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, unofficially since 2003 and officially since 2007, covering California, 9th Circuit and US Supreme Court decisions, and new laws signed by Governor. To subscribe, contact LaborLaw@CLA.Legal.

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Carroll v. City & County of S.F. (CA1/4 A169408 11/12/25) FEHA Age Discrimination | Municipal Disability Retirement

The City and County of San Francisco (the City) permits employees who have completed at least 10 years of service and who become disabled to receive disability retirement benefits. (S.F. Charter, § A8.603-3.) These benefits are set by what the parties in this case refer to as “Formula 1” if the result of Formula 1’s application exceeds a certain percentage of the employee’s average final compensation, and these benefits are calculated according to what the parties refer to as “Formula 2” if the application of Formula 1 does not exceed a certain percentage of the employee’s average final compensation.

Plaintiffs contend on appeal that the City’s use of Formula 2 to calculate disability retirement benefits discriminates against them based on their age of entry (40 and above) into the City’s retirement system in violation of the California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.). The main question before us is whether the trial court erred by determining after a bench trial that plaintiffs had not prevailed under the FEHA. For the reasons explained herein, we conclude that the trial court did not err, and we affirm the judgment.

https://www4.courts.ca.gov/opinions/documents/A169408.PDF

Oregon Right to Life v. Stolfi (9th Cir. 24-6650 10/31/25) Abortion and Contraceptive Insurance Coverage for Employees

In an action brought by Oregon Right to Life (ORTL), an education and advocacy organization that seeks relief under the First and Fourteenth Amendments from Oregon’s Reproductive Health Equity Act’s requirement that it provide abortion and contraceptive insurance coverage to its employees, the panel reversed the district court’s order dismissing ORTL’s complaint for failure to state a claim, vacated the district court’s order denying ORTL a preliminary injunction, and remanded.

ORTL alleged that the Oregon Reproductive Health Equity Act (RHEA), as applied, violates its right to free exercise of religion under the First Amendment. Although ORTL is not, strictly speaking, affiliated with any particular-religious denomination and does not have a religious requirement for its board members, the directors on ORTL’s board assert that their sincerely held religious beliefs guide their governance of ORTL. RHEA contains multiple exceptions excusing some religious organizations, including religious employers, from its abortion and contraceptive insurance requirement, but ORTL claims it does not fall within any of those exceptions, which Oregon does not dispute. The district court denied a preliminary injunction and dismissed ORTL’s complaint on the grounds that there was “doubt” as to whether ORTL’s beliefs regarding abortion were “genuinely religious,” and that RHEA is a neutral and generally applicable law and thus subject only to rational basis review—which it satisfied.

The panel agreed with ORTL that its beliefs are religious and sincerely held. ORTL put forth significant evidence of its religiosity, and there was no conflicting evidence against ORTL’s claim that its views are religiously grounded. The district court therefore erred by failing to conclude at the motion to dismiss stage that ORTL actually holds the beliefs professed in the complaint and that ORTL’s opposition to abortion is genuinely religious. The panel reversed the district court’s order dismissing ORTL’s complaint and vacated the district court’s order denying ORTL a preliminary injunction.

The panel expressed no opinion on the issue of whether Oregon’s selective denial of a religious exemption to ORTL—whose beliefs about abortion were religious and sincere—violates the First Amendment’s Religion Clauses. In light of the Supreme Court’s recent decision in Catholic Charities Bureau, Inc. v. Wisconsin Labor & Industry Review Commission, 605 U.S. 238 (2025), which reiterated the constitutional significance of exemptions granted to some religiously motivated organizations but not others, the panel remanded this case to the district court to reevaluate, in the first instance, whether RHEA’s application to ORTL violates the First Amendment.

Concurring, Judge VanDyke agreed with the majority that the unrebutted evidence in this case demonstrates that ORTL is motivated by religious beliefs, and those beliefs are entitled to protection under the First Amendment’s Religion Clauses. He wrote separately to explain that under Catholic Charities, RHEA is subject to strict scrutiny because it discriminates based on theological choices and discriminates between religions. Judge VanDyke would, in addition to reversing the district court’s dismissal of ORTL’s complaint, order the district court to enter a preliminary injunction on behalf of ORTL because it demonstrated a strong likelihood of success on the merits of its First Amendment claim.

