CALIFORNIA CASE LAW ALERT

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Muldrow v. St. Louis (US 22-193 oral arg. transcript 12/6/23) Reach of Title VII

Title VII of the Civil Rights Act of 1964 makes it unlawful for an employer "to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual" with respect to "compensation, terms, conditions, or privileges of employment" on the basis of race, color, religion, sex, or national origin. 42 U.S.C. § 2000e-2(a)(l). The Eighth Circuit below followed binding circuit precedent to hold that discriminatory job transfers (and denials of requested transfers) are lawful under Title VII when they do not impose "materially significant disadvantages" on employees.

The question presented is: Does Title VII prohibit discrimination as to all "terms, conditions, or privileges of employment," or is its reach limited to discriminatory employer conduct that courts determine causes materially significant disadvantages for employees?

Transcript

Audio

Decision Below: 30 F.4th 680 (8th Cir. 2022)

City of Whittier v. Everest Nat. Ins. Co. (CA2/1 B321450 par. pub. 12/6/23) Labor Code section 1102.5 Retaliation and Indemnification

This appeal presents a question of first impression: whether Insurance Code section 533 (section 533), under which “[a]n insurer is not liable for a loss caused by the wilful act of the insured,” bars indemnification for claims under Labor Code section 1102.5. Labor Code section 1102.5 prohibits, inter alia, retaliation against employees for reporting activity they have reasonable cause to believe is unlawful, or for refusing to participate in activity that actually is unlawful.

This is an important question whose answer will influence enforcement of our employment laws. How so? Retaliation claims are the most common employment claims in California. For fiscal years 2016 through 2022, retaliation claims of all types were the majority of charges filed in California with the United States Equal Employment Opportunity Commission (EEOC). (See EEOC, FY 2009-2022 EEOC Charge Receipts for CA.) In 2019, retaliation was the most common basis for right-to-sue requests filed with the California Department of Fair Employment and Housing (DFEH). (DFEH, 2019 Annual Report, at p. 9.)

The availability of insurance is a key component of enforcing our employment laws and of an ordered workplace. The availability of insurance can ameliorate risk of collection against potentially judgment-proof employers while also providing expeditious compensation via settlement. Insurance also ameliorates financial risk to employers choosing to defend employment claims they believe are weak.

We decide this question upon the trial court’s grant of summary judgment against the insured City of Whittier (the City), in favor of its insurers, respondents Everest National Insurance Company (Everest) and Starr Indemnity & Liability Company (Starr). The City sought indemnification for settlement of a lawsuit alleging retaliation under Labor Code section 1102.5. In that lawsuit, police officers alleged retaliatory discipline when they objected to, and refused to comply with, a purported illegal citation and arrest quota system and the use of shift averaging to compare officers’ arrest counts in evaluating their job performance. The trial court concluded the police officers’ complaint necessarily involved willful conduct, thus barring indemnification under section 533.

We disagree. As we explain in our Discussion, post, the parties rely on jurisprudence, first developed in underlying sexual molestation and assault cases, that equates “wilful” with inherently harmful or intentional. Because we conclude not all Labor Code section 1102.5 claims involve necessarily willful conduct, but rather some involve conduct more akin to negligence, the trial court erred when it found to the contrary in granting summary judgment in favor of Everest and Starr.

In the unpublished portion of this opinion, we agree with Starr’s alternative argument that its specific policy language does not obligate it to indemnify the City for the settlement.

Accordingly, we reverse the judgment as to Everest, and affirm the judgment as to Starr under Starr’s alternative argument.

https://www.courts.ca.gov/opinions/documents/B321450.PDF

Baglione v. Health Net of Cal. (CA2/8 B319659, filed 11/27/23, pub. 12/6/23) ERISA

Health Net of California, Inc. (Health Net) appeals the trial court’s order denying its motion to compel arbitration of the breach of contract and bad faith causes of action brought against it by its insured, plaintiff Salvatore Baglione. The trial court found that the agreement between Health Net and plaintiff’s employer, the County of Santa Clara (County), did not satisfy the disclosure requirements of Health and Safety Code section 1363.1, rendering the arbitration provision of plaintiff’s enrollment form unenforceable. Health Net contends it satisfied those disclosure requirements on the enrollment form signed by plaintiff.

We hold that the enrollment form does not comply with the requirements of section 1363.1. We also agree with the trial court that the County’s agreement with Health Net is not compliant either, and an arbitration agreement, which is part of a health plan, is not enforceable unless both the enrollment form and the County agreement are compliant. Accordingly, we affirm the trial court’s order.

https://www.courts.ca.gov/opinions/documents/B319659.PDF

Argueta v. Worldwide Flight Services, Inc. (CA2/8 B306910, filed 11/8/23, pub. 12/5/23) Sexual Harassment | Prejudicial Error

After the jury returned a defense verdict in appellant Eunices Argueta’s action for sexual harassment against Worldwide Flight Services, Inc. (Worldwide), she filed a motion for a new trial and a motion for judgment notwithstanding the verdict (JNOV). The trial court denied both motions. Argueta now appeals, contending the trial court’s admission of evidence of the substance of other employees’ complaints about her to Worldwide was erroneous and warrants a new trial. She also contends there is no substantial evidence to support the jury’s finding that Worldwide employee Dzung Nguyen’s acts of sexual harassment were not severe or pervasive. On these grounds she contends a new trial or a finding in her favor is required. We agree admission of the substance of the complaints against Argueta was prejudicial error and reverse the trial court’s denial of her motion for a new trial. Accordingly, we need not and do not consider her JNOV motion.

https://www.courts.ca.gov/opinions/documents/B306910.PDF

Beltran v. Hard Rock Hotel Licensing, Inc. (CA4/3 G062736 12/5/23) Sexual Harassment | Summary Judgment

Plaintiff Stephanie Beltran, a server, worked at the Hard Rock Hotel in Palm Springs. She alleged she was sexually harassed by her superior and sued multiple entities and individuals for workplace sexual harassment under the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.) (FEHA), among other causes of action. The trial court eventually granted summary judgment against three of the defendants. Below, we review each cause of action in turn.

