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Ali v. Daylight Transport, LLC (CA1/2 A157104, filed 12/4/20, ord. pub. 12/31/20) Transportation Workers Misclassification/Arbitration
Daylight Transport, LLC (appellant) appeals from the trial court’s order denying its motion to compel arbitration and stay the underlying action in this matter arising from the proposed class action lawsuit filed by Sabid Ali and Eric Bland (collectively respondents), alleging they were misclassified as independent contractors and, therefore, denied certain wage and hour protections under California law. On appeal, appellant challenges the trial court’s findings that (1) respondents are exempt from the Federal Arbitration Act (FAA) (9 U.S.C. § 1, et seq.) because they are transportation workers engaged in interstate commerce, and (2) the agreement to arbitrate between appellant and each respondent was unconscionable and unenforceable. We shall affirm the trial court’s order.
Christian v. Umpqua Bank (9th Cir. 18-35522 12/31/20) Sexual Harassment/Hostile Work Environment by Customer
The panel reversed the district court’s grant of summary judgment in favor of defendant Umpqua Bank on claims of gender harassment brought under Title VII and the Washington Law Against Discrimination by a former Umpqua employee who alleged that a bank customer stalked and harassed her in her workplace and that Umpqua failed to take effective action to address the harassment.
The panel held that to establish sex discrimination under a hostile work environment theory, a plaintiff must show she was subjected to sex-based harassment that was sufficiently severe or pervasive to alter the conditions of employment, and that her employer is liable for this hostile work environment. The panel concluded that a trier of fact could find that the harassment altered the conditions of plaintiff’s employment, and the district court erred in failing to consider harassing incidents together, in declining to consider incidents in which plaintiff did not have any direct, personal interactions with the customer, and in neglecting to consider record evidence of interactions between the customer and third persons. The panel further concluded that there were genuine issues of material fact whether Umpqua either ratified or acquiesced in the harassment by failing to take prompt, appropriate, and effective action.
The panel reversed the district court’s grant of summary judgment and remanded for further proceedings. It addressed plaintiff’s retaliation claims in a concurrently filed memorandum disposition.
Bailey v. San Francisco District Attorney’s Office (SC S265223/A153520 nonpublished opinion, review granted 12/30/20) FEHA Race Discrimination, Harassment, Retaliation/Failure to Prevent
Petition for review after the Court of Appeal affirmed the judgment in a civil action. This case presents the following issue: Did the Court of Appeal properly affirm summary judgment in favor of defendants on plaintiff’s claims of hostile work environment based on race, retaliation, and failure to prevent discrimination, harassment and retaliation?
Shirvanyan v. Los Angeles Community College etc. (CA2/1 B296593, filed 11/30/20, ord. pub. 12/29/20) FEHA Disability Discrimination/Interactive Process/Available Reasonable Accommodation
Defendant Los Angeles Community College District (the District) appeals from a judgment following a jury verdict in favor of plaintiff Anahit Shirvanyan, a former employee of the District, on her Fair Employment and Housing Act (FEHA) claims against it. These claims were based on the District’s alleged failure to provide reasonable accommodations for and/or engage in an interactive process to identify reasonable accommodations for two injuries, each of which was sufficient to render Shirvanyan disabled for the purposes of FEHA. Shirvanyan offered evidence regarding the District’s response to both injuries—a wrist condition that began sometime in 2014, and a shoulder injury that occurred in December 2015—but she did not, either in her complaint or the evidence she presented, differentiate between them as bases for liability.
The District argues that a necessary element of a FEHA interactive process claim under Government Code section 12940, subdivision (n) is the availability of a reasonable accommodation at the time an interactive process should have taken place, such that engaging in the process would not have been futile. We agree with the District that a section 12940, subdivision (n) plaintiff must prove an available reasonable accommodation.
We further conclude that the evidence presented is sufficient to establish only that a reasonable accommodation of Shirvanyan’s wrist injury, not her shoulder injury, was available. The jury did not indicate whether it relied on the District’s response to one or both of these disabilities in reaching its verdict, and the record does not permit us to make such a determination. We therefore reverse with instructions that the trial court conduct a new trial on Shirvanyan’s failure to accommodate and interactive process claims based solely on the District’s handling of Shirvanyan’s wrist injury. We further conclude, in response to the District’s second primary argument on appeal, that the Workers’ Compensation Act (Lab. Code, § 3200 et seq.) (the WCA) does not bar such claims, as they seek recovery for a harm that is distinct from the harms for which the Workers’ Compensation Act provides a remedy.
The District also appeals from the order granting Shirvanyan attorney fees, which we also reverse. To the extent Shirvanyan prevails on the limited retrial set forth below, the court must reassess whether and to what extent she is entitled to attorney fees.
Conyer v. Hula Media Services, LLC, 53 Cal.App.5th 1189 (2020) (SC S264821/B296738 rev. granted 12/18/20) Arbitration/Employee Handbook Signature
Petition for review after the Court of Appeal reversed an order denying a motion to compel arbitration in a civil action and remanded with directions. This case includes the following issues: (1) Did the Court of Appeal err in severing some terms in the defendant employer’s mandatory employment arbitration agreement and remanding for arbitration under the remaining terms, or was the agreement permeated by unconscionability such that enforcement of the remaining terms would not be in the interests of justice? (2) Did Court of Appeal err in holding that the employee’s signature on a one-page employee handbook receipt and acknowledgment form, which made no reference to arbitration or to waiver of the right to pursue statutory employment law claims in court, constituted binding assent to arbitrate specified claims pursuant to the arbitration agreement? Review granted/brief due.
