CALIFORNIA CASE LAW ALERT

Reverse chronological e-mail alerts prepared pro bono for the California Lawyers Association (formerly State Bar of California) Labor & Employment Law Section since 2007, covering California, 9th Circuit and US Supreme Court decisions, and new laws signed by Governor. To subscribe, contact LaborLaw@CLA.Legal.

See prior archived alerts by clicking on "Blog" under menu. For alerts older than one year, please request under "Contact" tab.

Martinez-Gonzalez v. Elkhorn Packing (9th Cir. 19-17311 11/3/21) Arbitration

The panel reversed the district court’s order refusing to enforce arbitration agreements between Dario Martinez-Gonzalez and his former employers in an action alleging violations of federal and state labor and wage laws.

Elkhorn Packing Company is a farm labor contractor for D’Arrigo Brothers, a California-based grower of vegetables. As part of Elkhorn’s orientation for incoming employees, Martinez-Gonzalez signed employment paperwork that included arbitration agreements. The district court held that the arbitration agreements resulted from undue influence and economic duress, and therefore the agreements were invalid and unenforceable.

The panel held that under California law, the doctrine of economic duress did not render the arbitration agreements unenforceable because Elkhorn did not commit a wrongful act and reasonable alternatives were available to Martinez-Gonzalez. Martinez-Gonzalez asserted that Elkhorn committed a wrongful act by asking him to sign the arbitration agreement after he made the journey from Mexico to California, where he was dependent on Elkhorn housing and had already started harvesting lettuce. The panel held that, while the circumstances surrounding the signing of the agreements were not ideal, they did not constitute a “wrongful act” under California law. The panel held further that Martinez-Gonzalez also failed to demonstrate a lack of reasonable alternatives where the agreements themselves did not say they were necessary for him to keep his job, no one at Elkhorn told Martinez-Gonzalez that refusing to sign the agreements was a cause for termination, and Martinez-Gonzalez admitted that no one at Elkhorn told him he would be terminated if he did not sign the agreements. With no threat of termination or express statement that the agreements were mandatory, it was clearly erroneous for the district court to conclude that Martinez-Gonzalez lacked a reasonable alternative – such as asking whether he could decline to sign the agreements. Furthermore, Martinez-Gonzalez had another reasonable alternative – to revoke the arbitration agreements.

The doctrine of “undue influence” can be used to rescind an agreement under California law. The panel held that the economic duress doctrine is employed only in limited circumstances, and here there was no reason to invoke this last resort given the lack of wrongful actions, the existence of reasonable alternatives, and Martinez-Gonzalez’s continued ability to vindicate his interests in arbitration. Martinez-Gonzalez did not show undue susceptibility where the facts did not support a finding that he was especially vulnerable to pressure. Given the lack of heightened susceptibility, Martinez-Gonzalez had to establish that “extraordinary force” was brought against him to prove undue influence. The panel held that the conditions here, while not ideal, were a far cry from actions considered “oppressive” under California law where: the timing and place of the orientation did not show that Martinez-Gonzalez’s will was overborne; the lack of time to consult with attorneys or read the agreements did not improperly induce Martinez-Gonzalez’s signatures since Elkhorn did not interfere with his ability to use either option; Elkhorn’s representatives’ instructions to sign the agreements quickly were not insistent demands; and Elkhorn representatives’ general statements to follow the company’s rules and directions had nothing to do with the arbitration agreements. Given the totality of the circumstances, the panel held that the district court clearly erred in finding undue influence here.

The panel remanded to the district court to determine whether Martinez-Gonzalez’s claims fell within the scope of the arbitration agreements.

Judge Rawlinson dissented because the majority completely disregarded the district court’s comprehensive factual findings following trial and the clear error standard of review. She agreed with the district court because the district court did not clearly err in concluding, after a bench trial, that the atmosphere surrounding the arbitration agreements rose to the level of a wrongful act. In addition, the district court’s finding of economic duress was amply supported by the evidence developed during trial, and the majority’s contrary finding was not.

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/11/03/19-17311.pdf

Zamora v. Security Industry Specialists (CA6 H044008, filed 9/30/21, pub. ord. 10/29/2 ) FEHA Disability Discrimination, Retaliation, Wrongful Termination

David Zamora sued his former employer, Security Industry Specialists, Inc. (SIS), under the California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.) for employment discrimination based on physical disability, failure to make a reasonable accommodation, failure to engage in the interactive process, retaliation, wrongful termination, and other claims after SIS laid him off while he was recovering from an industrial injury. The trial court granted summary adjudication of all but two causes of action. The parties later stipulated to dismiss the remaining claims, and the court entered judgment for SIS.

In this appeal, Zamora challenges the trial court’s summary adjudication of his disability discrimination, retaliation, wrongful termination in violation of FEHA, and wrongful termination in violation of public policy claims. Our de novo review of the record demonstrates that summary adjudication was improperly granted with respect to Zamora’s disability discrimination and wrongful termination claims, but that summary adjudication in favor of SIS was appropriate with respect to Zamora’s retaliation claim. We will therefore reverse the judgment and remand the matter for further proceedings in the trial court.

https://www.courts.ca.gov/opinions/documents/H044008.PDF

Harris v. County of Orange (9th Cir. 19-56387 10/28/21) Orange County Retiree Medical Plan

The panel affirmed the district court’s summary judgment in favor of the County of Orange in an action alleging that the County breached its contractual obligations to retired County employees and deprived them of vested health benefits by restructuring the method through which the County assisted retired employees in defraying the cost of their health insurance.

In January 1993, the County and the Orange County Employee Retirement System (OCERS) entered into a Memorandum of Understanding (MOU) which allowed the County to access surplus investment earnings controlled by OCERS and which deposited a portion of the surplus into an Additional Retirement Benefit Account (ARBA) to pay for health insurance of present and future County retirees. In April 1993, the County adopted the Retiree Medical Plan, funded by investment earnings from the ARBA account and mandatory employee deductions. The Retiree Medical Plan explicitly provided that the Plan did not create any vested rights to benefits. Contemporaneous with or after adoption of the Retiree Medical Plan, labor unions entered into MOUs with the County providing that the County would administer a Retiree Medical Insurance Plan and retirees would receive a Retiree Medical Insurance Grant.

