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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Rosales v. Uber Technologies, Inc. (CA2/8 B305546 4/30/21) Arbitration/PAGA

 

Defendant Uber Technologies, Inc. moved to compel arbitration in a case where the plaintiff, Damaris Rosales, alleged a single cause of action for wage violations under the Private Attorneys General Act (PAGA, Lab. Code, § 2698 et seq.).  Plaintiff was an Uber driver under a written agreement stating she was an independent contractor and all disputes would be resolved by arbitration under the Federal Arbitration Act (FAA, 9 U.S.C. § 1 et seq.).  The agreement delegated to the arbitrator decisions on the enforceability or validity of the arbitration provision.  The trial court denied defendant’s motion to compel arbitration.

 

Defendant contends plaintiff cannot bring a PAGA claim in court unless or until an arbitrator first decides whether she has standing to bring a PAGA claim—that is, whether she is an employee who can seek penalties under PAGA on behalf of the state, or an independent contractor who cannot.  We conclude, as has every other California court presented with this or similar issues, that the threshold question whether plaintiff is an employee or an independent contractor cannot be delegated to an arbitrator.  Accordingly, we affirm the trial court’s order.

 

https://www.courts.ca.gov/opinions/documents/B305546.PDF

 

Martinez v. Rite Aid Corporation (CA2/7 B292672 4/30/21)  Wrongful Termination/ Compensatory Damages

 

In 2008 Maria Martinez filed this action against her former employer, Rite Aid Corporation, and her former supervisor, Kien Chau.  In 2010 a jury returned a special verdict in Martinez’s favor and awarded her $3.4 million in compensatory damages and $4.8 million in punitive damages.  Following an appeal by Rite Aid and Chau, this court reversed the judgment and remanded the case for a new trial on compensatory damages on Martinez’s causes of action for wrongful termination in violation of public policy against Rite Aid and intentional infliction of emotional distress against Rite Aid and Chau.

 

At the 2014 retrial, the jury awarded Martinez $321,000 on her wrongful termination cause of action against Rite Aid, $0 on her intentional infliction of emotional distress cause of action against Rite Aid, and $20,000 on her intentional infliction of emotional distress cause of action against Chau.  Following an appeal by Martinez, this court reversed the judgment and remanded the case for another new trial on compensatory damages on Martinez’s wrongful termination cause of action against Rite Aid and her intentional infliction of emotional distress causes of action against Rite Aid and Chau.  Recognizing that the case would be tried for a third time, the court “offer[ed] . . . guidance to the trial court on retrial,” including that the special verdict form ask the jury to apportion noneconomic damages for intentional infliction of emotional distress between Chau and other Rite Aid employees.

 

At the 2018 retrial, the jury awarded Martinez $2,012,258 on her wrongful termination cause of action against Rite Aid and $4 million on her intentional infliction of emotional distress causes of action against Rite Aid and Chau.  Rite Aid argues the trial court prejudicially erred by rejecting this court’s direction that the special verdict form require the jury to apportion noneconomic damages for intentional infliction of emotional distress between Chau and other Rite Aid employees.  Rite Aid contends the trial court also erroneously instructed the jury about the damages to be awarded for intentional infliction of emotional distress and about Martinez’s post-termination earnings.  Rite Aid further asserts the trial court should have reduced the past economic damages award for wrongful termination by the amount of Martinez’s post-termination earnings. 

 

Actual earnings from substitute employment must be offset from lost earnings awards.  We accordingly agree with Rite Aid that Martinez’s post-termination earnings should have been deducted from the past economic damages award for wrongful termination, and we modify the judgment accordingly.  We affirm the judgment in all other respects.

 

https://www.courts.ca.gov/opinions/documents/B292672.PDF

 

Assn. for L.A. Deputy Sheriffs v. Macias (CA2/8  B295086 4/30/21) Union Board Member Removal

 

In 2014, the Association for Los Angeles Deputy Sheriffs (ALADS) sued Armando Macias and John Nance (collectively, defendants) for breaches of their fiduciary duty to ALADS as members of its board of directors.  The breaches of fiduciary duty occurred after the board removed Mr. Macias as a director and president of ALADS, on the ground he was not qualified under the bylaws to be a director (a requirement for holding an executive office).  Defendants refused to accept Mr. Macias’s removal, taking what they now downplay as merely “ill-advised” steps to contest the removal and remain in charge.  These included informing the staff Mr. Macias was still president; obtaining a cashier’s check for $100,000 from a political action committee (PAC) account of ALADS to retain a law firm; purporting to conduct board meetings without a quorum; and so on, causing great disruption in ALADS’s management.

