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.
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Capriole v. Uber Technologies (9th Cir. 20-16030 8/2/21) Arbitration/Class Action/MA Wage Laws
The panel affirmed the district court’s order compelling arbitration in a putative class action requesting a preliminary injunction prohibiting Uber from classifying drivers in Massachusetts as independent contractors and an order directing Uber to classify its drivers as employees and comply with Massachusetts wage laws.
Plaintiffs, Massachusetts residents who have worked as Uber drivers since at least May 2016, filed a putative class action in the District Court for the District of Massachusetts on behalf of all “individuals who have worked as Uber drivers in Massachusetts who have not released all of their claims against Uber.” When they signed up to become Uber drivers, Plaintiffs agreed to Uber’s 2015 Technology Services Agreement, which advised Plaintiffs of a mandatory arbitration agreement (“Arbitration Provision”), governed by the Federal Arbitration Act (“FAA”).
Uber moved to compel arbitration, stay proceedings pending arbitration, and transfer the case to the District Court for the Northern District of California pursuant to a forum selection clause in Uber’s driver agreements. The Massachusetts district court granted Uber’s motion to transfer the action to the California district court, including the pending Emergency Motion and Motion to Compel Arbitration. The California district court denied Plaintiffs’ request for a preliminary injunction and granted Uber’s Motion to Compel Arbitration.
Plaintiffs asserted that they are exempt from mandatory arbitration under Section 1 of the FAA because they are a class of workers engaged in foreign or interstate commerce. The panel disagreed. Rather, the panel joined the growing majority of courts holding that Uber drivers as a class of workers do not fall within the interstate commerce exemption from the FAA.
Section 1 of the Act exempts from its coverage contracts of employment of three categories of workers: seamen, railroad employees, and a residual category comprising any other class of workers engaged in foreign or interstate commerce. The panel noted that the Supreme Court has instructed that this last residual category must be afforded a narrow construction to further the FAA’s purpose to overcome judicial hostility to arbitration agreements.
The panel first held that in light of the text of the FAA and Supreme Court precedent, the relevant class of workers here, Uber drivers, needed to be assessed at the nationwide level, rather than confined to any limited geographic region. Limiting the relevant class of workers to a specific geographic area would undermine the very purpose of the FAA, by which Congress sought to create a national policy favoring arbitration.
The panel concluded that Uber drivers, as a nationwide class of workers, are not engaged in foreign or interstate commerce and are therefore not exempt from arbitration under the FAA. Here, the district court’s unchallenged factual findings compelled the conclusion that Uber’s service was primarily local and intrastate in nature. Only 2.5% of all trips fulfilled using the Uber Rides marketplace in the United States between 2015 and 2019 started and ended in different states. Moreover, only 10.1% of all trips taken in the United States in 2019 began or ended at an airport, not all of which involved interstate travel. Plaintiffs did not (and likely could not) point to any evidence that Uber drivers were sufficiently engaged in interstate commerce to fall under the Section 1 exemption.
The panel next concluded that the district court properly addressed the motion to compel arbitration prior to adjudicating Plaintiffs’ preliminary injunction motion. Because Plaintiffs’ claims and requested injunctive relief were arbitrable by the terms of the arbitration agreement and Plaintiffs’ requested injunctive relief would have upended the status quo rather than maintained it, the panel determined that the district court properly addressed the motion to compel arbitration first.
The panel further held that the district court properly concluded that the proposed injunction against Uber’s current driver classification as independent contractors was not one for public injunctive relief. Plaintiffs argued that a claim for public injunctive relief could not be waived contractually under Massachusetts law. The panel held that even assuming class-wide public injunctive relief, as conceptualized in McGill v. Citibank, N.A., 393 P.3d 85 (Cal. 2017), were available under Massachusetts law and that such relief could not be contractually waived, the requested injunctive relief here could not be remotely characterized as public injunctive relief as this court or any other court has recognized it.
Because the panel agreed with the district court that Plaintiffs’ requested injunctive relief did not constitute public injunctive relief, the panel also agreed that Plaintiffs could not evade the Class Action Waiver in Uber’s Arbitration Provision, even assuming Massachusetts law provided for such non-waivable relief. Likewise, because Plaintiffs’ request for injunctive relief regarding their classification was properly a matter for the arbitrator, the district court did not err by declining to reach the merits of Plaintiffs’ request for a preliminary injunction under Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 20 (2008).
