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Simers v. LA Times Communications (CA2/8 B269565 1/5/18) Disability & Age Discrimination/Constructive Termination/JNOV


In March 2013, plaintiff T.J. Simers was a well-known and sometimes controversial sports columnist for Los Angeles Times Communications, LLC (The Times or defendant).  He had held that position since 2000, receiving uniformly favorable and often exceptional performance reviews from defendant.  On March 16, 2013, plaintiff, then 62 years old, suffered a neurological event with symptoms similar to a “mini-stroke.”  He recovered quickly, for the most part, and soon was again writing his thrice-weekly column.


Two and a half months later, The Times reduced plaintiff’s columns to two per week, to “give [him] more time to write on [his] columns.”  His editors expressed the dissatisfaction of upper management with several recent columns, and stated “they had been having problems with [his] writing for the past 18 months.”  Two weeks later, The Times learned from an article in another publication that a Hollywood producer (who had just filmed a 90-second video that had “gone viral,” in connection with one of plaintiff’s columns) was apparently developing a television show loosely based on plaintiff’s life.  Viewing this as a possible ethical breach, defendant put plaintiff’s columns “on holiday” for 10 days, and then, on June 24, 2013, suspended the column pending an investigation.


On August 8, 2013, after completion of the investigation and several meetings with plaintiff, defendant issued a “final written warning” that removed plaintiff from his position as a columnist and made him a senior reporter, albeit with no reduction in salary “for now.”  Plaintiff’s lawyer informed defendant on August 12 that plaintiff could not work in that environment and considered himself to have been constructively terminated.


On September 4, 2013, The Times asked plaintiff to return to his position as columnist.  But defendant did not answer plaintiff’s questions about how many columns he would write and whether he had to change his interviewing approach, and plaintiff did not trust The Times.  The next day, plaintiff met with editors at the Orange County Register, and by September 9, 2013, had accepted a position as a columnist there.


On October 15, 2013, plaintiff sued The Times.  After a 28-day trial in the fall of 2015, the jury found in favor of plaintiff on his claims of disability and age discrimination, and on his claim of constructive termination.  The jury awarded plaintiff $2,137,391 in economic damages for harm caused by his constructive termination and $5 million in noneconomic damages.  The parties agreed to give the jury a special verdict form that instructed them to fill in the blanks for past and future economic damages only if they found plaintiff was constructively terminated.  The special verdict form allowed the jury to award past and future noneconomic damages without identifying which noneconomic damages were caused by the constructive termination and which were caused by the discrimination.


The trial court granted defendant’s motion for judgment notwithstanding the verdict (JNOV) on plaintiff’s constructive termination claim, and otherwise denied JNOV, finding substantial evidence supported the verdict on plaintiff’s age and disability discrimination claims.  The court also granted defendant’s motion for a new trial on all damages, economic and noneconomic, finding it was not possible to determine what amount of noneconomic damages the jury awarded because of the discrimination but not because of the constructive discharge.  The court denied defendant’s motion for a new trial on plaintiff’s discrimination claims.


Both parties appealed.  We affirm the trial court’s orders.

Stirling v. Brown (CA4/3 G053998 1/4/18) California Military Whistleblower Protection Act


The California Military Whistleblower Protection Act, Military and Veterans Code section 56 (Section 56), affords certain rights and protections to service members of the California National Guard who face actual or threatened adverse personnel actions in retaliation for reporting waste, fraud, abuse of authority, violation of law, or threats to the public health and safety.  A service member may file an allegation that a prohibited personnel action has been taken.  The allegation is filed with the state inspector general, who must expeditiously determine whether there is sufficient evidence to conduct an investigation and, if so, expeditiously conduct an investigation and prepare a report on the results.


Under Section 56, subdivision (e) (Section 56(e)), if the inspector general is not outside the immediate chain of command of both the service member submitting the allegation and the individual or individuals alleged to have taken the challenged personnel action, then the inspector general must refer the allegation to the Chief of the National Guard Bureau and the Governor.  At issue in this case is the scope of the Governor’s responsibilities upon receiving an allegation referred by the inspector general.


Major Dwight D. Stirling, a part‑time judge advocate in the California National Guard, brought a petition for writ of mandate in the trial court to compel Governor Edmund G. Brown, Jr. (the Governor) to act on Stirling’s whistleblower allegation in accordance with Section 56, subdivisions (d) and (f)(1).  Stirling argues that Section 56(e) requires the Governor to undertake the same preliminary determination, investigation, and reporting that is required of the inspector general under Section 56, subdivisions (d) and (f)(1).  The Attorney General, representing the Governor, argues Section 56(e) does not require the Governor to take any particular action on a whistleblower allegation and permits the Governor to defer to the Chief of the National Guard Bureau, who is a federal military officer responsible for heading the federal agency that controls the United States Army National Guard.


The trial court sustained without leave to amend the Attorney General’s demurrer to Stirling’s amended petition for writ of mandate.  Because we are reviewing a judgment following an order sustaining a demurrer without leave to amend, our analysis is necessarily limited to the pleadings and matters of which we may take judicial notice.  (Santa Ana Police Officers Assn. v. City of Santa Ana (2017) 13 Cal.App.5th 317, 323.)


We conclude Section 56 is unambiguous, and its plain language does not require the Governor to undertake the procedures required of the inspector general in response to a whistleblower allegation.  We also conclude, based on the appellate record, that Section 56 does not violate California’s equal protection clause because in all cases a whistleblower allegation is referred to an impartial decision maker who has discretion whether to undertake a full investigation.


Ortega Mekendres v. Sheridan (9th Cir. 16-16663 1/4/18) Contempt for Violating Injunction/Attorneys’ Fees


The panel granted in part plaintiffs’ motion for attorney’s fees on appeal pursuant to 42 U.S.C. § 1988(b).