As to the individual defendant, Donna Shepherd, we find no personal liability and affirm summary judgment in her favor. As to the entity defendants, we shall affirm summary adjudication in their favor as to most, but not all, of Beltran’s 15 claims.

In the published portion of the opinion, we shall discuss the adoption of Government Code section 12923 and its impact on hostile work environment claims, particularly in the context of summary judgment motions. In light of this statute, we conclude that because the trial court used outdated standards to conclude no triable issue of material fact existed, summary adjudication should not have been granted as to the hostile work environment cause of action. We also discuss the deeply problematic misuse of the separate statement of material facts by all parties and how separate statements can be brought into compliance with existing law.

In the remainder of the opinion, we reverse in part and remand on Beltran’s claims for failure to prevent sexual harassment under FEHA, intentional infliction of emotional distress, and for violation of the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.). The judgment is affirmed as to the remaining causes of action.

https://www.courts.ca.gov/opinions/documents/G062736.PDF

Velasquez v. Workers' Comp. Appeals Bd. (CA2/6 B321638 12/5/23) Workers’ Comp. Employer

Our Workers’ Compensation Act broadly defines employment and must be liberally construed to protect injured workers. Persons “rendering service for another” are generally presumed to be employees. (Lab. Code, § 3357.) But the Legislature has expressly excluded from the definition of “employer” any private, nonprofit organization sponsoring a person who, as a condition of sentencing, performs services for the organization. (§ 3301, subd. (b).) The Legislature did so to encourage these organizations to provide drug and alcohol rehabilitation programs at no cost to convicted defendants who could not otherwise afford treatment as an alternative to their incarceration.

As a condition of probation, Jose Velasquez entered a residential rehabilitation program sponsored by The Salvation Army. He was injured while working in its warehouse. The Workers’ Compensation Appeals Board (the Board) concluded Velasquez was not employed by either The Salvation Army or the County of Santa Barbara (the County), and denied workers’ compensation benefits.

We issued a writ of review. (§ 5950.) We conclude: 1) The Salvation Army is statutorily excluded from being an employer for workers’ compensation purposes under section 3301; and 2) the record was inadequately developed during the administrative proceedings to determine whether the County was Velasquez’s employer. The latter issue must be remanded to the Board for further consideration. Accordingly, we affirm in part, annul in part, and remand the matter for further proceedings.

https://www.courts.ca.gov/opinions/documents/B321638.PDF

Sanders v. County of Ventura (9th Cir. 22-55663 11/30/23) FLSA Op-Out Fees

The panel affirmed the district court’s grant of summary judgment to the defendant in an action brought under the Fair Labor Standards Act by employees who opted out of their union- and employer-sponsored health plans. The employees received a monetary credit, part of which was deducted as a fee that was then used to fund the plans from which they had opted out. The employees argued that this opt-out fee should be treated as part of their “regular rate” of pay for calculating overtime compensation under the Act. The panel held that the opt-out fees were not part of the employees’ “regular rate” of pay, but rather were exempted as “contributions irrevocably made by an employer to a trustee or third person pursuant to a bona fide plan for providing” health insurance under 29 U.S.C. § 207(e)(4).

https://cdn.ca9.uscourts.gov/datastore/opinions/2023/11/30/22-55663.pdf

Thomas v. The Regents of the University of Cal. (CA1/2 A164550 11/29/23) Sexual Harassment | Civ. Code section 51.9

Renee Thomas was recruited to play on the women’s soccer team at the University of California, Berkeley (UCB), played on the team during her freshman year and, in the spring of that year, was released from the team. She sued UCB, the head coach of the women’s soccer team, and the Director of Athletics (collectively, defendants), first in federal court and then in state court. The present appeal is from the judgment in favor of the defendants entered after the trial court sustained demurrers to all Thomas’s causes of action without leave to amend. As we will explain, we conclude Thomas sufficiently pleaded a cause of action for sexual harassment in violation of Civil Code section 51.9 against the head coach and UCB and should have been granted leave to amend her complaint to clarify the statutory basis of this claim. In all other respects, we will affirm the trial court’s decision.

https://www.courts.ca.gov/opinions/documents/A164550.PDF

State of Cal. v. Alco Harvest (CA2/6 B327137 11/22/23) H-2A Temporary Agricultural Program | Foreign Workers

The H-2A Temporary Agricultural Program allows employers to recruit foreign agricultural workers when the domestic labor market cannot meet employers’ needs. The United States Department of Labor (DOL) must certify an employer’s participation in the H-2A program. This process requires the employer, among other things, to submit a “job order” describing “the material terms and conditions” of the jobs for which it seeks foreign workers.

Plaintiff and respondent Jesus Guzman is a foreign worker hired by defendant and appellant Alco Harvesting LLC to work at farms owned by defendant and appellant Betteravia Farms. He later brought employment claims against appellants. Alco moved to compel arbitration pursuant to an arbitration agreement presented to and signed by Guzman at his orientation. The trial court found the agreement void and denied the motion. It considered arbitration a “material term and condition” of Guzman’s employment, and as such, a job requirement that Alco should have disclosed during the H-2A certification process.