Hipsher v. Los Angeles County Employees Retirement etc. (CA2/4 B276486A 12/15/20) Public Sector Retirement/PEPRA
Shortly after plaintiff and appellant Tod Hipsher retired from the Los Angeles County Fire Department (LAFD), he was convicted of a federal felony for directing an offshore gambling operation. Defendant and respondent, Los Angeles County Employees Retirement Association (LACERA), subsequently reduced Hipsher’s vested retirement benefits under the Public Employees’ Pension Reform Act of 2013 (Gov. Code, § 7522 et seq. (PEPRA)), based on a determination by defendant County of Los Angeles (County) that Hipsher’s felonious conduct was committed in the scope of his official duties. Section 7522.72 of PEPRA, at issue here, provides a mechanism requiring that a public pensioner employed prior to PEPRA’s effective date (commonly referred to as a “legacy employee”) forfeit a portion of his or her retirement benefits following a conviction of a felony offense occurring in the performance of the pensioner’s official public duties.
Hipsher challenged LACERA’s forfeiture determination by a petition for writ of mandate and a complaint seeking declaratory relief. The trial court issued a peremptory writ of mandate directing the County to afford adequate due process protections before reducing Hipsher’s retirement benefits, but found in favor of defendants on Hipsher’ claim for declaratory relief. On appeal, we determined that section 7522.72 is constitutionally sound, but that LACERA, not the County, bears the burden to afford Hipsher the requisite due process protections to determine whether his conviction falls within the scope of that statute. (See Hipsher v. Los Angeles County Employees Retirement Assn. (2018) 24 Cal.App.5th 740, 756, 762–767 (Hipsher I), vacated by Alameda County Deputy Sheriffs’ Assn. v. Alameda County Employees’ Retirement Assn. (2020) 9 Cal.5th 1032 (Alameda County).
This case is before us a second time after the California Supreme Court granted Hipsher’s petition for review, deferred briefing and transferred the matter back to this court with directions to vacate our prior decision and reconsider the cause in light of its decision in Alameda County, supra, 9 Cal.5th 1032. In Alameda County, the Court articulated a multi-step test for analyzing contract clause claims in the public employee pension context.
After reviewing the matter, we conclude that Alameda County confirms our prior holding that section 7522.72’s public purpose—to protect the pension system from abusive practices of faithless public employees and preserve public trust in government—justifies any concomitant diminution in Hipsher’s pension rights. We also conclude anew that section 7522.72 need not provide a comparable advantage to offset disadvantages Hipsher may suffer as a result of Legislative changes to the public employee retirement system enacted decades after he began his employment. Such a requirement would be antithetical to the statute’s purpose by unfairly enriching a malfeasant legacy employee for engaging in the very sort of abusive practices section 7522.72 is intended to curb.
Further, in accordance with the portion of our prior decision—as to which Hipsher did not seek review by the California Supreme Court—we conclude that section 7522.72 is not an unconstitutional ex post facto law, and that Hipsher is entitled to appropriate administrative due process. Accordingly, we will modify the trial court’s judgment and remand the matter with instructions for LACERA to provide Hipsher appropriate notice of its intent and the reasons for its initiation of forfeiture proceedings, and an opportunity to present his objection to LACERA’s impartial decisionmaker whether he falls within the scope of section 7522.72. In all other respects, we affirm the judgment, as modified.
Calleros v. Rural Metro of San Diego (CA4/1 D075400, filed 11/23/20, ord. pub. 12/15/20) On-Call Rest Breaks/Proposition 11
Two ambulance employees filed a class action lawsuit against several ambulance entities claiming the entities violated wage and hour laws by requiring the employees to remain on call during their rest breaks. One day after the court denied plaintiffs’ class certification motion, the voters passed Proposition 11 enacting provisions requiring ambulance employees to remain reachable by a communications device during their work shifts, including rest breaks. (Gen. Elect. (Nov. 6, 2018); Lab. Code, § 880 et seq.)
Plaintiffs challenge the class action denial order. Defendants oppose these arguments on their merits and also move to dismiss the appeal, arguing the claims are now moot based on Proposition 11.
We agree the appeal has become moot and therefore dismiss the appeal. Under the statutes enacted by Proposition 11, plaintiffs are required to remain on call during their rest breaks and thus they do not have a valid claim challenging defendants’ on-call rest-break policies. We reject plaintiffs’ contentions that Proposition 11 is not retroactive and/or that a retroactivity finding is unconstitutional because it would interfere with their vested rights. Based on our mootness determination, we do not reach the merits of the court’s order denying plaintiffs’ class certification motion, nor do we discuss the factual issues pertaining only to the merits issues.
Doe v. CVS Pharmacy (9th Cir. 19-15074 12/9/20) Affordable Care Act/Employer-Sponsored Healthcare Plan
The panel affirmed in part and vacated in part the district court’s order dismissing an action brought under the Affordable Care Act and other statutes by individuals living with HIV/AIDS whose pharmacy benefits manager for their employer-sponsored health plans required them to obtain specialty medications through its designated specialty pharmacy for those benefits to be considered “in-network.”
The panel held that Section 1557 of the ACA incorporates the anti-discrimination provisions of various civil rights statutes, and prohibits discrimination on the basis of race, color, or national origin pursuant to Title VI of the Civil Rights Act of 1964, on the basis of sex pursuant to Title IX of the Education Amendments Act of 1972, on the basis of age pursuant to the Americans with Disabilities Act, and on the basis of disability pursuant to Section 504 of the Rehabilitation Act. Agreeing with the Sixth Circuit, the panel held that Section 1557 did not create a healthcare-specific anti-discrimination standard that would permit a discrimination claim under any of the enforcement mechanisms of the ACA regardless of plaintiffs’ protected class. Accordingly, because plaintiffs claimed discrimination on the basis of their disability, to state a claim for a Section 1557 violation, they were required to allege facts adequate to state a claim under Section 504 of the Rehabilitation Act.
Vacating in part and remanding for further proceedings, the panel held that plaintiffs stated a claim for disability discrimination under the ACA. Applying the Section 504 framework, the panel concluded that plaintiffs adequately alleged that they were denied meaningful access to their prescription drug benefit under their employer-sponsored health plans because defendants’ program prevented them from receiving effective treatment for HIV/AIDS.
