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

Gonzalez v. Kalu, 140 Cal. App. 4th 21 (2006)

Gabriela Gonzalez, who worked as a cleaner for a building maintenance company, hired an attorney to represent her in a matter involving a possible sexual harassment claim against her employer. The attorney sent a letter to Gonzalez’s employer asserting the employer’s liability, threatening to file a lawsuit and demanding a settlement. The letter also warned the employer not to retaliate against Gonzalez by terminating her employment; Gonzalez’s employment was terminated by the end of the month. The attorney then filed an administrative complaint with the Department of Fair Employment and Housing and sent another letter to the employer, asserting there had been illegal retaliation and stating that he would be filing a lawsuit on Gonzalez’s behalf as soon as he received the right-to-sue letter. Gonzalez alleged that she did not hear from the attorney for three years – until she came to his office to pick up her file in connection with separate litigation against her former employer and was told that the attorney would not be prosecuting the sexual harassment claim on her behalf. The attorney demurred to the malpractice complaint on the ground that it was barred by the one-year statute of limitations. Although the trial court granted the attorney’s motion for summary judgment, the Court of Appeal reversed, concluding there was a triable issue of fact whether the attorney continued to represent Gonzalez, which would toll the statute of limitations. Cf. In re ZiLog, Inc., 450 F.3d 996 (9th Cir. 2006) (Ninth Circuit reverses dismissal and discharge of contract, tort and discrimination claims untimely filed against employer in bankruptcy based upon communication from employer to employees that seemed “designed to lull [them] into a false sense of security about the need to file claims”); Wasti v. Superior Court, 140 Cal. App. 4th 667, 2006 WL 1653385 (2006) (unrepresented employee need not serve upon employer a copy of complaint filed with Department of Fair Employment and Housing before proceeding with FEHA claim).

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Moran v. Selig, 447 F.3d 748 (9th Cir. 2006)

Seeking to make partial amends for its exclusion of African-American baseball players prior to 1947 (when Jackie Robinson “broke the color barrier”), MLB voluntarily decided to provide certain benefits, including medical coverage and a supplemental income plan, to qualifying African-Americans players who had been in the “Negro Leagues” prior to 1948. In this lawsuit, certain retired players (mostly Caucasians) who played in the Major Leagues between 1947 and 1979 for too short a period to vest in similar benefits challenged MLB’s action on the ground that it discriminated against them on the basis of their race. The trial court granted MLB’s motion for summary judgment, and the Ninth Circuit affirmed, holding that the benefits are not “part and parcel of the employment relationship” because members of the Negro Leagues were (by definition) not members of MLB. Moreover, since none of the plaintiffs had been excluded from MLB because of his race, none was similarly situated to those who were. The Court further held that MLB had a legitimate non-discriminatory and non-pretextual reason for providing these benefits and that it had acted “honorably and decently and not out of an improper or invidious motive.” Finally, the Court affirmed summary judgment of plaintiffs’ battery claim involving alleged multiple injections of cortisone and other drugs without their informed consent as a result of the absence of sufficient evidence in support thereof.
 

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Olinick v. BMG Entertainment, 138 Cal. App. 4th 1286 (2006)

Martin Olinick, a lawyer who is admitted to practice both in New York and California, began working for BMG’s predecessor, RCA Records in New York in 1971. In the last of a series of 3-year employment agreements between the parties, Olinick and BMG executed an 8-page employment agreement covering the period from July 1, 2000 to October 31, 2004. The agreement was the product of nine months of negotiations that were conducted almost entirely in New York between Olinick’s New York lawyer and BMG’s in-house counsel also located in New York. The parties exchanged more than 10 drafts of the agreement. Among other things, the agreement contained a New York choice-of-law provision and a New York forum-selection clause. When BMG terminated Olinick before the expiration of the agreement, Olinick filed the instant lawsuit, alleging age discrimination. In response, BMG sought to stay Olinick’s lawsuit on inconvenient forum grounds based upon the forum-selection provision in the contract. The trial court granted BMG’s motion, and the Court of Appeal affirmed, holding that Olinick has an adequate remedy for his age discrimination claim under New York law
 