From 1993 through 2007, retired employees received a monthly grant (the Grant Benefit) to defray the cost of health care premiums. Beginning in 2004, the County negotiated with its labor unions to restructure the retiree medical program, which was underfunded. Ultimately, the County approved an agreement with the labor unions that reduced benefits for retirees.

Plaintiffs brought suit asserting, among other things, that the 1993 MOUs demonstrated an intent by the County to create an implied vested right to the Grant Benefit, and that the County breached the MOUs by reducing the Grant Benefit. Noting that the April 6, 1993, Retiree Medical Plan explicitly provided that the Plan did not create any vested right to benefits, the panel held that plaintiffs’ claim to an implied vested right to the Grant Benefit was foreclosed; the prescribed law of Orange County set forth in the Retiree Medical Plan was at variance with such a right. Accordingly, the panel held that plaintiffs failed to raise a material issue of fact regarding the County’s intent to create an implied vested right to the grant provided by the County to defray the cost of health insurance.

The panel rejected plaintiffs’ assertion that this courts prior decision in Harris v. County of Orange (Harris IV), 902 F.3d 1061 (9th Cir. 2018), compelled a different result. The panel held that at the summary judgment stage, the County provided evidence that the Retiree Medical Plan was adopted by resolution and therefore became governing law with respect to Grant Benefits. As existing County law, the Retiree Medical Plan became part of the MOUs. The panel further held that the MOUs, as acknowledged by plaintiffs, were of limited duration and expired on their own terms by a specific date. Absent express language providing that the Grant Benefits vested, the right to the benefits expired when the MOUs expired. As to the MOUs in existence prior to adoption of the Grants Benefits, they clearly reflected an intention to incorporate the provisions of the Retiree Medical Plan into the MOUs.

The panel held that the Retiree Medical Plan was not unilaterally imposed on the unions and their employees without collective bargaining because the unions had the option to reject the plan or to negotiate different terms. Instead, the unions executed MOUs adopting the Retiree Medical Plan. Finally, the panel rejected the assertion that the Grant Benefit was deferred compensation, and vested upon retirement, similar to pension benefits. Applying the reasoning in California Fire Local 2881 v. Cal. Pub. Emps. Ret. Sys., 6 Cal. 5th 965 (2019), the panel held that the Grant Benefit was an optional benefit rather than fixed compensation.

Concurring in part and dissenting in part, Judge Forrest agreed with the majority that the County’s MOUs entered into with its employees’ unions after its Retiree Medical Plan went into effect were deemed to have incorporated the terms of the Plan by operation of law. She also agreed that this court’s decision in Harris IV did not foreclose that result. Judge Forrest disagreed, however, with the majority’s conclusion that the Plan’s terms were incorporated by operation of law into the MOUs that the County entered into before the Plan went into effect. Regarding the pre-Plan MOUs, California law gave plaintiffs a viable basis to assert an implied vested right to the Grant Benefit at issue. Thus, to prevail on its motion for summary judgment, the County needed to demonstrate—without relying on the Plan’s anti-vesting term—that plaintiffs lacked any evidence proving that the pre-Plan MOUs created an implied vested right. Because the County did not do this, Judge Forrest would reverse the district court’s grant of summary judgment on the grounds that there were material questions of fact concerning whether the Grant Benefit provided in those pre-Plan MOUs was vested.

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/10/28/19-56387.pdf

Uribe v. Crown Building Maintenance Co. (CA4/3 G057836, filed 9/30/21, pub. ord. 10/26/21) PAGA

Isabel Garibay, an intervenor in the action, appeals from the trial court’s entry of judgment confirming final approval of a class action settlement reached between Josue Uribe and Crown Building Maintenance Company (Crown). Uribe initially sued Crown as an individual regarding alleged Labor Code violations for failure to reimburse him for the cost of uniform cleaning and required footwear as a day porter doing janitorial-type work. Uribe’s suit also included a cause of action in a representative capacity for civil penalties and injunctive relief under the Labor Code Private Attorneys General Act of 2004 (PAGA). (Lab. Code, § 2698 et seq.) Following stalled dispute resolution efforts, the parties reached a settlement after a daylong private mediation. The settlement was conditioned on Uribe filing an amended complaint converting his lawsuit into a class action on his Labor Code claims and including unreimbursed employee cell phone usage costs as an additional basis for both his Labor Code and PAGA causes of action.

Garibay, an unnamed member of the class once it was formed, had earlier filed in the Alameda County Superior Court a putative class action asserting Labor Code claims for unreimbursed cell phone use by Crown employees, together with a representative PAGA cause of action on that basis. Garibay filed her Alameda County action before Uribe filed his original complaint in the Orange County Superior Court. When Uribe and Crown sought preliminary approval of their agreement to settle Uribe’s Orange County lawsuit on a class‑wide basis, including settling his representative PAGA claim, the trial court authorized Garibay to intervene as a named party in the lawsuit to oppose the settlement. The trial court later granted Uribe’s motion for preliminary approval of the settlement, and then Crown and Uribe’s subsequent joint motion for final approval.

Meanwhile, the Judicial Council had referred Crown’s petition to coordinate Uribe’s and Garibay’s lawsuits to the presiding judge of the Alameda County Superior Court to appoint a judge to hear the petition; that appointment remained pending at the time the judgment in Orange County was entered. After the parties advised the trial court in this action that no stay had been entered in the coordination proceedings, the court subsequently entered judgment. Garibay now challenges the settlement after the trial court declined to rule on both Crown’s motion to dismiss Garibay’s complaint in intervention and Garibay’s motion to vacate the judgment.

The parties raise a host of issues in this appeal. Garibay contends Uribe’s PAGA notice failed to reference unreimbursed cell phone expenses in any manner, thereby precluding litigation on that basis. Garibay also contends Uribe failed to provide the trial court with basic information necessary to approve the settlement, including a range of settlement values for each settled claim and a range of PAGA penalties on each claim. Garibay further argues the settlement was unfair, and the scope of the release Uribe and Crown negotiated was too broad and no presumption of fairness should apply to the settlement because Uribe’s trial counsel had no prior experience in class action litigation; the settlement was not reached through arms-length bargaining and provided no range of settlement values for the trial court to consider; and Uribe was neither typical nor adequate to serve as class representative.