Plaintiffs had obtained an injunction against defendant in an action under 42 U.S.C. § 1983. Melendres v. Arpaio, 784 F.3d 1254, 1267 (9th Cir. 2015). Gerard Sheridan, a now-retired employee of defendant, appealed from the district court’s finding that he committed civil contempt by disobeying the injunction. After Sheridan filed his opening brief, the panel granted plaintiffs’ motion to dismiss Sheridan’s appeal for lack of standing. Plaintiffs then sought attorney’s fees under 42 U.S.C. § 1988(b) for services performed in connection with the appeal.


The panel held that plaintiffs were “prevailing part[ies]” within the meaning of section 1988 in every sense. They succeeded in obtaining an injunction in the district court and succeeded in dismissing Sheridan’s appeal from the district court’s finding of contempt for violating the injunction. That the panel dismissed Sheridan’s appeal for lack of standing rather than on the merits did not, as Sheridan asserted, divest plaintiffs of prevailing party status. The panel therefore granted plaintiffs’ application for attorney’s fees and costs related to Sheridan’s dismissal. Because, however, plaintiffs did not succeed in opposing Sheridan’s appeal on the merits, the panel declined to award them fees for preparing the answering brief. The panel referred the matter to the Appellate Commissioner to calculate the amount of reasonable attorney’s fees and non-taxable costs to award plaintiffs consistent with this order.


Arave v. Merrill Lynch, Pierce, etc. (CA4/2 E061677 1/2/18) FEHA Religious Discrimination/Wage & Hour


Plaintiff and appellant, J. Brent Arave, brought several claims under the California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.) against his former employers, Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch), Bank of America (BoA), his supervisor Joseph Holsinger, and a human resources supervisor, Katherine Anderson (collectively, defendants).  He sought to recover damages caused by discrimination, harassment, and retaliation based on his membership in the Church of Jesus Christ of Latter-day Saints.  He also sought damages for nonpayment of wages (Lab. Code, § 201) and whistleblower retaliation (Lab. Code, § 1102.5).


After a five-week trial, the jury returned a verdict in favor of defendants on all counts that had survived summary judgment and dismissal. The trial court denied Arave’s post-trial motions and awarded defendants, as prevailing parties, $54,545.18 in costs, $29,097.50 in expert witness fees, and $97,500 in attorney fees incurred defending against Arave’s wage claim.


Arave appeals the verdict and the award of fees and costs.  He maintains:


  1. The trial court made numerous evidentiary errors, which prejudiced Arave;

  2. Defense counsel committed prejudicial misconduct;

  3. The trial court’s bias deprived him of a fair trial;

  4. The trial court committed prejudicial error by instructing the jury certain evidence could not constitute harassment attributable to his employers;

  5. The jury’s verdict was not supported by substantial evidence because defendants conceded they subjected Arave to an adverse employment action;

  6. The trial court erred in denying Arave’s motion for a new trial;

  7. The trial court erred by awarding defendants $97,500 in attorney fees on Arave’s wage claim despite not finding the claim frivolous;

  8. The trial court erred in awarding defendants costs and expert witness fees on Arave’s FEHA claims despite finding the claims nonfrivolous; and

  9. The trial court erred in granting summary judgment in favor of individual defendant Katherine Anderson on Arave’s harassment claim.


Defendants cross-appeal, contending the trial court abused its discretion when it determined Arave’s FEHA claims were not frivolous and denied them attorney fees on those claims.


We affirm the trial court in all respects but two. We conclude the trial court erred by awarding $83,642.68 in costs and expert witness fees though it found Arave’s FEHA claims were nonfrivolous, and therefore reverse the order making the award. However, because a portion of the award may be attributable to Arave’s wage claim, we will remand for the trial court to make that apportionment, as appropriate.  We also conclude the trial court erred by awarding $97,500 in attorney fees on the wage claim without determining whether that claim was frivolous.  We will remand for the trial court to make that determination.


Kramer v. Cullinan (9th Cir. 14-36103 1/3/18) Liberty Interest/Stigmatizing Termination Information


Dr. Mary Cullinan (Dr. Cullinan), former-President of Southern Oregon University (SOU), appeals from the district court’s denial of her motion for summary judgment seeking qualified immunity in an action filed by Ronald Kramer (Kramer) alleging that Dr. Cullinan violated his liberty interest by releasing stigmatizing information in connection with his termination. Because it is unlikely that the information released was stigmatizing, and because it was not clearly established as a matter of law that the information was stigmatizing, Dr. Cullinan was entitled to qualified immunity.


Kim v. Reins International California, Inc. (CA2/4 B278642 12/29/17) PAGA/Aggrieved Employee


Appellant Justin Kim sued his former employer, Reins International California, Inc., alleging individual and class claims for wage and hour violations, and seeking civil penalties on behalf of the State of California and aggrieved employees under Labor Code section 2698 et seq., the Labor Code Private Attorneys General Act of 2004 (PAGA).  Reins successfully moved to compel arbitration of Kim’s individual claims.  While arbitration was pending, Kim accepted an offer to settle his individual claims and dismiss those claims with prejudice.  Reins then moved for summary adjudication on the PAGA claim, asserting that Kim was no longer an “aggrieved employee” because he had dismissed his individual claims against Reins, and therefore he no longer had standing to assert a claim under the PAGA.  The trial court granted Reins’s motion and entered judgment.