The panel affirmed the district court’s dismissal of plaintiffs’ claim of disability discrimination pursuant to the Americans with Disabilities Act on the ground that a benefit plan is not a place of “public accommodation.” The panel also affirmed the district court’s denial of plaintiffs’ claim for benefits pursuant to ERISA and their cause of action under California’s Unfair Competition Law, except to the extent it was predicated on a violation of the ACA.
Kao v. Joy Holiday (CA1/3 A157886, filed 11/12/20 pub. ord. 12/7/20) Wage and Hour/Alter Ego and Joint Employer Liability
In these consolidated appeals, defendants Joy Holiday, Jessy Lin, and Harry Chen appeal from an amended judgment and order awarding plaintiff Ming-Hsiang Kao unpaid wages, attorney fees, and costs, payable jointly and severally.
Defendants Lin and Chen challenge the trial court’s ruling that they were personally liable for Kao’s damages based upon both alter ago and joint employer liability theories. We affirm.
We dismiss the appeals filed on behalf of defendant Joy Holiday as no relief is sought on behalf of that entity. (See Golightly v. Molina (2014) 229 Cal.App.4th 1501, 1519 [appellate “ ‘review is limited to issues which have been adequately raised and briefed’ ”].)
Lawson v. PPG Architectural Finishes (9th Cir. 19-55802 cert. question to CA Supreme Court 12/7/20) CA Labor Code Evidentiary Standard/McDonnell Douglas Test
The panel certified the following question to the Supreme Court of California: Does the evidentiary standard set forth in section 1102.6 of the California Labor Code replace the McDonnell Douglas test as the relevant evidentiary standard for retaliation claims brought pursuant to section 1102.5 of California’s Labor Code?
Gulf Offshore Logistics, LLC v. Superior Court (CA2/6 B298318A opn. on transfer 12/7/20) Wage and Hour/Offshore Oil Platforms
This case returns to us after the California Supreme Court directed us to reconsider our prior opinion in light of Ward v. United Airlines, Inc. (2020) 9 Cal.5th 732 (Ward) and Oman v. Delta Air Lines, Inc. (2020) 9 Cal.5th 762 (Oman). In our prior opinion, we held Louisiana law governed the employment relationships at issue here. After considering the Supreme Court’s recent guidance on the matter, we now conclude that California law applies and that the trial court correctly denied petitioner’s motion for summary judgment. Accordingly, we deny the petition for writ of mandate.
Petitioners, Louisiana-based employers Gulf Offshore Logistics, LLC and JNB Operating, LLC, employed real parties in interest, non-California residents, to work as crew members on a vessel that provided maintenance services to offshore oil platforms. The vessel was docked at a California port and sailed through California waters to the platforms, which are located outside the state’s boundaries.
Crew members alleged that petitioners violated numerous provisions of California’s wage and hour laws, including those relating to minimum wage and overtime, providing meal and rest periods, maintaining accurate work records and providing complete wage statements. Petitioners moved for summary judgment on the theories that Louisiana rather than California law governed these employment relationships and that the federal Fair Labor Standards Act (FLSA) preempted California law with respect to these employees. The superior court denied the motion because petitioners had not “demonstrated that Louisiana law should apply” or that California law has been preempted.
Petitioners sought a writ of mandate directing the superior court to vacate its order denying the motion for summary judgment and to enter a new order granting the motion. We issued an order to show cause and temporarily stayed all trial court proceedings. In our prior opinion, we applied a conflict of laws analysis and concluded that Louisiana law governed because that state had more significant contacts with the parties and a greater interest in regulating the employment relationships at issue.
After the Supreme Court granted review and transferred the matter back to us, we vacated our prior opinion and received supplemental briefs from the parties. We now conclude that California law applies and that the trial court correctly denied the motion for summary judgment.
Hildebrandt v. Staples the Office Superstore, LLC (CA2/3 B294642 12/4/20) Wage and Hour Class Action/Statute of Limitations/Tolling
Plaintiff Von Hildebrandt appeals a summary judgment entered in favor of defendant Staples the Office Superstore, LLC (Staples). The trial court determined all of Hildebrandt’s claims were barred by the applicable statutes of limitations and the pendency of related class actions did not toll the limitations periods. We conclude the trial court erred in applying the class action tolling rules articulated in Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103 (Jolly).
Because Hildebrandt concedes his claim for failure to furnish accurate itemized wage statements (see Lab. Code, § 226) is time barred, even if tolling applies, we will affirm the summary adjudication of that claim. In all other respects the summary judgment is reversed.
Ventura Coastal v. Occupational Safety & Health Appeals Bd. (CA5 F077267 12/1/20) CalOSHA/Writ of Mandate/Equitable Tolling
The Department of Industrial Relations, Division of Occupational Safety and Health (Division) issued a citation to an employer for a safety violation on its premises that resulted in injury to an employee. The employer contested the citation. It was upheld by the hearing officer and, on reconsideration, by the Occupational Safety and Health Appeals Board (Board). The employer filed a second petition for reconsideration by the Board, then filed a petition for writ of mandate in the trial court. On the Board’s motion for judgment on the pleadings, the trial court dismissed the writ petition, finding it was not timely filed. We conclude filing a second petition for reconsideration was not permitted when the employer was not newly aggrieved by the decision after the first reconsideration, and the petition for writ of mandate was not timely filed after the Board’s decision after the first reconsideration.
In light of the recent decision in Saint Francis Memorial Hospital v. State Dept. of Public Health (2020) 9 Cal.5th 710 (Saint Francis), however, we conclude the time limitation for filing the writ petition is subject to equitable tolling, and the employer should have been allowed to amend its petition to allege facts supporting application of that doctrine. Accordingly, we reverse the judgment and remand with directions to the trial court to permit the employer to amend its petition.