Dissenting, Judge Schroeder wrote that the district court’s dismissal should be affirmed. The majority appears to suggest that ORTL may have been wrongfully denied an exemption as a religious employer under RHEA. Yet ORTL never asked to be considered a religious employer; the state of Oregon has never been asked to determine whether ORTL is a religious employer; and the record demonstrates that ORTL does not consider itself to be a religious organization. This case, therefore, is not similar to Catholic Charities, and a remand for the district court to consider the applicability of Catholic Charities is wasteful.

https://cdn.ca9.uscourts.gov/datastore/opinions/2025/10/31/24-6650.pdf

NLRB v. Mountain Foothills Apartments, LLC (9th Cir. 24-2223 10/28/25) NLRB

The panel granted an application by the National Labor Relations Board (“NLRB”) for enforcement of its order finding that North American Foothills Apartments (“NMFA”) violated Section 8(a)(1) of the National Labor Relations Act.

The panel held that it had jurisdiction to adjudicate NMFA’s unexhausted constitutional challenges to the NLRB, which it did not raise before the NLRB.

First, NMFA challenged a statutory provision— providing that an administrative law judge (“ALJ”) could be removed “only for just cause,” as determined by the Merit Systems Protection Board—on the ground that the provision violates Article II, which it argued vests the sole removal power over agency “officers” (such as the ALJ who initially rendered the order appealed from here) in the President. The President never sought to remove the ALJ who issued the order here. The panel held that so long as an agency officer was validly appointed (which NMFA did not contest as to this ALJ), retrospective relief based on an unconstitutional removal provision is available only where the provision inflicts compensable harm. The panel held that even if it assumed arguendo that the NLRB’s for-cause protections were invalid, NMFA’s failure to show harm precluded retrospective relief.

Second, NMFA argued that the NLRB’s adjudication scheme violated the Seventh Amendment by denying employers the right to a jury trial. The Supreme Court has squarely held that an NLRB unfair practice proceeding is not a “suit at common law” for purposes of the Seventh Amendment. The panel held that employers are not entitled to jury trials in cases involving Thryv v., Inc. v. International Brotherhood of Electrical Workers, Local 1269, 372 NLRB No. 22 (2022), remedies. Accordingly, the panel concluded that the Seventh Amendment was not implicated.

Third, NMFA argued that the combined investigatory and adjudicatory functions of the NLRB were inconsistent with separation of power principles such that the NLRB’s decision violated NMFA’s Fifth Amendment right to due process. The panel held that the combination of investigative and judicial functions within an agency does not, of itself, violate due process. NMFA did not argue that the NLRB confers both investigative and adjudicatory powers on a single individual within the agency, nor could it. NMFA also failed to demonstrate that either the NLRB’s ALJs or its Board members had an unconstitutional potential for bias, such that the presumption of honesty and integrity should not apply to them. Accordingly, the panel rejected NMFA’s due process challenge.

Turning to the merits, the panel held that NMFA had forfeited three of the NLRB’s four findings that NMFA violated Section 8(a)(1) of the National Labor Relations Act.

As to the NLRB’s finding that NMFA discharged an employee for engaging in actual or perceived concerted activities, the panel applied the test set forth in Wright Line, 251 NLRB 1083 (1980), and concluded that the NLRB’s finding that NMFA violated Section 8(a)(1) by discharging the employee for engaging in actual or perceived protected activities was supported by substantial evidence.

https://cdn.ca9.uscourts.gov/datastore/opinions/2025/10/28/24-2223.pdf

Int’l Union of Operating Engineers v. NLRB (9th Cir. 23-124, 23-150, 23-18810/21/25) NLRA

The panel filed (1) an order denying a petition for rehearing en banc and amending the opinion and partial dissent filed on January 21, 2025; and (2) an amended opinion and an amended partial dissent denying petitions for review brought by the International Union of Operating Engineers, Stationary Engineers, Local 39 (the “Union”) and Macy’s Inc., and granting the National Labor Relations Board’s cross-application for enforcement of its final order in a case in which the Union charged Macy’s with unfair labor practices under the National Labor Relations Act (“NLRA”).

During negotiations over a successor collective bargaining agreement, Union members voted to reject Macy’s Final Offer and began a strike. After three months, the Union ended its strike and unconditionally offered to return to work. Macy’s locked out the Union members who reported for work. The Union charged that Macy’s lockout was an unfair labor practice. The Board adopted the conclusion of the ALJ, and found that Macy’s violated the NLRA.