Garibay also contends the trial court should have applied a heightened standard in evaluating the settlement to guard against a “reverse auction,” in which a defendant settles with the low bidder among two or more class representatives, to the detriment of the class. Amici curiae, the California Employment Lawyers Association (CELA) and Employers Group, and the California Employment Law Council (CELC) debate on behalf of Garibay and Crown, respectively, whether a heightened standard is necessary or applicable here.

For their part, Crown and Uribe defend the settlement and, as a preliminary matter, contest Garibay’s standing to appeal the judgment once she opted out of the class action component of Uribe’s lawsuit.

As we explain, we need only address the standing issue and whether Uribe’s notice to the state PAGA administrator was adequate to encompass a PAGA claim for unreimbursed cell phone use. Because Garibay has the requisite “immediate, pecuniary, and substantial” interest in preserving and advancing her PAGA cause of action in her lawsuit, which would be extinguished by res judicata if the judgment confirming Uribe and Crown’s settlement were to be upheld, she has standing here at least to challenge the settlement’s PAGA component.

On the merits, because the “plain meaning” of the stated “facts and theories” disclosed in Uribe’s PAGA notice did not encompass a claim for unreimbursed cell phone expenses, the notice was inadequate to support Uribe’s PAGA cause of action on that theory in his lawsuit. And because Uribe and Crown’s agreement did not allow for severance of nonviable settlement terms—indeed, an express nullity provision provided otherwise—judicial approval of a settlement that includes Uribe’s PAGA cause of action cannot survive review. We therefore reverse the judgment.

https://www.courts.ca.gov/opinions/documents/G057836.PDF

Najarro v. Super. Ct. (CA4/2 E076328A, filed 9/23/21, pub. ord. 10/25/21) Arbitration

In a companion case, where an employee claimed she was forced to sign an arbitration agreement after litigation had commenced and without the benefit of her counsel, we issued an order to show cause why relief should not be granted. Although this case generally does not present the same factual scenario, we issued an order to show cause following motions to compel arbitration because this case was ordered related to the other and involves the same defendants.

Here, the trial court granted the motions for eight employees, each of whom signed one of two versions of arbitration agreements. Because the first version does not clearly and unmistakably delegate questions of arbitrability to the arbitrator, we grant the writ petition as to the employees who signed that version. As to two of these employees, the trial court must decide whether this first version is unconscionable, guided by our discussion below. As to the other two employees who signed this version, we find that the arbitration agreement is unenforceable for the separate reason of fraud in the execution. We also find that fraud in the execution voids the agreement for two of the employees who signed the other, second version of the arbitration agreement. For reasons substantially similar to those stated in the companion case, we deny the petition as to the remaining two employees who signed the second version.

https://www.courts.ca.gov/opinions/documents/E076328A.PDF

Crestwood Behavioral Health v. Lacy (CA1/3 A158830 10/19/21) Wage & Hour Retaliation/Labor Commissioner Intervention

Deeveria Lacy, a former employee of respondent Crestwood Behavioral Health, Inc. (Crestwood), filed a retaliation complaint against Crestwood with appellant Lilia Garcia-Brower, in her official capacity as the California Labor Commissioner (Labor Commissioner or Commissioner), pursuant to Labor Code section 98.7, subdivision (a). After the Commissioner notified Crestwood of its investigation of Lacy’s complaint, Crestwood filed a petition to compel arbitration against Lacy but did not include the Commissioner as a party. In granting the petition, the trial court not only compelled Lacy to arbitrate her retaliation complaint, it also stayed the Commissioner’s investigation pending the completion of that arbitration.

Approximately 100 days after Crestwood alerted her to the trial court’s ruling, the Labor Commissioner moved ex parte to intervene so she could vacate the order. After requiring the Commissioner to file a noticed motion, the trial court denied her motion to intervene because it was untimely and because the order staying the Commissioner’s investigation did not impair or impede her ability to protect her interest in Lacy’s retaliation complaint. As a result, the court denied the Commissioner’s motion to vacate that order as moot. We conclude that the motion to intervene was timely and that the order staying the Commissioner’s investigation impaired her ability to vindicate the public interest. We therefore reverse.

https://www.courts.ca.gov/opinions/documents/A158830.PDF

In re Walsh (9th Cir. 21-70685 10/19/21) Fair Labor Standards Act/Disclosure of Informants

The panel denied a petition for a writ of mandamus seeking to reverse the district court’s order requiring the Secretary of Labor for the U.S. Department of Labor to disclose by April 2, 2021, the identities of informants who will testify at trial and to direct the district court not to require any disclosure of informant witnesses until a date closer to trial.

The Secretary filed an action against Valley Wide Plastering Construction, Inc., and various individual defendants, alleging violations of the Fair Labor Standards Act. During discovery, Valley Wide sought the identities of all informant employees who provided information to the Secretary. In response, the Secretary filed a motion for protective order, invoking the government’s informant privilege and requesting the district court to prohibit Valley Wide from soliciting information tending to reveal any informant identities. The district court granted the motion but also ordered the Secretary to reveal the identities of informants testifying at trial by April 2, 2021. The Secretary thereupon petitioned this court for a writ of mandamus to reverse the district court’s order and to direct the district court not to order the Secretary to identify the informant witnesses any earlier than 75 days before trial.

The panel held that the district court’s order requiring the Secretary to disclose the identities of informant witnesses and their unredacted witness statements by April 2, 2021, was not clearly erroneous as a matter of law. Applying the third factor set forth in Bauman v. U.S. Dist. Ct., 557 F.2d 650 (9th Cir. 1977), whether the district court’s order was clearly erroneous as a matter of law, the panel noted that the record showed that the district court identified a need for Valley Wide to know the identities of informant witnesses by April 2, 2021, before summary judgment motions were due, and carefully balanced the government’s interest in nondisclosure before making its decision. The district court did not pick that date arbitrarily and addressed and considered the informant privilege issue on four separate occasions. Considering the particular circumstances of this case, the panel declined to interfere with the district court’s day-to-day case management.

