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

Pinero v. Specialty Restaurants Corp., 130 Cal. App. 4th 635 (2005)

Alberto Pinero, the former General Manager of the Castaways Restaurant (owned by Specialty Restaurants Corporation (SRC)), sued SRC for retaliation in violation of the Fair Employment and Housing Act that allegedly resulted from Pinero’s filing an age discrimination lawsuit against his former employer and a member of the Monterey Park City Council, Alfred Balderrama. SRC believed that Pinero’s lawsuit against Balderrama was frivolous and should be dismissed. The trial court granted SRC’s motion for nonsuit. The Court of Appeal affirmed, holding that Pinero had failed to present any evidence of “adverse employment action.” The Court concluded that Pinero’s evidence of alleged retaliation against him (for refusing to dismiss the lawsuit against Balderrama) did not demonstrate any retaliatory motive by Pinero’s supervisors and was not likely to deter others from engaging in protected activity.

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Head v. Glacier Northwest, Inc., 413 F.3d 1053 (9th Cir. 2005)

Matthew Head, a barge offloader, sued his former employer, Glacier Northwest, Inc., for discrimination in violation of the Americans with Disabilities Act (ADA) and Oregon state law. Glacier contended it terminated Head because he had damaged one of its loaders when it got stuck in the mud. At trial, the jury was instructed that Head had to prove that Glacier terminated his employment “because of” his perceived disability instead of the disability’s being a “motivating factor” in the termination. The jury returned a verdict in favor of Glacier; the Ninth Circuit reversed the judgment, holding that the jury should have been given a “mixed motive” instruction. The Court further held that in order to defeat summary judgment, Head was not required to supply medical evidence of his alleged disability, but only that his condition impaired one or more major life activities. Since Head had submitted evidence that his depression and bipolar disorder impaired his ability to sleep, interact with others, think and read, he was entitled to proceed to trial on his claims of disability discrimination. Cf. Mendoza v. Town of Ross, 128 Cal. App. 4th 625 (2005) (terminated school volunteer could not assert disability discrimination claim because he was not an employee).

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Coghlan v. American Seafoods Co., 413 F.3d 1090 (9th Cir. 2005)

James Coghlan, a commercial fisherman, was employed by American Seafoods Company (ASC). In 1998, following a layoff, Coghlan retained his job as a master of one of ASC’s fishing trawlers. The person who was responsible for retaining Coghlan was Inge Andreassen, ASC’s Vice President of Operations, who was a man of Norwegian birth. Andreassen retained Coghlan even though there was at least one Norwegian candidate for the job. Coghlan was later transferred to be a mate (a step down from master) on another vessel, but he did not object because it gave him the opportunity to earn more money. When Coghlan was transferred back to his original vessel as a mate, he did object because Jarl Hogseth (a Norwegian) was appointed master. Coghlan sued ASC for national-origin discrimination in violation of Title VII. The district court granted summary judgment to ASC, and the Ninth Circuit affirmed, holding that ASC was entitled to the “same-actor inference” – “an employer’s initial willingness to hire the employeeplaintiff is strong evidence that the employer is not biased against the protected class to which the employee belongs.”

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Tellis v. Alaska Airlines, Inc., 414 F.3d 1045 (9th Cir. 2005)

H. Charles Tellis was terminated from his job as an Alaska Airlines maintenance mechanic when he took an unexcused leave of absence from work to fly from Seattle to Atlanta in order to retrieve one of the family’s automobiles, which he then drove back to Seattle. Tellis contended that his trip to Atlanta (which he took during the time his wife was giving birth to their child) “provided psychological reassurance to [his wife] that she would soon have reliable transportation, and his [cell] phone calls to her while he drove back to Seattle provided moral support and psychological comfort.” The district court granted the employer’s motion for summary judgment, and the Ninth Circuit affirmed, holding that “as a matter of law, providing care to a family member under the FMLA requires some actual care which did not occur here.”

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People v. Pacific Landmark, LLC, 129 Cal. App. 4th 1203 (2005)

The City of Los Angeles brought a red-light abatement action against the operators of a business and the owners of a strip mall where the business (an illegal massage parlor) was located. The trial court issued a preliminary injunction prohibiting the operation of a massage parlor or house of prostitution. Ron Mavaddat contended that as a manager of Pacific Landmark, a limited liability company, he was exempt from any personal liability. The Court of Appeal disagreed and affirmed the judgment against Mavaddat, holding that “whereas managers of limited liability companies may not be held liable for the wrongful conduct of the companies merely because of the managers’ status, they may nonetheless be held accountable … for their personal participation in tortious or criminal conduct, even when performing their duties as manager.”
 

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Gieg v. DRR, Inc., 407 F.3d 1038 (9th Cir. 2005)

Plaintiffs in this case are finance and insurance managers of retail automobile dealerships who claimed they were entitled to overtime under the federal Fair Labor Standards Act. The employers contended the managers were exempt from overtime on the ground that at least half their compensation was derived from commissions. The managers received commissions based on the sale of insurance policies and extended warranties, but not on vehicle sales. The district court granted the managers’ motion for summary judgment, but the Ninth Circuit reversed, holding that the managers were exempt from overtime even though their commissions were not based on vehicle sales. Cf. Pioneer Electronics (USA), Inc. v. Superior Court, 128 Cal. App. 4th 246 (2005) (identifying information about putative class members may not be disclosed to plaintiff absent affirmative consent from each).
 

