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

Armenta v. Osmose, Inc., 135 Cal. App. 4th 314, 2005 WL 3549422 (Dec. 29, 2005)

Osmose, Inc., which is in the business of maintaining standing wood utility poles for major utility companies, employed union members as employees pursuant to a collective bargaining agreement. In this class action, the employees alleged they were not compensated for various tasks, including travel time in company vehicles, preparing daily paperwork, and maintaining company vehicles. Osmose argued that it had not violated the California minimum wage law because the average hourly pay the employees received exceeded the minimum wage. The employees argued they were entitled to be paid at least the minimum wage for each hour they worked, plus statutory penalties and interest, irrespective of the average hourly rate they received. The Court of Appeal affirmed judgment in favor of the employees, holding that the federal rule permitting averaging is not applicable under California law. The Court also affirmed an award of waiting time penalties (for willful failure to pay the minimum wage) and attorney's fees and costs against Osmose.

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Kroske v. U.S. Bank Corp., 432 F.3d 976 (9th Cir. 2005)

Kathy Kroske, a former bank manager of U.S. Bank Corp. in Spokane, Washington, alleged her employment was terminated after 25 years based upon her age (51 years old). The Bank contended Kroske had been terminated because her branch failed to meet its daily performance goals. After Kroske filed suit in Washington state court, U.S. Bank removed the action to federal court based on diversity of citizenship. The Ninth Circuit held there was federal court jurisdiction because there was at least $75,000 in controversy based upon Kroske's interrogatory responses about her alleged damages. However, the Court reversed the summary judgment that had been granted in favor of the Bank, holding that Kroske's age discrimination claim was not preempted by the National Bank Act as the district court had held.

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Josephs v. Pacific Bell, 432 F.3d 1006 (9th Cir. 2005)

Joshua Liam Josephs, a former Pacific Bell service technician, sued PacBell for mental disability discrimination in violation of the ADA and the California Fair Employment and Housing Act. PacBell hired Josephs after he checked "No" to a question on his employment application asking whether he had ever been convicted of a felony or misdemeanor. PacBell, which is permitted by statute to obtain a detailed criminal history of its employees who have unsupervised access to customers' homes, later discovered that Josephs had been tried for attempted murder (but was found not guilty by reason of insanity) and had been convicted of a misdemeanor battery on a police officer. PacBell also learned that Josephs had been committed to and had spent 2½ years in a California state mental hospital and six months in a board-and-care mental health facility. Shortly after learning this information, PacBell suspended Josephs and then terminated his employment for making fraudulent entries on his employment application. At trial, the jury determined that PacBell's termination of Josephs was nondiscriminatory, but that the company's refusal to reinstate him after he grieved the termination through the union was unlawful because PacBell regarded him as mentally disabled in violation of the ADA. The Ninth Circuit affirmed the judgment in favor of Josephs on the ground that "the evidence simply does not compel a conclusion that, in the eyes of PacBell, Josephs was not qualified for the service technician position because of his past violent acts." Cf. Claudio v. Regents of the Univ. of Cal., 134 Cal. App. 4th 224 (2005) (given the "unusual circumstances" of this case, employer should have engaged in the interactive process with disabled employee's attorney rather than the employee himself).

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Rivera v. Baker West, Inc., 430 F.3d 1253 (9th Cir. 2005)

Jack Rivera sued his former employer, Baker Concrete Construction, Inc., for race and national origin discrimination and wrongful termination. The matter was settled for "$40,000 less all lawfully required withholdings" during a settlement conference before a magistrate judge. Baker subsequently issued a settlement check in the amount of $25,140, withholding $14,860 for federal and state income tax and FICA contributions. Rivera cashed the check. However, Rivera opposed Baker's motion to dismiss his claims on the ground that Baker had improperly withheld money from the settlement proceeds. The district court granted Baker's motion to dismiss, holding that the settlement amount was lawfully classified as taxable wages since there was no evidence that Rivera had alleged or was being compensated for any personal physical injuries or physical illness. The Ninth Circuit affirmed and further held that awards for back pay under Title VII are subject to income tax withholding.
 

