower retaliation. After a jury found for Hawkins and Kim on those causes of action, the trial court assessed a penalty under the Private Attorney General Act (PAGA) and awarded them attorney fees. The City appeals, contending the judgments must be reversed for insufficient evidence and instructional error. They also contend that the awards of civil penalties and attorney fees must be reversed. We reject these contentions and affirm the judgments and orders.

https://www.courts.ca.gov/opinions/documents/B279719.PDF

Liday v. Sim (CA2/3 B283180 9/25/19) Domestic Worker Bill of Rights/Minimum Wage

When determining a claim for unpaid minimum wages, does the court presume that a fixed salary paid to a live-in domestic worker—who is exempt from overtime but subject to minimum wage laws—covers only the regular, nonovertime work hours mandated for nonexempt workers? Or, does the court determine the worker’s unpaid minimum wages by calculating the difference between the total number of hours she worked at the prevailing minimum wage rate and the amount she received through her salary? That is the question this wage-and-hour appeal poses.

Lea Liday sued her former employers, appellants, for unpaid wages incurred from April 2010 to April 2014. Liday worked for appellants as their children’s live-in caretaker for a fixed salary of $3,000 per month. After a bench trial, the trial court found Liday was a “personal attendant” under Wage Order No. 15, 2001 (Cal. Code Regs., tit. 8, § 11150 (Wage Order 15)). It also found Liday’s salary did not compensate her at the statutory minimum wage for all the hours it found she had worked. Appellants do not contest the trial court’s finding that Liday worked more hours than they had argued at trial, but they do challenge the propriety of the formula the court used to determine Liday’s unpaid minimum wages due from April 2010 through December 2013.

Before 2014, live-in domestic workers classified as “personal attendants” were exempt from California’s overtime requirements but were entitled to be paid at least the minimum wage for all hours worked. The Legislature passed the Domestic Workers Bill of Rights (DWBR) to provide personal attendants with overtime protection beginning January 1, 2014. Under that law, personal attendants cannot work more than nine hours per day or more than 45 hours per week unless paid one and one-half times their regular rate of pay for all hours worked in excess of those limits. (Lab. Code, § 1454.)

The DWBR applied only to the last three months of Liday’s employment. The trial court acknowledged Liday was exempt from overtime requirements for the period from 2010 through 2013. But, to calculate her unpaid minimum wages for that period, the court presumed Liday’s salary compensated her for a regular, nonovertime 45-hour workweek—the number of hours above which overtime is due under the 2014 law. It calculated Liday’s regular, hourly rate to be $15.38 by dividing her averaged weekly salary by 45 hours and concluded appellants owed Liday minimum wages at that rate for the hours she worked in excess of 45 per week.

Appellants argue the trial court erred when it presumed a 45-hour workweek to make this calculation because Liday was exempt from overtime. They assert the court should have divided Liday’s salary by the $8 per hour statutory minimum wage to determine how many hours Liday’s salary had covered and then ordered appellants to pay Liday for any uncompensated hours at $8 per hour. The difference is significant. Using the $15.38 per hour rate at a presumed 45 hours per week, the court found appellants owed Liday $265,720.26 in unpaid wages earned before 2014. Applying the minimum wage rate of $8 per hour to each hour the court found Liday worked, the amount drops to under $75,000.

Because personal attendants were exempt from overtime requirements before 2014, we conclude California law in effect at the time did not limit the number of hours a personal attendant’s salary could cover, except to require that it pay at least the minimum wage of $8 per hour for each hour worked. As the parties do not dispute the trial court’s finding that they did not agree to an hourly rate, and nothing in the record demonstrates they agreed Liday would work a set number of hours per week, the court erred when it presumed Liday’s monthly salary compensated her for only 45 hours of work per week. We thus reverse the judgment and remand to the trial court to recalculate the unpaid wages appellants owe Liday for work she performed from April 2010 through December 2013 applying an $8 per hour rate of pay for each hour she worked.

https://www.courts.ca.gov/opinions/documents/B283180.PDF

Vazquez v. Jan-Pro Franchising Int’l (9th Cir. 17-16096 9/24/19) Dynamex and Retroactivity