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/10/19/21-70685.pdf

Doe v. The Regents of the U. of Cal. (CA1/2 A159004, filed 9/30/21, pub. ord. 10/19/21) Title IX

John Doe was a student at University of California, Davis (UC Davis), when fellow student Jane Roe reported that he engaged in nonconsensual sexual intercourse with her in violation of University of California policy. John agreed they had sex but said Jane consented. Following an investigation, UC Davis found that, on the night John and Jane had sex, Jane was incapacitated due to alcohol such that she was unable to consent and that, given her condition, a reasonable person should have known she was unable to consent. UC Davis concluded John violated explicit UC policy, and he was suspended from all UC campuses for two years. John petitioned the superior court for a writ of administrative mandate to set aside the suspension, and the court denied the petition.

In this appeal, John contends he was denied a fair process in UC Davis’s investigation and adjudication of Jane’s allegations. He argues (1) he was denied a live hearing and an opportunity to cross-examine witnesses before a fact finder who was not also the investigator, (2) the investigator in this case failed to conduct a fair, thorough, and impartial investigation, and (3) the findings were not supported by substantial evidence.

In Doe v. Allee (2019) 30 Cal.App.5th 1036, 1069 (Allee), the court held in university disciplinary proceedings involving allegations of sexual misconduct, when the sanction is severe and credibility is central to the adjudication, the university must provide cross-examination at a live hearing before a neutral adjudicator who was not also the investigator as a matter of fair process. We conclude that, in this case, credibility was not central because John’s own account of the incident provided substantial evidence of the policy violation; therefore, the procedures mandated in Allee were not required. The administrative record shows the investigation was thorough, there is no evidence of investigator bias, and John was provided many opportunities to state his version of events and to review and respond to the evidence. On this record, we cannot say John was denied a fair process.

Accordingly, we affirm.

https://www.courts.ca.gov/opinions/documents/A159004.PDF

Doe v. The Regents of the U. of Cal. (CA1/2 A159023, filed 9/30/21, pub. ord. 10/19/21) Title IX

John Doe was a senior at University of California, Santa Barbara (UCSB), when fellow student Jane Roe reported that he engaged in dating violence against her in violation of University of California policy. John admitted that, after arguing with Jane for hours, he “grabbed her, screamed in her face and shook her” and “eventually dragged her out of the bed to the front door” of his home. Following an investigation, the university found John violated UC policy, and he was suspended for three years, resulting in a three-year hold of his degree and diploma. John petitioned for a writ of administrative mandate seeking to set aside the disciplinary decision and suspension, and the trial court denied the petition.

In this appeal, John contends UCSB failed to provide a fair process and the factual findings were not supported by substantial evidence. We affirm.

https://www.courts.ca.gov/opinions/documents/A159023.PDF

Patterson v. Superior Court (CA2/7 B312411 10/18/21) FEHA/Prevailing Defendant’s Attorney Fees

Several well-established rules govern imposition of fees and costs incurred in actions under the California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.). First, a successful plaintiff is entitled to recover his or her reasonable attorney fees. A prevailing defendant, however, may not be awarded attorney fees or costs “unless the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so.” (Gov. Code, § 12965, subd. (b) (§ 12965(b)).) Second, FEHA claims may be included in a predispute arbitration agreement, but an employer that seeks to compel arbitration of FEHA claims may not limit statutorily imposed remedies or “require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 103, 110-111 (Armendariz).)

Given these fundamental principles, may an employer’s arbitration agreement authorize the recovery of attorney fees for a successful motion to compel arbitration of a FEHA lawsuit even if the plaintiff’s opposition to arbitration was not frivolous, unreasonable or groundless? Because a fee-shifting clause directed to a motion to compel arbitration, like a general prevailing party fee provision, risks chilling an employee’s access to court in a FEHA case absent section 12965(b)’s asymmetric standard for an award of fees, a prevailing defendant may recover fees in this situation only if it demonstrates the plaintiff’s opposition was groundless.

No such finding was made by the superior court in the underlying action before awarding real party in interest Charter Communications, Inc. its attorney fees after granting Charter’s motion to compel Michael Patterson to arbitrate his FEHA claims. Accordingly, we grant Patterson’s petition for writ of mandate and direct respondent Los Angeles Superior Court to vacate its March 16, 2021 order awarding attorney fees to Charter and to conduct a new hearing to reconsider Charter’s motion for attorney fees.

https://www.courts.ca.gov/opinions/documents/B312411.PDF

Williams v. RGIS, LLC (CA3 C091253 10/18/21) PAGA/FAA Preemption

Defendant RGIS, LLC (RGIS) appeals the trial court’s order denying its petition to compel arbitration of representative claims under the Private Attorney General Act of 2004 (PAGA) (Lab. Code, § 2699 et seq.). In denying the petition, the trial court followed our Supreme Court’s decision in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian), which held that individual employees cannot contractually waive their right to bring a representative action under the PAGA, and this state law rule is not preempted by the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.).

RGIS argues that our Supreme Court’s holding in Iskanian was subsequently abrogated by the United States Supreme Court’s decision in Epic Systems Corporation v. Lewis (2018) __ U.S. __ [138 S.Ct. 1612] (Epic Systems). Epic Systems, however, did not consider the same issue concerning the nonwaivable nature of PAGA claims decided by Iskanian. Accordingly, and along with every published Court of Appeal decision that has decided this issue, we reject the argument and follow Iskanian. Although we agree with the multitude of reported cases addressing this issue, we publish this opinion because this is an issue of first impression for this district.

https://www.courts.ca.gov/opinions/documents/C091253.PDF

SEIU-USWW v. Preferred Building Services, Inc. (CA1/5 A159790 10/15/21) Successor Contractor/Retaining Employees

A class of janitors (Janitors) were employed by VPM Maintenance Management, LLC (VPM) at a residential complex (the Site). After VPM terminated its janitorial contract with the Site, a successor janitorial contractor (Successor) replaced VPM. Janitors and their union (Union) (collectively, Plaintiffs) sued Successor for failing to retain Janitors under state and local laws. The trial court granted Plaintiffs’ motion for summary judgment and awarded attorney fees. We affirm.

