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Jackpot Harvesting Co. v. Superior Ct. (CA6 H044764 8/14/18) Piece Rate/Rest and NP Time
Labor Code section 226.2, which became effective January 1, 2016, addresses the manner in which piece-rate employees are to be compensated for rest and recovery periods and other nonproductive time on the job (collectively, rest/NP time). Subdivision (b) of the statute (hereafter section 226.2(b)) provides a safe harbor for an employer that, prior to 2016, failed to properly compensate its piece-rate workers for rest/NP time. Under section 226.2(b), an employer that pays its employees for previously unpaid rest/NP time accrued between July 1, 2012 and December 31, 2015, is entitled to assert “an affirmative defense to any claim or cause of action . . . based solely on the employer’s failure to timely pay the employee the compensation due for [rest/NP time] . . . for time periods prior to and including December 31, 2015.”
This lawsuit concerns whether an employer complying with the requirements of section 226.2(b) has a safe harbor against any employee claims for rest/NP time accruing prior to and including December 31, 2015, or has an affirmative defense only to those claims accruing between July 1, 2012 and December 31, 2015. We will conclude that under the plain and unambiguous language of section 226.2(b), an employer complying with the statute has an affirmative defense against any employee claims for rest/NP time accruing prior to and including December 31, 2015.
Fritsch v. Swift Transportation (9th Cir. 18-55746 8/8/18) Class Action Fairness Act/Wage & Hour
The panel reversed the district court’s order that remanded this [wage and hour] action to state court on the ground that the defendant removing party failed to prove that the matter in controversy exceeded the sum or value of $5 million, as required for jurisdiction under the Class Action Fairness Act (“CAFA”).
As an initial matter, the panel considered whether the appeal was moot due to defendant’s second removal. The panel concluded that, pursuant to the collateral consequences doctrine, defendant’s appeal of the first remand order was not moot.
The panel held that the district court erred in concluding that the defendant failed to prove that CAFA’s amount-in-controversy requirement was met. The panel held that in light of Chavez v. JPMorgan Chase & Co., 888 F.3d 413 (9th Cir. 2018), and this court’s precedents, a court must include future attorneys’ fees recoverable by statute or contract when assessing whether the amount-in-controversy was met. Applying the rule, the panel vacated the district court’s remand order, and remanded to allow the district court to determine whether the defendant carried its burden of proving that the amount in controversy exceeded the jurisdictional threshold. The panel further held that the defendant retained the burden of proving the amount of attorneys’ fees by a preponderance of the evidence.
The panel rejected the plaintiff’s argument that future attorneys’ fees should not be included in the amount in controversy because they were inherently speculative. The panel also rejected plaintiff’s argument that it should adopt a per se equitable rule that the amount of attorneys’ fees in controversy in class actions is 25 percent of all other alleged recovery.
Lacagnina v. Comprehend Systems, Inc. (CA1/4 A147559 part. pub. 8/3/18) Penal Code Theft of Labor
After a 10-day trial, a jury ruled in favor of appellant David Lacagnina on his claims for fraud, breach of contract, and breach of the covenant of good faith and fair dealing against respondents Comprehend Systems, Inc. (Comprehend) and its two cofounders, Richard Morrison and Jud Gardner. From June 1, 2012 to November 20, 2013, when he was terminated, Lacagnina worked for Comprehend as vice president of business development. The gist of Lacgnina’s claims was that he was fraudulently induced to enter into an employment agreement with Comprehend by false representations made to him by Morrison and Gardner. The jury rendered a special verdict and awarded Lacagnina a total of $556,446 in damages, including $226,446 in damages for fraud and $75,000 for emotional distress. However, the trial court granted respondents’ motion for judgment notwithstanding the verdict on the fraud claim on the ground that Lacagnina was not damaged by the alleged fraud, and entered an amended judgment against respondents in the amount of $255,000. Lacagnina now appeals from that judgment, and from the trial court’s order granting respondents’ motion for nonsuit. We will reverse the judgment in part and affirm in part.
In the published portion of this opinion, we reject Lacagnina’s contention that an employee who recovers a judgment against an employee for lost compensation has suffered a “theft” of “labor” for which he or she is entitled to recover treble damages and attorneys’ fees under Penal Code Section 496, subdivision (c).
Boling v. Public Employment Relations Board (SC S242034 8/2/18) PERB/MMBA
This case arises from unfair practice claims filed by unions after San Diego’s mayor sponsored a citizens’ initiative to eliminate pensions for new municipal employees and rebuffed union demands to meet and confer over the measure. The Court of Appeal annulled a finding by respondent, the Public Employment Relations Board (PERB), that the failure to meet and confer constituted an unfair labor practice. We granted review to settle two questions: (1) When a final decision by PERB under the Meyers-Milias-Brown Act (the MMBA; Gov. Code, § 3500 et seq.) is appealed, what standards of review apply to PERB’s legal interpretations and findings of fact?; (2) When a public agency itself does not propose a policy change affecting the terms and conditions of employment, but its designated bargaining agent lends official support to a citizens’ initiative to create such a change, is the agency obligated to meet and confer with employee representatives?
These questions are resolved by settled law and the relevant statutory language. First, we have long held that PERB’s legal findings are entitled to deferential review. They will not be set aside unless clearly erroneous, though the courts as always retain ultimate authority over questions of statutory interpretation. The MMBA specifies that PERB’s factual findings are “conclusive” “if supported by substantial evidence.” (§ 3509.5, subd. (b).) Second, the duty to meet and confer is a central feature of the MMBA. Governing bodies “or other representatives as may be properly designated” are required to engage with unions on matters within the scope of representation “prior to arriving at a determination of policy or course of action.” (§ 3505.) This broad formulation encompasses more than formal actions taken by the governing body itself. Under the circumstances here, the MMBA applies to the mayor’s official pursuit of pension reform as a matter of policy. The Court of Appeal erred, first by reviewing PERB’s interpretation of the governing statutes de novo, and second by taking an unduly constricted view of the duty to meet and confer.