Certified Question to the California Supreme Court

The panel certified the following question of state law to the California Supreme Court: Does Dynamex Operations West Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018), apply retroactively?

http://cdn.ca9.uscourts.gov/datastore/opinions/2019/09/24/17-16096%20web%20order.pdf

Williams v. Sacramento River Cats Baseball Club, LLC (CA3 C086487 9/24/19) Common Law Failure to Hire

Plaintiff Wilfert Williams sued defendant Sacramento River Cats Baseball Club, LLC in a common law tort action for failing to hire him due to his race. His complaint also alleged discrimination under the Unruh and Ralph Civil Rights Acts and that defendant engaged in unfair business practices under Business and Professions Code section 17200. The trial court dismissed plaintiff’s complaint after sustaining defendant’s demurrer. Plaintiff stipulated the dismissal be entered without leave to amend.

Defendant asserts as a threshold matter that plaintiff lacks standing in this appeal given his stipulation in the trial court was tantamount to a nonappealable consent judgment and in any event, his causes of action fail on the merits. In the unpublished portion of this opinion, we reject defendant’s contention that plaintiff lacks standing to appeal but agree the trial court properly dismissed plaintiff’s causes of action for discrimination under the Unruh and Ralph Civil Rights Acts and for unfair business practices.

In the published portion of this opinion, we address plaintiff’s common law failure to hire claim. Central to that claim is the applicability of Tameny. (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167 (Tameny).) While we agree with the parties that failing to hire a prospective employee based on race violates public policy, specifically the Government Code as well as our state Constitution, that prospective employee’s remedies are grounded in the Fair Employment and Housing Act (the Act). Tameny on the other hand requires “the prior existence of an employment relationship” between the parties upon which to predicate a tort duty of care. (Miklosy v. Regents of University of California (2008) 44 Cal.4th 876, 900.) Because defendant did not owe plaintiff any duty, plaintiff cannot bring a failure to hire claim against defendant in a common law tort action and must instead proceed under the Act. Accordingly, we affirm the judgment of dismissal.

https://www.courts.ca.gov/opinions/documents/C086487.PDF

Gerawan Farming, Inc. v. Agricultural Labor Relations Bd. (CA5 F076148 9/24/19) ALRA

After agricultural employer Gerawan Farming, Inc. (Gerawan) and the United Farm Workers Union (UFW) failed to agree on the terms of an initial collective bargaining agreement (CBA), the Agricultural Labor Relations Board (Board), at the UFW’s request, ordered the parties to “mandatory mediation and conciliation” (MMC) under the MMC statutory scheme, Labor Code section 1164 et seq. In the MMC process, the parties present their disputed and undisputed issues to the mediator, who takes evidence and hears argument on the disputed issues in recorded proceedings, but retains discretion to go off the record at any time to clarify or resolve issues informally. (Cal. Code Regs., tit. 8, § 20407, subd. (a)(2).) After the mediation period expires, if the parties do not “resolve the issues to their mutual satisfaction,” the mediator submits a “report” to the Board that resolves all of the parties’ issues and establishes the CBA’s final terms. The grounds for the mediator’s determination of disputed issues must be stated in the report and supported by the record. (§ 1164, subds. (c) & (d).) When the report becomes the Board’s final order, it establishes the terms of an imposed, binding CBA. (§ 1164.3, subds. (a)-(e).)

Four mediation sessions were held, two of which were on-the-record sessions in which witness testimony was transcribed by a court reporter. Lupe Garcia (Garcia), a Gerawan employee, attempted to attend and observe an early MMC proceeding, but the mediator denied his request. Garcia asked the Board to decide whether he and other Gerawan employees had the right to attend on-the-record MMC proceedings under the federal and state Constitutions. The Board issued a decision in which it held the public does not have a constitutional right to attend MMC proceedings. (Gerawan Farming, Inc. (2013) 39 ALRB No. 13.) Gerawan filed a declaratory relief action in superior court, seeking a judicial declaration that the Board’s decision violates the right of public access protected under the federal and state Constitutions. Garcia intervened in the same action and filed a complaint in intervention seeking the same relief.