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Patten v. Grant Joint Union High School Dist., 134 Cal. App. 4th 1378 (2005)

Colleen Patten, a junior high school principal, "blew the whistle" concerning four "legal violations" that she believed had occurred at her school. After she complained, Patten was notified that she was being transferred to a smaller junior high school for the 2002-03 academic year. Patten's illness with mononucleosis initially prevented her from returning to work during the summer and early fall months of 2002. Eventually, she claimed in October 2002 that she had been forced to quit her job based on the school district's retaliatory conduct toward her in violation of Labor Code § 1102.5 (the "whistleblower" statute). The Court of Appeal reversed the summary judgment that had been granted in favor of the school district after determining that Patten had engaged in protected activity when she disclosed to legislative personnel her concerns about the school's alleged unauthorized use of public assets. However, the Court agreed with the trial court that the other matters about which Patten had complained were nothing more than internal personnel matters that did not rise to the level of a legal violation on the part of the district. The Court further held that Patten may have suffered "adverse employment action" when the school district transferred her from an "underperforming school… requiring immediate intervention" to a smaller magnet school where she would not be able to "make her mark" as readily.
 

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Hope v. California Youth Authority, 134 Cal. App. 4th 577 (2005)

Bruce Hope worked as a cook for the CYA for approximately five years during which time he was subjected to derogatory remarks on multiple occasions from his supervisor and others in the workplace based upon his sexual orientation. Although Hope complained to other supervisors and co-workers in the workplace about the harassment, it did not cease. When the wards threatened Hope with physical violence, the security officer who was assigned to the kitchen (and who was one of Hope's harassers, having told the wards that Hope thought they were "pretty") did nothing to protect Hope. Hope, who was diagnosed with HIV two months before starting the job, missed work on occasion and eventually developed a bleeding blister in one of his retinas, which led to a permanent loss of vision in one eye. (Hope's doctor told him the blindness was caused by job stress and that it more commonly occurs among doctors and lawyers.) Hope was eventually placed on a medical leave of absence and never returned to work. At trial, the jury awarded Hope $917,014 in economic damages and $1 million in non-economic emotional distress damages. The Court of Appeal affirmed the judgment in Hope's favor, holding that the CYA actually knew of the severe and/or pervasive harassment but failed to take any corrective action in response – or even to properly investigate the allegations.
 

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Fleetwood Enterprises, Inc. v. WCAB, 134 Cal. App. 4th 1316 (2005)

After completing the business portion of a trip to Europe, John Moody extended his stay for additional sightseeing with his wife in Italy. Moody sought workers' compensation coverage for severe injuries that he suffered in an automobile accident in which he was involved while driving from Rome to Düsseldorf. The workers' compensation judge determined that Moody, a design manager for Fleetwood (an RV manufacturer), had driven to Rome after completing the business portion of the trip in part to observe RV designs and elements that he happened to see on the road. The Court of Appeal reversed, holding that "there is no evidence that Fleetwood expected or required [Moody] to continue photographing RV's in between admiring Michelangelo's David and the Coliseum…. A unilateral, sporadic consideration of the employer's business, at times and locations that cannot be regulated or supervised by the employer, does not expand the course of employment." Cf. Kinsman v. Unocal Corp., 37 Cal. 4th 659 (2005) (landowner may be liable for injuries sustained by employees of independent contractor due to latent or concealed preexisting hazardous condition on the property).
 

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Caliber Bodyworks, Inc. v. Superior Court, 134 Cal. App. 4th 365 (2005)

Four former employees of Caliber Bodyworks filed a complaint for various wage-and-hour violations on behalf of themselves and as class representatives and for civil penalties for these violations. Caliber demurred to the entire complaint on the ground that plaintiffs had failed to allege they had satisfied the administrative prerequisites of the Labor Code Private Attorneys General Act of 2004 (PAGA), Labor Code § 2698, et seq. After the trial court overruled its demurrer, Caliber filed a petition for writ of mandate. The Court of Appeal granted the petition in part, holding that plaintiffs' claims for civil penalties arose, if at all, under PAGA, meaning that plaintiffs were required to plead compliance with the Act's pre-filing notice and exhaustion requirements. However, the Court left undisturbed the trial court's order denying dismissal of the other parts of the complaint.
 