           

ALADS obtained a temporary restraining order requiring return of the $100,000, and several weeks later a preliminary injunction preventing Mr. Macias from claiming to be a director.  Four years later, the case was tried to the court over seven days in May 2018.  ALADS sought several categories of damages caused by defendants’ disruption of ALADS’s management, including $7.8 million in compensation for its members, based on a 140-day delay in negotiating a new memorandum of understanding (MOU) with Los Angeles County.  ALADS offered lay and expert testimony to prove the $7.8 million of lost salary it sought to recover on behalf of its members.  That evidence was admitted without objection from defendants.  Defendants then asserted in closing arguments, for the first time in the four-year course of this litigation, that ALADS lacked standing to recover monetary damages on behalf of its members.

 

The trial court entered judgment for ALADS, awarding damages sustained by ALADS and a permanent injunction, but found ALADS did not have standing to recover monetary compensation for its members.  After the judgment was entered, ALADS sought cost-of-proof sanctions (Code Civ. Proc., § 2033.420) from defendants.  The court denied the motion.

           

Both parties appealed.  We conclude the trial court did not err in its conclusion defendants breached their fiduciary duties to ALADS, or in its award of damages for harm to ALADS (except in one very minor respect), or in its award of a permanent injunction.  The court did err, however, when it concluded ALADS did not have standing to seek the $7.8 million in damages on behalf of its members.  ALADS proved those damages without objection from defendants and had standing to do so.  We further conclude ALADS was entitled to cost-of-proof sanctions. 

 

Accordingly, we amend the judgment to include the $7.8 million in damages to ALADS’s members, affirm the judgment as amended, and remand the matter to the trial court to determine the appropriate amount of cost-of-proof sanctions.   

 

https://www.courts.ca.gov/opinions/documents/B295086.PDF

 

Verceles v. L.A. Unified School Dist. (CA2/7 B303182, filed 4/19/21, ord. pub. 4/29/21) FEHA/Anti-SLAPP 

 

Junnie Verceles appeals the order granting the Los Angeles Unified School District’s special motion to strike his complaint for discrimination and retaliation in violation of California’s Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.).  Verceles contends the trial court erred in finding his causes of action arose from protected activity within the meaning of Code of Civil Procedure section 425.16, subdivision (e) and he had failed to establish a probability of prevailing on the merits of his claims.  Verceles also appeals the court’s award of attorney fees to the District.  We reverse. 

 

https://www.courts.ca.gov/opinions/documents/B303182.PDF 

 

Calif. Truck. Ass’n v Bonta (9th Cir. 20-55106 4/28/21) AB 5 ABC Test/FAAAA Preemption 

 

Reversing the district court’s order preliminarily enjoining enforcement, against any motor carrier doing business in California, of California’s Assembly Bill 5, which codified the judge-made “ABC test” for classifying workers as either employees or independent contractors, the panel held that application of AB-5 to motor carriers is not preempted by the Federal Aviation Administration Authorization Act of 1994.  

 

In Dynamex Operations W. v. Superior Ct., 4 Cal. 5th 903 (2018), the California Supreme Court adopted the ABC test. The California legislature enacted AB-5, codifying the ABC test, in September 2019. California Trucking Association, a trade association representing motor carriers that hire independent contractors who own their own trucks, and two independent owner-operators filed suit, seeking to enjoin enforcement of AB-5. The district court granted a preliminary injunction against enforcement of AB-5 against any motor carrier doing business in California.  

 

The panel held that California Trucking Association and its members had standing to bring this suit because they demonstrated that their policies were presently in conflict with the challenged provision, and they had a concrete plan to violate AB-5. In addition, CTA established that there was a threat to initiate proceedings against its members.  

 

The panel held that the district court abused its discretion by enjoining the State of California from enforcing AB-5 against motor carriers doing business in California on the ground that such enforcement is preempted by the FAAAA. The panel held that because AB-5 is a generally applicable labor law that affects a motor carrier’s relationship with its workforce and does not bind, compel, or otherwise freeze into place the prices, routes, or services of motor carriers, it is not preempted by the FAAAA.  

 

Dissenting, Judge Bennett wrote that AB-5 both affects motor carriers’ relationship with their workers and significantly impacts the services motor carriers are able to provide to their customers, and it therefore is preempted as applied to California Trucking Association’s members. 

