California Employment Law Update : Labor and Employment Lawyers & Attorneys : Proskauer Rose Law Firm : Wage & Hour Laws, Disability, Workplace Safety

Rietveld v. Rosebud Storage Partners, L.P., 121 Cal. App. 4th 250 (2004)

Jon and Carole Rietveld sued their former employer, Rosebud Storage Partners, for breach of contract and fraud. Following entry of summary judgment in favor of Rosebud, the Rietvelds and their attorney, Lyle Havens, appealed. In the published portion of the opinion, the Court of Appeal considered Havens's appeal of a $2,380 sanctions order against him personally, resulting from his failure to participate meaningfully in a judicial arbitration. The appellate court affirmed the sanctions order against Havens in view of the following: He arrived 25 minutes late to the hearing; failed to provide the pleadings and the brief the arbitrator had requested; failed to have the Rietvelds appear or be available by telephone; and failed to produce evidence to support the Rietvelds' case.

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Stevens v. Brink's Home Security, 378 F.3d 944 (2004)

David Stevens and Donald Goines filed a class action in Washington state court against Brink's Home Security for unpaid wages and overtime pay under state law. Brink's removed the action to federal court on the basis of diversity of citizenship. Twenty days after the removal, Stevens and Goines filed a motion to amend the complaint to add two new defendants whose presence in the lawsuit would destroy diversity of citizenship. The district court granted the motion to amend and in the same order remanded the case back to state court. Brink's appealed, but the Ninth Circuit dismissed the appeal on the ground that the order permitting plaintiffs to amend their complaint (assuming it was separable from the remand order, which itself was immune from appellate review) was neither a final order reviewable on appeal nor a collateral order that was subject to review.

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Huffman v. Interstate Brands Companies, 121 Cal. App. 4th 679 (2004)

After Interstate Brands demoted Daniel Huffman from a district sales manager to a division sales manager, he filed a lawsuit alleging age discrimination and wrongful demotion in violation of public policy. At trial, the judge allowed Huffman to testify about the injury to his knees that occurred when he had to load and deliver bakery products in the job to which he had been demoted; two years after the demotion, Huffman had bilateral knee replacement surgery. Interstate Brands objected to Huffman's introduction of evidence about his knee injury on the ground that the exclusive remedy for such injuries was provided by the Workers' Compensation Act. The jury awarded Huffman $699,000 in economic damages and $2 million for emotional distress attributable to the demotion and the pain and suffering from the knee injury and knee replacement surgery. The Court of Appeal reversed the judgment, holding that the exclusive remedy for Huffman's knee-related pain and suffering was provided by the Workers' Compensation Act.

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Diaz v. Gates, 380 F.3d 480 (9th Cir. 2004)

David Diaz sued Daryl Gates, Willie Williams, Bernard Parks and many others, alleging violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO") as a result of damages he allegedly suffered from police misconduct associated with the LAPD Rampart scandal. One of the elements of a RICO claim is that the plaintiff must prove that he suffered injury to business or property. Diaz alleged that he had suffered economic harm in the form of lost employment and employment opportunities and that he was rendered unable to pursue gainful employment while defending himself against unjust charges and while being unjustly incarcerated. The district court granted defendants' motion to dismiss on the ground that Diaz had failed to allege that he had been deprived of business or property within the meaning of the statute. The Ninth Circuit affirmed.

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Reeves v. Hanlon, 33 Cal. 4th 1140 (2004)

Attorney Robert L. Reeves filed a lawsuit against attorneys Daniel P. Hanlon and Colin T. Greene and their law firm, Hanlon & Greene (H&G), after Hanlon and Greene abruptly resigned from their positions with Reeves & Hanlon (R&H) and allegedly persuaded certain R&H employees to join H&G, solicited R&H's clients, misappropriated trade secrets, destroyed computer files and withheld property that belonged to R&H. Following a bench trial, the judge concluded that H&G had engaged in interference with contracts and prospective economic opportunity, resulting in damages totaling $182,180, which was reduced to $150,000 as a result of a prior stipulation of the parties. The court of appeal affirmed the judgment in favor of Reeves, holding that Hanlon and Greene had interfered with the Reeves firm's employment relationship with its employees, even though the employees were terminable at will. The Supreme Court affirmed the court of appeal's judgment, holding that Hanlon and Greene "did not simply extend job offers to plaintiffs' atwill employees. Rather, [they] purposely engaged in unlawful acts that crippled [Reeves's] business operations and caused [Reeves's] personnel to terminate their at-will employment contracts." The Supreme Court expressly disapproved the contrary holding of GAB Business Services, Inc. v. Lindsey & Newsom Claim Services, Inc., 83 Cal. App. 4th 409 (2000). Further, the Supreme Court affirmed the lower courts' judgment that Hanlon and Greene had violated the Uniform Trade Secrets Act by using Reeves's customer list to directly solicit clients for their own pecuniary gain to the detriment of Reeves.

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Haney v. Aramark Uniform Services, Inc., 121 Cal. App. 4th 623 (2004)

Michael Haney, a route sales representative for Aramark and a member of Teamsters Local 431, alleged that his employment was terminated in violation of public policy after he complained to Aramark about its allegedly fraudulent billing practices. Aramark filed a motion for summary adjudication in response to Haney's wrongful termination claim on the grounds that the claim was preempted by the National Labor Relations Act and Section 301 of the Labor Management Relations Act and that, in any case, Haney had failed to identify a public policy that Aramark had allegedly violated. Although the trial court granted the motion, the Court of Appeal reversed, holding that the claim was not preempted by federal labor law and that "when an employer discharges an employee who refuses to defraud a customer, the employer has violated a fundamental public policy and may be liable in tort for wrongful discharge."