In the amended opinion, the panel held that it had jurisdiction because the Union is a “person aggrieved.” The panel rejected Macy’s contention that it could lawfully lock out the employees under Section 8(a)(1) and (3) of the NLRA because it could not show legitimate and substantial business justifications for the lockout. The Board applied the correct legal standard when it considered Dayton Newspapers, Inc., 339 N.L.R.B. 650 (2003). Reviewing the record as a whole, the panel found substantial evidence supporting the Board’s conclusion that Union employees were not clearly and fully informed of conditions they needed to satisfy to be reinstated. Considering Dayton Newspapers, the panel concluded that the lockout was not justified.

Finding no clear abuse of discretion, the panel enforced the Board’s remedial order. The Board did not abuse its discretion in declining to award additional extraordinary remedies, requested by the Union, because the traditional remedies awarded were sufficient to effectuate the policies of the NLRA here. Rejecting Macy’s challenges, the panel held that the Board did not clearly abuse its discretion in ordering make-whole relief pursuant to Thryv, Inc., 372 N.L.R.B. No. 22 (Dec. 13. 2022). The panel agreed with the partial dissent that the Board was not authorized to award “consequential damages,” but the Board did not award such damages here. The panel concluded that the Board’s invocation of Thryy’s make-whole relief framework in this case vindicated a public right. The panel noted that its amendments merely reiterated that it was unable to permit or prohibit any specific forms of relief at this stage. Such determinations must await the forthcoming compliance proceeding, where Macy’s can raise the arguments the dissent urges the panel to consider now.

In the amended partial dissent, Judge Bumatay would hold that the Board had no authority to order the type of monetary relief it did, requiring Macy’s to compensate Union members for direct or foreseeable pecuniary harms incurred as a result of the unlawful lockout, and for ongoing harms accumulating to this day—more than four years since the lockout. Blessing the Board’s authority to impose these remedies would implicate the Seventh Amendment’s right to a jury trial. The Board’s actions were arbitrary and capricious and unsupported by the record. While he agreed with the denial of the Union’s petition for review, he dissented from the denial of Macy’s petition for review and from the grant of the Board’s application for enforcement.

Dissenting from the denial of rehearing en banc, Judge R. Nelson, joined by Judges Callahan, Ikuta, Lee, Bumatay, and VanDyke, wrote that this case should be reheard en banc because the majority erred in affirming the NLRB’s unprecedented award of consequential Thryy damages, which are unauthorized by statute and forbidden by the Seventh Amendment right to a jury trial.

https://cdn.ca9.uscourts.gov/datastore/opinions/2025/10/21/23-188.pdf

Gurganus v. IGS Solutions LLC (CA1/3 A170738, filed 9/25/25, pub. 10/17/25) Arbitration

IGS Solutions LLC (IGS) appeals from the trial court’s denial of its motion to compel arbitration of a lawsuit brought by its former employee, Sarah Gurganus. IGS contends the trial court erred by concluding the arbitration agreement was unconscionable and in refusing to sever the offending provisions. We affirm.

https://www4.courts.ca.gov/opinions/documents/A170738.PDF

Final 2025 California Labor and Employment Bills Enacted

BY BILL NUMBER

AB 138 by the Committee on Budget – State employment: state bargaining units

AB 247 by Assemblymember Isaac Bryan (D-Los Angeles) – Incarcerated individual hand crew members: wages

AB 248 by Assemblymember Isaac Bryan (D-Los Angeles) – County jails: wages

AB 250 by Assemblymember Aguiar-Curry (D-Napa) – Sexual assault: statute of limitations

AB 288 by Assemblymember Tina McKinnor (D–Inglewood) – Employment: labor organization and unfair practices

AB 354 by Assemblymember Michelle Rodriguez (D-Chino) – Commission on Peace Officer Standards and Training

AB 378 by Assemblymember Avelino Valencia (D-Anaheim) – Education finance: Classified School Employee Summer Assistance Program

AB 406 by Assemblymember Pilar Schiavo (D-Baldwin Park) – Employment: unlawful discrimination: victims of violence

AB 499 by Assemblymember Liz Ortega (D-San Leandro) – Robert F. Kennedy Farm Workers Medical Plan