Honeycutt v. JPMorgan Chase Bank, N.A. (CA2/7 B281982 8/2/18) Arbitration Disclosures /Employment Discrimination
The Code of Civil Procedure and the Ethics Standards for Neutral Arbitrators in Contractual Arbitration (Ethics Standards) require arbitrators in contractual arbitrations to make various disclosures about themselves, their experience, and their activity as private judges or, as they are sometimes called, “dispute resolution neutrals.” Failure to make required disclosures may be a ground for disqualifying the arbitrator and, if the arbitrator was actually aware of the ground for disqualification, for vacating an award.
In this case, the arbitrator did not comply with several applicable disclosure requirements, which gave rise to multiple grounds for disqualification. Because the arbitrator was actually aware of at least one of the grounds for disqualification, the resulting arbitration award was subject to vacatur. Therefore, we reverse the trial court’s order denying the petition to vacate the award and granting the petition to confirm it.
Jones v. Sorenson (CA3 C084870 8/2/18) Respondeat Superior Liability/Homeowners
Despite the prevalence of “do-it-yourself” manuals and television shows, most homeowners eventually decide that some home repairs or maintenance would best be done by hiring someone to do the work. Inevitably, some workers are injured. There are sometimes confusing rules about when a homeowner is liable for injuries to workers on the property, either in tort or under the workers’ compensation system. The common questions include whether the person hired by the homeowner was (1) required to be a licensed professional to do the work, and (2) if so, whether the person had the required license.
As stated by our Supreme Court, “It is doubtful the average homeowner realizes tree trimming can require a contractor’s license.” (Fernandez v. Lawson (2003) 31 Cal.4th 31, 37 (Fernandez).)
Plaintiff Mary E. Jones appeals from a judgment after a grant of summary judgment to defendant Danita Sorenson. Sorenson hired a gardener to work on her property and the gardener hired Jones to help her. Jones was injured when she fell from a ladder while trimming a tree at least 15 feet tall. Jones sued Sorenson, claiming such work required a license but the gardener was not licensed and the gardener’s negligence caused the fall. Jones claimed that Sorenson was liable to Jones under a respondeat superior theory, because she was as a matter of law the employer of both the gardener and Jones.
The trial court ruled in effect that the terms “gardener” and “nurseryperson” as used in Business and Professions Code section 7026.1 were synonymous, and therefore Sorenson could avoid tort liability because a person acting as a nurseryperson may trim trees 15 feet tall or higher without a contractor’s license, although a gardener cannot.
We disagree with this reading of the relevant statute, which distinguishes between a “gardener” and a “nurseryperson”; the latter refers to a licensed operator of a nursery, whereas a gardener does not require a license. There is no evidence that the gardener Sorenson hired was also a nurseryperson. This means Sorenson--the movant on summary judgment--has not refuted the claim that she was the gardener’s (and therefore Jones’s) employer, and potentially liable under a respondeat superior theory for the gardener’s alleged negligence. We shall reverse the judgment without addressing other subsidiary points.
Nishiki v. Danko Meredith, APC (CA1/4 A147733 8/1/18) Wage & Hour/Waiting Time and Attorneys’ Fees
When an employee resigns without notice, California law requires the employer to pay all wages within 72 hours. (Lab. Code § 202, subd. (a).) If the employer willfully fails to do so, the employee’s wages continue as a penalty from that due date until the wages are paid, for up to 30 days. (§ 203.) This case considers an award of these “waiting time” penalties, as well as an award of attorney fees to the employee for the employer’s unsuccessful appeal. (§ 98.2.)
Taryn Nishiki, a former employee of defendant Danko Meredith P.C., filed a complaint with the California Labor Commissioner (the commissioner) seeking vacation wages, rest period premiums, and waiting time penalties. She prevailed on her claim for waiting time penalties, and was awarded $4,250. Defendant appealed the award to the superior court, which affirmed the commissioner’s award, and awarded Nishiki $86,160 in attorney fees. On appeal, defendant contends the waiting time penalties are unwarranted and the attorney fee award was excessive. We shall reduce the waiting time penalties and otherwise affirm the judgment.
Alaska Airlines v. Schurke (9th Cir. 13-35574 8/1/18) Railroad Labor Act/ PreemptionVacation Leave/CBA
Affirming the district court’s summary judgment in favor of the defendants, the en banc court held that the Railway Labor Act did not preempt a worker’s claim premised on a state law right to reschedule vacation leave for family medical purposes, when the worker’s underlying right to vacation leave was covered by a collective bargaining agreement.
The en banc court held that the RLA did not preempt the worker’s claim because the claim neither arose entirely from nor required construction of the CBA; that the CBA must be consulted to confirm the existence of accrued vacation days was not sufficient to extinguish the worker’s independent state law right to use the accrued time to care for a sick child.
Dissenting, Judge Ikuta, joined by Judges Tallman, Callahan, Bea, and M. Smith, wrote that resolution of the state law claim required interpretation or application of the CBA, and the claim therefore constituted a “minor dispute” that must be resolved through the RLA’s mandatory arbitral mechanism.
Moen v. The Regents of the University of California (CA1/5 A153386 8/1/18) Class Certification/UC Retirees
Appellants (hereafter, Retirees) are retired employees of the University of California (University) who worked at Lawrence Livermore National Laboratory (Livermore). They claim that during their employment, the University promised to provide them with University-sponsored group health insurance in their retirement, and this promise constitutes an implied contract term that the University subsequently impaired. After initially certifying a class of such retirees, the trial court decertified the class. We agree with Retirees that the trial court’s decertification order relied on erroneous legal standards, and we reverse.
Estill v. County of Shasta (CA3 C077513 7/31/18) Government Claim/Internal Investigation
Renee Estill submitted a government claim against the County of Shasta and others, specifically representing that she first became aware of the alleged incident [an internal affairs investigation by her employer] on September 9, 2011. The County accepted Estill’s representation and denied her claim on the merits. Because it accepted the claim as timely, the County did not warn Estill to seek leave to present a late claim. This lawsuit followed.