We affirm.

https://www.courts.ca.gov/opinions/documents/B327137.PDF

Mattson Technology, Inc. v. Applied Materials, Inc. (CA1/5 A165378M, filed 11/1/23, mod. rehrn. den. 11/20/23) Trade Secrets

Appellant’s petition for rehearing is DENIED. The opinion filed on November 1, 2023, shall be MODIFIED as follows:

On page two, the following sentence in the third full paragraph (Background A.) is deleted:

“Many were highly placed executives or engineers; 10 were from Lai’s Dielectric Deposition Products group.”

The sentence is replaced as follows:

“Many were highly placed executives or engineers.”

On page 10, the word “trial” is inserted into the first sentence of the first full paragraph so that the sentence reads as follows:

“The trial court reasonably found otherwise.”

On page 10, the following sentence in the second full paragraph is deleted:

“And he was one of numerous Applied employees Mattson had recently recruited, many of whom worked in an area it targeted for expansion and many of whom wiped their Applied phones before leaving and tried to conceal their new employer’s identity.”

The sentence is replaced as follows:

“And he was one of numerous Applied employees Mattson had recently recruited, many of whom wiped their Applied phones before leaving and tried to conceal their new employer’s identity.”

The modifications make no change to the judgment.

-----

After many years at Applied Materials, Inc. (Applied), Canfeng Lai left for a new job at Mattson Technology, Inc. (Mattson). First, however, he emailed himself a number of files containing Applied trade secrets. Applied sued both Lai and Mattson for violating the Uniform Trade Secrets Act (Civ. Code, § 3426 et seq.; the Act) and, as against Lai, for breaching his employment contract. The court granted Lai’s motion to compel arbitration under the arbitration clause in his employment contract but rejected Mattson’s claim that it, too, was entitled to arbitrate. It then denied Mattson’s motion to stay the litigation pending Lai’s arbitration and issued a preliminary injunction to protect Applied’s confidential information pending the proceedings.

Mattson asserts all of these ruling were erroneous. We agree only in part. The court correctly found that Mattson, as a nonparty to Lai’s employment contract with Applied, could not compel Applied to arbitrate against it. It also properly issued the preliminary injunction. However, it erred in declining to stay the litigation against Mattson pending arbitration of its claims against Lai.

https://www.courts.ca.gov/opinions/documents/A165378M.PDF

Martin v. Board of Trustees of the Cal. State University (CA2/8 B303509 11/14/23) Wrongful Termination

This is an appeal from a trial court order granting Respondent the Board of Trustees of California State University’s (CSU) summary judgment motion against Appellant Jorge Martin (Martin). We affirm. Martin has not adduced sufficient evidence to dispute CSU’s legitimate reason for his termination. Similarly, he presents insufficient evidence to create a dispute of fact regarding his hostile work environment claim.

https://www.courts.ca.gov/opinions/documents/B303509.PDF

Lurner v. American Golf Corp. (CA4/3 G061267 11/14/23) ADA, Unruh Act, Disabled Persons Act

Plaintiff Jefferey Lurner was a member of Marbella Golf and Country Club (Marbella) where he played golf. Defendants American Golf Corporation and Root’N USA Corporation own and operate Marbella. At some point after plaintiff joined Marbella, he was diagnosed with pulmonary arterial hypertension (PAH). Given this disability, plaintiff claimed he had to drive his golf cart to wherever his ball landed on the golf course. But for safety reasons, Marbella had rules governing where golfers could drive their golf carts. Some of those restrictions applied to all members, including golfers with disabilities. Plaintiff brought the instant action alleging defendants failed to accommodate his disability and denied him full and equal enjoyment of the golf course.

After the case proceeded to trial, the jury returned a verdict in favor of defendants. The jury found defendants did not “discriminate against or deny [plaintiff] full and equal access to and enjoyment of accommodations or advantages or facilities or services at [Marbella] at any time after May 14, 2016.” The court subsequently denied plaintiff’s motion for judgment notwithstanding the verdict (JNOV) and motion for new trial.

Plaintiff appeals from the judgment and the court’s denial of his JNOV motion and motion for new trial. He contends Marbella’s relevant policies were facially discriminatory. He also argues there was no substantial evidence to support the verdict, and the court erred by finding defendants modified their policies for plaintiff. Finally, plaintiff claims the court erred by allowing defendants’ expert witness to opine on the application of the law to the facts of this case.

We disagree with plaintiff’s contentions. Assuming, without deciding, Marbella’s policies had a discriminatory effect in practice, there was substantial evidence defendants modified their policies for plaintiff. Any error regarding the testimony of defendants’ expert witness also did not result in a miscarriage of justice. We therefore affirm the judgment.

https://www.courts.ca.gov/opinions/documents/G061267.PDF

Woodworth v. Loma Linda University Medical Center, 93 Cal. App. 5th 1038 (2023), review granted, 2023 WL 7203349 (Mem) (Nov. 1, 2023); S281717/E072704 PAGA

Petition for review after affirmance in part and reversed in part. The court ordered briefing deferred pending decision in Estrada v. Royalty Carpet Mills, Inc., S274340, which presents the following issue: Do trial courts have inherent authority to ensure that claims under the Private Attorneys General Act (Cal. Lab. Code § 2698 et seq.) will be manageable at trial, and to strike or narrow such claims if they cannot be managed?; and Camp v. Home Depot U.S.A., Inc., S277518, which presents the following issue: Under California law, are employers permitted to use neutral time-rounding practices to calculate employees' work time for payroll purposes? Holding for lead case.