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Fontani v. Wells Fargo Investments, LLC, 129 Cal. App. 4th 719 (2005)

Wells Fargo terminated Marco Fontani, one of its NASDregistered broker-dealers. Following Fontani’s termination, Wells Fargo filed a Form U-5 with the NASD, stating that Fontani had been terminated “for violation of company policies by misrepresenting information in the sale of annuities, not being properly registered and firm procedures regarding annuity applications.” Fontani filed suit against Wells Fargo alleging 10 causes of action, including defamation and interference with prospective business advantage. Wells Fargo demurred to these claims and filed a special motion to strike them based on the anti-SLAPP law, which authorizes dismissal of a claim arising from the exercise of free speech in connection with a public issue. The trial court denied the special motion to strike, but the Court of Appeal reversed, holding that Wells Fargo’s filing of the U-5 constituted a communication before an official proceeding authorized by law and involving a matter of public interest. Cf. Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc., 129 Cal. App. 4th 1228 (2005) (animal-testing laboratory’s harassment claims asserted on behalf of its employee against animal-rights protestors were not subject to dismissal under anti-SLAPP statute).
 

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In re Cossu, 410 F.3d 591 (9th Cir. 2005)

Jefferson Pilot Securities filed a claim in the bankruptcy proceeding of Claude Cossu, one of its former broker-dealers, who had failed to report his outside business activities to Jefferson Pilot (for which he was an NASD-registered representative). Cossu was aware that under NASD guidelines, he was not permitted to engage in private securities transactions without obtaining Jefferson Pilot’s prior approval. Notwithstanding Cossu’s agreement with Jefferson Pilot, Cossu sold promissory notes from SafeRate Financial Services on which he earned approximately $500,000 in commissions. After the SEC closed down one of the companies from which Cossu’s clients had purchased the SafeRate notes, the SEC sued Cossu, and the customers sued Jefferson Pilot for losses they had suffered. Cossu, who had a “serious gambling habit,” filed a Chapter 7 bankruptcy petition. Jefferson Pilot then brought an adversary proceeding against Cossu to recover the amounts it had paid to defend and settle the claims brought against it by Cossu’s clients. The Bankruptcy Court awarded Jefferson Pilot $1.2 million against Cossu on the ground that the debt was non-dischargeable in Cossu’s bankruptcy since it amounted to fraud committed in a fiduciary capacity. The Ninth Circuit affirmed the judgment against Cossu based on his fraudulent activity, but remanded the matter to the lower court with orders to recalculate the appropriate amount of the non-dischargeable award against Cossu.
 

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Valles v. Ivy Hill Corp., 410 F.3d 1071 (9th Cir. 2005)

David Valles and John Breslin sued their employer, the Ivy Hill Corporation, for failing to provide them and other unionized employees with adequate meal periods and rest breaks in violation of the California Labor Code and the applicable wage regulations. In response to the lawsuit, Ivy Hill removed the action to federal court on the ground that the state law claims were preempted by Section 301 of the Labor Management Relations Act. The district court denied the employees’ motion to remand the action and granted summary judgment to Ivy Hill. The Ninth Circuit reversed, holding that the employees’ claims were not completely preempted by federal labor law since the state law right to meal periods applies to unionized as well as non-unionized employees and because such rights are non-negotiable. The Court remanded the matter and ordered the district court to remand the action to state court.
 

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Sunderland v. Lockheed Martin Aeronautical Sys. Support Co., 130 Cal. App. 4th 1 (2005)

While they were waiting in line at the In-N-Out Burger Restaurant in Lancaster, Ali Mazloom, a Lockheed field service representative, rear-ended Kristi Sunderland. In her personal injury action against Mazloom and Lockheed, Sunderland alleged that Mazloom had been acting within the course and scope of his employment when the accident occurred. Sunderland sought to rely upon the “commercial traveler rule” of workers’ compensation law, which provides that an employee acts within the course of his or her employment during the entire period of travel upon the employer’s business. The trial court rejected the application of the broad workers’ compensation rule in this context and granted Lockheed’s motion for summary judgment. The Court of Appeal affirmed, holding that at the time of the accident, “Mazloom’s driving and activity was personal in nature and was not related to his employment or to his employer.”
 

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Trop v. Sony Pictures Entertainment Inc., 129 Cal. App. 4th 1133 (2005)

Anne Trop was terminated from her position as an assistant to Betty Thomas, a movie producer and director for Tall Trees Productions, a motion picture production company with a “first look” deal with Columbia Pictures (a division of Sony). Prior to her termination, Trop had discussed her pregnancy (and her efforts to become pregnant) with two other employees of Tall Trees (whom she swore to secrecy), but she never directly mentioned it to Thomas. Thomas decided to terminate Trop shortly after her performance began to deteriorate and after she took a lengthy vacation to England. After her termination, Trop sued for pregnancy discrimination. The trial court granted summary judgment to defendants, and the Court of Appeal affirmed, holding that Trop could not prove that Thomas knew she was pregnant at the time of the termination. Further, the Court held that in any event Sony had produced sufficient evidence that it had a legitimate nondiscriminatory reason for the termination – Trop’s “job performance did not meet Thomas’ demanding standards.”
 

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Helmer v. Bingham Toyota Isuzu, 129 Cal. App. 4th 1121 (2005)

Kevin Helmer alleged that Bingham Toyota Isuzu and Bob Clark, his former supervisor, fraudulently induced him to leave a prior job based on false promises made to him by Clark. A jury awarded Helmer $450,913 in compensatory damages (for future lost income) and $1.5 million in punitive damages, which the trial court later reduced to $675,000. Helmer allegedly quit his job at Lithia Automotive, where he was the parts and service manager, in reliance upon Clark’s promise that he would earn at least $5,700 per month at Bingham. When Bingham paid Helmer less, and Helmer complained about it, Clark notified Helmer that he was terminated. The Court of Appeal affirmed the judgment in Helmer’s favor, holding that Helmer was properly awarded the value of his future lost income from Lithia.
 

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