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

Smith v. City of Jackson, 544 U.S. 228, 125 S. Ct. 1536 (2005)

A group of police officers older than 40 challenged the decision of the City of Jackson, Mississippi to raise the starting salaries of officers with less than five years of seniority in order to bring starting salaries up to the regional average. Since officers with less than five years of seniority were disproportionately under 40 years of age, plaintiffs alleged that the policy had a disparate impact upon them in violation of the Age Discrimination in Employment Act (ADEA). While the Supreme Court stated that a disparate impact theory of liability such as that set forth by plaintiffs in this case is available under the ADEA, it concluded that this particular lawsuit had been properly dismissed because plaintiffs had failed to identify a specific employment practice that allegedly resulted in a statistical disparity and, in any event, the City’s plan was based on reasonable factors other than age.

• Email This
• Print
• Trackbacks

Ampex Corp. v. Cargle, 128 Cal. App. 4th 1569 (2005)

Ampex Corporation and its president and chairman of the board, Edward J. Bramson, sued an anonymous poster to an Internet message board (Scott Cargle, a former employee of iNEXTV, a wholly-owned subsidiary of Ampex) for defamation after Cargle posted messages critical of Ampex and Bramson. Cargle responded to the defamation action with a motion to strike the complaint under California’s anti-SLAPP statute. Upon learning Cargle’s identity, Ampex and Bramson dismissed their complaint, and the trial court then declined to rule on Cargle’s anti-SLAPP motion. The Court of Appeal reversed, holding that Cargle had met his burden to show that he had made a statement in a public forum in connection with an issue of public interest. Further, Ampex and Bramson had failed to demonstrate a probability that they would prevail on the merits. Accordingly, Cargle was entitled to recover his costs and attorneys’ fees. See also Gallant v. City of Carson, 128 Cal. App. 4th 705 (2005) (former employee’s defamation action against city and two employees who said she was “incompetent” and “had done something illegal” should not have been stricken in response to an anti-SLAPP motion).

• Email This
• Print
• Trackbacks

Blakemore v. Superior Court, 129 Cal. App. 4th 36 (2005)

In this class action, Raven Blakemore and several other women who sold Avon beauty products as independent sales representatives alleged, among other things, a violation of California’s Unfair Competition Law (UCL). The representatives alleged that Avon would “stuff” unwanted or unordered merchandise in with products they did order and would then refuse to credit the representatives for the extra items or would deny receiving returns of same. Although the trial court sustained Avon’s demurrers to several claims and struck the class allegations, the Court of Appeal reversed. The appellate court held that since the representatives had properly alleged a claim for fraudulent concealment, the alleged practices were sufficient to constitute an alleged violation of the UCL. Moreover, the Court held that the trial court had abused its discretion in striking the class allegations at the pleadings stage. The Court rejected plaintiffs’ UCL claim predicated upon a violation of the FTC Act and remanded the case to the original trial court judge (over plaintiffs’ objections).

• Email This
• Print
• Trackbacks

Boyer v. Jensen, 129 Cal. App. 4th 62 (2005)

Holly Boyer was in an automobile accident with Russell Jensen, who was employed by Valley Mechanical Services at the time of the accident. Jensen sued Boyer for negligence shortly before the expiration of the statute of limitations. Approximately five months later, Boyer cross complained against Jensen; six months after that, Boyer amended her cross complaint to include Valley Mechanical as a defendant on the theory that Jensen may have been engaged in job-related travel at the time of the accident. Jensen obtained dismissal of the cross complaint against him after the claim was discharged in Jensen’s bankruptcy proceeding. Valley Mechanical filed a motion for judgment on the pleadings on the theory that the claim against it was barred by the applicable statute of limitations. The trial court dismissed Valley Medical on the ground that its statute of limitations defense was not tied to Jensen’s waiver of that defense (which occurred when Jensen filed his action against Boyer) even though he was an employee at the time of the incident. The Court of Appeal affirmed.

• Email This
• Print
• Trackbacks

Woods v. Fox Broadcasting, 129 Cal. App. 4th 344 (2005)

Mel Woods and Stan Golden, former shareholders of Fox Family Worldwide, Inc. (a joint venture between Saban Entertainment and Fox Entertainment and affiliates) sued Fox Entertainment, et al., after the sale of Fox Family to the Walt Disney Company. Woods and Golden alleged that as part of the deal with Disney, Fox insisted that Disney carry cable broadcasts of Major League Baseball games, which resulted in a $400 million reduction in the purchase price, which in turn resulted in a diminution in the value of the stock options that Woods and Golden owned. Woods and Golden alleged that Fox interfered with their contractual rights and their prospective economic advantage. The trial court sustained Fox’s demurrers, but the Court of Appeal reversed, holding that Fox could potentially be liable to Woods and Golden for interfering with the contracts at issue even though Fox had been a 49.5% owner in Fox Family and, therefore, not a “stranger” to those contracts.