Foroudi v. The Aerospace Corporation (CA2/8 B291302 11/24/20) RIF/Age Discrimination and Class Claims/Exhaustion of Administrative Remedies
David Foroudi filed a complaint against his former employer, The Aerospace Corporation (Aerospace), alleging he was selected for a company-wide reduction in force because of his age. A federal district court struck from his complaint disparate impact and class allegations, finding he failed to exhaust his administrative remedies with respect to such claims. After the case was remanded to the superior court, Foroudi amended his original administrative charges to include class and disparate impact allegations. He then sought leave to amend his complaint in order to reallege class and disparate impact claims. The trial court denied the request after finding the administrative amendments were untimely and unauthorized. The court subsequently granted Aerospace’s motion for summary judgment. On appeal, Foroudi contends the trial court erred in denying his request for leave to amend and in granting Aerospace’s motion for summary judgment. We affirm.
Olsen v. United States (9th Cir. 19-35389 11/23/20) FMLA/Willful Interference
The panel affirmed the district court’s judgment in favor of the Bonneville Power Administration (“BPA”) in an action alleging claims under the Family and Medical Leave Act (“FMLA”).
Plaintiff contracted to work with the BPA. Plaintiff alleged that BPA willfully interfered with her rights under the FMLA by failing to provide her notice of those rights.
The panel held that the district court did not clearly err in determining that BPA’s alleged interference with plaintiff’s FMLA rights was not willful. Agreeing with other circuits that have addressed the issue, the panel held that the standard for willfulness adopted by the Supreme Court in McLaughlin v. Richard Shoe Co., 486 U.S. 128 (1988), for Fair Labor Standards Act claims also applied to FMLA claims. The panel further held that the three-year statute of limitations in 29 U.S.C. § 2617(c)(2) applied to a “willful violation.” The panel held that the district court did not err in finding that the facts in this case did not constitute willfulness by the BPA. The panel concluded that plaintiff’s claim was barred by the two-year statute of limitations in 29 U.S.C. § 2617(c)(1).
People v. Uber Technologies, Inc. (CA1/4 A160701M, filed 10/22/20, mod. 11/20/20) Misclassification/Preliminary Injunction
On November 6, 2020, appellants Lyft, Inc. and Uber Technologies, Inc. filed petitions for rehearing of this court’s October 22, 2020 opinion in the above-entitled matter, on the ground that a preliminary injunction is no longer appropriate after passage of Proposition 22 in the November 3, 2020 election. The petitions for rehearing are denied without prejudice to the parties’ right to file a motion in the trial court to vacate the injunction in light of new circumstances. This court will issue the remittitur forthwith if all parties so stipulate. (Cal. Rules of Court, rule 8.272(c)(1).)
The opinion filed on October 22, 2020 is modified as follows.
On page 22, the disposition is modified to read:
The August 10, 2020 order is affirmed. The stay issued on August 20, 2020 shall expire 60 days after issuance of the remittitur, or, if any party brings an application or motion to vacate the preliminary injunction within that time period, 30 days after the trial court rules on the motion or application, whichever is later.
This modification does not effect a change in the judgment.
Big Lots Stores v. Super. Ct. (CA4/1 D077486 11/20/20) Misclassification/Pro Hac Vice Order
This lawsuit is one of many recent attempts to challenge what some believe are inappropriate efforts by business entities to misclassify workers as “managerial” employees in order to avoid paying overtime and other benefits to which they would otherwise be entitled. In this case, real parties in interest and plaintiffs Menlo, Ngo, Pedraza and Smith are former store managers for petitioner and defendant Big Lots Inc. who claim they spent less than 50 percent of their worktime on managerial tasks and, as a result, should have been paid overtime compensation for hours worked in excess of a standard 40-hour week.
The writ proceeding before us represents an interesting but minor procedural skirmish in that much larger legal battle. Big Lots is an Ohio corporation. When this lawsuit was first filed, it retained a California law firm—Haight Brown & Bonesteel LLP (Haight Brown)—as counsel of record. Big Lots later sought the superior court’s permission for attorneys from an Ohio law firm—Vorys, Sater, Seymour & Pease LLP (Vorys)—to also represent it. This request is known as an application for an out-of-state lawyer to be admitted “pro hac vice” to practice law before the court. The trial judge ultimately granted applications filed by three different attorneys in the Vorys firm. But after later being advised that these Ohio attorneys were attempting to represent various current and former Big Lots managers in depositions noticed by plaintiffs, the court revoked pro hac vice authorization for all three lawyers. Big Lots asks that we overturn that order by means of this writ petition.
Addressing the narrow issue before us, we chart a course between the polar positions of the two parties. We agree with the trial judge that there is a difference between an attorney’s representation of the defendant corporation in a lawsuit and his or her representation of current or former employee witnesses. Pro hac vice admission as to one client does not necessarily allow a lawyer to represent a different client even if substantive law does not otherwise prohibit it. We nonetheless conclude that the total revocation of pro hac vice status for the Vorys attorneys was not supported by the record then before the court. The scope of the court’s pro hac vice orders did not become a disputed issue until after the first two orders were entered, and all the depositions (at which the Vorys attorneys represented the deponent) took place before plaintiffs’ counsel raised the issue with the court in conjunction with the third pro hac vice application.
At that point, having clarified the scope of its orders, the trial court could have prohibited additional representation of current and former employee-deponents absent further court order (the more limited remedy that plaintiffs requested). And it could have set a further hearing to determine whether, in contacting the prospective deponents, the Vorys attorneys engaged in some form of ethical misconduct that would justify other corrective action. But in advance of such a hearing and appropriately supported findings, the circumstances did not justify barring all further participation by Big Lots’ counsel of choice based on conduct that occurred before the issue was ever presented to the trial court. We therefore grant the petition to vacate the revocation order, but return the matter to the trial judge for any additional hearings and/or orders that she deems are warranted.