Docket

Decision Below

Su v. Bowers (9th Cir. 22-15378 10/25/23) Equal Access to Justice Act

The panel affirmed the district court’s denial of attorneys’ fees and nontaxable costs under the Equal Access to Justice Act (“EAJA”), and remanded the district court’s award of taxable costs.

The U.S. Department of Labor brought the underlying lawsuit under the Employee Retirement Income Security Act, alleging that Appellants Brian Bowers and Dexter Kubota sold their company to an employee stock ownership plan (ESOP) at an allegedly inflated value. The government’s case hinged on a single valuation expert, who opined that the plan overpaid for that company. The district court rejected the opinion, and the government lost a bench trial. The district court denied Appellants’ request for attorneys’ fees and nontaxable costs under EAJA, finding that the government’s litigation position was “substantially justified” and that it did not act in bad faith.

The panel held that the district court did not abuse its discretion in concluding that the government’s position at trial was substantially justified, and in denying attorneys’ fees and nontaxable costs under EAJA. The panel noted that the government could not rely on red flags alone, such as the “suspicious” circumstances of the ESOP transaction, to defend its litigation position as “substantially justified.” The government, however, did not know heading to trial that the district court would reject the expert’s entire opinion as unreliable. The panel further held that it was constrained by the deferential standard of review, and it could not say that the district court abused its discretion in finding that the government’s position was substantially justified at the time of trial. Given the panel’s holding that the government’s position was substantially justified, the district court did not clearly err in finding that the government did not litigate in bad faith.

The panel held that the district court abused its discretion in reducing the award of taxable costs because it relied on a clearly erroneous finding of fact in reducing the magistrate judge’s recommended award of taxable costs.

Judge Collins concurred with the majority’s decision to vacate the district court’s order reducing the award of taxable costs, and dissented from the majority’s decision to affirm the denial of EAJA attorneys’ fees. He would reverse the district court’s determination that the government’s position in this case was substantially justified, and would remand for the district court to consider the government’s remaining argument that none of the Appellants satisfied the “net worth” requirements of EAJA.

https://cdn.ca9.uscourts.gov/datastore/opinions/2023/10/25/22-15378.pdf

DeFirore v. SOC LLC (9th Cir. 21-15261 10/25/23) Federal Officer Removal Statute

The panel reversed the district court’s order remanding to state court an action against private contractors providing war-zone security services to the Department of Defense, brought by a group of their employees who guarded bases, equipment, and personnel in Iraq.

The guards alleged that their working conditions violated the contractors’ recruiting representations, their employment contracts, and the Theater Wide Internal Security Services II (TWISS II) contract between the contractors and the Department of Defense.

The panel held that the contractors met the limited burden imposed by the federal officer removal statute, 28 U.S.C. § 1442(a)(1), which permits removal of a civil action against “any officer (or any person acting under that officer) of the United States or of any agency thereof . . . for or relating to any act under color of such office.” To satisfy this requirement, a removing private entity must show that (a) it is a “person” within the meaning of the statute; (b) there is a causal nexus between its actions, taken pursuant to a federal officer’s directions, and the plaintiff’s claims; and (c) it can assert a colorable federal defense.

There was no dispute that the contractors, as corporations, were “persons” for purposes of § 1442(a)(1).

The panel held that the contractors sufficiently pleaded that there was a causal nexus between their actions and the guards’ claims. First, the contractors “acted under” a federal officer because, under common-law agency principles, they were independent contractors serving as the government’s agents, rather than acting as non-agent service providers. The panel concluded that the TWISS II contract’s subordination of the contractors to U.S. military command in the performance of their duties in Iraq sufficed to render them Department of Defense agents. Second, there was a causal connection between the actions of the contractors as agents of the government and the guards’ claims because the actions the contractors took which gave rise to the guards’ claims resulted from their work for the Department of Defense.

The panel further held that the contractors sufficiently alleged a colorable federal defense of compliance with the federal regulations incorporated into the TWISS II contract. Agreeing with the Fifth Circuit, the panel held that the question was not whether the contractors’ asserted federal defense was meritorious, but whether that defense was immaterial and made solely for the purpose of obtaining jurisdiction or was wholly insubstantial and frivolous. The panel remanded the case to the district court for further proceedings.

Dissenting, Judge Collins wrote that the contractors’ removal notice failed to adequately plead a colorable federal defense because the removal notice did not allege sufficient facts to support the defense of compliance with the TWISS II contract’s incorporation of federal regulations, and this defense applied only to a subset of the guards’ claims. Further, the contractors did not satisfy the causal nexus requirements because it is not sufficient only to show that a defendant contractor is an “agent” of the Government and that, absent that contractual relationship, the plaintiff’s claim would never have arisen.

https://cdn.ca9.uscourts.gov/datastore/opinions/2023/10/25/21-15261.pdf

Snoeck v. ExakTime Innovations (CA2/3 B321566, filed 10/2/23, ord. pub. 10/25/23) FEHA | Reduction in Attorneys’ Fees

Plaintiff Steve Snoeck appeals from the trial court’s order awarding him $686,795.62 in attorney fees after the court applied a .4 negative multiplier to its $1,144,659.36 adjusted lodestar calculation “to account for [p]laintiff’s counsel’s . . . lack of civility throughout the entire course of this litigation.” The court awarded Snoeck fees after he prevailed on one of his six causes of action against his former employer ExakTime Innovations, Inc. on his complaint for disability discrimination under the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.) and related causes of action. The jury awarded Snoeck $130,088 in damages on his claim ExakTime failed to engage in a good faith interactive process with him. On Snoeck’s appeal, we affirmed that verdict.