During Estill’s deposition, however, defendants learned she was aware of the alleged wrongdoing as early as 2009. The trial court granted defendant’s motion for summary judgment primarily on the ground that Estill’s government claim was untimely, but later granted her motion for a new trial, ruling there are triable issues of fact as to whether defendants waived their defense of untimeliness because the County did not warn Estill that she should seek leave to present a late claim pursuant to Government Code section 911.3, subdivision (b). Defendants appeal from the order granting Estill a new trial, and Estill cross-appeals from the judgment in favor of defendants.
After oral argument in this case, we asked the parties for supplemental briefing on the application of equitable estoppel in this context. We conclude that a claimant may be estopped from invoking the section 911.3 waiver provision where a public entity’s failure to notify the claimant that a claim is untimely is induced by the claimant’s representation on the government claim form. And in this case, based on the entire appellate record, including the supplemental briefs, we conclude Estill is estopped from asserting that defendants waived their defense of untimeliness. She represented in her government claim that the incident of wrongdoing occurred in September 2009, but that she “first became aware” of the incident on September 9, 2011. She included an attachment to her government claim in which she could have explained what she had learned in 2009 and 2010 about the alleged misconduct, but she did not mention her prior knowledge. Thus, the record indicates she intended for the County to rely on her representation in the government claim, and the County did in fact rely on the representation. Accordingly, we will reverse the trial court’s order granting Estill’s motion for a new trial and affirm the judgment entered in favor of defendants.
Interpipe Contracting v. Becerra (9th Cir. 17-55248 7/30/18) SB 954 Amendment/Wage Credit Limitation
The panel affirmed the district court’s dismissal of an action challenging a 2017 amendment to the California labor code that imposed a wage-credit limitation on employers for payments to third-party industry advancement funds (Senate Bill 954).
Pursuant to the California’s labor code, employers must pay public works employees either the prevailing wage or pay a combination of cash wages and benefits. The list of eligible benefits includes employer payments to third-party industry advancement funds. Amendment SB 954 permits employers to take a wage-credit for advancement fund contributions only if their employees consent to doing so through a collective bargaining agreement negotiated by a union. Plaintiff is a contractor that favors open shop employment arrangements and opposes project labor agreements on public works projects. Prior to the amendment, plaintiff took a wage credit for its contributions to co-plaintiff ABC-CCC, an industry advancement fund that opposes project labor agreements and supports open shop arrangements. Since SB 954 went into effect, plaintiff has ceased making payments to ABC-CCC.
The panel held that amendment SB 954 does not frustrate the objectives of the National Labor Relations Act and is not preempted under the doctrine set forth in Machinists v. Wis. Emp’t Relations Comm’n, 427 U.S. 132 (1976). The panel held that by setting a floor for employee pay while allowing unionized employees to opt out of a particular provision, California has acted well within the ambit of its traditional police powers. SB 954 also does not violate ABC-CCC’s alleged First Amendment rights. Contrary to its assertion, ABC-CCC has no free-floating First Amendment right to “amass” funds to finance its speech. And to the extent SB 954 implicates ABC-CCC’s speech interests at all, those interests are not constitutional in nature because SB 954 merely trims a state subsidy of speech, and does so in a viewpoint-neutral way. The panel concluded that the law was therefore subject to rational basis review. Under that lenient standard, because SB 954 was rationally related to a legitimate government purpose—ensuring meaningful employee consent before employers contribute portions of their wages to third-party advocacy groups—it easily withstood scrutiny. The panel further concluded that ABCCCC lacked standing to press its equal protection claim because the law applied to employers, and so ABC-CCC could not show that SB 954 causes an equal protection injury to itself.
Troester v. Starbucks Corporation (SC S234969 7/26/18) FLSA/De Minimis Doctrine
Upon a request by the United States Court of Appeals for the Ninth Circuit (Cal. Rules of Court, rule 8.548), we agreed to answer the following question: Does the federal Fair Labor Standards Act’s de minimis doctrine, as stated in Anderson v. Mt. Clemens Pottery Co. (1946) 328 U.S. 680, 692, and Lindow v. United States (9th Cir. 1984) 738 F.2d 1057, 1063, apply to claims for unpaid wages under California Labor Code sections 510, 1194, and 1197?
The de minimis doctrine is an application of the maxim de minimis non curat lex, which means “[t]he law does not concern itself with trifles.” (Black’s Law Dict. (10th ed. 2014) p. 524.) Federal courts have applied the doctrine in some circumstances to excuse the payment of wages for small amounts of otherwise compensable time upon a showing that the bits of time are administratively difficult to record.
We approach the question presented in two parts: First, have California’s wage and hour statutes or regulations adopted the de minimis doctrine found in the federal Fair Labor Standards Act (FLSA)? We conclude they have not. There is no indication in the text or history of the relevant statutes and Industrial Welfare Commission (IWC) wage orders of such adoption.
Second, does the de minimis principle, which has operated in California in various contexts, apply to wage and hour claims? In other words, although California has not adopted the federal de minimis doctrine, does some version of the doctrine nonetheless apply to wage and hour claims as a matter of state law? We hold that the relevant wage order and statutes do not permit application of the de minimis rule on the facts given to us by the Ninth Circuit, where the employer required the employee to work “off the clock” several minutes per shift. We do not decide whether there are circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.
Golden v. CEP (9th Cir. 16-17354 7/24/18) Employment Settlement/“Restraint of a Substantial Character”
We are now called on to answer the question that we left open when this case was last before us: whether a provision of a settlement agreement between Dr. Donald Golden and his former employer, the California Emergency Physicians Medical Group (“CEP”), places a “restraint of a substantial character” on Dr. Golden’s medical practice. See Golden v. Cal. Emergency Physicians Med. Grp., 782 F.3d 1083, 1093 (9th Cir. 2015) (“Golden I”). We conclude that it does, and that it therefore runs afoul of California law. See Cal. Bus. & Prof. Code § 16600.