Coughenour v. Del Taco (CA4/2 E072772 11/20/20) Disaffirmance of Arbitration Contract/Age of Majority
Plaintiff and respondent Sarah Coughenour worked for defendant and appellant Del Taco, LLC, starting when she was 16 years old. When she was first employed by Del Taco, she signed a “Mutual Agreement to Arbitrate” (Agreement). After Coughenour reached the age of 18, she continued working for Del Taco for four months. Coughenour quit and filed a lawsuit against Del Taco for sexual harassment committed by one of their employees, wage and hour claims brought pursuant to the Labor Code, and other claims under the Fair Housing and Employment Housing Act (Complaint). Del Taco filed a motion to compel arbitration against Coughenour (Motion). The trial court denied the Motion, finding that Coughenour’s filing of the lawsuit was a disaffirmance of the Agreement within the meaning of Family Code section 6710, which allows a person upon reaching majority age to disaffirm a contract entered into while a minor.
Del Taco appeals the denial of the Motion arguing that by working for Del Taco for four months after she reached the age of majority, she ratified the Agreement, which estopped her power to disaffirm the Agreement. In the alternative, Del Taco argues that Coughenour did not disaffirm the Agreement within a “reasonable time” after reaching the age of 18 as required by Family Code section 6710.
Castillo v. Bank of America (9th Cir. No. 19-56228 11/18/20) Wage & Hour/Class Certification
The panel affirmed the district court’s order denying a plaintiff’s motion to certify a class regarding her overtime-wage claim under California law against Bank of America, N.A.
The plaintiff sought to certify a class of hourly-paid, nonmanagerial call center workers. The panel held that she established the requirements of commonality and typicality under Fed. R. Civ. P. 23(a)(2)–(3), but not predominance under Rule 23(b)(3) because the challenged Bank of America policy either did not apply or did not cause injury to many employees.
Levone Harris v. Kim Industrial, Inc. (9th Cir. 20-16767 11/13/20) Wage & Hour/CAFA
In order to remove a case commenced as a class action in a state court, the Class Action Fairness Act of 2005 (“CAFA”) requires that the removing defendant allege that the amount in controversy exceeds $5 million. 28 U.S.C. § 1332(d)(2). Here, the plaintiff factually attacked the defendant’s allegations regarding the amount in controversy. After the parties had an opportunity to submit evidence, the district court remanded the case to state court because it found that the defendant based the claimed amount in controversy on unreasonable assumptions. We affirm.
Brennon B. v. Super. Ct. (CA1/1 A157026 11/13/20) Unruh Civil Rights Act/School Districts
We are asked to decide two issues: (1) whether a public school district is a business establishment for purposes of the Unruh Civil Rights Act (Civ. Code, § 51), and (2) even if a school district is not a business establishment, whether it can nevertheless be sued under the Unruh Act where, as here, the alleged discriminatory conduct is actionable under the Americans With Disabilities Act (ADA) (42 U.S.C. § 12101 et seq.). Both are issues of first impression in the California appellate courts.
Our Supreme Court has examined the meaning of the term “business establishment” as used in the Unruh Act in a number of cases. However, the defendant in each was a private entity. Thus, the court has had no occasion to consider whether a government entity, and specifically an agent of the state performing a state constitutional obligation, such as a public school district, is a business establishment within the meaning of the Act.
We have therefore followed the analytical template our high court has employed in deciding whether a private entity is a business establishment for purposes of the Act, examining the historical genesis of the Act and the Act’s limited legislative history, and canvassing the court’s decisions and considering the scholarly articles to which the court has regularly cited, as well as other pertinent authorities. This multi-pronged inquiry leads us to conclude public school districts are not business establishments under the Unruh Act.
We further conclude the Unruh Act imposes liability only on business establishments and therefore reject petitioner’s alternative assertion that, even if a public school district is not a business establishment, it may nevertheless be held liable under the Act where, as here, the alleged discriminatory conduct is actionable under the ADA. Reading the language on which petitioner predicates his assertion in context, and in light of its legislative history and our high court’s decisions discussing it, we conclude this language makes explicit that any violation of the ADA by a business establishment is also a violation of the Unruh Act.
In reaching these conclusions, we are by no means suggesting our public school districts are not subject to stringent anti-discrimination laws. They are. These include the panoply of antidiscrimination statutes set forth in the Education Code and applicable to all schools receiving any form of state funding or assistance (Ed. Code, § 200 et seq.) and the comprehensive antidiscrimination provisions set forth in the Government Code and applicable to all government entities (Gov. Code, § 11135), as well as federal constitutional mandates (actionable under 42 U.S.C. § 1983), and statutes such as Title IX of the Education Amendments of 1972 (20 U.S.C. § 1681 et seq.), Title II of the ADA (42 U.S.C. § 12131 et seq.), and section 504 of the Rehabilitation Act of 1973 (29 U.S.C. § 794).
We thus conclude the trial court did not err in sustaining the school district’s demurrer to petitioner’s cause of action under the Unruh Act without leave to amend, and therefore deny his petition for a writ of mandate (Code Civ. Proc., § 1085) challenging that ruling.
Brown v. TGS Management Co., LLC (CA4/3 G058323, filed 10/13/20, ord. pub. 11/12/20) Arbitration/Restrictive Employment Agreement
This appeal is from a judgment confirming an arbitration award in favor of defendant TGS Management Company (TGS) in an employment contract dispute with TGS’s former employee, plaintiff Richard Hale Brown (Brown). Brown contends we must vacate the judgment because the arbitration award exceeded the arbitrator’s powers “and the award cannot be corrected without affecting the merits of the decision[.]” (Code Civ. Proc., § 1286.2, subd. (a)(4).) Brown argues we may review the arbitration award under Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1 (Moncharsh), because the award is “inconsistent with the protection of a party’s statutory rights” and conflicts with “explicit legislative expression of public policy[.]” (Id. at p. 32.)
The specific statutory right at issue in the underlying dispute is Brown’s right to work in his chosen field free of contractual restraints on competition. The Legislature expressed that right in the simple but sweeping language of Business and Professions Code section 16600 (section 16600): “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind is to that extent void.”