https://www.courts.ca.gov/opinions/documents/A159790.PDF

Morales v. Factor Surfaces LLC (CA2/4 B306652, filed 9/22/21, ord. pub. 10/14/21) Wage & Hour/Regular Rate of Pay

Byron Jerry Morales sued his former employer, Factor Surfaces LLC (“Factor”), and its managing agent Gregory Factor (sometimes collectively referred to as appellants) for, among other things, unpaid overtime wages, meal and rest break compensation, statutory penalties for inaccurate wage statements, retaliation, and wrongful termination in violation of public policy. After a bench trial, the trial court entered judgment in favor of Morales in the amount of $99,394.16, which included $42,792.00 in unpaid overtime wages. Factor’s sole contention on appeal is that the trial court erred in calculating Morales’s regular rate of pay for purposes of determining the amounts owed to Morales for unpaid overtime. For the reasons discussed below, we affirm.

https://www.courts.ca.gov/opinions/documents/B306652.PDF

2021 LABOR AND EMPLOYMENT BILLS SIGNED BY GOVERNOR

BY BILL NUMBER

AB 12 by Assemblymember Kelly Seyarto (R-Murrieta) – Personal information: social security numbers: the Employment Development Department
AB 26 by Assemblymember Chris Holden (D-Pasadena) – Peace officers: use of force
AB 56 by Assemblymember Rudy Salas (D-Bakersfield) – Benefits: outgoing mail: claim processing: reporting
AB 57 by Assemblymember Jesse Gabriel (D-Encino) – Law enforcement: hate crimes

AB 73 by Assemblymember Robert Rivas (D-Hollister) – Health emergencies: employment safety: agricultural workers: wildfire smoke
AB 89 by Assemblymember Reggie Jones Sawyer (D-Los Angeles) – Peace officers: minimum qualifications processing: reporting
AB 110 by Assemblymember Cottie Petrie-Norris (D-Laguna Beach) – Fraudulent claims for unemployment compensation benefits: inmates.
AB 131 by Committee on Budget — Child development programs and workers
AB 237 by Assemblymember Adam Gray (D-Merced) – Public employment: unfair practices: health protection
AB 262 by Assemblymember Jim Patterson (R-Fresno) – Human trafficking: vacatur relief for victims
AB 275 by Assemblymember Jose Medina (D-Riverside) – Classified community college employees
AB 286 by Assemblymember Lorena Gonzalez (D-San Diego) – Food delivery: purchase prices and tips
AB 313 by Assemblymember Cristina Garcia (D-Bell Gardens) – Civil service: Limited Examination and Appointment Program
AB 397 by Assemblymember Chad Mayes (I-Rancho Mirage) – Unemployment insurance: benefits: disqualification: notice
AB 450 by Assemblymember Lorena Gonzalez (D-San Diego) – Paramedic Disciplinary Review Board
AB 468 by Assemblymember Laura Friedman (D-Glendale) – Emotional support animals
AB 539 by Assemblymember Ken Cooley (D-Rancho Cordova) – State teachers’ retirement: investment managers and investment advisers: contracts
AB 565 by Assemblymember Tom Lackey (R-Palmdale) – Interagency Advisory Committee on Apprenticeship: homeless youth and foster youth
AB 579 by Assemblymember Heath Flora (R-Ripon) – Fire prevention: purchases of personal protective equipment: Department of Forestry and Fire Protection
AB 615 by Assemblymember Freddie Rodriguez (D-Pomona) – Higher Education Employer-Employee Relations Act: procedures relating to employee termination or discipline
AB 628 by Assemblymember Eduardo Garcia (D-Coachella) – Breaking Barriers to Employment Initiative
AB 643 by Assemblymember James C. Ramos (D-Highland) – Apprenticeship programs: career fairs
AB 654 by Assemblymember Eloise Gómez Reyes (D-Grand Terrace) – COVID-19: exposure: notification
AB 701 by Assemblymember Lorena Gonzalez (D-San Diego) – Warehouse distribution center workers
SB 721 by Senator Ben Hueso (D-San Diego) – California Farmworker Day
AB 761 by Assemblymember Phillip Chen (R-Yorba Linda) – County employees’ retirement: personnel: Orange County
AB 845 by Assemblymember Freddie Rodriguez (D-Pomona) – Disability retirement: COVID-19: presumption
AB 846 by Assemblymember Evan Low (D-Campbell) - Local Agency Public Construction Act: job order contracting
AB 890 by Assemblymember Sabrina Cervantes (D-Riverside) – Public employee retirement systems: investment management: reports
AB 941 by Assemblymember Steve Bennett (D-Ventura) – Farmworker assistance: resource centers
AB 958 by Assemblymember Mike Gipson (D-Carson) – Peace officers: law enforcement gangs
AB 1003 by Assemblymember Lorena Gonzalez (D-San Diego) – Wage theft: grand theft
AB 1023 by Assemblymember Heath Flora (R-Ripon) – Contractors and subcontractors: records: penalties
AB 1031 by Assemblymember Carlos Villapudua (D-Stockton) – State agencies: interns and student assistants: hiring preference
AB 1033 by Assemblymember Rebecca Bauer-Kahan (D-Orinda) – California Family Rights Act: parent-in-law: small employer family leave mediation: pilot program
AB 1273 by Assemblymember Freddie Rodriguez (D-Pomona) – Interagency Advisory Committee on Apprenticeship: the Director of Consumer Affairs and the State Public Health Officer: earn and learn training
AB 1383 by Assemblymember Wendy Carrillo (D-Los Angeles) – Community colleges: academic employees: involuntary administrative leave
AB 1407 by Assemblymember Autumn Burke (D-Inglewood) – Nurses: implicit bias courses
AB 1480 by Assemblymember Freddie Rodriguez (D-Pomona) – Employers: prohibited disclosure of information: arrest or detention
AB 1550 by Assemblymember Luz Rivas (D-Arleta) – Higher education labor relations: employee organizations
AB 1506 by Assemblymember Ash Kalra (D-San Jose) – Worker status: employees and independent contractors: newspaper distributors and carriers
AB 1561 by the Committee on Labor and Employment – Worker classification: employees and independent contractors
AB 1577 by Assemblymember Autumn Burke (D-Inglewood). Income taxes: federal CARES Act: gross income: loan forgiveness
SB 2 by Senator Steven Bradford (D-Gardena) – Peace officers: certification: civil rights
SB 16 by Senator Nancy Skinner (D-Berkeley) – Peace officers: release of records
SB 62 by Senator María Elena Durazo (D-Los Angeles) – Employment: garment manufacturing
SB 93 by Committee on Budget and Fiscal Review. Employment: rehiring and retention: displaced workers: COVID-19 pandemic
SB 95 by Senator Nancy Skinner (D-Berkeley). Employment: COVID-19: supplemental paid sick leave
SB 142 by the Committee on Budget and Fiscal Review – State employment: State Bargaining Units
SB 144 by Senator Anthony Portantino (D-Glendale). Taxes: credits: qualified motion pictures: certified studio construction projects; wages and diversity: reports
SB 159 by the Committee on Budget and Fiscal Review – State Employment: State Bargaining Unit 6
SB 165 by the Committee on Budget and Fiscal Review – State employment: State Bargaining Units
SB 206 by Senator Mike McGuire (D-Healdsburg) – Firefighters Procedural Bill of Rights Act: Department of Forestry and Fire Protection: temporary appointments
SB 270 by Senator María Elena Durazo (D-Los Angeles) – Public employment: labor relations: employee information
SB 272 by Senator John Laird (D-Santa Cruz) – State government: gender-neutral terms: California Conservation Corps
SB 278 by Senator Connie Leyva (D-Chino) – Public Employees’ Retirement System: disallowed compensation: benefit adjustments
SB 294 by Senator Connie Leyva (D-Chino) – Public retirement: leave of absence: service credit
SB 296 by Senator Monique Limόn (D-Santa Barbara) – Code enforcement officers: safety standards.
SB 321 by Senator María Elena Durazo (D-Los Angeles) – Employment safety standards: advisory committee: household domestic services
SB 331 by Senator Connie Leyva (D-Chino) – Settlement and nondisparagement agreements
SB 338 by Senator Lena Gonzalez (D-Long Beach) – Joint and several liability of port drayage motor carrier customers: health and safety violations: prior offenders: liability owed to the state
SB 352 by Senator Susan Talamantes Eggman (D-Stockton) – The military: sexual harassment
SB 362 by Senator Josh Newman (D-Fullerton) – Chain community pharmacies: quotas
SB 390 by Senator John Laird (D-Santa Cruz) – Employment Development Department: recession plan
SB 411 by Senator Dave Cortese (D-San Jose) – Public Employees’ Retirement System: employment without reinstatement
SB 461 by Senator Dave Cortese (D-San Jose) – Unfair Competition Law: enforcement
SB 497 by Senator Monique Limόn (D-Santa Barbara) – Qualifying accounts for direct deposit of publicly administered funds
SB 501 by Senator Bob Wieckowski (D-Fremont) – Claims against public entities
SB 509 by Senator Scott Wilk (R-Santa Clarita) – Optometry: COVID-19 pandemic: temporary licenses
SB 572 by Senator Robert Hertzberg (D-Van Nuys) – Labor Commissioner: enforcement: lien on real property
SB 586 by Senator Steven Bradford (D-Gardena) – Peace officers: certification
SB 598 by Senator Richard Pan (D-Sacramento) – Sacramento Regional Transit District: employee relations
SB 606 by Senator Lena Gonzalez (D-Long Beach) – Workplace safety: violations of statutes: enterprise-wide violations: egregious violations
SB 634 by the Committee on Labor, Public Employment and Retirement – Public employees’ retirement
SB 639 by Senator María Elena Durazo (D-Los Angeles) – Minimum wages: persons with disabilities
SB 646 by Senator Robert Hertzberg (D-Van Nuys) – Labor Code Private Attorneys General Act of 2004: janitorial employees
SB 657 by Senator Ochoa Bogh (R-Yucaipa) – Employment: electronic documents
SB 718 by Senator Patricia Bates (R-Laguna Niguel) – Health care coverage: small employer groups
SB 727 by Senator Connie Leyva (D-Chino) – Labor-related liabilities: direct contractor
SB 753 by Senator Richard D. Roth (D-Riverside) – Unemployment information: California Workforce Development Board: program outcomes