• Email This
• Print
• Trackbacks

Gober v. Ralphs Grocery Co., 128 Cal. App. 4th 648 (2005)

The jury awarded Dianne Gober and five other employees of Ralphs a total of $550,000 in compensatory damages and punitive damages in the amount of $30 million as a result of sexual harassment they suffered in the workplace. The trial court conditionally granted a new trial on the amount of punitive damages as to any plaintiff who did not consent to reduce the amount of punitive damages to a multiple of 15 times compensatory damages. The Court affirmed the trial court’s order granting a new trial on the appropriate amount of punitive damages to be awarded and provided guidance as to the type and character of evidence that the jury should consider during such a retrial. See also Bains v. ARCO, 405 F.3d 764 (9th Cir. 2005) (jury could consider breach of contract damages in assessing appropriate amount of punitive damages to award in case involving discrimination under 42 U.S.C. § 1981).

• Email This
• Print
• Trackbacks

McRae v. Dep’t of Corrections, 127 Cal. App. 4th 779 (2005)

Dr. Margie McRae filed a lawsuit against her employer, the California Department of Corrections, and four individual defendants, seeking damages for discrimination and retaliation in violation of the Fair Employment and Housing Act (FEHA). The trial court granted summary judgment to the four individual defendants, and the case proceeded to trial against the Department. The jury returned a verdict against McRae on her discrimination claim, but it awarded her $75,000 on her claim of retaliation. The Court of Appeal reversed the judgment, holding that neither the law nor the evidence permitted a finding of retaliation in this case. The Court held that plaintiff had failed to prove that the Department’s allegedly retaliatory actions (a letter of instruction, an unimplemented suspension and a transfer to another facility) caused “substantial and tangible harm, such as, but not limited to, a material change in the terms and conditions of employment”; the Court rejected the “overbroad” deterrence test applied by the Ninth Circuit in Title VII cases. Cf. Jackson v. Birmingham Bd. of Ed., 544 U.S. 167, 125 S. Ct. 1497 (2005) (Title IX provides private right of action for claim of retaliation by girls’ basketball coach who complained about funding and access to equipment and facilities).

• Email This
• Print
• Trackbacks

SEC v. Gemstar-TV Guide Int’l, 401 F.3d 1031 (9th Cir. 2005) (en banc)

As part of its announced plans to restructure its management and corporate governance, Gemstar-TV Guide entered into negotiations for termination agreements with its CEO and CFO. The CEO’s termination agreement provided for a “termination fee” of $22.45 million, an additional $7.03 million in unpaid salary, bonuses, and unused vacation and millions of shares of restricted stock; the CFO’s agreement provided for a termination fee of $7 million, an additional $1.21 million in unpaid salary, bonuses, and unused vacation and shares of common and restricted stock (collectively, the “Payments”). Shortly after the SEC ordered a formal investigation into the announced overvaluation of the revenue and profits from some of Gemstar’s sectors, the Commission requested that the Payments be placed in escrow. Hours before the restructuring agreements were to be executed, Gemstar informed the CEO and CFO that the Payments were to be placed in escrow for six months and that the escrow provision was non-negotiable. Although the executives acceded to the six-month escrow in “side letters,” they subsequently unsuccessfully challenged the escrow in an action filed in the district court. The SEC later filed an application to place the Payments in a 45-day escrow account pursuant to Section 1103 of the Sarbanes-Oxley Act (involving “extraordinary payments”). The district court determined that the Payments were “extraordinary payments” in that they were outside the ordinary course of business and were, therefore, subject to involuntary retention in an escrow account pursuant to Section 1103. A panel of the Ninth Circuit reversed and held that in the absence of objective evidence of what an “ordinary payment” might be, the Payments in question could not be subject to involuntary retention under the Act. In an en banc hearing, the Ninth Circuit reversed the panel’s opinion, affirming the district court’s judgment.

• Email This
• Print
• Trackbacks

Lutz v. Glendale Union High School, 403 F.3d 1061 (9th Cir. 2005)

Claudette Lutz, a longtime teacher and assistant principal at schools in Glendale, Arizona, alleged that she was fired in violation of the Americans with Disabilities Act (ADA). Lutz filed her case in Arizona state court, and the school district removed the action to federal court. Lutz then had 10 days during which to demand a jury, which she failed to do until 11 months later. Notwithstanding her failure to comply with the requirements of F.R.C.P. 38(b), the district court allowed Lutz’s action to be tried to a jury. The Ninth Circuit reversed, holding that although Lutz’s complaint made reference to a jury’s awarding damages, it did not make a similar reference in connection with the determination of liability. Accordingly, the liability phase of the lawsuit would have to be retried without a jury.

• Email This
• Print
• Trackbacks