As we explain below, Brown’s appeal has merit. We conclude the arbitrator exceeded his power in issuing an award enforcing provisions of an employment agreement which illegally restrict Brown’s right to work. Consequently, we reverse the judgment and remand the matter to the trial court for further proceedings consistent with this opinion.
California v. Texas (US 19-840 oral arg. transcript 11/10/20) Affordable Care Act
As part of the Patient Protection and Affordable Care Act (ACA), Congress adopted 26 U.S.C. § 5000A. Section 5000A provided that "applicable individual[s] shall" ensure that they are "covered under minimum essential coverage," 26 U.S.C. § 5000A(a); required any "taxpayer" who did not obtain such coverage to make a "[s]hared responsibility payment," id. § 5000A(b); and set the amount of that payment, id.
§ 5000A(c). In National Federation of Independent Business v. Sebelius, 567 U.S. 519, 574 (2012), this Court held that Congress lacked the power to impose a stand-alone command to purchase health insurance but upheld Section 5000A as a whole as an exercise of Congress's taxing power, concluding that it affords individuals a "lawful choice" between buying health insurance or paying a tax in the amount specified in Section 5000A(c). In 2017, Congress set that amount at zero but retained the remaining provisions of the ACA.
The questions presented are:
1. Whether the individual and state plaintiffs in this case have established Article III standing to challenge the minimum coverage provision in Section 5000A(a).
2. Whether reducing the amount specified in Section 5000A(c) to zero rendered the minimum coverage provision unconstitutional.
3. If so, whether the minimum coverage provision is severable from the rest of the ACA.
Semprini v. Wedbush Securities, Inc. (CA4/3 G057740 11/9/20) Wage and Hour Exemption /Commissions
Under California law, an employer generally must pay its employee overtime if he or she works above a set number of hours. A person employed in an administrative capacity, however, is exempt from this and other wage and hour requirements if he or she performs certain duties and is paid a monthly salary equivalent to at least twice the state minimum wage for full-time employment.
The question presented here is whether a compensation plan based solely on commissions, with recoverable advances on future commissions, qualifies as a “salary” for purposes of this exemption. We conclude it does not. Since the trial court found the employees in question are exempt and entered judgment for the employer, we reverse and remand this matter for further proceedings.
Cruz v. Fusion Buffet, Inc. (CA4/1 D075479, filed 10/15/20, ord. pub. 11/9/20) Wage & Hour/Attorneys’ Fees and Costs
Defendants Fusion Buffet, Inc. (Fusion Buffet), Xiao Yan Chen, and Zhao Jia Lin (jointly "the defendants") appeal from postjudgment orders of the trial court regarding attorney fees and costs. The defendants contend that the court erred in: (1) granting plaintiff Justine Cruz's motion for attorney fees and costs against Fusion Buffet and in awarding her fees and costs in the amount of $47,132.50; (2) denying the defendants’ motion to strike or to tax Cruz's costs; (3) denying the motion filed by Chen and Lin seeking attorney fees and costs against Cruz in the amount of $22,735; and (4) granting Cruz's motion to strike Chen and Lin's costs.
We conclude that the defendants have failed to demonstrate reversible error in the court's determinations with respect to these four postjudgment orders. We therefore affirm the challenged orders.
Stone v. United Healthcare Ins. Co. (9th Cir. 19-16227 11/9/20) ERISA
The panel affirmed the district court’s grant of summary judgment in favor of the defendants in an ERISA action concerning the denial of health care coverage for out-of-state residential treatment for anorexia nervosa.
The panel held that defendants’ denial of coverage did not violate the Mental Health Parity and Addiction Equity Act or the California Mental Health Parity Act because the denial was based solely on the ERISA plan’s exclusion of coverage for out-of-state treatment, which applied equally to mental and physical illnesses.
S.F. Taxi Coalition v. City & Cty. of S.F. (9th Cir. 19-16439 11/9/20) Taxi Drivers/Equal Protection/Age Discrimination
The panel affirmed the district court’s judgment on the pleadings in favor of defendants, but remanded for the district court to consider whether plaintiffs should be given leave to amend some of their state law claims in an action challenging regulations adopted in 2018 by the San Francisco Municipal Transportation Agency which favored recent owners of taxi permits (called “medallions”) over those who obtained their permits years ago.
The 2018 regulations favored taxi drivers who recently obtained medallions from the City of San Francisco for $250,000—only to see ridership dry up in the face of Uber and Lyft and other ride-sharing services. For example, the 2018 regulations gave priority for lucrative airport pick-up rides to recent medallion owners. Several taxi drivers, as well as groups representing them, challenged the 2018 regulations as violating equal protection, substantive due process, the California Environmental Quality Act (CEQA), and state anti-age discrimination law.
The panel held that rational basis review applied to the equal protection claim because this case did not implicate suspect or quasi-suspect classifications. The panel held that the 2018 regulations were rationally related to the legitimate government interests of aiding beleaguered taxi drivers and easing taxi congestion at the airport. The panel held that the City’s attempt to mitigate the fallout for those most affected by a shift in the taxi market was a permissible state purpose, even if some questioned its policy wisdom. The panel also rejected plaintiffs’ invocation of substantive due process to strike down the 2018 regulations.
The panel held that plaintiffs’ pleadings failed to plausibly allege that the 2018 regulations qualified as a project under CEQA. The panel further held that plaintiffs failed to plausibly allege that the 2018 regulations were governed by California Government Code section 11135, forbidding state actions that discriminate based on age. The panel remanded for the district court to consider granting leave to amend those claims in the event the taxi drivers could allege additional facts to support them.
Fulton v. City of Philadelphia (US 19-123 oral arg. Transcript 11/4/20) First Amendment Religion/Free Exercise Clause
1. Whether free exercise plaintiffs can only succeed by proving a particular type of discrimination claim-namely that the government would allow the same conduct by someone who held different religious views-as two circuits have held, or whether courts must consider other evidence that a law is not neutral and generally applicable, as six circuits have held?