Snoeck contends the $457,863 reduction in attorney fees based on his counsel Perry Smith’s incivility must be reversed for several reasons. In essence, he argues that—because the fee reduction was not associated with any costs—the court impermissibly applied it to punish Smith and had no legal authority to shift attorney fees to defendant as a sanction. ExakTime argues the trial court’s downward adjustment to the lodestar sum was permissible under Ketchum v. Moses (2001) 24 Cal.4th 1122 (Ketchum) because civility is an aspect of an attorney’s skill, as this District stated in Karton v. Ari Design & Construction, Inc. (2021) 61 Cal.App.5th 734 (Karton) and on which the trial court relied.

We agree a trial court may consider an attorney’s pervasive incivility in determining the reasonableness of the requested fees. A court may apply, in its discretion, a positive or negative multiplier to adjust the lodestar calculation—a reasonable rate times a reasonable number of hours—to account for various factors, including attorney skill. (Ketchum, supra, 24 Cal.4th at pp. 1131–1134; Karton, supra, 61 Cal.App.5th at pp. 744–745, 747.) The record before us amply supports the trial court’s finding that plaintiff’s counsel was repeatedly, and apparently intentionally, uncivil to defense counsel—and to the court—throughout this litigation. We thus find no abuse of discretion and affirm.

https://www.courts.ca.gov/opinions/documents/B321566.PDF

Doe v. Atkinson (CA1/1 A166145 10/19/23) Title IX | Attorneys’ Fees

John Doe was suspended for a year from the University of California, Davis (UC Davis), for violating its policy against sexual violence and harassment. He challenged the decision by filing a petition for a writ of administrative mandate against the Regents of the University of California (Regents) and Dr. Sheri Atkinson, Ed.D., the associate vice chancellor of student affairs at UC Davis (collectively, respondents). The trial court issued a writ overturning the one-year suspension, concluding that it was “objectively unreasonable” in light of Doe’s conduct.

Doe then unsuccessfully moved for attorney fees under Code of Civil Procedure section 1021.5 (section 1021.5) and Government Code section 800 (section 800). In this appeal from the order denying attorney fees, he claims the trial court erred by determining he was not entitled to an award under either statute.

We conclude the trial court properly denied attorney fees under section 1021.5 on the basis that the litigation did not confer “a significant benefit . . . on the general public or a large class of persons.” But we also conclude the court applied an incorrect legal standard in denying fees under section 800, which authorizes an award of up to $7,500 if the challenged administrative determination “was the result of arbitrary or capricious action or conduct by a public entity or an officer thereof.” In doing so, we hold that—contrary to the court’s supposition—all aspects of an administrative proceeding need not be arbitrary or capricious to justify attorney fees under section 800. Thus, we affirm the denial of fees under section 1021.5, vacate the denial of fees under section 800, and remand for the court to reconsider whether respondents engaged in sufficient arbitrary or capricious conduct to warrant a section 800 award.

https://www.courts.ca.gov/opinions/documents/A166145.PDF

Arce v. The Ensign Group, Inc. (CA2/5 B317161 9/19/23) PAGA | Standing

Plaintiff and appellant Cecilia Arce claims the nursing facility where she worked as an aide for nine years was so chronically understaffed—and she was so persistently overworked—that she never took a rest break and frequently had to work through her meal breaks. After her termination, Arce brought a claim under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.) against defendants and respondents Southland Management LLC (Southland) and The Ensign Group Inc. (Ensign Group).

Respondents moved for summary judgment, arguing that Arce lacked standing to bring a representative PAGA action because she did not suffer a Labor Code violation within the limitations period. But the trial court granted summary judgment on a different, and perhaps broader, issue, holding that Arce had not offered any “competent proof that one or more cognizable Labor Code violation[s] occurred during her employment in connection with her right to meal and rest periods.” The court entered a judgment of dismissal, and Arce appeals.

On appeal, Arce contends respondents did not meet their initial burden of establishing her lack of standing, and as such, the court erred by granting summary judgment. We agree. We, therefore, reverse and remand with directions.

https://www.courts.ca.gov/opinions/documents/B317161.PDF

Kava Holdings, LLP v. NLRB (9th Cir. 21-70225 10/18/23) NLRA Unfair Labor Practice

The panel denied in part and dismissed in part Kava Holdings, LLC’s petition for review and granted the National Labor Relations Board’s cross-petition for enforcement of its order, which found that Kava committed unfair labor practices in violation of Sections 8(a)(1), 8(a)(3), and 8(a)(5) of the National Labor Relations Act.

Intervenor UNITE HERE Local (the Union) was the exclusive collective bargaining representative for a unit of employees whom Kava employed at the Hotel BelAir. When the Hotel reopened after extensive renovations, Kava refused to rehire 152 employees even though they were qualified for the open positions and refused to recognize the Union as the unit employees’ bargaining representative.

The panel held that substantial evidence supported the Board’s finding that Kava committed an unfair labor practice by refusing to rehire union-affiliated former employees so that Kava could avoid its statutory duty to bargain with the Union. Substantial evidence supported the Board’s finding of anti-union animus where the Board properly drew an inference of animus from Kava’s prior unlawful conduct, the Board reasonably inferred animus from the testimony of a Kava human resources manager, and there was more than substantial evidence of Kava’s generalized animus against former employees based on their union affiliation. The panel rejected Kava’s argument that it affirmatively proved that it refused to rehire the former employees for legitimate business reasons.