According to the PAGA, “‘aggrieved employee’ means any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.”  (Lab. Code, § 2699, subd. (c).)  The question on appeal is whether Kim, after settling and dismissing his individual claims against Reins with prejudice, continued to have standing under the PAGA as an “aggrieved employee.”  We hold that Kim’s dismissal of his individual Labor Code claims with prejudice foreclosed his standing under PAGA, and therefore affirm.


Dunlap v. Liberty Natural Products (9th Cir. 15-35395/16-35113 12/28/17) Disability Discrimination/Reasonable Accommodation


The panel affirmed (1) the district court’s decision denying the defendant’s renewed motion for judgment as a matter of law on a claim of disability discrimination under the Americans with Disabilities Act and Oregon state law, and (2) the district court’s order granting in part the plaintiff’s motion for an award of attorney’s fees.


The panel held that the district court committed instructional error by conflating the elements of the plaintiff’s disparate-treatment and failure-to-accommodate claims. Nevertheless, the instructional error was harmless because the defendant was on notice of the need to accommodate, and it was more probable than not that the jury’s verdict was not affected.


The panel held that, construed in the light most favorable to the plaintiff, the evidence supported the jury’s finding that a reasonable accommodation existed that would have enabled her to perform the essential functions of her shipping clerk position.


The panel also held that the district court did not abuse its discretion in reducing the plaintiff’s fee award by 50 percent based on the degree of success she achieved in the overall litigation.


Cornell v. Berkeley Tennis Club (CA1/1 A147516 12/21/17) FEHA Disability Discrimination/Obesity


Plaintiff Ketryn Cornell is a severely obese woman who was fired from the Berkeley Tennis Club after having worked there for over 15 years.  She brought eight claims against the Club:  three under the California Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.), for disability discrimination and failure to accommodate her disability (the discrimination/failure to accommodate claim), disability harassment, and retaliation; three for wrongful discharge in violation of public policy, based on her three FEHA claims; one for intentional infliction of emotional distress; and one for defamation.  She appeals from a final judgment entered after the trial court granted the Club’s motion for summary adjudication of all eight claims.


We affirm in part and reverse in part.  Under the law governing motions for summary adjudication, the Club had the initial burden to produce evidence that Cornell cannot establish at least one element of each claim.  The Club failed to sustain this burden on the claims requiring Cornell to show that her obesity has a physiological cause.  We therefore conclude that the trial court improperly granted summary adjudication of the FEHA claims alleging that the Club discriminated against and harassed Cornell and the claim alleging that the Club terminated her in violation of public policy based on the FEHA discrimination claim.  We also conclude, however, that the court properly granted summary adjudication of the FEHA claims alleging that the Club failed to accommodate Cornell’s disability and retaliated against her and the claims alleging that the Club terminated her in violation of public policy based on the FEHA harassment and retaliation claims.  Finally, we conclude that the court properly granted summary adjudication of the claim alleging that the Club intentionally inflicted emotional distress on Cornell but that a triable issue of material fact remains on the claim alleging that she was defamed.


Lawson v. ZB, N.A. (CA4/1 D071279 mod. 12/19/17) PAGA/Arbitration Order and Appealability/Bifurcation


It is ordered that the opinion filed herein on December 19, 2017, be modified as follows:


On page 24, the last sentence under the heading Disposition should be deleted and a new sentence added so that the sentence now reads:         


            Each party to bear its own costs on appeal.


This modification changes the judgment.  In all other respects the opinion remains the same.

Lawson v. ZB, N.A. (CA4/1 D071279 12/19/17) PAGA/Arbitration Order and Appealability/Bifurcation


An order granting a motion to arbitrate is not appealable.  Here, the trial court granted appellant ZB, N.A.'s (ZB) motion to arbitrate respondent Kalethia Lawson's wage and hour claim, which was brought under the provisions of the Private Attorneys General Act (the PAGA), Labor Code section 2698 et seq.  The fact Lawson's PAGA claim, of necessity, included not only Labor Code violations committed with respect to her employment, but violations with respect to other employees, and that the arbitration ordered by the trial court included those violations, does not alter the fact the trial court ordered that Lawson's claim be arbitrated.  Hence, we have no appellate jurisdiction over the trial court's order compelling arbitration.


However, apparently recognizing the potential defect in its appeal, shortly after ZB filed its notice of appeal, ZB filed a petition for a writ of mandate challenging the trial court's order.  We thereafter ordered that the appeal and petition be considered together and issued an order to show cause.  By separate order we have now consolidated the appeal and the writ proceeding and reach the merits of ZB's contentions with respect to the trial court's order in our disposition of ZB's petition for extraordinary relief.


In our disposition on the merits, we find the trial court erred in bifurcating the underpaid wages portion of Lawson's PAGA claim and ordering arbitration of that portion of the claim.  Accordingly, we issue a writ directing the trial court to vacate its order bifurcating and compelling arbitration of the underpaid wages portion of Lawson's PAGA claim.


Benjamin v. B&H Education (9th Cir. 15-17147 12/19/17) FLSA/Student Workers/Primary Benefit Analysis


The panel affirmed the district court’s summary judgment in favor of the defendant in an action brought under the Fair Labor Standards Act by students of cosmetology and hair design. The panel held that, under the “economic reality” test, the students were not employees under the FLSA even though they alleged that much of their time was spent in menial and unsupervised work. Agreeing with other circuits, the panel held that a “primary beneficiary” analysis, rather than a test formulated by the Department of Labor, applies in the specific context of student workers. The panel concluded that the students, not defendant’s schools, were the primary beneficiaries of their own labors because at the end of their training they qualified to practice cosmetology. The panel held that the students also were not employees entitled to be paid under Nevada or California law. The panel further held that the district court did not abuse its discretion by striking declarations as a sanction under Federal Rule of Civil Procedure 37.