In this appeal by Gerawan and Garcia, we are called to review simultaneous summary judgment motions filed by Gerawan, Garcia, and the Board, on the issue of whether there is a public right of access to on-the-record MMC proceedings under the federal and state Constitutions, and whether Gerawan has standing to challenge the Board’s decision. The trial court found that while Gerawan had standing, the Board’s decision was not unconstitutional, as the public does not have a constitutional right of access to MMC proceedings. The trial court granted summary judgment in favor of the Board, and against Gerawan and Garcia, and entered judgment in the Board’s favor. Gerawan and Garcia challenge the trial court’s ruling, arguing the Board’s decision is unconstitutional, while the Board renews its argument that Gerawan has no standing. While we conclude Gerawan lacks standing, we agree with the trial court that there is no right of access under the federal and state Constitutions to on-the-record MMC proceedings. Accordingly, we affirm the judgment.

https://www.courts.ca.gov/opinions/documents/F076148.PDF

Doe v. Occidental College (CA2/7 B284707, filed 8/27/19, pub. ord. 9/23/19) Title IX/Sexual Misconduct

Occidental College expelled John Doe for violating its sexual misconduct policy after he sexually assaulted Jane Doe. An external adjudicator found Jane was incapacitated within the meaning of the policy because she was intoxicated and unable to make “an informed and rational decision to engage in sexual activity.” The adjudicator found John was also intoxicated; in fact, so intoxicated he did not know Jane was incapacitated. Under Occidental’s policy, however, John’s intoxication did not diminish his responsibility to obtain Jane’s consent, and John violated the policy because he should have known Jane was incapacitated. The adjudicator concluded a sober person in John’s position should have known Jane was too drunk to consent.

After unsuccessfully appealing within the college, John filed a petition for writ of administrative mandate in the trial court. The trial court denied the petition and entered judgment in favor of Occidental. John argues on appeal that he did not have a fair disciplinary hearing and that the evidence did not support the adjudicator’s findings. We affirm.

https://www.courts.ca.gov/opinions/documents/B284707.PDF

Bills Signed by Governor (9/20/19)

AB 894 by Assemblymember Miguel Santiago (D-Los Angeles) – Attorney General: directors and employees: exemption from civil service.
AB 1223 by Assemblymember Joaquin Arambula (D-Fresno) – Living organ donation.
AB 1452 by Assemblymember Patrick O’Donnell (D-Long Beach) – State teachers’ retirement.
AB 1651 by Assemblymember Jose Medina (D-Riverside) – Licensed educational psychologists: supervision of associates and trainees.
SB 782 by the Committee on Labor, Public Employment and Retirement – Public employees’ and judges’ retirement: administration.

Southern Cal. Pizza Co., LLC v. Certain Underwriters, etc. (CA4/3 G056243, filed 8/27/19, pub. ord. 9/20/19) Wage and Hour/EPLI Insurance Coverage

This insurance coverage lawsuit calls on us to interpret the scope of an employment practices liability insurance policy (Policy) exclusion relating to “wage and hour or overtime law(s).” In the context of a demurrer by defendant Certain Underwriters at Lloyd’s, London Subscribing To Policy Number 11EPL-20208, the trial court interpreted the term to encompass all provisions of the Labor Code. This led the court to sustain defendant’s demurrer, concluding all causes of action in the underlying employment lawsuit against plaintiff Southern California Pizza Company, LLC, fell within the scope of the Policy exclusion.

Using well-established insurance policy interpretation principles, we find the wage and hour law language of the exclusion is more narrow in scope than stated by the trial court. It concerns laws regarding duration worked and/or remuneration received in exchange for work. Applying that interpretation, and taking into account the Policy’s general coverage, we conclude many of the disputed underlying lawsuit claims are potentially subject to coverage. Thus, the trial court erred in sustaining defendant’s demurrer and we reverse the judgment.

https://www.courts.ca.gov/opinions/documents/G056243.PDF

Bill Signed by Governor (9/18/19)

AB 5 by Assemblymember Lorena Gonzalez (D-San Diego) – Worker status: employees and independent contractors. A signing message can be found here.