Munro v. University of Southern California (9th Cir. 17-55550 7/24/18) Arbitration/ERISA
The panel affirmed the district court’s denial of defendants’ motion to compel arbitration of collective claims for breach of fiduciary duty in the administration of two ERISA plans. The plaintiffs, current and former employees of the University of Southern California, and participants in the two ERISA plans, were required to sign arbitration agreements as part of their employment contracts. The panel concluded that the dispute fell outside the scope of the arbitration agreements because the parties consented only to arbitrate claims brought on their own behalf, and the employees’ claims were brought on behalf of the ERISA plans.
Segalman v. Southwest Airlines (9th Cir. 17-15196 7/23/18) Air Carrier Access Act
The panel affirmed the district court’s dismissal of a claim under the Air Carrier Access Act of 1986, which prohibits air carriers from discriminating against individuals on the basis of a physical or mental impairment. Joining other circuits, the panel held that the ACAA’s anti-discrimination prohibition is not enforceable through an implied private cause of action.
Bills Signed by Governor (7/20/18)
AB 2285 by Assemblymember Patrick O’Donnell (D-Long Beach) – Teacher credentialing: out-of-state prepared teachers: clear credential.
AB 2610 by Assemblymember Cecilia Aguiar-Curry (D-Winters) – Employees: meal periods.
Glazing Health & Welfare Fund v. Lamek (9th Cir. 16-16155 7/19/18) ERISA
The panel filed (1) an order amending its opinion and denying, on behalf of the court, a petition for rehearing en banc; and (2) an amended opinion affirming the district court’s dismissal of an ERISA action.
The action was brought by employee benefit trust funds, seeking unpaid contributions owed under the contracts governing the benefit plans that the trust funds managed for Accuracy Glass & Mirror Company. The trust funds argued that, pursuant to those contracts, the unpaid contributions were trust assets over which the owners and officers of Accuracy exercised control and that the trust funds therefore could sue these individuals as fiduciaries to collect the contributions. The panel held that the trust funds’ claim was foreclosed by Bos v. Bd. of Trustees (Bos I), 795 F.3d 1006 (9th Cir. 2015), which held that employers are not fiduciaries under ERISA as to unpaid contributions to ERISA benefit plans.
Dissenting, Judge Gleason wrote that she disagreed with the majority’s interpretation of Bos I and would find that outside of the bankruptcy context unpaid employer contributions to employee benefit plans may constitute plan assets when the ERISA plan document expressly defines them as such.
Navarro v. Encino Motorcars, Inc. (9th Cir. 13-55323 order 7/19/18) FLSA Overtime Exemption
On remand from the Supreme Court, Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134 (2018), no further issues remain. The district court’s judgment is AFFIRMED.
Rodriguez v. Taco Bell (9th Cir. 16-15465 7/18/18) Wage & Hour/Meal Breaks
The panel affirmed the district court’s judgment in favor of Taco Bell Corp. in a putative class action concerning employee meal breaks.
After the district court granted summary judgment to Taco Bell on most of plaintiff’s claims, the court granted plaintiff’s request that the district court dismiss the remaining pending claim. As a threshold jurisdictional issue, the panel held that the dismissal with prejudice created a valid final judgment for purposes of 28 U.S.C. § 1291.
California Wage Order 5-2001 requires employees be relieved of all duty during a requisite meal period. During plaintiff’s period of employment, Taco Bell offered thirty-minute meal breaks that were fully compliant with California’s requirements, but with a special offer that employees could purchase a meal from the restaurant at a discount, provided they ate the meal in the restaurant.
The panel held that California law was not violated because Taco Bell relieved their employees of all duties during the meal break period and exercised no control over their activities, where employees were free to use the thirty minutes in any way they wished, subject only to the restriction that if they purchased a discounted meal, they had to eat in the restaurant. The panel rejected plaintiff’s contention that employees were under sufficient employer control to render the time compensable. The panel also rejected plaintiff’s assertion that the value of the discounted meals be added to the regular rate of pay for overtime purposes.
Bills Signed by Governor (7/18/18)
AB 1896 by Assemblymember Sabrina Cervantes (D-Riverside) – Sexual assault counselor-victim privilege.
AB 2052 by Assemblymember Rob Bonta (D-Alameda) – State Teachers’ Retirement System: contributions due to system: form.
AB 2282 by Assemblymember Susan Talamantes Eggman (D-Stockton) – Salary history information.
SB 766 by Senator Bill Monning (D-Carmel) – International commercial arbitration: representation.
SB 1331 by Senator Hannah-Beth Jackson (D-Santa Barbara) – Peace officers: domestic violence training.
Bill Vetoed by Governor (7/18/18)
AB 2070 by Assemblymember Eloise Gómez Reyes (D-Grand Terrace) – Postsecondary education: sexual assault and sexual violence prevention training: intimate partner and dating violence. A veto message can be found here.
Bills Signed by Governor (7/16/18)
AB 2076 by Assemblymember Freddie Rodriguez (D-Pomona) – County employees’ retirement: disability: date of retirement.
AB 3247 by the Committee on Judiciary – Arbitration: agreements: enforcement. [Impacts labor and employment cases.]
SB 914 by Senator Bill Dodd (D-Napa) – Local agency contracts: construction manager at-risk construction contracts.
SB 942 by Senator Ricardo Lara (D-Bell Gardens) – State claims. [Impacts labor and employment claims against the state.]
SB 1270 by Senator Andy Vidak (R-Hanford) – County employees’ retirement: system personnel.
SB 1500 by the Committee on Veterans Affairs – Prohibited discrimination against service members.
SB 1501 by the Committee on Veterans Affairs – Military and veterans: enlisted persons.
Coffman v. Queen of the Valley Med. Ctr. (9th Cir. 17-17413 7/16/18) NLRA/Unconditional Bargaining
The panel affirmed the district court’s entry of a preliminary injunction, pursuant to Section 10(j) of the National Labor Relations Act (“NLRA”), requiring the employer to engage in unconditional bargaining with a union.