The panel held that substantial evidence supported the Board’s finding that Kava committed an unfair labor practice by refusing to recognize and bargain with the Union as it reopened the Hotel, and by unilaterally changing the bargaining unit’s established, pre-closure terms and conditions of employment.

https://cdn.ca9.uscourts.gov/datastore/opinions/2023/10/18/21-70225.pdf

L.O. v. Kilrain (CA2/6 B321294 10/18/23) Workplace Violence Restraining Order

Failure to comply with time-honored rules of appellate procedure may result in forfeiture of the issues on appeal.

David Matthew Kilrain appeals from a three-year workplace violence restraining order obtained against him by the City of Santa Barbara (the City) on behalf of five of its employees, and a five-year civil harassment restraining order obtained by L.O. (Code Civ. Proc., §§ 527.6, 527.8; all statutory references are to the Code of Civil Procedure). We will affirm both restraining orders.

https://www.courts.ca.gov/opinions/documents/B321294.PDF

FCM Investments v. Grove Pham, LLC (CA4/1 D080801 10/17/23) Arbitrator Impartiality (not an employment case, but holding may be applicable)

When parties agree to private arbitration, they bargain for very limited judicial review. One of the few grounds for vacating an arbitration award is misconduct on the part of a neutral arbitrator substantially prejudicing the rights of a party. (Code Civ. Proc., § 1286.2, subd. (a)(3).) Misconduct includes circumstances creating a reasonable impression of possible arbitrator bias.

In this high-stakes commercial arbitration over a canceled real estate deal, the arbitrator found the seller in breach based largely on an assessment of witness credibility. In the arbitrator’s view, defendant Phuong Pham lacked credibility because she used an interpreter during the arbitration proceedings. Reasoning that she had been in the country for decades, engaged in sophisticated business transactions, and previously functioned in some undisclosed capacity as an interpreter, the arbitrator felt that her use of an interpreter at the arbitration was a tactical ploy to seem less sophisticated.

Given the exceedingly narrow scope of judicial review of arbitration awards, assuring both the actual and apparent impartiality of a neutral arbitrator is crucial to the legitimacy of arbitration as a dispute resolution mechanism. Courts are empowered to act where that impartiality can reasonably be questioned. Here, the arbitrator’s credibility finding rested on unacceptable misconceptions about English proficiency and language acquisition. These misconceptions, in turn, give rise to a reasonable impression of possible bias on the part of the arbitrator requiring reversal of the judgment and vacating the arbitration award.

https://www.courts.ca.gov/opinions/documents/D080801.PDF

Granite Construction Co. v. CalOSHA (CA3 C096704, filed 9/25/23, ord. pub. 10/16/23) Workplace Safety

The Department of Industrial Relations, Division of Occupational Safety and Health (the Division) is a state agency authorized to issue citations to employers for workplace safety violations. In this case, it issued a citation to Granite Construction Company/Granite Industrial, Inc. (Granite Construction) for allegedly violating three regulations relevant here. It alleged Granite Construction violated one regulation because it required its employees to wear masks without first providing a medical evaluation to determine their fitness to wear them. And it alleged the company violated two other regulations because it exposed its employees to dust containing a harmful fungus—namely, Coccidioides, the fungus that causes Valley fever—and failed to implement adequate measures to limit this exposure.

After Granite Construction disputed these allegations, an administrative law judge (ALJ) rejected the Division’s claims. The ALJ reasoned that no credible evidence showed that Granite Construction required its employees to wear masks and no reliable evidence showed that Coccidioides was present at the worksite. But after the Division petitioned for reconsideration, the Occupational Safety and Health Appeals Board (the Board) reversed on these issues and ruled for the Division. The trial court later denied Granite Construction’s petition for writ of administrative mandate seeking to set aside the Board’s decision.

On appeal from the trial court, we reverse. We agree with Granite Construction’s claim that insufficient evidence shows its employees were exposed to Coccidioides. But we reject its additional claim that it allowed (rather than required) its employees to wear masks, finding sufficient evidence supports the Board’s contrary ruling on this point. We will direct the trial court to enter a new judgment granting Granite Construction’s petition in part.

https://www.courts.ca.gov/opinions/documents/C096704.PDF

2023 California Labor and Employment Bills Signed by Governor

By Bill Number

AB 1 by Assemblymember Tina McKinnor (D-Los Angeles) – Collective bargaining: Legislature

AB 5 by Assemblymember Rick Chavez Zbur (D-Los Angeles) – The Safe and Supportive Schools Act

AB 56 by Assemblymember Tom Lackey (R-Palmdale) – Victim’s compensation: emotional injuries

AB 96 by Assemblymember Ash Kalra (D-San Jose) – Public employment: local public transit agencies: autonomous transit vehicle technology
AB 113 by Assemblymember Mark Stone (D-Monterey) – Agricultural labor relations

AB 120 by the Committee on Budget – Human services: Registered Home Care Aid

AB 127 by the Committee on Budget – State government: Commission on the State of Hate

AB 129 by the Committee on Budget – Housing: Employee Housing

AB 130 by the Committee on Budget – Public Employment

AB 242 by Assemblymember Jim Wood (D-Healdsburg) – Critical access hospitals: Employment

AB 254 by Assemblymember Rebecca Bauer-Kahan (D-Orinda) – Confidentiality of Medical Information Act: reproductive or sexual health application information

AB 336 by Assemblymember Sabrina Cervantes (D-Riverside) – Contractors: workers’ compensation insurance

AB 338 by Assemblymember Cecilia Aguiar-Curry (D-Winters) – Fuel reduction work

AB 342 by Assemblymember Avelino Valencia (D-Anaheim) – Architects and real estate appraisers: applicants and licensees: demographic information