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United States v. Karaouni, 379 F.3d 1139 (9th Cir. 2004)

Ali Abdulatif Karaouni checked a box on an I-9 Employment Eligibility Verification Form next to the printed statement: "I attest, under penalty of perjury, that I am…[a] citizen or national of the United States." In fact, Karaouni was born in and is a citizen of Lebanon. In February 1995, an Immigration Judge ordered Karaouni deported, but he remained in the country and subsequently married a U.S. citizen in October 1997. In September 2002, Karaouni was arrested and tried for falsely claiming on the I-9 Form that he was a U.S. citizen. In June 2003, a federal jury convicted Karaouni. The Ninth Circuit, per Reinhardt, J., reversed the conviction, holding that since the I-9 statement was phrased in the disjunctive ("…I am a citizen or national of the United States"), Karaouni may have been asserting the latter and not the former, which would not be a crime – even though Karaouni was neither a citizen nor a national of the United States.

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Sav-on Drug Stores, Inc. v. Superior Court, 34 Cal. 4th 319 (2004)

Plaintiffs in this case sought to certify a class of between 600 and 1,400 current and former operating managers and assistant managers of Savon Drug Stores. The managers contended that they had been misclassified as employees exempt from overtime in that they spent more than 50 percent of their time doing non-exempt work. Although the trial court certified the class, the court of appeal issued a writ of mandate commanding the lower court to vacate its order on the ground that common issues did not predominate among the proposed class members. The California Supreme Court reversed the court of appeal and held that although it was not deciding the merits of plaintiffs' case, in the class certification context, "common issues may be present when a defendant's tortious acts, as here, allegedly are the same with regard to each plaintiff."

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Estes v. Monroe, 120 Cal. App. 4th 1347 (2004)

After he became paralyzed in an automobile accident, Major James Estes filed a claim for wrongful termination in violation of public policy against the California Military Department on the ground that the Department had failed to provide reasonable accommodation to him as a disabled worker. Estes alleged that his termination violated not the Fair Employment and Housing Act (FEHA), but the public policy embodied therein. The Court of Appeal affirmed dismissal on demurrer of Estes's claim on the ground that the FEHA does not provide remedies to National Guardsmen on state active duty when the challenged personnel action is incident to military service. Likewise, Estes could not state a common law tort claim predicated on the FEHA for the same reason.
 

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Kulshrestha v. First Union Commercial Corp., 33 Cal. 4th 601 (2004)

Dheeraj Kulshrestha sued First Union for wrongful termination, promissory fraud, and discrimination, among other things. In response to First Union's motion for summary judgment, Kulshrestha filed a declaration that he executed in Columbus, Ohio but that did not state that it was signed "under penalty of perjury under the laws of the State of California" as required by the Code of Civil Procedure. The trial court sustained First Union's objection to the declaration and granted summary judgment in its favor. The Court of Appeal affirmed summary judgment, holding that since the declaration Kulshrestha filed failed to subject him to criminal penalties under California's perjury law, it was not in "substantial compliance" with the law's requirements. The California Supreme Court affirmed.
 

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Watkins v. Ameripride Services, 375 F.3d 821 (9th Cir. 2004)

John Watkins worked as a customer service representative (CSR) for Ameripride Services, a company that supplies businesses with uniform rental, sales and laundry services and building maintenance products. Watkins injured his wrist while lifting a rack of uniforms as part of his CSR duties and became disabled. He subsequently sued Ameripride for violation of California's overtime pay requirements and for violation of the California Fair Employment and Housing Act, prohibiting disability discrimination. The Ninth Circuit reversed the partial summary judgment that had been entered in Ameripride's favor on the overtime claim; the Court held that there was a triable issue of fact as to whether Watkins was involved in interstate commerce and thus exempt from California's overtime law under the Motor Carrier Act exemption. The Court affirmed partial summary judgment against Watkins on his claim that Ameripride had not reasonably accommodated his disability.
 

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Agosta v. Astor, 120 Cal. App. 4th 596 (2004)

Len Agosta, who was employed by Clear Channel Communications, had a series of meetings with N. Arthur Astor before accepting a position as general sales manager of KFSD, Astor's San Diego radio station. Agosta insisted on receiving something from Astor in writing before giving Clear Channel notice of his intent to resign. After further negotiations, Astor provided Agosta with a document entitled "Compensation Packages." Agosta proceeded to notify Clear Channel of his intent to resign; thereafter, Astor provided Agosta with additional terms, including a termination-at-will provision. Within a month, Astor told Agosta that he was reneging on the agreed terms of employment, including key components of the compensation package; Agosta was "shocked" that Astor had repudiated the deal. Two days later, Astor terminated Agosta's employment. Agosta sued for fraud and breach of the implied covenant of good faith and fair dealing, among other things. The trial court granted Astor's motion for summary adjudication on the ground that Agosta's employment was terminable at will. The Court of Appeal reversed, holding that Astor was not entitled to summary adjudication of Agosta's misrepresentation claims, notwithstanding the existence of the atwill agreement. The Court held that Agosta could seek recovery of fraudulent inducement damages unrelated to the discharge. The Court affirmed summary adjudication of the implied covenant claim given Agosta's at-will status.

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