SB 762 by Senator Bob Wieckowski (D-Fremont) – Contracts – Payment of arbitration fees
SB 779 by Senator Josh Becker (D-Menlo Park) – California Workforce Innovation Opportunity Act: earn and learn programs
SB 807 by Senator Bob Wieckowski (D-Fremont) – Enforcement of civil rights: Department of Fair Employment and Housing

BY SUBJECT MATTER

Apprenticeships

AB 565 by Assemblymember Tom Lackey (R-Palmdale) – Interagency Advisory Committee on Apprenticeship: homeless youth and foster youth
AB 643 by Assemblymember James C. Ramos (D-Highland) – Apprenticeship programs: career fairs
AB 1273 by Assemblymember Freddie Rodriguez (D-Pomona) – Interagency Advisory Committee on Apprenticeship: the Director of Consumer Affairs and the State Public Health Officer: earn and learn training

Arbitration

SB 762 by Senator Bob Wieckowski (D-Fremont) – Contracts – Payment of arbitration fees

Childcare Workers

AB 131 by Committee on Budget — Child development programs and workers

Civil Procedure

SB 501 by Senator Bob Wieckowski (D-Fremont) – Claims against public entities

Collective Bargaining

SB 142 by the Committee on Budget and Fiscal Review – State employment: State Bargaining Units
SB 270 by Senator María Elena Durazo (D-Los Angeles) – Public employment: labor relations: employee information
SB 159 by the Committee on Budget and Fiscal Review – State Employment: State Bargaining Unit 6
SB 165 by the Committee on Budget and Fiscal Review – State employment: State Bargaining Units
SB 598 by Senator Richard Pan (D-Sacramento) – Sacramento Regional Transit District: employee relations

COVID-19

AB 579 by Assemblymember Heath Flora (R-Ripon) – Fire prevention: purchases of personal protective equipment: Department of Forestry and Fire Protection
AB 654 by Assemblymember Eloise Gómez Reyes (D-Grand Terrace) – COVID-19: exposure: notification