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Murphy v. Kenneth Cole Productions, Inc., 134 Cal. App. 4th 728 (2005)

Former store manager John Paul Murphy sued Kenneth Cole Productions, Inc. (KCP), a small, upscale retail clothing store, for violations of the wage and hour law, asserting that he was improperly classified as an exempt employee. After resigning his employment, Murphy filed a complaint with the Labor Commissioner. The Labor Commissioner awarded Murphy $26,667.22 in unpaid overtime, $2,863.99 in interest and a waiting time penalty of $7,177.50 ($239.25 x 30 days). After KCP appealed, Murphy (by then represented by the Hastings College of the Law Civil Justice Clinic) filed a "notice of claims," adding claims for unpaid meal and rest periods, pay-stub violations and interest and attorney's fees. The trial court awarded Murphy unpaid overtime ($28,412.56), payments for missed meal and rest periods ($17,431.77) and pay stub violations ($1,650), waiting time penalties ($7,895.40) and prejudgment interest plus attorney's fees in the amount of $62,171.40. The Court of Appeal affirmed the lower court's judgment that Murphy was a non-exempt employee (and, thus, entitled to overtime) in that he spent "far less than half of his time engaged in managerial duties." However, the Court reversed the judgment to the extent it included an award for missed meal and rest periods and for pay-stub violations because such claims had not been raised before the Labor Commissioner. Further, the Court held that the payment for a meal/rest period violation is a penalty not a wage and, therefore, is subject to a one-year statute of limitations. Compare Tomlinson v. Indymac Bank, F.S.B., 359 F. Supp. 2d 891 (C.D. Cal. 2005).
 

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Greka Integrated, Inc. v. Lowrey, 133 Cal. App. 4th 1572 (2005)

Greka Integrated sued its former safety manager, Gary Lowrey, for breach of a non-disclosure agreement and conversion associated with Lowrey's taking emails and other documents that belonged to the company and for disclosing those documents to third parties, including Greka's competitors. Lowrey contended that he discovered many violations of worker safety and environmental regulations while he was employed at Greka and that the company refused to correct these conditions, which caused Lowrey to experience debilitating stress. The trial court granted Lowrey's anti-SLAPP motion to strike Greka's complaint. The Court of Appeal affirmed dismissal of Greka's lawsuit on the ground that Lowrey had met his burden of showing that the complaint arose from protected speech (deposition and trial testimony in response to subpoenas) and that Greka had little probability of success on the merits. Additionally, the Court ordered that Lowrey recover his costs and attorney's fees on appeal.
 

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Figueroa v. Northridge Hosp. Med. Ctr., 134 Cal. App. 4th 10 (2005)

One year after she filed suit against Northridge Hospital for discrimination and failure to accommodate her pregnancy, among other things, Raquel Figueroa requested leave to file an amended complaint to include class action claims for failure to pay wages and unfair business practices on behalf of all current and former nurses and other non-exempt employees. The trial court denied Figueroa's motion to amend on the grounds that she had unreasonably delayed and that defendants would be prejudiced because they already had engaged in costly discovery proceedings and two costly private mediations. The Court of Appeal held that the denial of a motion to amend is not an appealable order and dismissed Figueroa's appeal. (The Court noted that Figueroa could have sought timely review of the trial court's order by filing a writ petition, which she had failed to do.) Cf. Mpoyo v. Litton Electro-Optical Sys., 430 F.3d 985 (9th Cir. 2005) (employee's later-filed FLSA and FMLA claims were barred by the res judicata doctrine).
 

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MacIsaac v. Waste Mgmt. Collection & Recycling, Inc., 134 Cal. App. 4th 1076 (2005)

North Bay Disposal Corporation purchased from Empire Waste Management a contract to provide waste disposal services to the City of Santa Rosa. As part of the agreement, Empire Waste transferred to North Bay one mechanic and 41 garbage truck drivers who would drive the same routes for the City, use the same equipment and work the same schedule for the same pay, benefits and seniority rights. After Stanley MacIsaac was laid off (along with 19 other employees) by Empire Waste, he filed a class action lawsuit, claiming the company had violated the California WARN Act by failing to provide him and other similarly situated employees 60 days' notice of a "layoff." In its motion for summary judgment, Empire Waste asserted that there had been no "mass layoff" because it had laid off only 20 employees, and the statute applies only to layoffs of 50 or more employees. MacIsaac argued that the 20 laid off Empire Waste employees should be added to the 42 employees who had been transferred to North Bay Disposal for a total of 62 employees affected by the "layoff." The Court of Appeal affirmed summary judgment in favor of Empire Waste, holding that the 42 transferred employees were not part of a "lay off" within the meaning of the California WARN Act because they continued to perform the same work at the same rates of pay and for the same benefits following the transfer.
 

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