 

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/28/20-55106.pdf 

 

Towner v. County of Ventura (CA2/7 B306283 4/28/21) POBRA 

 

Tracy Towner appeals from an order granting the special motion to strike (Code Civ. Proc., § 425.16; anti-SLAPP statute) filed by defendants County of Ventura (County), Ventura County Office of the District Attorney (VCDA), District Attorney Gregory D. Totten, Chief Assistant District Attorney Michael Schwartz, and outside counsel Edward Zappia (collectively, the County defendants).  Towner worked for VCDA as an investigator.  He alleged the County defendants terminated him for dishonesty based on his testimony at a fellow peace officer’s administrative hearing before the Civil Service Commission of Ventura County (Commission).  After Towner appealed the termination decision to the Commission, the County filed a petition for writ of mandate requesting the superior court enjoin the Commission from hearing Towner’s appeal due to an alleged conflict of interest.  The County attached as exhibits to its petition excerpts from an investigative report on Towner’s conduct and notices of discipline from VCDA to Towner relating to VCDA’s termination decision.  The superior court denied the County’s request for ex parte relief, and after a hearing, the Commission reversed the County’s termination of Towner and ordered him reinstated. 

 

Towner then filed this action, alleging five causes of action, including for violation of the Public Safety Officers Procedural Bill of Rights Act (Gov. Code, § 3300 et seq.; POBRA) and negligence per se based on violation of Penal Code 832.7. Towner contends the trial court erred in granting the County defendants’ special motion to strike the POBRA and section 832.7 causes of action because the County’s disclosure of his confidential personnel records was illegal as a matter of law and therefore was not protected activity under Code of Civil Procedure section 425.16.  Because the County defendants’ willful disclosure of Towner’s confidential personnel records without complying with mandatory procedures for disclosure was punishable as a misdemeanor under Government Code section 1222, the disclosure did not constitute protected activity.  We reverse. 

 

https://www.courts.ca.gov/opinions/documents/B306283.PDF 

 

Oakland Police Officers' Assn. v. City of Oakland (CA1/1 A158662 4/26/21) POBRA

 

This appeal concerns the meaning of certain requirements described in section 3303, subdivision (g) of the Public Safety Officers Procedural Bill of Rights Act (Gov. Code, § 3300 et seq., POBRA), mandating the disclosure of complaints, reports, and other materials to a peace officer under investigation for misconduct.  In December 2017, a citizen filed a complaint against officers from the Oakland Police Department (Department), alleging that the officers violated the citizen’s rights in various ways while conducting a mental health welfare check.  Following an internal investigation, the Department cleared the officers of misconduct.  The Oakland Community Police Review Agency (CPRA), a civilian oversight agency with independent authority to investigate claims of police misconduct, conducted its own investigation.  Before the CPRA’s formal interrogation of the officers, counsel for the officers demanded copies of all “reports and complaints” prepared or compiled by investigators pursuant to section 3303, subdivision (g).  The CPRA refused to disclose these materials.  Based on its investigation, the CPRA determined that officers knowingly violated the complainant’s civil rights by entering the residence and seizing property without a warrant, and then actively concealed this violation from investigators.

   

The officers and their police union filed a petition for writ of mandate alleging that the City of Oakland (City) violated their procedural rights by refusing to disclose reports and complaints prior to holding the supplemental interrogations.  The Fourth District Court of Appeal previously considered the same issue in Santa Ana Police Officers’ Association v. City of Santa Ana (2017) 13 Cal.App.5th 317, 328 (City of Santa Ana), holding that POBRA requires the disclosure of such materials after an initial interrogation and “ ‘prior to any further interrogation.’ ”  Feeling constrained by City of Santa Ana, the trial court below granted the petition and ordered the City to disregard the interrogation testimony in any current or future disciplinary proceedings against the officers.  

 

We conclude that mandatory disclosure of complaints and reports prior to any subsequent interrogation of an officer suspected of misconduct is inconsistent with the plain language of the statute and undermines a core objective under POBRA—maintaining the public’s confidence in the effectiveness and integrity of law enforcement agencies by ensuring that internal investigations into officer misconduct are conducted promptly, thoroughly, and fairly.  Under our reading of section 3303, subdivision (g), an investigating agency’s disclosure obligations should instead be guided by whether the agency designates otherwise discoverable materials as confidential. While confidential materials may be withheld pending the investigation—and may not be used as the basis for disciplinary proceedings absent disclosure—nonconfidential material should be disclosed upon request.  Accordingly, we reverse the judgment and remand the matter for further proceedings consistent with this opinion. 

 

https://www.courts.ca.gov/opinions/documents/A158662.PDF

 

Gomez v. The Regents of the University of Cal (CA4/1 D077181.4/23/21) Wage and Hour/PAGA

 

Guivini Gomez is a former employee of the Regents of the University of California (Regents).  She sued the Regents, as the named plaintiff in a purported class action, claiming the Regents failed to pay her the required minimum wage for all hours she worked.  However, she does not allege that the Regents set her hourly wage below the minimum wage as established by California law.  Instead, she contends the Regents’ time-keeping procedures of rounding hours and automatically deducting 30 minute meal breaks resulted in her not receiving the minimum wage for all hours she actually worked.  In addition to claiming the Regents did not pay her the minimum wage, Gomez also sought penalties under the Private Attorneys General Act of 2004, Labor Code section 2698 et seq. (PAGA).