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Jespersen v. Harrah’s Operating Co., 444 F.3d 1104 (9th Cir. 2006) (en banc)

Darlene Jespersen, a former bartender in the sports bar at Harrah’s Casino in Reno, filed this Title VII action, alleging the casino had discriminated against her on the basis of her sex when she was fired for refusing to comply with the casino’s appearance standards policy requiring all female beverage servers to wear makeup. (Harrah’s “Personal Best” appearance standards also required that male employees maintain short haircuts and neatly trimmed fingernails.) The district court granted summary judgment to the employer, and the Ninth Circuit (sitting en banc) affirmed that judgment after concluding that “grooming standards that appropriately differentiate between the genders are not facially discriminatory.” The Court determined that Jespersen had failed to provide evidence that Harrah’s “Personal Best” appearance standards policy imposed unequal burdens on male and female employees. Further, the Court held that Harrah’s policy was not based on sex stereotypes. It applied to all bartenders, regardless of sex, and most of it applied to both sexes equally. Women were not asked to dress suggestively or provocatively in a way that would stereotype women as sex objects. Moreover, Harrah’s grooming policy did not create a hostile work environment. The only evidence to support Jespersen’s claim was her own subjective reaction to the makeup requirement. There was no objective evidence that the grooming standards would impair a woman’s ability to do her job.
 

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Taylor v. Roseville Toyota, Inc., 138 Cal. App. 4th 994 (2006)

Derrick Lewis, a car detailer employed by Roseville Toyota, was driving a car owned by the dealership and was on a personal errand during his lunch break when he rear-ended another car that was stopped at a stoplight. The jury concluded that although Lewis was not acting within the scope of his employment at the time of the accident, Roseville had given Lewis permission, by words or conduct, to use the car before the accident. The evidence of permissive use was that Lewis was given the key to the car by the dealership’s key shack attendant, who told Lewis he could use the car during his lunch break “as long as he brought it back.” In affirming the judgment against Roseville, the Court of Appeal acknowledged there was no evidence the key shack attendant had actual authority to ignore the dealership’s “unwritten policy” against personal use and give Lewis the keys, but there was sufficient evidence the attendant had ostensible authority to do so since the dealership did not expressly prohibit the personal use of its vehicles in the employee handbook and because Roseville had failed to better supervise the use of the vehicles. Cf. Thomas v. Duggins Constr. Co.¸ 139 Cal. App. 4th 1105 (2006) (company whose employees made intentional misrepresentations about equipment was not entitled to reduction of non-economic damages under Fair Responsibility Act of 1986 (Proposition 51)).
 

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Sully-Miller Contracting Co. v. California OSHA Bd., 138 Cal. App. 4th 684 (2006)

Sully-Miller, an asphalt-paving company, leased one of its employees, Jeff Moreno, to Manhole Adjusting, Inc., as a roller operator. While working at Manhole’s worksite, Moreno was fatally injured when he was thrown from the roller because it lacked an operable seatbelt. OSHA cited Sully-Miller for a serious violation of the employer safety provisions of its regulations due to Sully-Miller’s failure to have an Injury Prevention Program (IPP) that would have instructed Moreno to refuse to work at the secondary site until he was provided an operative seatbelt and further for its failure to provide periodic monitoring of the worksite. The Court of Appeal concluded that Sully-Miller was Moreno’s primary employer and that it was not relieved of its responsibilities to provide general safety training to its employees when the employee is leased to a secondary employer. Cf. Violante v. Communities Southwest Development & Constr. Co., 138 Cal. App. 4th 972 (2006) (subcontractor’s employee on a public works project cannot sue the general contractor for the sub’s non-payment of prevailing wages).
 