Yuba City Unified School Dist. v. Cal. State Teachers' Ret. System (CA/3 C082934 12/18/17) Pension Overpayment/Inquiry Notice


The California State Teachers’ Retirement System (CalSTRS) appeals from a decision granting the Yuba City Unified School District’s (District) petition for writ of mandate and setting aside CalSTRS’s decision to collect overpayments mistakenly made to some of the District’s retirees.  The superior court held that the three-year statute of limitations set forth in Education Code section 22008, subdivision (c) bars collection of the overpayments because a 2005 letter CalSTRS sent one of the retirees demonstrated actual notice of the payment issues. We disagree.  The letter does not reflect actual notice of the specific payment issues raised in this proceeding.  We conclude, however, that inquiry notice would be sufficient to start the limitation period contained in section 22008, subdivision (c).  Whether CalSTRS had inquiry notice in this case is a question of fact that was not addressed at the administrative level or by the superior court.  We will reverse and remand for further proceedings in light of these conclusions.


Hartnett v. San Diego County Office of Education (CA4/1 D070974 12/14/17) Wrongful Termination/ Personnel Commission Investigation


Appellants and defendants San Diego County Office of Education (Office) and Randolph E. Ward appeal from a judgment in favor of plaintiff and respondent Rodger Hartnett reinstating his employment and awarding him $306,954.99 in back pay, benefits, and prejudgment interest.  Defendants contend (1) collateral estoppel precluded the trial court from granting Hartnett's requested relief; (2) the court misinterpreted Education Code section 45306 in its decision; and (3) the court improperly determined the amount of Hartnett's back pay without remanding that issue to the proper administrative forum, Office's personnel commission (the commission), for the commission to make factual findings on the issue. 


We conclude that the trial court's sole ground for granting Hartnett's petition—that the commission did not proceed in a manner required by law because it did not conduct an investigation—is not supported by section 45306.  Here, the commission fulfilled its statutory duty to investigate Office's allegations against Hartnett by conducting a four-day evidentiary hearing at which Hartnett was either present or chose to be present through his legal counsel and the parties were represented and afforded the opportunity to present oral and documentary evidence relevant to the charges, cross-examine witnesses who were sworn under oath, and argue their positions to the commission.  Both Hartnett and Office agree that in the event we reach this conclusion, no further proceedings are necessary and Office and Ward are entitled to judgment in their favor.  We reverse and remand for the trial court to enter judgment accordingly.

Julian v. Glenair, Inc. (CA2/4 B277064M mod. rhg. den. 12/13/17) PAGA/Arbitration


It is ordered that the opinion filed herein on November 27, 2017 be modified as follows: 

On page 4, line 8, after “[the Rojas action].”, insert the following footnote: 

“The proposed agreement further provided that “to the extent permitted by law, for any claims for which you are seeking relief as a private attorney general on behalf of a government entity as a representative action, both you and [Glenair] agree that any such dispute shall be resolved on an individual basis only under this Program . . . , and that such an action may not be used to resolve the claims or rights of other employees or individuals in a single proceeding . . . .”” 


On page 19, lines 10 though 20, delete: 


“Here, the arbitration agreement also contains a provision barring such claims, but Glenair’s petition to compel did not attempt to enforce that provision.  Rather, before the trial court and on appeal, Glenair has contended only that the agreement obliges respondents to submit their PAGA claim as a whole to arbitration. 


In order to resolve Glenair’s contention, we must examine the circumstances under which employees may agree to arbitrate PAGA claims, thereby waiving their right to assert those claims in a judicial forum.” 


And substitute:


“Here, the arbitration agreement also bars such claims “to the extent permitted by law,” but Glenair’s petition to compel requested only an order that respondents submit their claims to arbitration as required under the agreement, and a stay of court proceedings.  For the reasons explained below, we conclude that to the extent the petition sought arbitration of respondents’ claims, the agreement constituted an unenforceable predispute waiver of respondents’ right to litigate their claims in court.  In view of Iskanian, our conclusion necessarily implies as a corollary that the agreement also constituted an unenforceable predispute waiver of respondents’ right to assert PAGA claims on behalf of other employees in any forum.  (Iskanian, supra, 59 Cal.4th at pp. 382-383.) The focus of our inquiry is therefore on the predispute/postdispute boundary relating to agreements that require arbitration of PAGA claims in lieu of litigation in court.    


In order to resolve that issue, we must examine the circumstances under which employees may agree to arbitrate PAGA claims, thereby waiving their right to assert those claims in a judicial forum.” 


Glenair’s petition for rehearing is denied. The modification does not change the judgment.   


Baxter v. Calif. State Teachers' Retirement System (CA6 H042680 12/12/17) Retirement Benefit Overpayments


Eleven retired teachers (Teachers) who had been employed in the Salinas Unified High School District (District), disputed attempts by appellant California State Teachers’ Retirement System (CalSTRS) to recoup retirement benefit overpayments.  The overpayments were the result of a years-long miscalculation by the District of the monthly retirement benefits to which the Teachers were entitled.  The parties do not dispute that the District miscalculated Teachers’ monthly benefit amounts.  But Teachers contend that the statute of limitations bars CalSTRS’s efforts to recoup prior overpayments and to reduce future monthly benefits to the proper amounts. 


The dispute stems back to 1999, when the District and the Teachers’ union entered into a collective bargaining agreement that purported to create a separate class of employees for teachers who elected to work an extra (sixth) period.  Some years later—on August 18, 2005, after three Teachers had retired—a District employee sent a memorandum to the Monterey County Office of Education (MCOE), which arguably alerted MCOE to the potential overpayment of retirement benefits to teachers in the District who had worked a sixth period.  In December 2008, CalSTRS was advised by its outside auditing firm that Teachers had been overpaid for several years due to the District’s improper inclusion of certain earnings in the calculation of their monthly benefits.  In July 2010, CalSTRS directed the District to correct its calculations and remit prior overpayment amounts to CalSTRS.  Teachers and the District appealed the audit findings of CalSTRS and requested an administrative hearing.  In April 2012, before any such hearing, CalSTRS began reducing Teachers’ monthly payments.