 

The superior court sustained the Regents’ demurrer without leave to amend and entered judgment in their favor.  Gomez appeals, arguing the superior court erred in concluding that the minimum wage laws do not apply to the Regents and that she could not seek penalties against the Regents under PAGA as a matter of law.

 

https://www.courts.ca.gov/opinions/documents/D077181.PDF

 

Felczer v. Apple (CA4/1 D077314 4/23/21) Postjudgment Interest on Prejudgment Interest

 

This case presents a single question for our determination:  in a civil case [wage and hour action] where the prevailing party is entitled to recover certain litigation expenses and attorney’s fees from the losing party, when does postjudgment interest on an award of prejudgment costs begin to run?  As we discuss below, accrual begins on the date of the judgment or order that establishes the right of a party to recover a particular cost item, even if the dollar amount has yet to be ascertained.

 

https://www.courts.ca.gov/opinions/documents/D077314.PDF

Citizens of Humanity, LLC v. Ramirez (CA2/5 B299469 4/19/21)  Wage & Hour/Attorney’s Fees

 

An employee brought a wage and hour class action against her employer.  Prior to certification, the action was settled.  The employer paid a sum to the employee to resolve her individual claims, and she dismissed the class claims without prejudice, with court approval.  Thereafter, the employer brought the current malicious prosecution action against the employee and her counsel.  The employee and her counsel each moved to strike the action under the anti-SLAPP law (Code Civ. Proc., § 425.16).  The trial court denied the anti-SLAPP motions on the basis that the employer established a prima facie showing of prevailing on its malicious prosecution cause of action.  We disagree.  As the prior action resolved by settlement, the employer is unable to establish the action terminated in its favor as a matter of law.  We therefore reverse and remand for determination of one unadjudicated anti-SLAPP issue, and whether the employee and her counsel are entitled to an award of attorney fees.

 

https://www.courts.ca.gov/opinions/documents/B299469.PDF

 

Wilson v. Craver (9th Cir. 18-56139 4/19/21) ERISA

 

The panel affirmed the district court’s dismissal of an action alleging breach of fiduciary duty under the Employee Retirement Income Security Act in the management of the assets of a pension plan.

 

An employee of Edison International, Inc., alleged that fiduciaries of Edison’s employee stock ownership plan breached their duty of prudence by allowing employees to continue to invest in Edison stock after learning that the stock was artificially inflated.

 

The panel held that the plaintiff failed to state a duty of prudence claim under the Fifth Third standard because she failed plausibly to allege an alternative action so clearly beneficial that a prudent fiduciary could not conclude that it would be more likely to harm the fund than to help it. Agreeing with other Circuits, and distinguishing a Second Circuit case, the panel held that general economic principles are not enough on their own to plead duty-of-prudence violations.

 

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/19/18-56139.pdf

 

Bill Signed by Governor (4/16/21)

 

SB 93, Committee on Budget and Fiscal Review. Employment: rehiring and retention: displaced workers: COVID-19 pandemic.

 

Salisbury v. City of Santa Monica (9th Cir. 20-55039 4/16/21) FHAA

 

Affirming the district court’s summary judgment in favor of the City of Santa Monica, the panel held that the Fair Housing Amendments Act of 1988 does not require landlords to accommodate the disability of an individual who neither entered into a lease nor paid rent in exchange for the right to occupy the premises.

 

Plaintiff lived with his father in a mobile home on land rented from the City of Santa Monica. Upon his father’s death, plaintiff refused to vacate the mobile home park, and he asked the City to accommodate his disability by waiving park rules to allow him to store his vehicle immediately next to his mobile home.

 

The panel held that, by its plain language, the FHAA does not apply to claims by plaintiffs who never themselves or through an associate entered into a lease or paid rent to the defendant landlord. As to occupants requesting accommodation, the FHAA’s disability discrimination provisions apply only to cases involving a “sale” or “rental” for which the landlord accepted consideration in exchange for granting the right to occupy the premises. Applying a federal standard, rather than California landlord-tenant law, the panel concluded that because plaintiff never provided consideration in exchange for the right to occupy a space in the mobile home park, the FHAA did not apply to his claim for relief, and the City was not obligated to provide, offer, or discuss an accommodation.

 

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/16/20-55039.pdf