The panel held that an employer cannot begin unconditional bargaining and later withdraw recognition because such actions interfere with the union’s collective bargaining rights protected by the NLRA. The panel held that the Regional Director of the National Labor Relations Board had shown a sufficient likelihood of success in establishing its underlying position that the employer recognized the union and engaged in unconditional bargaining before withdrawing recognition and refusing to bargain in violation of Section 8(a)(1) of the NLRA.
The panel held that the Director established a continuing threat of irreparable harm to the union’s collective bargaining rights to support the extraordinary remedy of injunctive relief. The panel also held that the harm to the union outweighed the harm to the employer. The panel further held that the district court did not abuse its discretion in balancing the equities, and in finding that injunctive relief in this case was in the public interest. The panel held that the Director submitted sufficient evidence to establish a likelihood of success and irreparable harm with regard to the union’s claim that the employer discriminated against an employee for his union activity in violation of Section 8(a)(1) and (3) of the NLRA.
Skidgel v. Cal. Unemployment Ins. Appeals Bd. (CA1/5 A151224M mod., rehg. den. 6/14/18) In-Home Supportive Services Recipient is Employer
Appellant’s petition for rehearing is denied. It is ordered that the opinion filed on June 14, 2018, shall be modified as follows:
1. On page 4, in part I.A.2., at the end of the eighth line of the first full paragraph (after the quoted phrase and citation reading, “ ‘on the recipient’s behalf as the employer’ (id., § 12302.2, subd. (a)(2)),”), a new footnote is added that reads:
Skidgel argues a phrase in Welfare and Institutions Code section 12302.2 that refers to the recipient as “an employer” of the IHSS provider (Welf. & Inst. Code, § 12302.2, subd. (a)(1), italics added; see id., § 12302.2, subd. (c)) “means that the statute contemplates more than one employer.” However, the statute also refers to the recipient as “the employer” of the IHSS provider. (Welf. & Inst. Code, § 12302.2, subd. (a)(1), (2), italics added; see id., § 12302.2, subd. (a)(3) [“the recipient as employer”].) These conflicting uses of definite and indefinite articles in the same statute reveal little about the Legislature’s intent.
2. On page 19, in part II.B.3., at the end of the penultimate sentence in the first partial paragraph (after the sentence reading, “We agree that the FLSA and state wage and hour statutory schemes are distinguishable.”), a new footnote is added that reads:
The FLSA and state wage and hour laws define “employ” and “employer” more expansively than the Unemployment Insurance Code or the common law. (See Martinez v. Combs (2010) 49 Cal.4th 35, 57–58 [“suffer or permit to work” is more expansive than the common law]; see 29 U.S.C. § 203(g) [FLSA defining “employ” as “to suffer or permit to work”]; 29 U.S.C. § 203(d) [FLSA defining “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee”]; Martinez, at p. 52 [employment relationship for purposes of state wage and hour laws is defined Industrial Welfare Commission wage orders]. As noted ante, the Legislature could not change these definitions in the IHSS context for purposes of applying federal wage and hour laws. (See U.S. Const., art. VI, cl. 2.)
The modification effects no change in the judgment.
Hipsher v. Los Angeles County Employees etc. (CA2/4 B276486M mod. 6/19/18) Public Pension forfeiture/Due Process
It is ordered that the opinion filed on June 19, 2018, be modified as follows:
On the last line of the caption page and the first two lines of page two, counsel for the County of Los Angeles is deleted and replaced with “Liebert Cassidy Whitmore, Steven M. Berliner, Joung H. Yim and Christopher S. Frederick for Real Party in Interest and Appellant, County of Los Angeles”; and
On page 4, “the County” in the last sentence of the second full paragraph is deleted and replaced with “LACERA.” There is no change in the judgment. (Cal. Rules of Court, rule 8.264(c)(2).)
Baskin v. Hughes Realty, Inc. (CA2/4 B278580 7/12/18) Disabled Persons Act
In the underlying action for disability discrimination, appellant Tamara Baskin alleged that respondent Hughes Realty, Inc. (Hughes) violated the California Disabled Persons Act (DPA) (Civ. Code, §§ 54-55.3.) by providing no designated and accessible path of travel for persons with disabilities within the parking lot of a grocery store. Specifically, she alleged that under the DPA, the store was obliged to designate an accessible path of travel from the street to the store’s entrance that did not require wheelchair-bound patrons to travel behind parked vehicles. The trial court concluded that Baskin’s claim, as alleged in her first amended complaint, failed on the undisputed facts. We affirm.
Moreles v. 22nd District Agricultural Assn. (CA4/1 D072378 7/10/18) Joint Employment of State and Non-State Workers/Overtime Pay
In this appeal, we must determine whether a state entity whose employees are exempt from state law requiring the payment of overtime compensation is nevertheless required to pay overtime compensation to such employees when the state entity jointly employs the employees with a non-state employer. Although we concluded in a prior appeal in this case that the matter should be remanded to the trial court to permit the plaintiffs to amend their complaint to attempt to state a cause of action premised on such a theory (Morales v. 22nd Dist. Agricultural Assn. (2016) 1 Cal.App.5th 504, 542–544 (Morales)), we now conclude that such a cause of action would not be legally viable. We further conclude that the law-of-the-case doctrine does not require that we reverse the trial court's order sustaining a demurrer to the plaintiffs' second amended complaint.
Caldera v. Dept. of Corrections & Rehabilitation (CA4/3 G053168 7/9/18) FEHA Harassment/Severe or Pervasive
Under the Fair Employment and Housing Act (FEHA), an employee with a disability can sue his or her employer and supervisors for disability harassment. (Gov. Code, § 12940, subd. (j)(1).) The employee must prove the harassment was either severe or pervasive. (Miller v. Department of Corrections (2005) 36 Cal.4th 446, 466.)