Alaama v. Presbyterian Intercommunity Hospital, Inc. (CA2/7 B288360, filed 8/28/19, pub. ord. 9/18/19) Termination of Staff Privileges/Hearing

Business and Professions Code section 809.1 requires a hospital peer review board to give a physician notice and the right to request a hearing when the hospital revokes or terminates the physician’s membership, staff privileges, or employment for a “medical disciplinary cause or reason.” In 2016 Presbyterian Intercommunity Hospital, Inc., doing business as PIH Health Hospital-Whittier, and PIH Health Physicians (collectively, the hospital) terminated Dr. Abdulmouti Alaama’s privileges and staff membership without giving him a hearing. Dr. Alaama filed a complaint that included causes of action seeking a writ of administrative mandate, alleging, among other things, the hospital denied him the right to a hearing before terminating his privileges. The trial court denied the petition. Because the hospital terminated Dr. Alaama’s privileges and staff membership for a “medical disciplinary cause or reason,” we reverse.

https://www.courts.ca.gov/opinions/documents/B288360.PDF

ZB, N.A. v. Superior Court (SC S246711 9/12/19) PAGA/Civil Penalties

Under the Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.), an employee may seek civil penalties for Labor Code violations committed against her and other aggrieved employees by bringing –– on behalf of the state –– a representative action against her employer. (§ 2699, subd. (a).) In Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian), we held that a court may not enforce an employee’s alleged predispute waiver of the right to bring a PAGA claim in any forum. We also found that where such a waiver appears in an employee’s arbitration agreement, the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.) does not preempt this state law rule.

This case concerns a PAGA action seeking civil penalties under Labor Code section 558. Brought by real party in interest Kalethia Lawson, the action named as defendants Lawson’s employer, ZB, N.A. — with whom she agreed to arbitrate all employment claims and forego class arbitration — and its parent company, Zions Bancorporation (collectively, ZB). Before the enactment of the PAGA, section 558 gave the Labor Commissioner authority to issue overtime violation citations for “a civil penalty as follows: [¶] (1) For any initial violation, fifty dollars ($50) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages. [¶] (2) For each subsequent violation, one hundred dollars ($100) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages.” (Id., subd. (a), italics added.) We granted review to decide whether Iskanian controls, and the FAA has no preemptive force, where an aggrieved employee seeks the “amount sufficient to recover underpaid wages” in a PAGA action.

But to resolve this case we must answer a more fundamental question: whether a plaintiff may seek that amount in a PAGA action at all. The Court of Appeal thought so. It concluded section 558’s civil penalty encompassed the amount for unpaid wages, and Lawson’s claim for unpaid wages could not be compelled to arbitration under Iskanian. It accordingly ordered the trial court below to deny ZB’s motion to arbitrate that portion of her claim.

What we conclude is that the civil penalties a plaintiff may seek under section 558 through the PAGA do not include the “amount sufficient to recover underpaid wages.” Although section 558 authorizes the Labor Commissioner to recover such an amount, this amount –– understood in context –– is not a civil penalty that a private citizen has authority to collect through the PAGA. ZB’s motion concerned solely that impermissible request for relief. Because the amount for unpaid wages is not recoverable under the PAGA, and section 558 does not otherwise permit a private right of action, the trial court should have denied the motion. We affirm the Court of Appeal’s decision on that ground. On remand, the trial court may consider striking the unpaid wages allegations from Lawson’s complaint, permitting her to amend the complaint, and other measures.

https://www.courts.ca.gov/opinions/documents/S246711.PDF

Bills Signed by Governor (9/12/19)

AB 34 by Assemblymember James Ramos (D-Highland) – Pupils: bullying and harassment prevention information.
AB 267 by Assemblymember Kansen Chu (D-San Jose) – Employment of infants: entertainment industry.
AB 1607 by Assemblymember Tasha Boerner Horvath (D-Encinitas) – Gender discrimination: notification.