AB 538 by Assemblymember Marc Berman (D-Menlo Park) – Public works: payroll records

AB 606 by Assemblymember Sharon Quirk-Silva (D-Fullerton) – Certificated employees: professional services credential: out-of-state applicants

AB 692 by Assemblymember Ash Kalra (D-San Jose) – Employment: contracts in restraint of trade

AB 715 by Assemblymember Rick Chavez Zbur (D-Hollywood) — Educational equity: discrimination: antisemitism prevention

AB 751 by Assemblymember Mike Gipson (D-Carson) – Rest periods: petroleum facilities: safety-sensitive positions

AB 774 by Assemblymember Rebecca Bauer-Kahan (D-Orinda) – Civil actions: enforcement of judgments

AB 836 by Assemblymember Catherine Stefani (D-San Francisco) – Midwifery Workforce Training Act

AB 845 by Assemblymember Dr. Joaquin Arambula (D-Fresno) – Employment: complaints: agricultural employees

AB 847 by Assemblymember Dr. LaShae Sharp-Collins (D-San Diego) – Peace officers: confidentiality of records

AB 1009 by Assemblymember Blanca Rubio (D-Baldwin Park) – Teacher credentialing: administrative services credential: occupational and physical therapists

AB 1028 by Assemblymember Mike Fong (D–Alhambra) – Community colleges: temporary employees

AB 1034 by Assemblymember Anamarie Ávila Farías (D-Concord) – Teacher credentialing: programs of professional preparation: youth mental health

AB 1119 by Assemblymember Darshana Patel (D-San Diego) – Teacher credentialing: dual credentialing

AB 1125 by Assemblymember Stephanie Nguyen (D–Elk Grove) – Workers’ compensation: peace officers

AB 1155 by Assemblymember Mike Fong (D–Alhambra) – Law schools: externships: compensation

AB 1181 by Assemblymember Matt Haney (D-San Francisco) – Firefighters: personal protective equipment

AB 1239 by Assemblymember Diane Dixon (R-Newport Beach) – Human trafficking: data

AB 1293 by Assemblymember Greg Wallis (R-Bermuda Dunes) – Workers’ compensation: qualified medical evaluators

AB 1340 by Assemblymember Buffy Wicks (D-Oakland) – Transportation network company drivers: labor relations

AB 1362 by Assemblymember Ash Kalra (D-San Jose) – Foreign labor contractor registration: agricultural workers

AB 1388 by Assemblymember Isaac Bryan (D-Los Angeles) – Law enforcement: settlement agreements

AB 1390 by Assemblymember José Luis Solache (D-Lynwood) – Public school governance: board member compensation

AB 1398 by Assemblymember Avelino Valencia (D-Anaheim) – Workers’ compensation

AB 1438 by Assemblymember James Gallagher (R-East Nicolaus) – School finance: administrative employee-to-teacher ratio: Paradise Unified School District

AB 1510 by the Committee on Public Employment and Retirement – Santa Clara Valley Transportation Authority: employee relations

AB 1514 by Committee on Labor and Employment – Worker classification: employees and independent contractors: licensed manicurists: commercial fishers

SB 8 by Senator Angelique Ashby (D-Sacramento) – Peace officers: injury or illness: leaves of absence

SB 20 by Senator Caroline Menjivar (D-San Fernando Valley) – Occupational safety: high-exposure trigger tasks on artificial stone

SB 48 by Senator Lena Gonzalez (D-Los Angeles) – Educational equity: discrimination prevention coordinators

SB 53 by Senator Scott Wiener (D-San Francisco) – Artificial intelligence models: large developers (Transparency in Frontier Artificial Intelligence Act (TFAIA))

SB 85 by Senator Tom Umberg (D-Santa Ana) – Civil actions: service of summons

SB 129 by the Committee on Budget and Fiscal Review — Labor

SB 139 by the Committee on Budget and Fiscal Review — State Bargaining Unit 9 and State Bargaining Unit 12

SB 140 by the Committee on Budget and Fiscal Review — State Bargaining Unit 6

SB 229 by Senator Marie Alvarado-Gil (R-Jackson) – Peace officers: deputy sheriffs

SB 230 by Senator John Laird (D-Santa Cruz) – Workers’ compensation: firefighters

SB 261 by Senator Aisha Wahab (D-Fremont) – Division of Labor Standards Enforcement: orders, decisions, and awards