2. Whether Employment Division v. Smith should be revisited?
3. Whether a government violates the First Amendment by conditioning a religious agency's ability to participate in the foster care system on taking actions and making statements that directly contradict the agency's religious beliefs?
Salinas v. Railroad Retirement Bd. (US 19-199 oral arg. transcript 11/2/20) Railroad Retirement Benefits
Whether, under section 5(f) of the Railroad Unemployment Insurance Act, 45 U.S.C. § 355(f), and section 8 of the Railroad Retirement Act, 45 U.S.C. § 231g, the Railroad Retirement Board's denial of a request to reopen a prior benefits determination is a "final decision" subject to judicial review.
Frlekin v. Apple (9th Cir. 15-17382 10/29/20) Wage-and-Hour Class Action/Exit Searches
The panel reversed the district court’s grant of summary judgment in favor of defendant Apple, Inc., in a wage-and-hour class action brought by employees who sought compensation under California law for time spent waiting for and undergoing exit searches.
Upon the panel’s certification of a question of California law, the California Supreme Court concluded that time spent on the employer’s premises waiting for, and undergoing, required exit searches of packages, bags, or personal technology devices voluntarily brought to work purely for personal convenience by employees was compensable as “hours worked” within the meaning of California Industrial Welfare Commission Wage Order 7.
The panel reversed the district court’s grant of Apple’s motion for summary judgment and remanded with instructions to (1) grant plaintiffs’ motion for summary judgment on the issue of whether time spent by class members waiting for and undergoing exit searches pursuant to Apple’s “Employee Package and Bag Searches” policy is compensable as “hours worked” under California law, and (2) determine the remedy to be afforded to individual class members.
Olson v. Lyft, Inc. (CA1/2 A156322 10/29/20) PAGA/Arbitration
Brandon Olson is a driver for Lyft, Inc. (Lyft), whose terms of service include an agreement he could not bring a Private Attorney General Act (PAGA) claim in court and that disputes with Lyft must be resolved by individual arbitration. Olson sued Lyft alleging six PAGA claims, which Lyft petitioned to compel to arbitration. The petition acknowledged that Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian) precluded enforcement of PAGA waivers, but asserted that Iskanian was wrongly decided and in any event was no longer good law in light of the 2018 opinion of the United States Supreme Court in Epic Systems Corp. v. Lewis (2018) 138 S.Ct. 1612 (Epic Systems). The trial court denied the petition in a comprehensive order rejecting Lyft’s arguments.
Lyft appeals and, represented by two prominent law firms, provides us with 96 pages of briefing, beginning with an argument as to what we “must follow” from United States Supreme Court opinions, going on to reassert its unsuccessful arguments below. Lyft’s opening brief cites 12 United States Supreme Court cases, two cases from the Fifth Circuit Court of Appeals, and, indeed, a 2013 case from an Ohio District Court. Olson, represented by a well-known appellate boutique, provides 54 pages of his own, included within which is a scholarly exposition of California jurisprudence dealing with arbitration.
We need not engage in any similar discussion, as we reject Lyft’s position based on Correia v. NB Baker Electric, Inc. (2019) 32 Cal.App.5th 602 (Correia), an opinion that thoughtfully analyzed—and rejected—the identical argument Lyft makes here. Other post-Epic Systems cases have agreed, including the only two other published Court of Appeal decisions and numerous California federal cases. Accordingly, we affirm the order denying arbitration.
Deiro v. L.A. County Civil Service Commission (CA2/8 B296926 10/29/20) Service-Connected Retirement/Reinstatement of Relief
A deputy sheriff who has obtained and continues to receive service-connected disability retirement benefits is no longer an employee of the county. Consequently, his appeal to the Civil Service Commission of his discharge by the Los Angeles Sheriff’s Department, filed before his disability retirement, is no longer viable. The commission has no authority to order reinstatement or any other relief to a retired person whose future status as an employee is not at issue. The commission properly dismissed the retired deputy sheriff’s disciplinary appeal. We affirm the trial court’s denial of a writ of mandate.
Midwest Motor Supply Co. v. Super. Ct. (CA1/4 A160096 10/28/20) Wage and Hour/Forum Selection
Petitioner Midwest Motor Supply Co. (Midwest) seeks writ relief from a trial court order denying its motion to dismiss or stay a lawsuit filed by its former employee, Patrick Finch, on the basis of forum non conveniens. At issue is whether Finch may void a forum-selection clause in his employment agreement under Labor Code section 925, which renders such a clause in an employment contract voidable by an employee if the contract containing the clause was “entered into, modified, or extended on or after January 1, 2017.” (Lab. Code, § 925, subd. (f).) The trial court determined Finch could void the forum-selection clause under section 925 because Midwest modified the compensation provision of Finch’s employment agreement in 2017 and again in 2018. Midwest claims this was error, arguing that section 925 applies only when a forum-selection clause itself is modified on or after January 1, 2017. We disagree and shall deny Midwest’s writ petition.
Miles v. City of Los Angeles (CA2/1 B299765 10/28/20) Wage and Hour/Sanitation Workers
Industrial Welfare Commission Wage Order No. 9 obligates the City of Los Angeles to provide meal and rest breaks to persons it employs in the transportation industry.
In this class action, wastewater collection workers employed by the city to clean its sewers allege they worked in the transportation industry because the job required them to drive commercial vehicles needed to clean and pump out sewers and transport refuse to collection locations. They allege the city denied them meal and rest breaks mandated by Wage Order No. 9.
The city moved for summary judgment on the ground that its wastewater collection workers did not work in the transportation industry, but in the sanitation industry. The trial court agreed and granted summary judgment, finding no triable issue existed as to whether plaintiffs worked in the transportation industry.