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Jenkins v. County of Riverside, 138 Cal. App. 4th 593 (2006)

Evelyn Jenkins worked as a full-time “Office Assistant II” for the County for six years before her employment was terminated. During the entire six years, Jenkins was classified as a “temporary employee.” After taking a workers’ compensation leave of absence and having surgery for carpal tunnel syndrome, Jenkins informed the County that she was disabled; she presented the County with documentation from her physician stating that her disability required that she be provided restricted duty and that she receive reasonable accommodation. Six hours later, the County terminated Jenkins’s employment ostensibly because she had been classified as a temporary employee but had worked more than 1,000 hours per year in contravention of the County’s salary ordinance. Jenkins challenged her termination in lawsuits filed in both state and federal court. Although the United States Court of Appeals for the Ninth Circuit reversed the summary judgment that had been granted in the County’s favor in federal court and ordered that summary judgment be entered in favor of Jenkins (398 F.3d 1093 (9th Cir. 2005)), the California Court of Appeal in this opinion affirmed the state trial court’s entry of summary judgment in favor of the County on the ground that Jenkins was a temporary and not a “regular” employee and, accordingly, it could not be liable for discriminating or failing to provide a reasonable accommodation to Jenkins. The California appellate court concluded that the Ninth Circuit had misconstrued California law and held that the Ninth Circuit’s decision was not binding in the state court action.

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Polone v. CIR, 499 F.3d 1041 (9th Cir. 2006)

Gavin Polone sued his former employer, United Talent Agency, alleging, among other things, wrongful termination and defamation. In settlement of the defamation claim, Polone agreed to accept $4 million in four equal, six-month installments, beginning on May 3, 1996. Congress amended Section 104 of the Internal Revenue Code in August 1996 (after the first but before the second installment payment was received), resulting in the inclusion in taxable income of compensation for defamation claims such as Polone’s. The Tax Court held that the pre-amendment Section 104 applied to Polone’s receipt of the first installment, but not to any of the other installments, resulting in his owing taxes on $3 million. The Ninth Circuit affirmed.

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Tien v. Superior Court, 139 Cal. App. 4th 528 (2006)

In this wage and hour class action litigation against Tenet Healthcare Corporation, plaintiffs sought from Tenet the names, addresses and telephone numbers of all of the putative members of the class, which Tenet estimated to be approximately 50,000 people. The parties subsequently agreed that a neutral letter would be sent to a random sample of class members informing them of the existence of the lawsuit and providing them with contact information for plaintiffs’ lawyers if they “would like more information.” Tenet then served a set of special interrogatories on plaintiffs seeking, among other things, the names and contact information of all putative class members who had contacted plaintiffs’ counsel. Although some of the putative class members who had contacted plaintiffs’ counsel expressly consented to having their identities disclosed to Tenet, others either did not respond to the request for consent or expressly refused to give their consent. Plaintiffs’ counsel filed a writ petition challenging the trial court’s order to disclose the names and contact information of anyone who did not expressly consent to the disclosure. The Court of Appeal granted the petition and held that although disclosure of the identifying information of non-consenting putative class members was not barred by the work product doctrine or the attorney-client privilege, it would violate the individuals’ rights to privacy and on that basis ordered the trial court to grant plaintiffs’ motion for a protective order. Cf. Singh v. Superior Court, 140 Cal. App. 4th 387, 2006 WL 1586949 (June 12, 2006) (health-care employees who elected to work three 12-hour days per week are entitled to overtime only after 40 hours in a week or 12 hours in a day).

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The Estée Lauder Companies Inc. v. Batra, 430 F. Supp. 2d 158 (S.D.N.Y. 2006)