Augustine Caldera is a correctional officer at a state prison. Officer Caldera stutters when he speaks. The prison’s employees mocked or mimicked Caldera’s stutter at least a dozen times over a period of about two years. Sergeant James Grove, a supervisor, participated in the mocking and mimicking of Caldera’s stutter. Such conduct reflected the prison’s culture, according to a senior prison official.
Caldera sued the California Department of Corrections and Rehabilitation (CDCR) and Grove (collectively defendants) for disability harassment, failure to prevent the harassment, and related claims. A jury found the harassment to be both severe and pervasive and awarded Caldera $500,000 in noneconomic damages. The trial court found the damage award to be excessive and granted defendants’ motion for a new trial solely as to that issue. Defendants appeal and Caldera cross-appeals.
Defendants claim there is insufficient evidence the harassment was either severe or pervasive. We disagree. There is substantial evidence to support the jury’s factual findings. Defendants also claim the trial court committed two instructional and one evidentiary error. We find no prejudicial instructional errors and the claimed evidentiary error has been forfeited.
Caldera claims the trial court failed to file a timely statement of reasons after granting defendants’ motion for a new trial. We agree. The court’s new trial order as to the damage award is reversed. In all other respects, the judgment is affirmed.
Bills Signed by Governor (7/9/18)
AB 2587 by Assemblymember Marc Levine (D-Marin County) – Disability compensation: paid family leave.
AB 2770 by Assemblymember Jacqui Irwin (D-Thousand Oaks) – Privileged communications: communications by former employer: sexual harassment.
SB 857 by the Committee on Budget and Fiscal Review – In-home supportive services: provider orientation.
Fisher v. State Personnel Bd. (CA3 C081957, filed 6/11/18, pub. ord. 7/618) State Officer or Employee/Incompatible Activities
While serving as an administrative law judge for the State Personnel Board (SPB), Richard Paul Fisher joined the law firm of Simas & Associates as “of counsel.” Simas & Associates specialized in representing clients facing administrative actions, including those heard by the SPB. Indeed, the Simas law firm represented a CalTrans employee in a high-profile case that was being heard before the SPB while Fisher was serving his dual roles. Unaware Fisher was working for the very law firm representing the CalTrans employee, the SPB administrative law judge hearing the high-profile case discussed the matter in a meeting attended by Fisher and even sent a draft opinion to her SPB colleagues, including Fisher. Fisher, however, never informed anyone at the SPB of his connection with the Simas law firm. Fisher’s connection with the law firm came to light only when another administrative law judge was asked about the matter during a local bar function. The SPB dismissed Fisher from his position as an administrative law judge.
Fisher challenged the dismissal, which was affirmed after a hearing before the Office of Administrative Hearings. After a petition for writ of administrative mandamus was denied by the superior court, Fisher timely filed this appeal. On appeal, Fisher focuses his arguments on the proposition that he should be reinstated to his position because he was never personally served with notice that working for a law firm specializing in administrative matters constituted an impermissible activity for an SPB administrative law judge. Fisher additionally argues that (1) the 2013 incompatible activities statement adopted by the SPB was “an invalid ‘underground regulation,’ ” (2) conflicting evidence “fairly detracts from the findings” that he engaged in neglect of duty and other failures of good behavior, (3) the SPB’s decision “failed to address the Skelly violation” of a missing document that was not disclosed to him prior to his hearing, and (4) his termination from employment at the SPB was not a just and proper penalty.
We reject Fisher’s arguments that an SPB administrative law judge must expressly be informed it is impermissible to work for a law firm actively litigating cases before the SPB. Fisher’s conduct violated Government Code section 19990 and the SPB’s incompatibility activities statements that were in effect throughout his tenure as an SPB administrative law judge. We determine substantial evidence supports the findings of the administrative law judge who heard Fisher’s case that Fisher “displayed an appalling lack of judgment when he became of counsel with Simas & Associates” and “continued to demonstrate poor judgment when he failed to disclose his of counsel relationship to SPB.” The SPB did not abuse its discretion by dismissing Fisher. These conclusions obviate the need to consider Fisher’s remaining contentions. Accordingly, we affirm the judgment.
Padda v. Super. Ct. (CA4/2 E070522, filed 6/11/18, pub. ord. 7/6/18) Employment-Related Contract Disputes
In this matter, we have reviewed the petition, its exhibits, and the letter response filed by real parties in interest (hereafter real parties). We have determined that resolution of the matter involves the application of settled principles of law, and that the equities favor petitioners. We conclude that issuance of a peremptory writ in the first instance is therefore appropriate. (Palma v. U.S. Industrial Fasteners, Inc. (1984) 36 Cal.3d 171, 178.)
Juarez v. Wash Depot Holdings (CA2/6 B282667 7/3/18) Wage & Hour/Arbitration
A company provides its employees with a handbook setting forth its employment policies. The handbook is written in English and Spanish. The handbook requires arbitration of employment disputes and denies an employee's right to bring an action under the California Private Attorneys General Act (PAGA). The English version states that the denial of the right to bring a PAGA action is severable if such denial is found by a court to be unenforceable. The Spanish version provides that the PAGA denial is not severable.
In many cases the disparity between the treatment of PAGA claims may have no consequences. But under the facts here, there are consequences. The arbitration agreement is unenforceable.
Wash Depot Holdings, Inc. and Sparkling Image Corp. (collectively Wash Depot) appeal an order of the trial court denying a petition to compel arbitration of plaintiff's wage-and-hour-violations lawsuit. We affirm.
Arbitration has long been accepted as an efficient and cost-effective alternative to litigation. (Epic Systems Corp. v. Lewis (2018) _ U.S. _, _ [138 S.Ct. 1612, 1621]; Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 235, fn. 4; Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, 1671 [California has a strong public policy in favor of arbitration as a speedy and relatively inexpensive method of dispute resolution].) Thus, an employer and employee may voluntarily agree to arbitrate their employment-related disputes, but courts will not enforce arbitration agreements that are unconscionable or in violation of public policy. (Code Civ. Proc., § 1281 ["A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract"]; Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97 ["California law, like federal law, favors enforcement of valid arbitration agreements"], overruled on other grounds by AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 344-346.)