AB 352 by Assemblymember Rebecca Bauer-Kahan (D-Orinda) – Health information

AB 443 by Assemblymember Corey Jackson (D-Moreno Valley) – Peace officers: determination of bias

AB 472 by Assemblymember Buffy Wicks (D-Oakland) – Classified school district and community college employees: compulsory leaves of absence: compensation

AB 494 by Assemblymember Dr. Joaquin Arambula (D-Fresno) – Robert F. Kennedy Farm Workers Medical Plan

AB 520 by Assemblymember Miguel Santiago (D-Los Angeles) – Employment: public entities

AB 521 by Assemblymember Rebecca Bauer-Kahan (D-Orinda) – Occupational safety and health standards: construction jobsites: toilet facilities

AB 567 by Assemblymember Philip Ting (D-San Francisco) – Criminal records: relief

AB 587 by Assemblymember Robert Rivas (D-Salinas) – Public works: payroll records

AB 621 by Assemblymember Jacqui Irwin (D-Thousand Oaks) – Workers’ compensation: special death benefit

AB 633 by Assemblymember Jim Patterson (R-Fresno) – Nursing: licensure: retired licenses

AB 636 by Assemblymember Ash Kalra (D-San Jose) – Employers: agricultural employees: required disclosures

AB 647 by Assemblymember Chris R. Holden (D-Pasadena) – Grocery workers

AB 658 by Assemblymember Mike Fong (D-Alhambra) – Public employment: retirement: benefits

AB 760 by Assemblymember Lori Wilson (D-Fairfield) – Public postsecondary education: affirmed name and gender identification

AB 752 by Assemblymember Blanca Rubio (D-Baldwin Park) – State highways: worker safety

AB 783 by Assemblymember Philip Ting (D-San Francisco) – Business licenses: single-user restrooms

AB 857 by Assemblymember Liz Ortega (D-San Leandro) – Vocational services: formerly incarcerated persons

AB 883 by Assemblymember Devon Mathis (R-Porterville) – Business licenses: United States Department of Defense SkillBridge program

AB 934 by Assemblymember Al Muratsuchi (D-Torrance) – Commission on Teacher Credentialing: public awareness campaign

AB 1020 by Assemblymember Tim Grayson (D-Concord) – County Employees Retirement Law of 1937: disability retirement: medical conditions: employment-related presumption

AB 1032 by Assemblymember Blanca Pacheco (D-Downey) – Courts: court interpreters

AB 1136 by Assemblymember Matt Haney (D-San Francisco) – State Athletic Commission: mixed martial arts: retirement benefit

AB 1204 by Assemblymember Chris R. Holden (D-Pasadena) – Contractors: contracts: restrictions

AB 1228 by Assemblymember Chris R. Holden (D-Pasadena) – Fast food restaurant industry: Fast Food Council: health, safety, employment, and minimum wage

AB 1273 by Assemblymember Mia Bonta (D-Oakland) – Classified employees: Classified Employee Staffing Ratio Workgroup

AB 1327 by Assemblymember Dr. Akilah Weber (D-San Diego) –Interscholastic athletics: California Interscholastic Federation: racial discrimination, harassment, or hazing

AB 1329 by Assemblymember Brian Maienschein (D-San Diego) – County jail incarcerated persons: identification card pilot program

AB 1366 by Assemblymember Brian Maienschein (D-San Diego) – Unfair competition and false advertising: disgorgement

AB 1484 by Assemblymember Rick Chavez Zbur (D-Los Angeles) – Temporary public employees

AB 1487 by Assemblymember Miguel Santiago (D-Los Angeles) – Public health: Transgender, Gender Variant, and Intersex Wellness Reentry Fund

AB 1646 by Assemblymember Stephanie Nguyen (D–Elk Grove) – Physicians and surgeons: postgraduate training: guest rotations

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

SB 14 by Senator Shannon Grove (R-Bakersfield) – Serious felonies: human trafficking

SB 27 by Senator María Elena Durazo (D-Los Angeles) – University of California: vendors

SB 75 by Senator Richard D. Roth (D-Riverside) – Courts: judgeships

SB 132 by the Committee on Budget and Fiscal Review – Income taxes: tax credits: motion pictures: occupational safety: California Film Commission

SB 148 by the Committee on Budget and Fiscal Review – State employment: State Bargaining Units: agreements: compensation and benefits

SB 150 by Senator María Elena Durazo (D-Los Angeles) – Construction: workforce development: public contracts

SB 151 by the Committee on Budget and Fiscal Review – State employment: State Bargaining Unit 6 agreement

SB 152 by the Committee on Budget and Fiscal Review – Background checks and fingerprinting: state employment, licensing, and contracting

SB 327 by Senator John Laird (D-Santa Cruz) – State teachers’ retirement: disability allowances and benefits

SB 365 by Senator Scott Wiener (D-San Francisco) – Civil procedure: arbitration

SB 372 by Senator Caroline Menjivar (D-San Fernando Valley/Burbank) – Department of Consumer Affairs: licensee and registrant records: name and gender changes

SB 432 by Senator Dave Cortese (D-San Jose) – Teachers’ retirement

SB 447 by Senator Toni Atkins. GO-Biz: Building and Reinforcing Inclusive, Diverse, Gender-Supportive Equity Project

SB 449 by Senator Steven Bradford (D-Gardena) – Peace officers: Peace Officer Standards Accountability Advisory Board

SB 461 by Senator Aisha Wahab (D-Hayward) – Days and hours of work: religious or cultural observance