Bonni v. St. Joseph Health System (SC S244148 per curiam 7/29/21) Retaliation/Hospital Peer Review/Anti-SLAPP
Under California law, hospitals must use a process of professional peer review to evaluate physicians’ qualifications for medical staff privileges. (See Bus. & Prof. Code, §§ 805, 809–809.9.) Because the loss of privileges can significantly limit a physician’s ability to practice medicine, peer review proceedings are a frequent subject of litigation in California courts. And as the number of lawsuits challenging peer review determinations has grown, so too has the number of motions to strike under Code of Civil Procedure section 425.16. Familiarly known as the anti-SLAPP statute, this provision allows defendants to seek early dismissal of unmeritorious claims arising from protected speech and petitioning activities. (Code Civ. Proc., § 425.16, subd. (b).)
We have previously held that the anti-SLAPP statute’s protections extend to speech and petitioning in connection with hospital peer review. (See Kibler v. Northern Inyo County Local Hospital Dist. (2006) 39 Cal.4th 192.) This case requires us to consider the scope and limits of those protections. Plaintiff, a physician, alleges the defendant hospitals and members of its medical staff unlawfully retaliated against him for raising concerns about patient care. He says this retaliation began with the suspension of his staff privileges and culminated in the termination of those privileges after peer review. The hospitals seek to strike the retaliation claims under the anti-SLAPP statute. They contend that any claim arising from the peer review process necessarily targets protected speech or petitioning activity and therefore must be afforded anti-SLAPP protection. We hold otherwise. While some of the forms of retaliation alleged in the complaint — including statements made during and in connection with peer review proceedings and disciplinary reports filed with official bodies — do qualify as protected activity, the discipline imposed through the peer review process does not. Thus, while the hospitals may seek to strike some of the physician’s retaliation claims, they are not entitled to wholesale dismissal of these claims under the anti-SLAPP law.
Mahler v. Judicial Council of Cal. (CA1/1 A158696 7/28/21) FEHA Age Discrimination/Temporary Assigned Judges Program
Plaintiffs, retired superior court judges who have participated in the Temporary Assigned Judges Program (TAJP), challenge recent changes to the program made by the Chief Justice. These changes include limits on the duration of service in the program but provide for some exceptions. Plaintiffs claim these changes discriminate against “older” retired judges and have filed the instant lawsuit, alleging disparate impact age discrimination under the Fair Employment and Housing Act (FEHA). The trial court sustained defendants’ demurrer without leave to amend on the ground legislative immunity bars the suit.
Legislative immunity does, indeed, shield the Chief Justice and the Judicial Council from suit, regardless of the nature of the relief sought, to the extent plaintiffs’ discrimination claim is based on the Chief Justice’s promulgation of changes to the TAJP. Legislative immunity does not, however, foreclose suit to the extent plaintiffs’ claim is based on defendants’ enforcement of the challenged provisions of the TAJP through individual judicial assignments. Rather, judicial immunity applies to the Chief Justice’s assignment of individual judges in accordance with the new TAJP provisions, and while judicial immunity forecloses monetary relief, it does not foreclose prospective declaratory relief.
Defendants also demurred on the ground plaintiffs’ allegations fail to state a viable disparate impact age discrimination claim. Although the trial court did not consider the sufficiency of the complaint, defendants press this as an alternative ground to affirm, and we therefore address the issue, given our conclusion that legislative immunity does not wholly bar plaintiffs’ suit. We agree that plaintiffs’ allegations are, at present, insufficient.
We do not agree, however, that plaintiffs must be denied leave to amend. In so concluding, we disagree with defendants that a disparate impact age discrimination claim cannot, as matter of law, be based on disparate impact on an older subgroup within the class of persons protected under the FEHA, namely employees forty years of age and older. No California court has squarely addressed this issue, and while several federal circuit courts have held “sub-class” disparate impact age discrimination claims are not viable under the Age Discrimination in Employment Act (ADEA), the majority view is now to the contrary. We find the reasoning of these recent cases more persuasive than that of the older cases and conclude it is in keeping with our Legislature’s stated intent that the FEHA age discrimination provisions be liberally construed to achieve its salutary purposes.