In February 2013, an administrative law judge (ALJ) rejected the challenges of Teachers and the District, upholding CalSTRS’s conclusion that Teachers had been overpaid in the past and that their monthly benefits should be reduced to reflect the proper amounts going forward and should reflect deductions for prior overpayments.  The ALJ rejected the statute of limitations defense asserted by Teachers and the District, i.e., that CalSTRS’s efforts to recoup prior overpayments and reduce future benefits were time-barred.  The Appeals Committee of CalSTRS (Committee), which reviewed the ALJ’s order, ultimately rendered a decision in CalSTRS’s favor.  Teachers successfully brought a petition for peremptory writ of administrative mandamus in the superior court compelling CalSTRS to resume paying them at the original monthly amounts.  The trial court found that CalSTRS was barred by the applicable statute of limitations from either recouping previous overpayments or reducing future payments to reflect the allegedly correct amount of monthly benefits.


In this appeal, we interpret certain provisions of Education Code section 22008—a statute that has not been the subject of any prior appellate decisions.  Under section 22008, subdivision (c) (§ 22008(c)), the three-year statute of limitations applicable for CalSTRS to bring an action to recoup the overpayments commenced with its “discovery of the incorrect payment.”  We conclude, contrary to the trial court’s decision, that “discovery” means the date CalSTRS actually discovered, or in the exercise of reasonable diligence should have discovered, the incorrect payment.  We hold that August 18, 2005, the date of the District’s memorandum to the MCOE, was the correct accrual date of the statute of limitations here because the memorandum gave CalSTRS (through its ostensible agent, MCOE) inquiry notice of the overpayment issue. 


We also address what action by CalSTRS constituted commencement of an “action” for purposes of determining whether the three-year statute of limitations under section 22008, subdivision (a) (§ 22008(a)) was satisfied.  We conclude that, contrary to the trial court’s decision, the action was commenced on July 6, 2012, when CalSTRS filed the statement of issues to initiate the administrative proceeding. 


The trial court incorrectly concluded that CalSTRS’s action to rectify the error for all monthly payments, past and future, was time-barred.  Although the trial court correctly found that CalSTRS had not satisfied the three-year statute of limitations because it had commenced the action more than three years after its claim accrued, under the continuous accrual theory, the statute of limitations for periodic payments such as Teachers’ monthly retirement benefits here commenced with the due date of each payment.  Therefore, only payments due more than three years prior to CalSTRS’s commencement of the action on July 6, 2012, were subject to Teachers’ statute of limitations defense.  Accordingly, we will reverse the judgment and remand the matter for further proceedings.


Brown v. Cinemark USA (9th Cir. 16-15377 12/7/17) Appellate Jurisdiction/Wage and Hour


The panel denied a motion to dismiss for lack of jurisdiction a class action complaint alleging wage and hour claims, and held that the court had jurisdiction under 28 U.S.C. § 1291 to consider the appeal on the merits.


Defendants Cinemark USA, Inc. and Century Theaters, Inc. sought to dismiss for lack of appellate jurisdiction in light of the Supreme Court decision in Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017), because plaintiffs voluntarily settled some of their claims. The panel held that this case was unlike Baker, where the plaintiffs intended to sidestep Fed. R. Civ. P. 23(f) when they voluntarily dismissed their claims.


The panel held that the parties’ mutual settlement for consideration in this case did not raise the same concerns. Unlike the plaintiffs in Baker, the plaintiffs in this case continued litigating their remaining individual claims after the district court denied class certification. The panel further held that the resolution of this case was not a unilateral dismissal of claims, but a mutual settlement for consideration reached by both parties which expressly preserved certain claims for appeal.


Skillin v. Rady Children's Hospital-San Diego (CA4/1 D071288 12/6/17) PAGA/ERISA Preemption


David Skillin brought a Private Attorneys General Act lawsuit against his former employer Rady Children's Hospital of San Diego (Rady) for alleged violations of the California Labor Code.  Skillin claimed Rady made unauthorized payroll deductions from his wages, resulting in higher than desired contributions to his retirement plan.  (Lab. Code, §§ 221–224.)  He also claimed Rady issued inaccurate wage statements by failing to show the amounts deducted for retirement "on written orders of the employee."  (Lab. Code, § 226.)


The trial court granted summary judgment in Rady's favor, concluding Skillin's claims were preempted by the Employee Retirement Income Security Act of 1974 (ERISA).  The court found preemption under ERISA section 514(a), which applies to state laws that "relate to any employee benefit plan."  (29 U.S.C. § 1144(a).)  It did not, however, find preemption under ERISA section 514(e), which applies to state laws that "directly or indirectly prohibit or restrict the inclusion in any plan of an automatic contribution arrangement."  (29 U.S.C. § 1144(e)(1).)


We affirm.  We need not decide whether Skillin's claims are preempted under subdivision (a) of section 514 because they are plainly preempted under subdivision (e) of that same section.