AB 1577 by Assemblymember Autumn Burke (D-Inglewood). Income taxes: federal CARES Act: gross income: loan forgiveness (Paycheck Protection Program)
SB 93 by Committee on Budget and Fiscal Review. Employment: rehiring and retention: displaced workers: COVID-19 pandemic
SB 95 by Senator Nancy Skinner (D-Berkeley). Employment: COVID-19: supplemental paid sick leave

Discrimination, Harassment & Retaliation

AB 628 by Assemblymember Eduardo Garcia (D-Coachella) – Breaking Barriers to Employment Initiative
AB 1407 by Assemblymember Autumn Burke (D-Inglewood) – Nurses: implicit bias courses

SB 352 by Senator Susan Talamantes Eggman (D-Stockton) – The military: sexual harassment
SB 807 by Senator Bob Wieckowski (D-Fremont) – Enforcement of civil rights: Department of Fair Employment and Housing

Employment Benefits

AB 237 by Assemblymember Adam Gray (D-Merced) – Public employment: unfair practices: health protection

Farm Workers

AB 73 by Assemblymember Robert Rivas (D-Hollister) – Health emergencies: employment safety: agricultural workers: wildfire smoke
SB 721 by Senator Ben Hueso (D-San Diego) – California Farmworker Day
AB 941 by Assemblymember Steve Bennett (D-Ventura) – Farmworker assistance: resource centers

Firefighters

SB 206 by Senator Mike McGuire (D-Healdsburg) – Firefighters Procedural Bill of Rights Act: Department of Forestry and Fire Protection: temporary appointments

Higher Education

AB 275 by Assemblymember Jose Medina (D-Riverside) – Classified community college employees
AB 615 by Assemblymember Freddie Rodriguez (D-Pomona) – Higher Education Employer-Employee Relations Act: procedures relating to employee termination or discipline
AB 1383 by Assemblymember Wendy Carrillo (D-Los Angeles) – Community colleges: academic employees: involuntary administrative leave

Human Trafficking

AB 262 by Assemblymember Jim Patterson (R-Fresno) – Human trafficking: vacatur relief for victims

Leaves

AB 1033 by Assemblymember Rebecca Bauer-Kahan (D-Orinda) – California Family Rights Act: parent-in-law: small employer family leave mediation: pilot program

Licensing

AB 450 by Assemblymember Lorena Gonzalez (D-San Diego) – Paramedic Disciplinary Review Board

SB 509 by Senator Scott Wilk (R-Santa Clarita) – Optometry: COVID-19 pandemic: temporary licenses

Peace Officers

AB 26 by Assemblymember Chris Holden (D-Pasadena) – Peace officers: use of force
AB 57 by Assemblymember Jesse Gabriel (D-Encino) – Law enforcement: hate crimes
AB 89 by Assemblymember Reggie Jones Sawyer (D-Los Angeles) – Peace officers: minimum qualifications
SB 296 by Senator Monique Limόn (D-Santa Barbara) – Code enforcement officers: safety standards
AB 958 by Assemblymember Mike Gipson (D-Carson) – Peace officers: law enforcement gangs
SB 2 by Senator Steven Bradford (D-Gardena) – Peace officers: certification: civil rights
SB 16 by Senator Nancy Skinner (D-Berkeley) – Peace officers: release of records
SB 586 by Senator Steven Bradford (D-Gardena) – Peace officers: certification

Procedure

SB 331 by Senator Connie Leyva (D-Chino) – Settlement and nondisparagement agreements

Public Sector Employment

AB 846 by Assemblymember Evan Low (D-Campbell) - Local Agency Public Construction Act: job order contracting

SB 272 by Senator John Laird (D-Santa Cruz) – State government: gender-neutral terms: California Conservation Corps
AB 313 by Assemblymember Cristina Garcia (D-Bell Gardens) – Civil service: Limited Examination and Appointment Program

AB 1031 by Assemblymember Carlos Villapudua (D-Stockton) – State agencies: interns and student assistants: hiring preference
AB 1480 by Assemblymember Freddie Rodriguez (D-Pomona) – Employers: prohibited disclosure of information: arrest or detention

Reasonable Accommodation

AB 468 by Assemblymember Laura Friedman (D-Glendale) – Emotional support animals.

Retirement/Pensions

AB 539 by Assemblymember Ken Cooley (D-Rancho Cordova) – State teachers’ retirement: investment managers and investment advisers: contracts

AB 845 by Assemblymember Freddie Rodriguez (D-Pomona) – Disability retirement: COVID-19: presumption
AB 890 by Assemblymember Sabrina Cervantes (D-Riverside) – Public employee retirement systems: investment management: reports
SB 278 by Senator Connie Leyva (D-Chino) – Public Employees’ Retirement System: disallowed compensation: benefit adjustments
SB 294 by Senator Connie Leyva (D-Chino) – Public retirement: leave of absence: service credit
SB 634 by the Committee on Labor, Public Employment and Retirement – Public employees’ retirement
SB 411 by Senator Dave Cortese (D-San Jose) – Public Employees’ Retirement System: employment without reinstatement
AB 761 by Assemblymember Phillip Chen (R-Yorba Linda) – County employees’ retirement: personnel: Orange County
AB 1293 by Assemblymember Ken Cooley (D-Rancho Cordova) - Judges' Retirement System II: federal law limits: adjustments

Unemployment Insurance

AB 12 by Assemblymember Kelly Seyarto (R-Murrieta) – Personal information: social security numbers: the Employment Development Department
AB 56 by Assemblymember Rudy Salas (D-Bakersfield) – Benefits: outgoing mail: claim processing: reporting
processing: reporting
AB 110 by Assemblymember Cottie Petrie-Norris (D-Laguna Beach) – Fraudulent claims for unemployment compensation benefits: inmates
SB 390 by Senator John Laird (D-Santa Cruz) – Employment Development Department: recession plan
AB 397 by Assemblymember Chad Mayes (I-Rancho Mirage) – Unemployment insurance: benefits: disqualification: notice
SB 497 by Senator Monique Limόn (D-Santa Barbara) – Qualifying accounts for direct deposit of publicly administered funds
SB 753 by Senator Richard D. Roth (D-Riverside) – Unemployment information: California Workforce Development Board: program outcomes