We therefore reverse the dismissal order and remand to allow plaintiffs an opportunity to amend. In doing so, we are expressing no opinion as to whether further amendment will sufficiently state a disparate impact age discrimination claim or as to the merits of plaintiffs’ claim.
Pollock v. Tri-Modal Distribution Services, Inc. (SC S262699 per curiam 7/26/21) FEHA Failure to Promote Statute of Limitations/Prevailing Defendant’s Fees & Costs
Plaintiff Pamela Pollock is a customer service representative at defendant Tri-Modal Distribution Services, Inc. (Tri-Modal), a corporation that ships freight by truck. She alleges that Tri-Modal passed her over for several promotions in part because she refused to have sex with defendant Michael Kelso, Tri-Modal’s executive vice-president. We granted review to address two questions. First, when does the statute of limitations begin to run in a failure to promote case brought under the harassment provision of the Fair Employment and Housing Act (FEHA) (Gov. Code, §§ 12940, subd. (j), 12960)? We hold that such a FEHA claim accrues, and thus the statute of limitations begins to run, at the point when an employee knows or reasonably should know of the employer’s allegedly unlawful refusal to promote the employee.
Second, does Government Code section 12965, subdivision (b)’s directive that a prevailing FEHA defendant “shall not be awarded fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so,” apply to an award of costs on appeal? The answer is yes. The Court of Appeal in this case erred in awarding costs on appeal to defendants without first finding that Pollock’s underlying claim was objectively groundless.
Bills Signed by Governor (7/23/21)
AB 131 by Committee on Budget — Child development programs and workers
AB 845 by Assemblymember Freddie Rodriguez (D-Pomona) – Disability retirement: COVID-19: presumption.
SB 272 by Senator John Laird (D-Santa Cruz) – State government: gender-neutral terms: California Conservation Corps.
SB 411 by Senator Dave Cortese (D-San Jose) – Public Employees’ Retirement System: employment without reinstatement.
SB 461 by Senator Dave Cortese (D-San Jose) – Unfair Competition Law: enforcement.
Shooter v. State of Arizona (9th Cir. 19-16248 7/22/21) Legislator Sexual Harassment/Expulsion/42 U.S.C. §1983
The panel affirmed the district court’s dismissal, for failure to state a claim, of an action brought by Donald Shooter pursuant to 42 U.S.C. § 1983 alleging that the Speaker of the Arizona House of Representatives, Javan Mesnard, and the Arizona Governor’s Chief of Staff, Kirk Adams, wrongfully engineered Shooter’s expulsion as a representative from the Arizona House.
Shooter was expelled from the Arizona House by a 56-3 vote after a legislative investigation into sexual harassment allegations concluded that he had created a hostile work environment. Shooter filed suit against Mesnard, Adams, and the State of Arizona, alleging that his expulsion was the product of a conspiracy to suppress his anti-corruption efforts. Shooter’s complaint alleged federal causes of action under § 1983 based on due process and equal protection violations.
Shooter conceded on appeal that the district court correctly dismissed his § 1983 claim against the State of Arizona on the grounds that the State is not a person for the purposes of § 1983. Accordingly, the only question before the panel was whether the district court properly dismissed Shooter’s § 1983 claim for monetary relief against Mesnard and Adams.
The panel first held that even assuming that Shooter had not abandoned his violation of equal protection theory, he failed to state a claim because the complaint failed to plead sufficient facts to raise a plausible inference that Mesnard and Adams acted with a discriminatory intent based on Shooter’s sex.
Addressing the procedural due process claims based on a stigma-plus theory, the panel held that even assuming that Shooter had any cognizable liberty interest, the claim failed because Mesnard and Adams were entitled to qualified immunity. The panel stated that in arguing that his due process rights to notice and a hearing were violated, Shooter relied on cases that arose in factual contexts that differed from the internal workings of a state legislature, thereby underscoring his failure to show clearly established law that was particularized to the facts of the case. Moreover, the legislative context in which Shooter’s claims arose presented distinct federalism concerns that were not addressed, much less clearly resolved, by the broadly framed due process principles he invoked. Given the lack of any relevant caselaw that placed the merits of his claims beyond debate, Shooter failed to carry his burden to show that the proceedings that led to his expulsion from the Arizona House violated clearly established law.