SB 272 by Senator Josh Becker (D‑Menlo Park) – San Mateo County Transit District: job order contracting: pilot program

SB 294 by by Senator Anna Caballero (D-Merced) – The Workplace Know Your Rights Act

SB 301 by Senator Tim Grayson (D-Orinda) – County Employees Retirement Law of 1937: employees

SB 303 by Senator Lola Smallwood-Cuevas (D-Los Angeles) – Employment: bias mitigation training: unlawful discrimination

SB 443 by Senator Susan Rubio (D-Baldwin Park) – Retirement: joint powers authorities

SB 447 by Senator Thomas Umberg (D-Santa Ana) – Workers’ compensation: death benefits

SB 464 by Lola Smallwood-Cuevas (D-Los Angeles) – Employer pay data

SB 477 by Senator Catherine Blakespear (D-Encinitas) – California Fair Employment and Housing Act: enforcement procedures

SB 513 by Senator María Elena Durazo (D-Los Angeles) – Personnel records

SB 518 by Assemblymember Akilah Weber Pierson (D-San Diego) – Descendants of enslaved persons: reparations

SB 520 by Senator Anna Caballero (D-Merced) – Nurse-midwifery education program

SB 578 by Senator Lola Smallwood-Cuevas (D-Los Angeles) – California Workplace Outreach Program

SB 590 by Senator María Elena Durazo (D-Los Angeles) –Paid family leave: eligibility: care for designated persons

SB 597 by Senator Dave Cortese (D-Silicon Valley) – Labor-related liabilities: direct contractor and subcontractor

SB 642 by Senator Monique Limón (D-Santa Barbara) – Employment: payment of wages

SB 648 by Senator Lola Smallwood-Cuevas (D-Los Angeles) – Employment: gratuities: enforcement

SB 693 by Senator Dave Cortese (D-San Jose) – Employees: meal periods

SB 809 by Senator María Elena Durazo (D-Los Angeles) – Employees and independent contractors: construction trucking

SB 847 by Senator Eloise Gómez Reyes (D-Colton) – Workers’ compensation: uninsured employer: transfer of real property

SB 848 by Senator Sen. Sasha Renée Pérez (D-Alhambra) – Pupil safety: school employee misconduct: child abuse prevention

SB 853 by the Committee on Labor, Public Employment and Retirement – Public employees’ retirement

BY SUBJECT MATTER

Agricultural Workers

AB 845 by Assemblymember Dr. Joaquin Arambula (D-Fresno) – Employment: complaints: agricultural employees

AB 499 by Assemblymember Liz Ortega (D-San Leandro) – Robert F. Kennedy Farm Workers Medical Plan

AB 1362 by Assemblymember Ash Kalra (D-San Jose) – Foreign labor contractor registration: agricultural workers

Artificial Intelligence

SB 53 by Senator Scott Wiener (D-San Francisco) – Artificial intelligence models: large developers (Transparency in Frontier Artificial Intelligence Act (TFAIA))

Budget

SB 129 by the Committee on Budget and Fiscal Review — Labor

SB 139 by the Committee on Budget and Fiscal Review — State Bargaining Unit 9 and State Bargaining Unit 12

SB 140 by the Committee on Budget and Fiscal Review — State Bargaining Unit 6

Cal/OSHA

SB 20 by Senator Caroline Menjivar (D-San Fernando Valley) – Occupational safety: high-exposure trigger tasks on artificial stone

Civil Procedure

SB 85 by Senator Tom Umberg (D-Santa Ana) – Civil actions: service of summons

AB 774 by Assemblymember Rebecca Bauer-Kahan (D-Orinda) – Civil actions: enforcement of judgments

Contractors and Subcontractors

SB 597 by Senator Dave Cortese (D-Silicon Valley) – Labor-related liabilities: direct contractor and subcontractor

SB 809 by Senator María Elena Durazo (D-Los Angeles) – Employees and independent contractors: construction trucking

Discrimination

AB 406 by Assemblymember Pilar Schiavo (D-Baldwin Park) – Employment: unlawful discrimination: victims of violence

SB 477 by Senator Catherine Blakespear (D-Encinitas) – California Fair Employment and Housing Act: enforcement procedures

Education

AB 323 by Assemblymember Mike Fong (D–Alhambra) – Strong Workforce Program: work-based learning opportunities