We agree. For purposes of Industrial Welfare Commission (IWC) wage orders, a sanitation worker does not become part of the transportation industry simply because the waste collected must be transported to collection sites. Therefore, we affirm.
Chacon v. Union Pacific Railroad (CA2/2 B299031 10/26/20) Federal Employers’ Liability Act
Bernie Chacon appeals from a judgment against him following a successful motion for judgment on the pleadings by respondent Union Pacific Railroad Company (Union Pacific). Chacon brought this action against Union Pacific in March 2018 under the Federal Employers’ Liability Act (FELA), title 45 United States Code section 51 et seq. Chacon alleges that he developed a sarcoma as a result of his exposure to diesel fumes and other carcinogenic substances while working as a diesel mechanic for Union Pacific (and for a predecessor, Southern Pacific) for 31 years.
Chacon previously sued Union Pacific for damages arising from an unrelated 2007 accident. The parties settled that case in 2010. As part of the settlement, Chacon executed a release of all claims arising from his employment, including any claims concerning exposure to toxic chemicals or fumes. That release was the basis for Union Pacific’s successful motion for judgment on the pleadings in this case.
The issue in this appeal is whether Chacon could validly release future claims unrelated to the particular injury that was the subject of his prior lawsuit and settlement. Section 5 of FELA (45 U.S.C. § 55) invalidates any contractual provision “the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this act [FELA].” The United States Supreme Court long ago concluded that this provision does not apply to a release provided in settlement of a specific liability claim. (See Callen v. Pennsylvania R. Co. (1948) 332 U.S. 625, 631 (Callen).) However, federal law, which governs here, is unsettled as to whether such a release may properly extend to known risks that have not yet caused any injury.
No California case has yet considered this issue. We conclude that the “bright line” rule described in Babbitt v. Norfolk & W. Ry. (6th Cir. 1997) 104 F.3d 89 (Babbitt) best conforms to the governing statute and to the United States Supreme Court opinions interpreting it. Under that rule, which we partially adopt (with a limitation on the scope of our decision explained below), a release of a FELA claim is valid only to the extent that it applies to a “bargained-for settlement of a known claim for a specific injury.” (Id. at p. 93.)
The release at issue here purported to extend to future claims unrelated to the particular injury that Chacon previously settled. To that extent it is invalid. We therefore reverse and remand for further proceedings on Chacon’s complaint.
Carroll v Commission on Teacher Credentialing (CA3 C083250 10/23/20) Whistleblower Retaliation/Attorney-Client Privilege
Plaintiff Kathleen Carroll sued her former employer, defendant California Commission on Teacher Credentialing (Commission), for terminating her employment in retaliation for her reporting Commission mismanagement to the state auditor. Prior to bringing this action, plaintiff appealed her termination to the State Personnel Board (Board), claiming the Commission fired her in retaliation for her whistleblower activities. She also filed a separate whistleblower retaliation complaint with the Board. The Board denied her claims.
In this action, plaintiff alleged the Commission’s termination of her employment violated the California Whistleblower Protection Act (Gov. Code, § 8547 et seq., the Act), Labor Code section 1102.5, and 42 U.S.C. section 1983 (section 1983). (Statutory section references that follow are to the Government Code unless stated otherwise.) After the Commission removed the matter to federal court, the district court dismissed the section 1983 claim and remanded the matter to state court. A jury found for plaintiff and awarded her substantial damages.
The Commission appeals. It contends (1) the district court’s judgment is res judicata as to this action; (2) the Board’s decisions collaterally estop this action; (3) the trial court abused its discretion in evidentiary matters by (a) permitting plaintiff’s counsel to question witnesses on and asking the jury to draw negative inferences from the Commission’s exercise of the attorney-client privilege, (b) denying the admission of the Board’s findings and decisions, (c) denying the admission of after-acquired evidence, and (d) denying the admission of evidence mitigating plaintiff’s emotional distress; and (4) the damages award was unlawful in numerous respects.
We reverse the judgment.
Although the district court’s judgment was not res judicata and the Board’s decisions did not collaterally estop this action, the trial court committed prejudicial error when it allowed plaintiff’s counsel to question witnesses on and ask the jury to draw negative inferences from the defendants’ exercise of the attorney-client privilege and did not timely instruct the jury with the mandatory curative instruction provided in Evidence Code section 913. Because we reverse on this ground, we do not address the Commission’s other claims of error.
Lares v. Los Angeles County Metropolitan etc. (CA2/4 B293850, filed 9/29/20, pub. ord. 10/23/20) CFRA Retaliation
This appeal involves the discipline provision in a collective bargaining agreement (CBA) between defendant Los Angeles County Metropolitan Transit Authority (MTA) and the union representing all operations employees of MTA. Under a section of that provision (the absenteeism rule), an employee is subject to progressive discipline, up to and including termination, if he or she has a certain number of absences. To avoid discipline, the employee may remove (or clear) an absence from his or her count by not having any absences for 60 consecutive calendar days. Certain kinds of absences, however, are expressly excluded from the absenteeism rule. One kind of excluded absence is an absence covered under the federal Family and Medical Leave Act (29 U.S.C. §§ 2601 et seq.) (FMLA) or the California Family Rights Act (Gov. Code, § 12945.2) (CFRA).
Plaintiff Alfonso Lares, a bus operator for MTA, was fired after he had eight non-excluded absences. There is no dispute that more than 60 calendar days had passed between absences on two occasions (i.e., two of the absences would have been cleared from his count), but Lares had taken leaves under the CFRA during each of those periods, and MTA did not count those days as part of the 60-day clearance period. The question presented in this appeal is: Does MTA’s failure to count the days an employee is on CFRA leave when calculating the 60-day clearance period violate the CFRA? We conclude, as did the trial court, it does not. Accordingly, we affirm the summary judgment in favor of MTA on Lares’s claims for retaliation based upon his use of CFRA leave, failure to prevent retaliation, and interference with CFRA leave.