ITV Gurney Holdings v. Gurney (CA2/1 B281694 12/5/17) CEO Termination and Management


Plaintiffs and appellants ITV Gurney Holding Inc. (ITV) and Gurney Productions, LLC (the Company) challenge the trial court’s grant of a preliminary injunction in favor of defendants and respondents Scott Gurney and Deirdre Gurney (the Gurneys), and Little Win, LLC.  The Gurneys are the minority owners of the Company and formerly served as its chief executive officers (CEO’s), pursuant to an employment agreement.  The Company fired the Gurneys as CEO’s and removed them from managing the day-to-day operations of the Company.  The Gurneys do not challenge the Company’s right to fire them as CEO’s.  Rather, they contend that under the operating agreement that governs the Company, they could not be removed from managing its day-to-day operations.  Plaintiffs contend the operating agreement gave the Company, through its board of managers, the ultimate authority to manage the Company, and thus permitted the board to remove the Gurneys as managers of the day-to-day operations.  We agree with plaintiffs and reverse the trial court’s order to the extent that it reinstated the Gurneys to their positions managing the day-to-day operations of the Company.  The Gurneys continue as members of the Company’s board of managers, and we affirm the portion of the preliminary injunction barring the Company from impinging on their rights as board members.


Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission (US 16-111 oral argument transcript 12/4/17) First Amendment Freedom of Speech/Religion/LGBT Public Accommodations (may have employment implications)


Issue: Whether applying Colorado's public accommodations law to compel the petitioner to create expression that violates his sincerely held religious beliefs about marriage violates the free speech or free exercise clauses of the First Amendment.


Oral Argument Transcript


Stoetzl v. State of California (2017) 14 Cal.App.5th 1256, 222 Cal.Rptr.3d 728 (SC S244751/A142832 review granted 11/29/17) Hours Worked


Petition for review after the Court of Appeal affirmed in part and reversed in part the judgment in a civil action. This case includes the following issue: Does the definition of “hours worked” found in the Industrial Wage Commission’s Wage Order 4, as opposed to the definition of that term found in the federal Labor Standards Act, constitute the controlling legal standard for determining the compensability of time that correctional employees spend after signing in for duty and before signing out but before they arrive at and after they leave their actual work posts within a correctional facility? Votes: Votes: Cantil-Sakauye, C.J., Chin, Corrigan, Liu, Cuéllar and Kruger, JJ. Review granted/brief due.


Court of Appeal Decision



OTO, L.L.C. v. Kho (2017) 14 Cal.App.5th 691, 222 Cal.Rptr.3d 506 (SC S244630/A147564 review granted 11/29/17) Arbitration/Berman Hearing


Petition for review after the Court of Appeal reversed an order denying a petition to compel arbitration in a civil action. This case presents the following issues: (1) Was the arbitration remedy at issue in this case sufficiently “affordable and accessible” within the meaning of Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109 to require the company’s employees to forego the right to an administrative Berman hearing on wage claims? (2) Did the employer waive its right to bypass the Berman hearing by waiting until the morning of that hearing, serving a demand for arbitration, and refusing to participate in the hearing? Votes: Cantil-Sakauye, C.J., Chin, Corrigan, Liu, Cuéllar and Kruger, JJ. Review granted/brief due.


Court of Appeal Decision



The Internat. Brotherhood of Boilermakers etc. v. NASSCO etc. (CA4/1 D070620 11/30/17) California WARN Act


Under a California law known as the California WARN Act, employers must provide 60 days' notice to affected employees before ordering a "mass layoff."  (Lab. Code, § 1400 et seq.) A labor union and several employees sued an employer, alleging the employer violated this law by failing to provide notice before ordering about 90 employees not to return to work for four to five weeks.  The employer countered that the California WARN Act was inapplicable because its action was a temporary furlough and not a "mass layoff."  All parties recognized there was no liability under the parallel federal WARN Act because the federal law applies to a temporary layoff only if the layoff "exceed[s] 6 months." (29 U.S.C. § 2101(a)(6)(B).)


The parties filed cross summary judgment/adjudication motions raising primarily the duty issue:  did the employer have a statutory duty to notify the affected employees even though the layoff was temporary, rather than permanent?  The superior court concluded the California WARN Act did apply to the employer's temporary layoff, and therefore the employer owed a statutory notification duty to the affected workers.  The court thus granted summary adjudication in plaintiffs' favor on this issue.  The court then held a one-day bench trial on damages issues.  After trial, the court entered judgment in plaintiffs' favor, awarding the workers $211,405 in backpay and lost pension benefits.  The court denied plaintiffs' request for statutory penalties, finding the employer acted in good faith because the legal issues were "unsettled."


On appeal, the employer contends the court erred in interpreting the California WARN Act as applying to temporary layoffs.  We affirm.  Based on our analysis of the statutory language, statutory scheme, legislative history, federal WARN law, and policies underlying the California WARN Act, we determine the employer had a duty to provide statutory notice under the particular circumstances of this case, even if the layoffs were not permanent and were for less than six months.


Yang v. Dongwon Industries (9th Cir. 15-16881 11/30/17) Arbitration


The panel affirmed the district court’s order denying a motion to compel arbitration in a maritime action arising from the death of a seaman in the sinking of a fishing vessel.


A defendant sought arbitration based on an employment agreement between the seaman and the vessel’s owner. Pursuant to a contract with the owner, the defendant supplied the vessel’s crew and supervised its repairs and maintenance.


The panel held that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, an act implementing a treaty of the same name, does not allow nonsignatories or non-parties to compel arbitration. Agreeing with other circuits, the panel held that, like an arbitration agreement, an arbitral clause in a contract must be “signed by the parties” in order to be enforceable under Article II(2) of the Convention Treaty.


The panel further held that the defendant could not compel arbitration under the Federal Arbitration Act, which expressly exempts from its scope any “contracts of employment of seamen.” The panel declined to import into the court’s Convention Act analysis precedent permitting a litigant who is not a party to an arbitration agreement to invoke arbitration under the FAA if the relevant state contract law allows the litigant to enforce the agreement.