Carlos Juarez is an hourly employee at Wash Depot's hand-car wash in Ventura. During his employment, Wash Depot adopted a policy set forth in its employee handbook requiring arbitration of legal claims arising from the employment relationship. After Juarez filed a wage-and-hour-violations lawsuit, individually and on behalf of others, Wash Depot sought to compel arbitration pursuant to this policy. The trial court denied Wash Depot's motion, however, concluding that the arbitration agreement is unenforceable according to Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian) and Securitas Security Services USA, Inc. v. Superior Court (2015) 234 Cal.App.4th 1109 (Securitas). In our independent review, we also conclude that the arbitration agreement is unenforceable.
McGlynn v. State of Calif. (2018) 230 Cal.Rptr.3d 470 (SC S248513/A146855 rev. granted 6/27/18) Judges’ Retirement System II
The petition for review is granted. Further action in this matter is deferred pending consideration and disposition of a related issue in Alameda County Deputy Sheriffs' Assn. v. Alameda County Employees' Retirement Assn., S247095 (see Cal. Rules of Court, rule 8.512(d)(2)), or pending further order of the court. Submission of additional briefing, pursuant to California Rules of Court, rule 8.520, is deferred pending further order of the court. Votes: Cantil-Sakauye, C.J., Chin, Corrigan, Liu, Cuéllar and Kruger, JJ.
Bills Signed by Governor (6/27/18)
SB 840 by Senator Holly J. Mitchell (D-Los Angeles) – Budget Act of 2018 (includes budgets for DFEH and DIR)
SB 852 by the Committee on Budget and Fiscal Review – State public employment: memorandum of understanding: State Bargaining Unit 6 (California Correctional Peace Officers Association): approval
SB 866 by Committee on Budget and Fiscal Review – Public Sector Employment
Janus v. AFSCME (US 16–1466 6/27/18) Public Sector Employee Agency Fees/First Amendment
Illinois law permits public employees to unionize. If a majority of the employees in a bargaining unit vote to be represented by a union, that union is designated as the exclusive representative of all the employees, even those who do not join. Only the union may engage in collective bargaining; individual employees may not be represented by another agent or negotiate directly with their employer. Nonmembers are required to pay what is generally called an “agency fee,” i.e., a percentage of the full union dues. Under Abood v. Detroit Bd. of Ed., 431 U. S. 209, 235–236, this fee may cover union expenditures attributable to those activities “germane” to the union’s collective bargaining activities (chargeable expenditures), but may not cover the union’s political and ideological projects (nonchargeable expenditures). The union sets the agency fee annually and then sends nonmembers a notice explaining the basis for the fee and the breakdown of expenditures. Here it was 78.06% of full union dues. Petitioner Mark Janus is a state employee whose unit is represented by a public-sector union (Union), one of the respondents. He refused to join the Union because he opposes many of its positions, including those taken in collective bargaining. Illinois’ Governor, similarly opposed to many of these positions, filed suit challenging the constitutionality of the state law authorizing agency fees. The state attorney general, another respondent, intervened to defend the law, while Janus moved to intervene on the Governor’s side. The District Court dismissed the Governor’s challenge for lack of standing, but it simultaneously allowed Janus to file his own complaint challenging the constitutionality of agency fees.
The District Court granted respondents’ motion to dismiss on the ground that the claim was foreclosed by Abood. The Seventh Circuit affirmed.
1. The District Court had jurisdiction over petitioner’s suit. Petitioner was undisputedly injured in fact by Illinois’ agency-fee scheme and his injuries can be redressed by a favorable court decision. For jurisdictional purposes, the court permissibly treated his amended complaint in intervention as the operative complaint in a new lawsuit. United States ex rel. Texas Portland Cement Co. v. McCord, 233 U. S. 157, distinguished. Pp. 6–7.
2. The State’s extraction of agency fees from nonconsenting public sector employees violates the First Amendment. Abood erred in concluding otherwise, and stare decisis cannot support it. Abood is therefore overruled. Pp. 7–47.
(a) Abood’s holding is inconsistent with standard First Amendment principles. Pp. 7–18.
(1) Forcing free and independent individuals to endorse ideas they find objectionable raises serious First Amendment concerns. E.g., West Virginia Bd. of Ed. v. Barnette, 319 U. S. 624, 633. That includes compelling a person to subsidize the speech of other private speakers. E.g., Knox v. Service Employees, 567 U. S. 298, 309. In Knox and Harris v. Quinn, 573 U. S. ___, the Court applied an “exacting” scrutiny standard in judging the constitutionality of agency fees rather than the more traditional strict scrutiny. Even under the more permissive standard, Illinois’ scheme cannot survive. Pp. 7–11.
(2) Neither of Abood’s two justifications for agency fees passes muster under this standard. First, agency fees cannot be upheld on the ground that they promote an interest in “labor peace.” The Abood Court’s fears of conflict and disruption if employees were represented by more than one union have proved to be unfounded: Exclusive representation of all the employees in a unit and the exaction of agency fees are not inextricably linked. To the contrary, in the Federal Government and the 28 States with laws prohibiting agency fees, millions of public employees are represented by unions that effectively serve as the exclusive representatives of all the employees. Whatever may have been the case 41 years ago when Abood was decided, it is thus now undeniable that “labor peace” can readily be achieved through less restrictive means than the assessment of agency fees.
Second, avoiding “the risk of ‘free riders,’ ” Abood, supra, at 224, is not a compelling state interest. Free-rider “arguments . . . are generally insufficient to overcome First Amendment objections,” Knox, supra, at 311, and the statutory requirement that unions represent members and nonmembers alike does not justify different treatment. As is evident in non-agency-fee jurisdictions, unions are quite willing to represent nonmembers in the absence of agency fees. And their duty of fair representation is a necessary concomitant of the authority that a union seeks when it chooses to be the exclusive representative. In any event, States can avoid free riders through less restrictive means than the imposition of agency fees. Pp. 11–18.