Pizzella v. Seward Ship’s Drydock (9th Cir. 18-71216 9/11/19) Occupational Safety and Health Review Commission

The panel granted the Secretary of Labor’s petition for review of a decision of the Occupational Safety and Health Review Commission interpreting a provision of the Respiratory Protection Standard promulgated under the Occupational Safety and Health Act of 1970, 29 C.F.R. § 1910.134.

The panel adopted the Secretary’s interpretation of § 1910.134(d)(l)(iii), requiring covered employers to evaluate the respiratory hazards at their workplaces whenever there is the “potential” for overexposure of employees to contaminants, in order to determine whether respirators are “necessary to protect the health” of employees. The panel held that the text, structure, purpose, and regulatory history of the Standard all pointed in the same direction, and the panel adopted the Secretary’s interpretation without resorting to Auer deference.

http://cdn.ca9.uscourts.gov/datastore/opinions/2019/09/11/18-71216%20(2).pdf

Rudel v. Hawaii Mgmt. Alliance Ass’n (9th Cir. 17-17395, 17-17460 9/11/19) ERISA

The panel affirmed the district court’s judgment holding that two Hawaii statutes restricting health insurers’ subrogation recovery rights were saved from preemption under the Employee Retirement Income Security Act and provided the relevant rule of decision in a federal ERISA action to determine the validity of an insurer’s lien on tort settlement proceeds.

The insurer paid health insurance benefits under an ERISA plan for plaintiff’s medical care after a vehicle accident. Plaintiff also received a payment in a tort settlement for general damages. The insurer asserted a right to a portion of the tort settlement, and placed a lien, under a reimbursement provision of the ERISA plan.

The Hawaii statutes prohibited insurance providers from seeking reimbursement for general damages from third-party settlements. They thus contradicted the terms of the ERISA plan, which provided that the insurer could be reimbursed for general damages.

Plaintiff filed suit in state court, and the insurer removed the case to federal court. The district court denied plaintiff’s motion for a remand and granted partial summary judgment in favor of plaintiff.

The panel held that, under ERISA § 502, asserted remedies and causes of action that conflict with ERISA’s civil enforcement scheme are deemed preempted. When a claim is removed from state to federal court, the state law claim is reconfigured as a federal ERISA cause of action. ERISA § 514 expressly preempts state laws that relate to any employee benefit plan but saves from preemption any state law that regulates insurance, banking, or securities. If a case is properly before a federal court under § 502, then a state statute that is saved from preemption under § 514 and does not conflict with § 502, can supply the relevant rule of decision. The panel held that § 502(a) completely preempted the Hawaii statutes, allowing the case to be removed to federal court. The panel concluded that plaintiff could have brought his claim under § 502(a) because, in substance, the claim was one to recover benefits or to clarify his rights to benefits pursuant to the ERISA plan. Joining the Third, Fourth, and Fifth Circuits, the panel held that challenges to a plan’s right to reimbursement are properly characterized as § 502(a) claims. The panel also concluded that no other independent legal duties were implicated by the insurer’s actions. Accordingly, plaintiff’s state law claims were completely preempted, and the district court properly denied his remand motion.

The panel held that the Hawaii statutes related to an employee benefit plan but were saved from express preemption under § 514 because they regulated insurance. The panel concluded that the Hawaii statutes were specifically directed toward entities engaged in insurance and substantially affected the risk pooling arrangement between the insurer and the insured.

The panel held that the Hawaii statutes provided the rule of decision for the newly reconfigured federal ERISA action because the statutes did not impermissibly expand the scope of liability under § 502(a). The panel concluded that the Hawaii statutes operated to define the scope of a benefit provided by the ERISA plan and did not create additional remedies not permitted by ERISA. Thus, the Hawaii statutes were not conflict preempted and could provide the rule of decision.

http://cdn.ca9.uscourts.gov/datastore/opinions/2019/09/11/17-17395.pdf

PHYLLIS W. CHENG, ESQ .

CALIFORNIA CASE LAW ALERT