Turman v. Superior Court (CA4/3 G051871, filed 11/7/17, pub. ord. 11/29/17) Wage and Hour/Alter Ego


Former restaurant employees sued their former employer, Koji’s Japan, Inc. (Koji’s), Koji’s president, sole shareholder and director Arthur J. Parent, Jr. (Parent), and A.J. Parent Company, Inc., which is otherwise known as America’s Printer (America’s Printer), of which Parent is also the president, sole shareholder and director.  The plaintiff employees alleged wage and hour claims under the Labor Code and the Fair Labor Standards Act of 1938 (29 U.S.C. § 201 et seq.) (FLSA), claims under the unfair competition law (Bus. & Prof. Code, § 17200), and a claim under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2699 et seq.).


The plaintiffs challenge four rulings:  The denial of their revised motion to compel further responses to a set of document requests; the concomitant issuance of discovery sanctions against plaintiffs’ counsel; an order only partially granting plaintiffs’ motion to certify a class action; and the trial court’s statement of decision determining that Parent and America’s Printer were not Koji’s alter egos and Parent was not liable to plaintiffs as a joint employer with regard to their state law claims.


We resolve doubts about our appellate jurisdiction by exercising our discretion to treat plaintiffs’ appeal as a petition for a writ of mandate.  We grant writ relief with regard to each challenged ruling and hold: 


            1.  The trial court erred by granting the motion to certify a class as to plaintiffs’ claims against only Koji’s because the court applied improper criteria in determining Parent’s potential liability as a joint employer on a class-wide basis. 

            2.  The trial court prejudicially erred by denying plaintiffs’ revised motion to compel further responses to a set of document requests, and also by sanctioning plaintiffs’ counsel.

            3.  Because, as set forth in the disposition, we direct the trial court to vacate its order denying the revised motion to compel further responses to discovery on alter ego issues, we direct the court to also vacate its findings that Parent and America’s Printer were not Koji’s alter egos.  Even if we did not direct the trial court to vacate its alter ego findings because of the court’s error in denying the revised motion compel, we would nevertheless order the court to vacate those findings because the court applied incorrect legal standards for alter ego liability.

            4.  Although the court’s statement of decision correctly cites Martinez v. Combs (2010) 49 Cal.4th 35 (Martinez) as setting forth the three alternative definitions of “employer” applied in analyzing certain violations of the Labor Code and the Industrial Welfare Commission’s (IWC) wage orders, the statement of decision misapplied those definitions.  In addition, the trial court failed to address whether Parent might be a joint employer under the definitions of the term “employer” applicable to plaintiffs’ claims under the unfair competition law, the tip misappropriation statute, and PAGA.


Lopez v. Routt (CA2/3 B269345 11/29/17) FEHA Defense Verdict/Defendant Supervisor’s Fee Award


Plaintiff Elisa Lopez sued her employer, the City of Beverly Hills (the City), and her supervisor, Gregory Routt, for harassment in violation of the California Fair Employment and Housing Act. (FEHA) (Gov. Code, § 12900 et seq.) A jury found in favor of the City and Routt on the harassment claim, and Routt moved for prevailing party attorney fees under FEHA’s fee shifting provision.  (§ 12965, subd. (b).)  The trial court denied Routt’s motion, concluding he had failed to establish Lopez’s claim was frivolous, as is required for a prevailing defendant to obtain an attorney fee award under FEHA.  (See Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 115 (Williams); Cummings v. Benco Building Services (1992) 11 Cal.App.4th 1383, 1385-1386 (Cummings).)


Routt appeals from the postjudgment order denying his request for attorney fees.  As his sole contention on appeal, Routt argues the frivolousness standard should not apply to a fee request by a supervising employee who has been sued as an individual defendant.  Based on California Supreme Court precedent and the relevant legislative history, we conclude the same standard applies to an individual defendant’s request for attorney fees under FEHA as applies to an employer defendant, and thus a fee award is only available in the discretion of a trial court when the court finds that the plaintiff’s claim was frivolous.  We affirm.


Olson v. Manhattan Beach Unified School Dist. (CA2/4  B272340 11/29/17) Government Claims Act


Appellant Cassidy Olson appeals from a judgment dismissing his second amended complaint (SAC) against respondents Manhattan Beach Unified School District (MBUSD) and Michael Matthews, Ed. D.  The trial court entered the dismissal order after sustaining MBUSD’s demurrer to the SAC on the ground that appellant’s grievance, filed pursuant to a collective bargaining agreement, did not satisfy the claim filing requirements of the Government Claims Act (Gov. Code, § 810 et seq.).  Appellant contends his noncompliance was excused under the doctrines of substantial compliance, “claim as presented,” and futility.  For the reasons set forth below, we reject his contentions.  Accordingly, we affirm.


Tri-Fanucchi Farms v. Agricultural Labor Relations Board (SC  S227270 11/27/17) ALRA/Abandonment Defense


In 2012, Tri-Fanucchi Farms (Tri-Fanucchi) refused to bargain with the United Farm Workers of America (the UFW), the labor union that its employees had elected in 1977 as their bargaining representative under the Agricultural Labor Relations Act (the ALRA or the Act).  Tri-Fanucchi argued that the union had abandoned its employees for more than two decades and thus forfeited its status as bargaining representative.  Consistent with its longstanding practice, the Agricultural Labor Relations Board (the Board or the ALRB) rejected the employer’s abandonment defense and determined that Tri-Fanucchi’s refusal constituted an unfair labor practice under the ALRA.  The Board then ordered Tri-Fanucchi to pay make-whole relief under Labor Code section 1160.3, which is intended in part to compensate employees for employer-caused delays in the collective bargaining process.  (All undesignated statutory references are to the Labor Code.)  The Court of Appeal affirmed the Board’s rejection of Tri-Fanucchi’s abandonment defense.  But the Court of Appeal reversed the Board’s make-whole relief award, reasoning that Tri-Fanucchi’s litigation “furthered the broader purposes of the ALRA” because no appellate court had expressly ruled on the abandonment issue presented here. 