(b) Respondents’ alternative justifications for Abood are similarly unavailing. Pp. 18–26.
(1) The Union claims that Abood is supported by the First Amendment’s original meaning. But neither founding-era evidence nor dictum in Connick v. Myers, 461 U. S. 138, 143, supports the view that the First Amendment was originally understood to allow States to force public employees to subsidize a private third party. If anything, the opposite is true. Pp. 18–22.
(2) Nor does Pickering v. Board of Ed. of Township High School Dist. 205, Will Cty., 391 U. S. 563, provide a basis for Abood. Abood was not based on Pickering, and for good reasons. First, Pickering’s framework was developed for use in cases involving “one employee’s speech and its impact on that employee’s public responsibilities,” United States v. Treasury Employees, 513 U. S. 454, 467, while Abood and other agency-fee cases involve a blanket requirement that all employees subsidize private speech with which they may not agree. Second, Pickering’s framework was designed to determine whether a public employee’s speech interferes with the effective operation of a government office, not what happens when the government compels speech or speech subsidies in support of third parties. Third, the categorization schemes of Pickering and Abood do not line up. For example, under Abood, nonmembers cannot be charged for speech that concerns political or ideological issues; but under Pickering, an employee’s free speech interests on such issues could be overcome if outweighed by the employer’s interests. Pp. 22–26.
(c) Even under some form of Pickering, Illinois’ agency-fee arrangement would not survive. Pp. 26–33.
(1) Respondents compare union speech in collective bargaining and grievance proceedings to speech “pursuant to [an employee’s] official duties,” Garcetti v. Ceballos, 547 U. S. 410, 421, which the State may require of its employees. But in those situations, the employee’s words are really the words of the employer, whereas here the union is speaking on behalf of the employees. Garcetti therefore does not apply. Pp. 26–27.
(2) Nor does the union speech at issue cover only matters of private concern, which the State may also generally regulate under Pickering. To the contrary, union speech covers critically important and public matters such as the State’s budget crisis, taxes, and collective bargaining issues related to education, child welfare, healthcare, and minority rights. Pp. 27–31.
(3) The government’s proffered interests must therefore justify the heavy burden of agency fees on nonmembers’ First Amendment interests. They do not. The state interests asserted in Abood— promoting “labor peace” and avoiding free riders—clearly do not, as explained earlier. And the new interests asserted in Harris and here—bargaining with an adequately funded agent and improving the efficiency of the work force—do not suffice either. Experience shows that unions can be effective even without agency fees. Pp. 31– 33.
(d) Stare decisis does not require retention of Abood. An analysis of several important factors that should be taken into account in deciding whether to overrule a past decision supports this conclusion. Pp. 33–47.
(1) Abood was poorly reasoned, and those arguing for retaining it have recast its reasoning, which further undermines its stare decisis effect, e.g., Citizens United v. Federal Election Comm’n, 558 U. S. 310, 363. Abood relied on Railway Employes v. Hanson, 351 U. S. 225, and Machinists v. Street, 367 U. S. 740, both of which involved private-sector collective-bargaining agreements where the government merely authorized agency fees. Abood did not appreciate the very different First Amendment question that arises when a State requires its employees to pay agency fees. Abood also judged the constitutionality of public-sector agency fees using Hanson’s deferential standard, which is inappropriate in deciding free speech issues. Nor did Abood take into account the difference between the effects of agency fees in public- and private-sector collective bargaining, anticipate administrative problems with classifying union expenses as chargeable or nonchargeable, foresee practical problems faced by nonmembers wishing to challenge those decisions, or understand the inherently political nature of public-sector bargaining. Pp. 35–38.
(2) Abood’s lack of workability also weighs against it. Its line between chargeable and nonchargeable expenditures has proved to be impossible to draw with precision, as even respondents recognize. See, e.g., Lehnert v. Ferris Faculty Assn., 500 U. S. 507, 519. What is more, a nonmember objecting to union chargeability determinations will have much trouble determining the accuracy of the union’s reported expenditures, which are often expressed in extremely broad and vague terms. Pp. 38–41.
(3) Developments since Abood, both factual and legal, have “eroded” the decision’s “underpinnings” and left it an outlier among the Court’s First Amendment cases. United States v. Gaudin, 515 U. S. 506, 521. Abood relied on an assumption that “the principle of exclusive representation in the public sector is dependent on a union or agency shop,” Harris, 573 U. S., at ___–___, but experience has shown otherwise. It was also decided when public-sector unionism was a relatively new phenomenon. Today, however, public-sector union membership has surpassed that in the private sector, and that ascendency corresponds with a parallel increase in public spending. Abood is also an anomaly in the Court’s First Amendment jurisprudence, where exacting scrutiny, if not a more demanding standard, generally applies. Overruling Abood will also end the oddity of allowing public employers to compel union support (which is not supported by any tradition) but not to compel party support (which is supported by tradition), see, e.g., Elrod v. Burns, 427 U. S. 347. Pp. 42–44.
(4) Reliance on Abood does not carry decisive weight. The uncertain status of Abood, known to unions for years; the lack of clarity it provides; the short-term nature of collective-bargaining agreements; and the ability of unions to protect themselves if an agency-fee provision was crucial to its bargain undermine the force of reliance. Pp. 44–47.
3. For these reasons, States and public-sector unions may no longer extract agency fees from nonconsenting employees. The First Amendment is violated when money is taken from nonconsenting employees for a public-sector union; employees must choose to support the union before anything is taken from them. Accordingly, neither an agency fee nor any other form of payment to a public-sector union may be deducted from an employee, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay. Pp. 48–49.
851 F. 3d 746, reversed and remanded.
ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, and, GORSUCH, JJ., joined. SOTOMAYOR, J., filed a dissenting opinion. KAGAN, J., filed a dissenting opinion, in which GINSBURG, BREYER, and SOTOMAYOR, JJ., joined.