While working as Global General Brand Manager for Estée Lauder, Shashi Batra (a resident of San Francisco) signed a non-compete agreement that prohibited him from competing with the company anywhere in the world for a period of 12 months after his employment ended. Batra had worldwide responsibilities for two of Estée Lauder’s skin care brands. Pursuant to the non-compete agreement, which contained a New York choice-of-law provision, the company would continue to pay Batra’s salary (post employment) during the non-compete period. When Batra announced his resignation to become Worldwide General Manager of Perricone (a competitor), Estée Lauder offered to reduce the duration of the non-compete to four months. Batra responded that he believed the non-compete was unenforceable under California law and immediately filed a lawsuit in California seeking a declaration to that effect. Two days later, Estée Lauder filed the instant lawsuit in the United States District Court for the Southern District of New York, seeking to enforce the non-compete under New York law. In this ruling, the federal judge rejected Batra’s request to apply the abstention doctrine, applied New York law and concluded that because Batra would inevitably disclose Estée Lauder’s trade secrets to Perricone, he should be enjoined from competing with Estée Lauder for five months. Cf. Kelton v. Stravinski, 138 Cal. App. 4th 941 (2006) (ongoing business relationship between business partners did not render covenant not to compete valid).

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Lyle v. Warner Bros. Television Productions, 38 Cal. 4th 264 (2006)

Amaani Lyle was terminated after four months of working as a typist in the writers’ room of the producers of the television show “Friends.” Following her termination because she could not type (contended the producers), Lyle asserted, among other things, that she had been subjected to a hostile environment in the form of conversations among the writers about their personal sex lives, their sexual preferences and predilections, their fantasies about female cast members, as well as sexually explicit doodling and cartoons on scripts, calendars and other pieces of paper. However, Lyle admitted during her deposition that none of this activity was directed at her, no one had said anything that was sexually explicit about her and no one on the show had asked her on a date or sexually propositioned her in any way. Because Lyle had failed to establish that she was exposed to sexually explicit conduct in the workplace “because of sex” or that it had been sufficiently severe or pervasive as to alter the terms and conditions of her employment, the California Supreme Court reinstated summary judgment in favor of defendants. Cf. Carter v. California Dep’t of Veterans Affairs, 38 Cal. 4th 914 (2006) (amendment to the Fair Employment and Housing Act providing for employer liability for the sexually harassing conduct of third parties (e.g., customers or clients) “merely clarified” existing law and was, therefore, to be retroactively applied).

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Williams v. Genentech, 139 Cal. App. 4th 357 (2006)

Rochelle Williams, a receptionist at Genentech, was criticized by her supervisors for mishandling an incident involving company security. (Instead of following the company’s established procedure for dealing with a security alert, Williams spoke to a security officer in a “code of her own devise” – “Hurry and bring the pizzas” and “It was a sad movie.”) Williams allegedly suffered stress and the exacerbation of an existing medical condition (asthma) as a result of the criticism of her performance and then commenced a seven-month medical leave of absence. During her absence, Williams’s position was filled, and when she was ready to return, she was unable to obtain a different position at Genentech within 60 days and, consistent with company policy, was terminated as a result. Although Genentech used “floaters” to cover Williams’s job duties during the first 12 weeks of her leave, thereafter the Company decided to fill the position because the continued use of floaters adversely impacted the other receptionists and the business. Williams responded with a lawsuit alleging, among other things, race and disability discrimination, failure to reasonably accommodate a disability, failure to engage in a timely interactive process with Williams and violation of the Unruh Civil Rights Act. The Court of Appeal affirmed summary judgment in favor of Genentech, holding that although Williams had timely exhausted her administrative remedies (due to an alleged continuing violation by Genentech through the date of the termination), she failed to establish disability discrimination because at the time the decision was made to fill her position, she was “totally disabled” and, therefore, was unable to perform the essential functions of her job. Similarly, at the time her employment was terminated, Williams was not qualified to fill any other available position. As for the failure to accommodate claim, the Court held Williams was not entitled to an accommodation that (1) would have resulted in her being transferred to a different supervisor; (2) would have kept her position open until she returned to work; or (3) would have placed her in a vacant position upon her release to return to work. Finally, the Court concluded Genentech had sufficiently engaged in the interactive process with Williams and that the Unruh Act does not apply in the employment discrimination context. See also Gelfo v. Lockheed Martin Corp., 140 Cal. App. 4th 34, 43 Cal. Rptr. 3d 874 (2006) (employee with prior back injury was not actually (or regarded as) physically disabled but was entitled to possible reasonable accommodation and interactive process).

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