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

SB 497 by Senator Lola Smallwood-Cuevas (D-Los Angeles) – Protected employee conduct

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

SB 525 by Senator María Elena Durazo (D-Los Angeles) – Minimum wages: health care workers

SB 531 by Senator Rosilicie Ochoa Bogh (R-Yucaipa) – Pupil safety: local educational agency contractors: background checks

SB 548 by Senator Roger Niello (R-Fair Oaks) - Public employees' retirement: joint county and trial court contracts

SB 553 by Senator Dave Cortese (D-San Jose) – Occupational safety: workplace violence: restraining orders and workplace violence prevention plan

AB 594 by Assemblymember Brian Maienschein (D-San Diego) – Labor Code: alternative enforcement

SB 54 by Senator Nancy Skinner (D-Berkeley) – Venture capital companies: reporting. A signing message can be found here

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

SB 616 by Senator Lena Gonzales (D-Long Beach) - Sick days: paid sick days accrual and use

SB 623 by Senator John Laird (D-Santa Cruz) – Workers’ compensation: post-traumatic stress disorder

SB 667 by Senator Bill Dodd (D-Napa) – Healing arts: pregnancy and childbirth

SB 699 by Senator Anna Caballero (D-Merced) — Contracts in restraint of trade

SB 700 by Senator Steven Bradford (D-Gardena) – Employment discrimination: cannabis use

SB 723 by Senator María Elena Durazo (D-Los Angeles) – Employment: rehiring and retention: displaced workers

SB 727 by Senator Monique Limόn (D-Santa Barbara) – Human trafficking: civil actions

SB 765 by Senator Anthony Portantino (D-Burbank) – Teachers: retired teachers: compensation limitation

SB 791 by Senator Mike McGuire (D-Healdsburg) – Postsecondary education: academic and administrative employees: disclosure of sexual harassment

SB 808 by Senator Bill Dodd (D-Napa) – California State University: annual report: sexual harassment reports: formal sexual harassment complaints

SB 831 by Senator Anna Caballero (D-Merced) – Agricultural workers: immigration: parole

SB 885 by the Committee on Labor, Public Employment and Retirement – Public employees’ retirement

By Subject Matter

ALRB

AB 113 by Assemblymember Mark Stone (D-Monterey) – Agricultural labor relations

Apprenticeships

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

Arbitration

SB 365 by Senator Scott Wiener (D-San Francisco) – Civil procedure: arbitration

Business

SB 54 by Senator Nancy Skinner (D-Berkeley) – Venture capital companies: reporting. A signing message can be found here

Contracts

SB 699 by Senator Anna Caballero (D-Merced) — Contracts in restraint of trade

Contractors

AB 1204 by Assemblymember Chris R. Holden (D-Pasadena) – Contractors: contracts: restrictions

COVID-19

SB 723 by Senator María Elena Durazo (D-Los Angeles) – Employment: rehiring and retention: displaced workers

Criminal Records

AB 567 by Assemblymember Philip Ting (D-San Francisco) – Criminal records: relief

AB 1329 by Assemblymember Brian Maienschein (D-San Diego) – County jail incarcerated persons: identification card pilot program

Education

AB 934 by Assemblymember Al Muratsuchi (D-Torrance) – Commission on Teacher Credentialing: public awareness campaign

AB 1327 by Assemblymember Dr. Akilah Weber (D-San Diego) –Interscholastic athletics: California Interscholastic Federation: racial discrimination, harassment, or hazing

SB 531 by Senator Rosilicie Ochoa Bogh (R-Yucaipa) – Pupil safety: local educational agency contractors: background checks

SB 791 by Senator Mike McGuire (D-Healdsburg) – Postsecondary education: academic and administrative employees: disclosure of sexual harassment

SB 808 by Senator Bill Dodd (D-Napa) – California State University: annual report: sexual harassment reports: formal sexual harassment complaints

Evidence

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

Farm Workers

AB 494 by Assemblymember Dr. Joaquin Arambula (D-Fresno) – Robert F. Kennedy Farm Workers Medical Plan

AB 636 by Assemblymember Ash Kalra (D-San Jose) – Employers: agricultural employees: required disclosures

SB 831 by Senator Anna Caballero (D-Merced) – Agricultural workers: immigration: parole

FEHA

SB 700 by Senator Steven Bradford (D-Gardena) – Employment discrimination: cannabis use

Grocery Workers

AB 647 by Assemblymember Chris R. Holden (D-Pasadena) – Grocery workers

Healthcare

AB 120 by the Committee on Budget – Human services: Registered Home Care Aid

AB 242 by Assemblymember Jim Wood (D-Healdsburg) – Critical access hospitals: Employment

AB 633 by Assemblymember Jim Patterson (R-Fresno) – Nursing: licensure: retired licenses

SB 667 by Senator Bill Dodd (D-Napa) – Healing arts: pregnancy and childbirth

Housing

AB 129 by the Committee on Budget – Housing: Employee Housing

Human Trafficking

SB 14 by Senator Shannon Grove (R-Bakersfield) – Serious felonies: human trafficking

SB 727 by Senator Monique Limόn (D-Santa Barbara) – Human trafficking: civil actions

Law Enforcement

AB 443 by Assemblymember Corey Jackson (D-Moreno Valley) – Peace officers: determination of bias

SB 449 by Senator Steven Bradford (D-Gardena) – Peace officers: Peace Officer Standards Accountability Advisory Board

Leaves

SB 848 by Senator Susan Rubio (D-Baldwin Park) – Employment: leave for reproductive loss

LGBTQ