For the reasons set forth in Gerawan Farming, Inc. v. Agricultural Labor Relations Board (Nov. 27, 2017, S227243) __ Cal.5th __ (Gerawan), we hold that the Court of Appeal correctly rejected Tri-Fanucchi’s assertion of an abandonment defense.  As we explain in Gerawan, the ALRA does not permit an employer to “unilaterally declare that it will refuse to engage with the union because it believes the union has abandoned its employees.”  (Gerawan, at p. __ [p. 44].)  As to the issue of make-whole relief, we hold that the Court of Appeal did not accord the Board sufficient deference and improperly exercised the Board’s remedial authority.  We thus reverse in part the Court of Appeal’s judgment.


Gerawan Farming, Inc. v. Agricultural Labor Relations Board (SC S227243 11/27/17) ALRA/Abandonment Defense


In 1975, the Legislature enacted the Agricultural Labor Relations Act (ALRA) “to encourage and protect the right of agricultural employees to full freedom of association, self-organization, and designation of representatives of their own choosing, to negotiate the terms and conditions of their employment, and to be free from the interference, restraint, or coercion of employers of labor.”  (Lab. Code, § 1140.2; all statutory references are to this code unless otherwise specified.)  The ALRA established an elaborate framework governing the right of agricultural workers to organize themselves into unions to engage in collective bargaining with their employers.  (Agricultural Labor Relations Bd. v. Superior Court (1976) 16 Cal.3d 392, 398 (ALRB I); see § 1140 et seq.)  It also created the Agricultural Labor Relations Board (ALRB or the Board) and granted it “specific powers and responsibilities of administration, particularly in conducting and certifying elections and in investigating and preventing unfair labor practices.”  (ALRB I, at p. 399.)


Twenty-five years later, the Legislature determined that additional legislation was necessary to fulfill the goals of the ALRA because it had proven ineffective at facilitating the negotiation and completion of collective bargaining agreements.  The Legislature therefore enacted the ALRA’s “mandatory mediation and conciliation” (MMC) provisions to “ensure a more effective collective bargaining process between agricultural employers and agricultural employees.”  (Stats. 2002, ch. 1145, § 1, p. 7401.)  In certain cases in which an employer and a labor union have failed to reach a first contract, either party may invoke MMC, which involves a mediation process before a neutral mediator.  (§ 1164 et seq. (the MMC statute).)  If the parties do not reach an agreement on all terms through mediation, the mediator resolves the disputed terms and submits a proposed contract to the Board, which can then impose that contract on the parties. 


In this case, the United Farm Workers of America (UFW) filed an MMC request with the Board after failing to reach a collective bargaining agreement with petitioner Gerawan Farming, Inc. (Gerawan).  When mediation similarly failed to produce an agreement, the mediator submitted a report fixing the contractual terms, which the Board adopted in its final order.  Gerawan petitioned for review of the Board’s order, contending, among other things, that the MMC statutory scheme was unconstitutional.  The Court of Appeal agreed, holding that “the MMC statute on its face violates equal protection principles” and that it “improperly delegated legislative authority.”  In so holding, the Court of Appeal adopted the reasoning of the dissent in Hess Collection Winery v. Agricultural Labor Relations Bd. (2006) 140 Cal.App.4th 1584, 1611 (dis. opn. of Nicholson, J.) (Hess), in which the court upheld the MMC statute against a similar constitutional challenge (see id. at pp. 1603–1610 (maj. opn.)).  We granted review to resolve this conflict, and we conclude that the MMC statute neither violates equal protection nor unconstitutionally delegates legislative power. 


We also granted review to resolve an important statutory question.  In  arguing that the final order should be set aside, Gerawan also claimed that the UFW, the labor union certified as the bargaining representative under the ALRA, had abandoned its employees after a lengthy absence and therefore forfeited its status as representative.  Applying the settled rule that a union remains certified until decertified by the employees in a subsequent election, the Board concluded that the ALRA precludes employers from raising an abandonment defense to an MMC request.  The Court of Appeal acknowledged the validity of the general rule but held that an employer may raise an abandonment defense against a union’s demand to invoke MMC because MMC is “a postbargaining process” materially different from ordinary collective bargaining.


We hold that the distinction drawn by the Court of Appeal is untenable and that employers may not refuse to bargain with unions — whether during the ordinary bargaining process or during MMC — on the basis that the union has abandoned its representative status.  As the Board and lower courts have consistently observed, the Legislature intended to reserve the power to decertify labor organization representatives to employees and labor organizations alone.  Allowing employers to raise an abandonment defense would frustrate that intent and undermine the ALRA’s comprehensive scheme of labor protections for agricultural employees.


Julian v. Glenair, Inc. (CA2/4 B277064 11/27/17) PAGA/Arbitration


Appellant Glenair, Inc., challenges the denial of its motion to compel arbitration of respondents’ claim under the Labor Code Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698 et seq.).  Glenair contends an agreement respondents executed during their employment with the company was an enforceable postdispute agreement obligating them to arbitrate the claim.  We hold that an agreement to arbitrate a PAGA claim, entered into before an employee is statutorily authorized to bring such a claim on behalf of the state, is an unenforceable predispute waiver.  As any agreement by respondents was entered into before they were authorized to bring a PAGA claim, the trial court properly denied the petition to compel.


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