Unfair Competition

SB 461 by Senator Dave Cortese (D-San Jose) – Unfair Competition Law: enforcement

Wage and Hour/Classification/Labor

AB 286 by Assemblymember Lorena Gonzalez (D-San Diego) – Food delivery: purchase prices and tips
AB 701 by Assemblymember Lorena Gonzalez (D-San Diego) – Warehouse distribution center workers
AB 1003 by Assemblymember Lorena Gonzalez (D-San Diego) – Wage theft: grand theft
AB 1023 by Assemblymember Heath Flora (R-Ripon) – Contractors and subcontractors: records: penalties
AB 1506 by Assemblymember Ash Kalra (D-San Jose) – Worker status: employees and independent contractors: newspaper distributors and carriers
AB 1561 by the Committee on Labor and Employment – Worker classification: employees and independent contractors
SB 62 by Senator María Elena Durazo (D-Los Angeles) – Employment: garment manufacturing

SB 144 by Senator Anthony Portantino (D-Glendale). Taxes: credits: qualified motion pictures: certified studio construction projects; wages and diversity: reports
SB 338 by Senator Lena Gonzalez (D-Long Beach) – Joint and several liability of port drayage motor carrier customers: health and safety violations: prior offenders: liability owed to the state
SB 362 by Senator Josh Newman (D-Fullerton) – Chain community pharmacies: quotas
SB 572 by Senator Robert Hertzberg (D-Van Nuys) – Labor Commissioner: enforcement: lien on real property
SB 639 by Senator María Elena Durazo (D-Los Angeles) – Minimum wages: persons with disabilities
SB 646 by Senator Robert Hertzberg (D-Van Nuys) – Labor Code Private Attorneys General Act of 2004: janitorial employees
SB 657 by Senator Ochoa Bogh (R-Yucaipa) – Employment: electronic documents
SB 727 by Senator Connie Leyva (D-Chino) – Labor-related liabilities: direct contractor

Workforce Development

SB 779 by Senator Josh Becker (D-Menlo Park) – California Workforce Innovation Opportunity Act: earn and learn programs

Workplace Safety

SB 321 by Senator María Elena Durazo (D-Los Angeles) – Employment safety standards: advisory committee: household domestic services
SB 606 by Senator Lena Gonzalez (D-Long Beach) – Workplace safety: violations of statutes: enterprise-wide violations: egregious violations

Bills Signed by Governor (10/9/21)

AB 237 by Assemblymember Adam Gray (D-Merced) – Public employment: unfair practices: health protection.
AB 1550 by Assemblymember Luz Rivas (D-Arleta) – Higher education labor relations: employee organizations.

Bills Signed by Governor (10/8/21) 2of 2

AB 57 by Assemblymember Jesse Gabriel (D-Encino) – Law enforcement: hate crimes.
AB 1084 by Assemblymember Evan Low (D-Campbell) – Gender neutral retail departments.
SB 206 by Senator Mike McGuire (D-Healdsburg) – Firefighters Procedural Bill of Rights Act: Department of Forestry and Fire Protection: temporary appointments.
SB 718 by Senator Patricia Bates (R-Laguna Niguel) – Health care coverage: small employer groups.

Bills Vetoed by Governor (10/8/21)

AB 375 by Assemblymember Jose Medina (D-Riverside) – Community colleges: part-time employees. A veto message can be found here.
AB 872 by Assemblymember Jim Wood (D-Santa Rosa) – Leave of absence: firefighters. A veto message can be found here.

Carrasco v. State Personnel Bd. (CA4/2 E072892 10/8/21) Probation Rejection/State Personnel Board

Plaintiff and appellant Jenaro Carrasco worked as a parole agent for real party in interest Department of Corrections and Rehabilitation (department) for five years. He was then promoted to the position of special agent and was subject to a 12-month probationary period. The department served Carrasco with a notice of rejection before the end of the probationary period and stated six reasons for the rejection. Carrasco challenged his rejection before defendant and respondent the State Personnel Board (the board) and, when the board upheld his rejection, he petitioned the superior court for a writ of administrative mandamus.

At the conclusion of the administrative and superior court proceedings, only two of the reasons given for Carrasco’s rejection were found to have been supported by substantial evidence. However, both the board and the superior court concluded Government Code section 19175—the statute that governs the board’s review of the decision to reject a probationer—does not mandate reinstatement if less than all the reasons given for the rejection are upheld. In addition, the board and the superior court concluded the department had not acted in bad faith when it rejected Carrasco. Therefore, the superior court denied Carrasco’s petition.

In this appeal from the judgment denying Carrasco’s petition, we hold: (1) section 19175, subdivision (d), does not require the board to reinstate a rejected probationer if at least one of the reasons given for the rejection is supported by substantial evidence; (2) the administrative record supports the board’s findings that substantial evidence supported the two remaining reasons for Carrasco’s rejection; and (3) the record supports the board’s findings that the department did not act in bad faith when it rejected Carrasco. We affirm the judgment.

https://www.courts.ca.gov/opinions/documents/E072892.PDF

Bill Signed by Governor (10/8/21)

AB 438 by Assemblymember Eloise Gómez Reyes (D-Grand Terrace) – School employees: classified employees: layoff notice and hearing

Bills Signed by Governor (10/7/21)

AB 539 by Assemblymember Ken Cooley (D-Rancho Cordova) – State teachers’ retirement: investment managers and investment advisers: contracts
SB 296 by Senator Monique Limόn (D-Santa Barbara) – Code enforcement officers: safety standards.
SB 331 by Senator Connie Leyva (D-Chino) – Settlement and nondisparagement agreements

Bills Vetoed by Governor (10/7/21)

SB 76 by Senator Jim Nielsen (R-Red Bluff) – Excluded employees: binding arbitration. A veto message can be found here.
SB 702 by Senator Monique Limόn (D-Santa Barbara) – Gubernatorial appointments: report. A veto message can be found here.
SB 804 by Senator Steven Glazer (D-Orinda) – California Conservation Corps: forestry training center: formerly incarcerated individuals: reporting. A veto message can be found here.

PHYLLIS W. CHENG, ESQ .

CALIFORNIA CASE LAW ALERT